Why the Ingame Items Market is Broken: a Gamer’s and Trader’s Perspective on Trading Inefficiencies
Most of the ingame item shops are so time and cost inefficient that they impede the ingame goods from flowing to where they’re most needed and degrade the overall experience from gaming as a result. In this post, we’ll take a look at what’s wrong with the ingame items market and put you in the shoes of a gamer — or a trader — that is forced to go through circles of hell on his way to buying/selling ingame items.
While in our previous post we discussed all types of ingame downloadable content, here we’ll only focus on the transferable ingame items that can be traded on external sites between users themselves rather than only be bought from the game producers for single use.
Say, you’ve been playing a not very widely known game for quite a while and you’ve acquired a whole bunch of cool stuff there: all sort of rare skins, armor, ingame currency, and what not. But you don’t need all of them. Moreover, lately you’ve been toying with the idea to start playing Fortnite — so why not sell a few items and get some stuff for Dota instead? This sounds like a legit idea and since you have no friends willing to transact, you start googling for ways to do that on your own.
It occurs to you that the easiest way to sell your items would be by putting an offer at an ingame items marketplace. So, you find quite a lot of them and already rub your hands anticipating the cash to flow in when difficulties start to pop up.
First, you figure out that most marketplaces don’t let you exchange your goods for real money, e.g. USD, which hinders you from switching to Dota items that you’d been hoping to acquire. Then, some marketplaces don’t even offer a market for your specific game. Furthermore, even if a particular website does, it sets crazy commissions that reach up to 50%, which you find completely unfair.
Eventually, you come across an online shop that offers a market for your items and has bearable trade conditions. However, you see there are just 5–7 other listings beside yours that have been pending there forever without anybody willing to respond. And since you want your cash ASAP, you keep searching for other alternatives.
Ultimately, you realize that gamers can also trade at eBay and turn to it as your last resort. The problem, however, is that you haven’t ever sold anything there and your brand-new account with zero feedbacks wouldn’t stand for your credibility. As a result, even if you set a good price, buyers will not pick your offer when choosing between you and a seller with a proven track record. eBay doesn’t have a mechanism that would guarantee them that you’ll deliver the goods after they’ve paid — and nobody wants to be scammed. So it looks like it’s going to take forever for you to find a buyer there, too.
At this point, it all gets too complicated and you have to admit that even though hypothetically you could monetize your ingame items and transfer your virtual wealth into the new game you’re starting, it’s just too much hurdle to get through. So eventually, you despair, drop it all and go back to doing what you love — playing your game.
So what’s wrong with the current ingame items trading marketplaces and why are we creating FiPME?
The typical example above shows that the current ingame items trading process is super inefficient. As gamers ourselves, we constantly face these complications and find them super irritating but above all — easy to avoid. So what exactly are these problems and how do we aim to solve them?
- There’s always a need to choose between secure & fast transactions or affordability;
If you want to buy/sell goods securely and as soon as possible, you’d usually go to a specialized marketplace where commissions can reach an insane 50%, harming both the buyer and the seller.
- Hard to execute the best price — both for buyers and sellers;
Sellers always want to sell for as much as possible and buyers — to buy for as little as they can. But in order to execute the best price, you’d usually have to manually search and compare deals from different websites — or even within one website as often there’s just a long list of offers with no built-in search engine. And since this takes a while, most buyers end up opting for one of the first deals they come across thus spending more. Same with sellers: they just set a random price and eventually either sell for less than their item could be sold for or wait too long to find a buyer due to a high price. Eventually, both sides lose time and money.
- Impossible to buy/sell your items instantly;
Sometimes you need cash or an ingame item immediately and might even be ready to pay for this urgency by buying for more or selling for less. But again, you face the same problem we mentioned in the previous point: you need to manually search for someone to transact with and this takes time. Moreover, at some marketplaces, if you want to sell faster, you need to pay to improve your position in the list of items or come up with some tricky ideas to attract more attention with your listing — e.g. add eye-catching pictures. And if you want to buy faster — all you can do is search and passively wait for fitting sell offers to pop up. In the end, neither buyers nor sellers get what they want on time and have to partake in all these “marketing” activities they’d prefer to avoid.
- Nowhere to trade the items from unpopular games;
Let’s say you adore a game that is only played by a small circle of people. And even if the game is truly awesome, no marketplace is going to list its items until it becomes a big thing. So if you want to monetize your ingame efforts or simply trade one item for another, the only way to do that for such games is by manually searching for a buyer/seller within your community or at websites like eBay — which will most likely take forever.
- Hard to exchange ingame items between games;
If you want to exchange an item from Dota to an item from Fortnite you’ll most likely have to initiate 2 transactions on two different markets. First, you’ll have to find a buyer for your Dota goods, wait for the cash to come (sometimes it takes up to a week to arrive!), find a good deal for the Lineage item you wanted to buy initially and finally get it if you don’t get scammed. How much time and effort will it take? You guessed it — a lot.
- Nowhere to trade ingame services;
Virtual worlds are as rich in opportunities as their “real” counterpart. So as a gamer, you might want to buy not only the “material” stuff in these ingame worlds but also the services — just like you do in the real world. Say, if in the real world you’re fine paying somebody to help you learn Spanish, why not pay someone inside the game to help you go through a quest together? At the moment, some professional gamers’ ingame services can well cost $1,000 per hour and there are many gamers that wouldn’t mind paying even more! Yet, there’s hardly any specialized platform for trading ingame services.
- Hard to monetize your ingame efforts if you’re not a professional player;
Eventually, considering all the hurdles listed above, if you’re a casual gamer and don’t engage in items trading on a constant basis, it’s so hard for you to monetize your gaming efforts that you just choose to avoid it.
- Impossible to invest in ingame items and trade them as commodities;
Another problem that ensues from all of the above is that it’s hard to imagine somebody trading ingame items as they’d trade Bitcoin. There’s simply no infrastructure allowing to do that in an effective manner, especially if you’re not a gamer yourself or want to trade in bulk. Nevertheless, ingame items have a potential to rise in price and act as a good investment vehicle, just like other tradable assets — otherwise, why would companies invest $6mln in a virtual item? Yet, currently there are no platforms that would meet this growing demand for trading.
The good news is that we aim to solve these problems at FiPME!
Being gamers and traders ourselves, we know how much pain all these shortcomings cause to the gaming community — and how hard it is to enter the space for somebody unfamiliar with it. That’s why we’ve decided to assemble solutions to these problems at one single platform that would be simple to use for everyone and will help people all around the world to get more pleasure from the gameplay. How are we going to do that exactly? Read about it in our next article!