An Economy of Goods & Services Exchange
More than 2.5 billion human beings are direct or indirect users of platforms that constitute the bases of the virtual economy. “The virtual economy is the system of online jobs, assets, marketplaces, and traders which has emerged across a range of online platforms.” (Verdict, 2020). It is understandably a multi-billion-dollar economy with a huge number of stakeholders. Since the topic is extensive, this article will focus on the virtual goods exchanged in the eGaming and eSports sector. It will investigate what is the virtual economy, what are the virtual goods and services, and will conclude with a case study of virtual goods trading platform FIPME. Since we are dealing with the dynamic eGamingworld, it is appropriate to make an attempt to define the future trends in the virtual goods and services sector.
What is the virtual economy?
The virtual economy (VE) is about exchanging virtual goods and services in a virtual world using virtual currencies (Nazir and Lui, 2016) or even real money. (CNBC, 2022) reports that investors are spending fortunes to buy lands in the Metaverse, and it’s all about users, ads, and sponsors. Metaverse appeared to the public in 2021 but virtual worlds (VW) existed at least a decade before as a 3D platform based on avatars that represent real world users, products, and services. Famous examples are World of Warcraft (WoW), Entropia Universe (EU) and Second Life (SL). Some of these worlds such as SL belong to the eGamingindustry with the absence of professional players and professional tournaments while others such as WoW belong to the eSports industry with its professional scene.
If we focus exclusively on the virtual economy in eGaming and eSports, it is worth noting that the eGaming market was valued at $173.7 billion in 2020. In a market analysis report published by (Yahoo Finance, 2021) the global eGamingmarket is expected to grow at a compound annual growth rate (CAGR) of 9.64% from 2020 to 2026. Until now, the majors of eGaming industry are Fortnite, Dota2, Counter Strike, and League of Legends.
What are the virtual goods
A fierce competition is raging among publishers and even the best may be surpassed by new entrants. This was evident with SL that had in 2014 over 1 million active users and around 1.2 million daily transactions of virtual products and services (Hendaoui, Limayem, & Thompson, 2008; Linden Lab, 2013a), but declined and stabilized in 2017 while Sandbox published by Roblox has grown five-fold and reached 500,000 wallets.
It is one of the largest users generated content (UGC) platforms in the world, boasting with over 40 million downloads and one million monthly active users around the world (Animocabrands, 2019).
In the eGaming industry, by definition virtual goods are non-physical intangible assets exchanged among players or sold by publishers in the virtual world and paid in virtual or real money. The Guinness World Book of Records reports that the most expensive virtual item ever sold is Planet Calypso which is the first and largest virtual planet in EU for $6 million.
Virtual items in eGaming may be divided into 2 major categories: functional or esthetic. Functional purchases usually bring advantages and fit into the game, they are sometimes main component of the move. In an online racing game for example, car and engine components are functional bringing extra power and speed to the gamer. Esthetic is also purchased in-game for different reasons and are called vanity items. Heroes’ skins provide a distinction from other players without giving true functional advantages. As an example, a courier in Dota2 “Legacy Ethereal Flames Wardog” ranges from $1700-$1800 although it has the same capabilities and functions as a standard courier.
A brief case study: FiPME
FiPME is a platform automating virtual goods trading in the world of gaming. It enables players and businesses to buy and sell items and services at the price they want. FiPME provides the opportunity for customers to trade freely without imposing specific prices. Consequently, it grants gamers to monetize the results of their in-game efforts through trading items in a simple, reliable, and secure way without acquiring high fees. This platform was made to support gamers rather than making large profits. Consequently, FiPme brings efficiency to the virtual goods market and automatically bridge it with the financial world, adding liquidity to the market. The platform provides safe and secure trade with escrow accounts; first it releases buyers’ money from escrow accounts only after both parties confirm the item’s been transferred. Second, all users go through a KYC process and if they still try to cheat, they get a life ban. In addition, customers are free to open new markets for trading any items from any game they want. Moreover, the customer who launches a new market for a specific game will receive a part of all future commissions from the trading that happens in that market. FiPME is the only platform that provide real market analytics and trending news on virtual economies. You can leverage it in your trading strategies or while playing — as an example, focus on getting the high demand items.
Safe, Reliable, and fast!
Near future trends
Virtual, Augmented reality have boosted the components of the virtual world as well as its attraction. Understandably, virtual goods and services should have golden days in the coming years to the point that researchers and the business world are wondering who will be the next Amazon of virtual goods. Andrew Chen an investor in Silicon Valley startups argues that the virtual items stores are in their infancy. After defining briefly the components of Amazon success built on personalizing the user shopping experience, one may speculate that if the components of such success are applied to virtual goods and services, it will create again a monopoly a giant of e-commerce. Chen cites these components: Product recommendations; price testing; product bundling; search, browse and navigational hierarchy; reviews, ratings, lists, and meta data; affiliate programs; add targeting and more…
Andrew Chen (undated) Virtual goods: Who will be the Amazon.com of virtualitem sales? (Accessed February, 2022) https://andrewchen.com/virtual-goods-who-will-be-the-amazoncom-of-virtual-item-sales/
Chris Dilella, Andrea Day, January 12 2022. Investors are paying millions forvirtual land in the metaverse. (Accessed February 15, 2022) https://www.cnbc.com/2022/01/12/investors-are-paying-millions-for-virtual-land-in-the-metaverse.html
Nazir, Mohamed & Lui, Carrie. (2016). A Brief History of Virtual Economy. Journal of Virtual Worlds Research. 9. 1–23. 10.4101/jvwr.v9i1.7179. https://www.researchgate.net/publication/303698171_A_Brief_History_of_Virtual_Economy
3D Social Virtual Worlds: Research Issues and Challenges
Adel Hendaoui;Moez Limayem;Craig W. Thompson IEEE Internet Computing Year: 2008 | Volume: 12, Issue: 1 | Magazine Article | Publisher: IEEE