BLOG – Page 9 – game economist consulting

June 5, 2021

A recent Twitter thread highlighted a popular Gamer™ belief:

Nope, they are mostly used to obfuscate real prices and can’t store value
— Nicola Visonà (@VisonaNicola) May 25, 2021

Even within gaming studios, I encounter a similar sentiment. Proponents of this position claim “firms use virtual currency pricing as a behavioral trick!” With virtual currency, there’s a disconnect between the real-world price and the virtual currency (VC) price. While true, there’s no intentional trickery going on. Instead, the reasons for VC are quite straightforward:

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The Creator Economy Is for Anyone but Not Everyone

May 31, 2021

*Ladies and gents.* Israel Kirzner, the Avatar.

UGC platforms have hailed the rise of the Creator Economy™. Roblox, TikTok, and Youtube have democratized the creation of content, abstracting the costs of getting content to market. But we’ve assumed UGC cuts out content gatekeepers in favor of entrepreneurs. Everyone gets a warm glow when “the little guy wins”. And by all means, this appears to be true! Creators can single handily craft and distribute TikTok videos in seconds, not days or months. The barriers to Roblox creation are higher, but it’s a far cry from the rigamarole of traditional game publishing. The effects of UGC are profound: despite easing requirements with Early Access, Steam hosts 50,000 games to Roblox’s 40 million. It’s such a gap I made this handy chart to underscore the difference:

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There’s More Money in Blockchain Games Than Blockchain Platforms

May 23, 2021

Blockchain gaming companies like Immutable and Mythical use games to “prove out the tech”. This strategy places games as a means rather than an end. But what exactly is the technology to prove and what are the gains to proving it?

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Battle Pass Who? We’ve Got Direct Stores

May 16, 2021

One revelation of the Apple v. Epic case is that 67% of revenue is from the Item Shop.

26% of all money made in Fortnite is from the Battle Pass, 67% is from the Item Shop, and 7% is from Real Money Bundles.
— iFireMonkey (@iFireMonkey) May 3, 2021

I couldn’t directly source the claim from a primary source (the specific page). If someone can link to the page number, please do so in the comments.

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More on the Economics of Battle Pass: Resting Prices, Forecasted Level and Complete Pass

May 9, 2021

WoW made blue bar = good a heuristic by way of XP boosts

The previous model of battle pass (BP) focused on average daily monetization cap (ADMC) as the key lever in driving more monetization from BP. Special attention was paid to the role of tiers and we’ll continue to do so here.

One of the more interesting shortcomings of BP is the inner temporal nature of the pass. The pass is available not on demand but at fixed time intervals. If a player joins in the middle of a twelve week season they face radically different pass economics then someone who started at the beginning of the season.

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The Environmental Economics Approach to Liveops Content Management

April 25, 2021

I’m sure Candy Crush will put Hotelling over the line for a posthumous Nobel Prize.

In 1931, American economist Harold Hotelling published the seminal paper The Economics of Exhaustible Resources. Harold described a problem many firms face: how much of a non-renewable resource should they sell at any given time? This problem is more apparent when thinking about managing an oil supply but just as relevant when considering how to manage match-3 levels.

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