Understanding a Virtual Item Economy: Price Factors

Understanding a Virtual Item Economy III

Inflation is the term used to describe the trend of items increasing in price (primary currency price, coins for example) as more money or credits are in active circulation and items will sell more quicker and thus, sellers can take advantage of this and raise their prices as to moderate supply and demand, but also earn more profit per sale. The rate of inflation can increase if there are more consumers earning money, thus meaning that there will be more money in active circulation and will be used as to buy or pay for things.

Going back to the fact that there isn’t a direct official system in nearly all games with a virtual item economy for trading items for cash money, cash money trades for virtual items can occur, if there is a feature as to trade and negotiate with someone 1-to-1 within a game. This is known as Real Money Transfer or RMT, and is done by both parties negotiating and establishing a trade but also decide which user should go first with their end of the trade, as you can’t trade real cash money within these games. Reliability and trust is needed by both parties for a RMT trade to be successful, with one of the users going first and the other party upholding their promise in the trade.

It’s crazy to think that someone could actually want to pay real cash for a simple virtual item, however, greed and envy lead the way in making a virtual item economy be successful and aid virtual items in maintaining their monetary worth. Do keep in mind though, that all virtual game items do not have an official monetary value but rather, the community and the players of these games do give them worth, and at times, may go as far as giving them a worth that is of high cash value based on a series of factors. These are:
  • Rarity
  • Popularity, also known as ‘hype’
  • Aesthetics
  • Purpose or function
  • Release Date

Rarity is the term used to describe how rare an item is or how difficult it is to get. Something that can be easily obtained is known as a 'common' item. Games generally will have their own rarity hierachy and feature some of rarer items on the higher end of the scale and at times, it can be very difficult to obtain these very rare items, possibly having only a 0.1% chance of getting them or along the lines of that.

Popularity or 'hype' is the term used to describe how popular or heard about the item is, meaning that there will be a high demand for very hyped items, especially those that are brought into the game with a new update.

Aesthetics, of course, is how an item looks. Colours, form and shape aid the price of an item, especially if it is regularly seen in-game and lavishing colours or obscure shapes can make or break the demand.

Purpose is what it says on the tin. What the item does or what it is used for is it's purpose. It could be a piece of equipment, a completely aesthetic version of a weapon or even just a piece of nonsense.

Release Date is a minor factor that ties in with most of the factors already mentioned. In games, there are often updates upon updates as well as patches as to fix certain components of the game but also bring in new content. The release date of an item is when it was brought into existence in the game through an update, allowing it to be dropped. It should be noted that the effect the release date of an item has different effects, depending on whether there are limitations put in place in the game as to stop production of that item.

For example, in the game Counter-Strike: Global Offensive, aesthetic variations of weapons that have no purpose but to look nice are brought into the game in batches with a case system. This case system is used in other games as well, where users may pay a certain amount of real life money as to buy a key to unlock this case and get an item based on the probabilities of getting them.