34 ms·

Counter-Strike's player economy is in a freefall

• mkagenius 1y ago
  Interesting that a whole economy is based on fake supply constraint. Or is making butterfly knife really hard? It seems like NFT before NFT.
  • colechristensen 1y ago
    A lot of real economies are based on fake constraints. Or the constraint is a closely held secret that's pretty arbitrary and not based on any grand amount of skill or effort.
  • Incipient 1y ago
    Artificial scarcity has existed for ages. Watches, playing cards, cars, etc. Selling 10 of something for $1000 instead of 1000 of something for $10 is not new. Also builds brand value.
    • eru 1y ago
      See the discussion around the supposedly lost Van Gogh painting, eg at https://news.artnet.com/art-world/van-gogh-lmi-group-2602847 https://news.artnet.com/art-world/van-gogh-lmi-group-2602847 Nothing about the painting itself would have changed, but its market value depends very much on whether Van Gogh painted it.
    • hshdhdhehd 1y ago
      I feel watches and cars are different. You cant magically "print" 10000000 Bentley's so supply will be constrained and they are expensive to make. I feel the luxury is more tangible than just being rare.
  • raihansaputra 1y ago
    yeah CS skins is one of the biggest markets of digital-only-aesthetic-items before NFT came around (and now probably still bigger than NFTs). The main thing with NFTs was that there's no "central database", CS skins solely lives in Valve's database. making a butterfly knife for Valve isn't hard (in the past Steam Customer Service duplicated items lost in scams). It's hard for the players because they have to "gamble" for it through paying keys to open cases.
    • TZubiri 1y ago
      It's hard as in "it's hard to trick or manipulate the centralized database". Similarly making USD in a bank account isn't technically hard, but it's fucking hard to get a bank to tweak some numbers in your favour.
  • pols45 1y ago
    All this froth on the ocean surface is only possible in an economy where household net worth has been inflated to 150 Trillion.
    • omnimus 1y ago
      Yeah the measly peasants should have never gotten their hands on such luxuries as game knives skins.
  • est 1y ago
    it's not a fake supply CSGO knifes actually currency run by shadow banks providing RMB <-> USD convertion. Google for "挂刀"
    • stickfigure 1y ago
      This should be a top level comment, it is the "ah hah" that suddenly makes everything clear.
    • EZ-E 1y ago
      Can you explain the shadow banking / conversion angle? All I found was that selling knives was used to get a discount on steam balance thanks to price arbitrage. > "Selling Knives" (挂刀) refers to the technique of buying in-game items from 3rd-party (Chinese) trading sites like NetEase BUFF, C5, IGXE, and UUYP, and then selling them on the Steam Market to obtain a discounted Steam Wallet balance by capitalizing on price differences. I'm surprised the price difference did not disappear if people make that trade. Source https://github.com/EricZhu-42/SteamTradingSiteTracker/wiki https://github.com/EricZhu-42/SteamTradingSiteTracker/wiki
      • est 1y ago
        Both US and CN have a massive player base, they all need to buy games in their own currency You can buy games with Steam Wallet You can also buy/sell in-game items with Steam Wallet Now only if someone invents a commodity with a stable price. Hmm what could that be?
      • omcnoe 1y ago
        China notoriously has intense capital controls. It's difficult for ordinary Chinese citizens to take capital out of the country. CS2 items can be bought and sold in both USD and RMB, and can be transferred between Chinese and international accounts. It's not about Steam wallet balances.
        • EZ-E 1y ago
          Interesting. I'm curious though, assuming I am Chinese and I trade knives for USD - where would I be able to receive USD to evade capital control? Surely not my bank account or Steam wallet. Or is it for people with bank account in both countries? But in that case crypto could be more convenient? I'm puzzled
  • TiredOfLife 1y ago
    It is NFT. But because it's Valve its actually good. Because of reasons.
• elphinstone 1y ago
  Good. Too many game companies are running unregulated casinos aimed at minors with their lootboxes and pay to win mechanics.
• zingababba 1y ago
  I play on and off. It's crazy hearing people talk about how they've spend thousands on a skin.
  • vecter 1y ago
    No more than someone spending a few thousand on a tiny designer bag that can fit almost nothing inside.
    • messe 1y ago
      It's a consistent viewpoint to think that those things are more or less equally nuts. The only difference with the designer bag is that there is scarcity, but that's about it.
      • matwood 1y ago
        They are both about signaling wealth and status. What I don’t understand about the digital items is that the people who own them are often anonymous so why signal? Signaling wealth and status IRL can also carry other benefits that don’t seem to carry over digitally.
        • omnimus 1y ago
          They are not anonymous but pseudonymus. I assume for many people building up their pseudonyms status is as intriguing as their AFK one.
          • matwood 1y ago
            Good point. Still odd in that it doesn’t connect to the real world easily, though that’s likely just showing my age bias.
      • jillesvangurp 1y ago
        I know people that spend gazillions on vintage sneakers. They will literally go and buy some rare designer second hand pair of Nikes or whatever with some scarce design that they only produced a few off. Personally, I wouldn't be that eager to stick my feet into somebody's well worn sneakers. But apparently that's beside the point. Nike actually on purpose feeds that market by coming up with new limited edition designs. These people have enough shoes. They don't buy them because they need another pair of shoes. The value of money used to be based on gold. Gold has very limited practical value. It actually kind of sucks as a metal because it's not that hard compared to e.g. iron. The main value proposition is that it's pretty and shiny. But people that buy gold don't tend to even look at it. They just store it in a vault. Or worse, they get a digital receipt that proves they own the gold without ever seeing or handling it. The main value of that is that, if you wanted, you could make pretty and shiny things out of the gold bars. And because those pretty and shiny things are valuable, gold is valuable. And therefore people invest in gold. Not to make those things but to be able to sell it to others that might do those things. Of course the vast majority of people buying and selling gold has zero interest in doing that. Most gold ever mined is locked in a vault in bar form and will never be used for anything else than as an intrinsic token of value. There are a lot of things that have no value beyond subjective esthetics and the group thinking around that. My home country the Netherlands produced a lot of fancy paintings in the seventeenth century. Those are worth a lot now. They are extremely nice according to some. People visit museums to go see them. They are worth tens/hundreds of millions in some cases. Objectively, most people that visit museums wouldn't be able to tell apart the original from a good replica. And reproducing these things with high fidelity digitally isn't all that hard either. You can find high quality scans of almost any painting for free on the internet. And you would get most of the appreciation/emotion looking at those as you would get by looking at the originals. Of course, most people aren't that into this stuff in any case. But we appreciate these things because other people tell us they are valuable and we take their word for it. The original paintings keep their value mainly because such people keep reassuring us how rare and amazing these things are. That tends to get embarrassing/awkward with forgeries in museums where experts literally have failed to tell the difference. The value of things whether digital or real is based on social mechanisms for appreciating things. Some things simply are valuable because people agree for whatever irrational reasons that they have value. And then some people buy these things at the market rate because they enjoy having them. Whether that's original art on the wall, some rare sneakers, or a cool skin for a game character that you engage with for many hours while playing the game. The dynamic between the willingness of people to separate with their cash and scarcity is what creates the value. NFTs are weird mainly because they are digital receipts for something (anything) that has value. They are no different than a paper certificate of authenticity for a painting. It all boils down to the trust people have in the impressive looking stamps/signatures on the paper, or the blockchain shenanigans used to ensure authenticity for the NFT. Of course a lot of NFTs are silly. But in game worlds, ownership of skin is kind of limited as you can't really resell them easily or prove authenticity. Which is something that NFTs addresses. Which is why NFTs became popular in games. The value of game skins is as irrational as second hand sneakers are or the appreciation for shiny metals. Or gems. Or paintings. But as long as people buy those, they have value.
• tetrisgm 1y ago
  I play CS. This is good. The gambling economy and the creator economy of people pumping their marketplaces and gambling sites is really toxic. It extracts money from kids, all for a nice skin. Making them more affordable is going to make this more fair and sensible.
  • uvaursi 1y ago
    Remember back in the day when we just downloaded skin packs from some random Geocities website with obnoxious red text on black background and after going through the install.txt written in broken English/Italian, lo and behold your AK47 now had a proper arctic camo skin and it was so much cooler? What was wrong with that? Doesn’t gaben have enough money for his super yachts and sword collections?
    • jayd16 1y ago
      Its about showing off to other players. You can still do local game mods just fine but that's not what people are after.
      • ehnto 1y ago
        Which is an easy technical problem to solve, but the liability of abuse when sharing user content with other users is not palatable. It is also not impressive to others, not a status symbol, and that's actually the purpose of skins in the modern day. No one grinds 1000hrs of warframe for a skin just because they think it looks cool, they think it makes THEM look cool. They want people to be impressed that they had $2000 to spend on a knife, not that the knife skin was neat. The skin is an auxiliary component to the task.
        • eru 1y ago
          And making it cheaper wouldn't fix anything, I guess?
          • close04 1y ago
• hardwaresofton 1y ago
  Thought this might be a hilarious sign of the bubble popping (a run on cs skins) but nope: > Following Valve's Oct. 22 update to Counter-Strike, the second-highest-tier, Covert (Red), can now be traded up and turned into Knives and Gloves. Essentially, this means that a previously extremely rare and highly sought-after cosmetic is going to be much more obtainable for those who increasingly want it, reducing the value of Knives and Gloves on the open marketplace.
• adrr 1y ago
  Gambling mechanics for anyone under 18 should be banned. Children can't buy lottery tickets or hit tables in Vegas. Its crazy they can buy loot boxes that real life value.
  • beeflet 1y ago
    they can buy pokemon cards. To be honest, I don't think CS:GO or TF2 or the like are pro-gambling. You learn pretty quickly as a kid that the best way to get good items is through trading, not gambling.
    • episteme 1y ago
      With the second best way being gambling. Doesn't really change anything.
    • vincnetas 1y ago
      Where do the items used in trading come from? I guess Gambling.
    • voidUpdate 1y ago
      I'm honestly really not a fan of the collectable trading card type of games (MtG, Pokemon TCG, yu-gi-oh etc). You have to pay to have a chance of getting a good card, which makes the whole thing pay to win. It should be perfectly acceptable to print off the cards at home ("proxies") so you can actually make a set that works for you, without having to pay more for having specific cards that you want to complete your ideal deck. I personally often go to the huge bins of "shit tier" cards that my local game stores have, because I like to have some pretty cards (I often use them as bookmarks), but I don't play the game itself, so the actual mechanical value of the cards is meaningless to me EDIT: I feel the same way about things like Warhammer. I don't know about other games, but in Warhammer at least there is a limit on how powerful an overall army can be, so sure it may not look as visually good, but just having tokens that say "squad of soldiers" or "mega death tank of doom" should be perfectly acceptable too
      • sjw987 1y ago
• hamhamed 1y ago
  It made the reds (coverts) way more pricier, so all is balanced (somewhat). see here, doubling and more in price: https://steamcommunity.com/market/listings/730/MAC-10%20%7C%20Neon%20Rider%20(Factory%20New) https://steamcommunity.com/market/listings/730/MAC-10%20%7C%...
• ramesh31 1y ago
  Valve employs an army of economists (notably Yanis Varoufakis as alumn) to make these decisions. It was certainly purposeful and will balance itself out.
  • beeflet 1y ago
    this is what I think. The change is that 10 of the highest-level weapon textures can be traded for a knife texture: the result is that the supply of knife textures goes up, but the supply of high-level weapon textures goes down significantly more. It's not so much a depreciation of knife textures, as a distribution of this value down the chain of item rarities.
    • ExpertAdvisor01 1y ago
      It is 5 covert skins not 10
    • omcnoe 1y ago
      The broader impact is that it creates a lot of uncertainty around valuations in the market. This is probably the most impactful (on valuations) policy change made by Valve in the history of the market. Now there is an increased fear that more similar such changes may be coming down the pipeline.
  • protocolture 1y ago
    >Yanis Varoufakis I wont google him, but take at your word an assurance that he can be trusted with the highest levels of economic decision making.
    • probably_wrong 1y ago
      You might want to search him, though. As far as "highest levels of economic decision making" goes, he's not a bad choice - not uncontroversial, perhaps, but definitely qualified for it.
  • evrimoztamur 1y ago
    Yanis Varoufakis is now writing and warning us about digital feudalism, seemingly based on his learnings at his Valve tenure. Valve, as a digital feudalist, generates funds, practically for free, from both transactions of items and the lootboxes. It operates the markets on which digital goods are traded, taxes all sales occurring on these platforms.
• jalapenos 1y ago
  > Counter-Strike's player economy There's a what? I guess once you've maxed out wasted hours of time playing it, you start wasting money too? Less absurd than NFTs though I guess
  • someothherguyy 1y ago
    > wasted hours of time playing it What would you dictate that humans do instead to not be wasteful with their time? Comment on threads about games?
    • beeflet 1y ago
      I don't know, reading? Building something? Exploring the natural world? Sports? Not to say that all video games are unsubstantive. But the substance in exploring virtual world comes from its uniqueness, not playing de_dust2 for 1000 hours. No other form of entertainment or art is analogous to video games in terms of the maximum time you can spend on it with totally depreciating returns.
      • mashlol 1y ago
        Would you say the same if someone played 1000 hours of a sport?
        • beeflet 1y ago
          No. If you play 1000 hours of a sport, you will at least be stronger, more coordinated, more agile. But the downsides are more about repetitive strain injury and the possibility of screwing up your joints. Different benefits and downsides. Of course, a lot of guys are suckered into sports-related gambling these days too.
          • ang_cire 1y ago
            You don't think that you get better at CS the more you play it? Better coordination, better accuracy, etc?
• tamimio 1y ago
  $20,000 for a fake knife!? And I buy an item, a real one, and find later there was a cheaper price by few bucks somewhere else and I feel like an idiot.. crazy!
  • chihuahua 1y ago
    I can't even imagine how rich someone must be in order for a $20,000 imaginary knife with only cosmetic value to seem like a rational purchase.
    • esseph 1y ago
      24mil a year, 20k would be 1 hundredth of your monthly salary.
    • cylemons 1y ago
      They are doing it for speculation. They buy it for 20k and sell for higher to profit
      • Gigachad 1y ago
        Yeah for a digital item with easy trading it's more like buying a stock vs a physical item which instantly depreciates. Basically holding $20k in an alternative form vs spending $20k.
    • devsda 1y ago
      It is more harmful for those who cannot afford to spend 20K, 2K or even 200 but does anyway out of ignorance or stupidity.
      • messe 1y ago
        You forgot addiction, which should not be reduced to just ignorance or stupidity.
    • tonyhart7 1y ago
      "I can't even imagine how rich someone must be in order for a $20,000 imaginary knife with only cosmetic value to seem like a rational purchase." its as real as people buy billions using made up money (BTC)
• stodor89 1y ago
  Counter-Strike's pLaYeR eCoNoMy shouldn't have been a thing to begin with.
• neilwilson 1y ago
  So high prices induce new supply in a market to relieve shortages and the “economy is in free fall”? Sounds like it is working as it should. Those with oversight fixing supply in response to price signals when the private system is unable to. Wouldn’t it be nice if those in charge of the economy in the real world made the same sort of intervention.
  • Gigachad 1y ago
    The supply of digital knife skins is infinite and free. The only reason they hold any value at all is because a company artificially restricts them. Doesn’t really tie in to actual markets involving physical item.
    • yard2010 1y ago
      Isn't it the same with USD to some extent?
      • chii 1y ago
        only to the extent that they are both artificial. The totality of USD _represents_ the totality of all resources that exist under the control of the USA (ala, the people, gov't, companies etc, as well as any natural resources). The counterstrike skins don't represent such real life physical resources.
        • tonyhart7 1y ago
          You retelling how money works on how money works comment USD is human created artificial item, as real as human believe that skins in video games worth something "The counterstrike skins don't represent such real life physical resources." it represend steam wallet currency
          • chii 1y ago
            my specific point is to claim that skins are not a currency - the crucial difference between things that are both artificial.
• ExpertAdvisor01 1y ago
  Unfortunately there was a suicide in china , because of this crash.
• hhh 1y ago
  People love buying unsecured securities and then being upset when bad things happen
  • deleted 1y ago
    [deleted]
• maxbond 1y ago
  People Make Games did a story on this market. https://www.youtube.com/watch?v=eMmNy11Mn7g https://www.youtube.com/watch?v=eMmNy11Mn7g [36m]
• system2 1y ago
  FYI some items go for $1.5M. "The GOAT of expensive skins in CS2 is the Karambit Case Hardened in the "Blue Gem" pattern. While the original is costly, one Factory-New variant with pattern 387 reached a staggering $1.5 million! The rarity comes down to its blue pattern, which is incredibly rare on a Karambit."
  • tasuki 1y ago
    What does "factory new" mean? That it... hasn't been scratched? Is that... how Counter Strike works?
    • jsheard 1y ago
      Each instance of a CS skin is assigned a random amount of wear between 0 and 1, so two copies of the same skin can be worth more or less money depending on their condition. To be clear the value is fixed, actually using a skin won't make it dirtier. Factory New is the highest tier with a wear value between 0 and 0.07. The game itself only distinguishes between those ranges of values, but it's possible to query the exact number via an API so I think traders will even price that in (e.g. Factory New 0.02 is worth more than Factory New 0.06).
      • Am4TIfIsER0ppos 1y ago
        Now that you explain that aspect of these dumb skins I now think they are even dumber. Thank you.
  • salamanteri 1y ago
    I find it funny that the person who owns this skin was offered $1.5 million over 4 years ago, and he said it was too low so he refused to sell it. There is a chance this skin won't sell at all anymore, not for that price at least.
    • Cthulhu_ 1y ago
      It's like that with any investment, cash out or wait for it to go up? I mean I could've bought more or kept my Tesla stock and earn more as it became a trillion dollar company, but I had lost faith in it by then and took my gains.
• Bengalilol 1y ago
  I bet this is an on-purpose move by Valve, and I view this as a sane action. [1] Having a game where some players only play in order to win money is, for sure, a no go. If the game is fun, then players will keep on playing it. It may also keep some money thirsty (sometimes very toxic) people at the gates. It is also smoothing players' frustration and shopping-spree habits in order to obtain a rare item. If you have the ability to trade N rare items for another rare item then you quite surely may obtain any cosmetic item you want for a much lower investment (less boxes to open). The 'grey market' will adapt to this new value. That's also a lesson on how a closed economy (and open ones too, to some extent) can collapse based on a single actor controlling the rules. That's fair to learn. [1] EDIT: and probably a preemptive protection for any future legal threat (as some countries tend to prohibit money gambling in games)
  • jackgavigan 1y ago
    > That's also a lesson on how a closed economy (and open ones too, to some extent) can collapse based on a single actor controlling the rules. That's fair to learn. A timely lesson!
  • gquere 1y ago
    They did this to take a bigger cut of the market because most trades happened off-platform. This new update ensures that they will sell more of their new items through their shop (contract cases) because it's going to be the only way to get the red items to fuses into "valuable" knives. They're rotten to the core.
    • Bengalilol 1y ago
      Any market maker, such as Valve, is free to establish the rules of its own "reality". I understand your analysis, and I certainly failed to mention that point, but making the overall value less attractive to speculators is not evidence of being "rotten to the core".
      • gquere 1y ago
        They're running an online casino directed at children and have made specific adaptations to bypass legal regulations in several countries.
• rolandog 1y ago
  I'm starting to suspect that market health comes at the expense of people's.
• novoreorx 1y ago
  Took me sometime to understand why these items can be so expensive, The CS trading market makes NFTs look like child's play.
  • pnt12 1y ago
    That's hyperbolic. You had high profile celebrities advertising NFTs, and stuff valued at millions, that's a whole other scale. Skins have their place when they're modestly priced, as they also have quite a modest impact. But the whole gambling, artificial restrictions and trading is quite suspicious indeed.
    • Cthulhu_ 1y ago
      NFTs failed because organized crime didn't latch onto it like they did CS knives. Only half-joking, the other half is stuff like grey market money conversion as mentioned in another thread.
• zdc1 1y ago
  CS is wild. I used to play and have like 40+ cases from free post-match drops. Because those cases are no longer supplied, the prices have been creeping up and to the right for years now; from $0.40 to $20+. I don't even know why people still buy these, but I will basically never have to pay for a Steam game again.
  • imdsm 1y ago
    Could you explain more? I played CS 1.6 back in the day, and then we moved onto CSS, but what is it like these days?
    • zdc1 1y ago
      I haven't played in years but the core game doesn't seem to have changed much. They tweaked lots: textures, hit-boxes, spray patterns, rankings, game modes, grenade types, guns, etc., but if you play a ranked match it will still be a 5 vs 5 bomb defusal. The (sellable) lootboxes give you weapon skins. This is cosmetic, but the temptation to express yourself or flex with pretty guns is tempting.
  • weakfish 1y ago
    Yeah, I recently made ~$70 when I realized this and cleaned out my inventory from when I played CS:GO in 2015ish
  • Cthulhu_ 1y ago
    I had to check but I barely played CS:GO. I have a 5 year veteran coin, untradeable, that's it lol. I also have a $0.03 gun for Payday 2, lol. Nearly 300 "trading cards" but they're all valued between $0.03 and $0.10 at best. Weirdly enough, even the randomest games still get some trading volume. I seriously doubt people are buying cards from random games to complete collections in those volumes, and fully expect it to be bot driven and / or some kind of scam. But I assume Valve gets a percentage for every transaction so they don't really care.
    • HaZeust 1y ago
      People do it for boosting gems so they can level up their Steam profile.
• neilv 1y ago
  > Prior to the most recent update, some Knives, like a Doppler Ruby Butterfly Knife, could fetch around $20,000 on third-party storefronts like CSFloat. How many whales are buying an in-game cosmetic for $20K for their own use? How much of this is day-trading? How much is investing? How much is fabricated by trading platforms? How much is money laundering? How much is a criminal payments channel?
  • Neil44 1y ago
    I thought the same. Surely the number of people buying a 20k knife so it looks good when they play must be extremely low. The bulk have to be speculators.
    • skeaker 1y ago
      This is true and it is also why a large portion of the playerbase likes this change. It makes many of these knives much more affordable for people that actually play the game.
    • Cthulhu_ 1y ago
      The number is probably nonzero but those are the whales, the kids of the super rich who have millions to blow on trivial shit. The rest will be in it for trading, for the potential that either another trader will buy their stuff for more (in the hopes that it will appreciate more) or one of those whales will. But it's probably mostly money laundering, I wouldn't be surprised if the crypto market is tightly integrated in it too. Buy using crypto, sell using fiat, ???, cash.
  • doug_durham 1y ago
    I think the majority is money laundering.
• adriatp 1y ago
  It seems more like a market strategy than an economic collapse. Afterall they control the skin market, and this will lead more players to buy very expensive skins (cheaper than the day before yesterday, but still quite pricey). Also, not all skins went down in price, the red ones from collections with gold skins even increased in value.
• bob1029 1y ago
  This is good news. It seems some parts of the gaming industry are starting to recover. I contend that games like Team Fortress 2 were also ruined by the F2P loot box crap. It's not that they took anything away, but it attracted a certain kind of customer that is very unappealing to the prior base. The "hats" made me walk away from TF2. No one on average seemed serious about the core gameplay anymore. Taking away that up front cost to play cheapened the experience for the existing paying customers. It's like going from shopping at Whole Foods to Walmart. Robinhood is your go-to application if you want to gamble legally and efficiently without (as much) fear of a single actor ruining your day.
  • SwtCyber 1y ago
    Changes like what Valve just did in CS are a sign they're rebalancing things a bit
  • fruitworks 1y ago
    The Freemium model made TF2. Most of the good updates were after the F2P update, and almost all of the playerbase.
• Jhsto 1y ago
  I asked friends who play why would Valve do this. Answers were divided to: 1. Valve wants to avoid regulatory scrutiny over loot boxes 2. Valve wants to limit prices; the Steam marketplace only allows items up to 2500 usd to be traded. By averaging out the item prices (knives drop, covert-class increases) they are able to indirectly limit the usefulness and harmful side effects (money laundering, decentralized liquidity) of 3rd party trading sites
• crimsoneer 1y ago
  I find it fascinating how the "HN Hivemind" (and yes, I know not a real thing, but the trends seem pretty consistent) is so opposed to kids playing with lootboxes, but also very angry at governments trying to impose age verification.
  • chii 1y ago
    They are completely unrelated. Some people are opposed to kids gambling (or gambling in general) - an understandable sentiment even if i dont agree. Some people are skeptical of the gov't and the implications of proper identification on the web (which is required for age verification). Whether you are pro or anti gambling doesn't make or change this skepticism.
  • bob1029 1y ago
    > is so opposed to kids playing with lootboxes I think the HN hive mind is more opposed to the concept of loot boxes in general. We don't need to go much beyond that. It follows that a puddle of industrial waste would cause trouble if it began to flow downstream.
  • candiddevmike 1y ago
    I'm against lootboxes in general, even for adults. It's a skinner box mechanic.
• thenthenthen 1y ago
  There is a whole skin stock market for exchanging Chinese Yuan to US Dollar outside of the banking system: https://www.iflow.work/ https://www.iflow.work/
  • y-curious 1y ago
    Yeah, IIRC China has some arbitrarily-low limit to how much foreign currency a Chinese citizen can possess at one time. This is clever
    • thenthenthen 1y ago
      There is also a limit to what amount you can bring in and out. For foreigners it depends on how much tax you payed over your salary…
• nkrisc 1y ago
  How are kids under 18 paying for stuff like this? What means of payment are they using that their parents don’t notice? Genuine question, been at least 20 years since I was that age.
  • jmcgough 1y ago
    Kids aren't the ones spending $12k on rare skins, they're buying keys to open lootboxes.
    • nkrisc 1y ago
      Same question. How are they buying things online at all? Whether $12k or $1.20?
      • salamanteri 1y ago
        Counter Strike has weekly drops, you get a case and some random skin. Usually those are not worth much themselves, except maybe for the case. People then sell these weekly drops on the community market and get Steam balance. Sell enough to afford a key (+case). In other cases kids might have access to their parents payment methods, or they can buy prepaid cards from places like gas stations. I used to do this to buy games when I was younger and my parents wouldn't buy games for me. Valve doesn't prevent anyone from opening cases. There is no KYC.
  • gambiting 1y ago
    You trade up. I have a friend who has thousands of dollars worth of CS items, he has never spent a single cent on any of them - you play, you gain some items, you sell them which adds money to your steam account, you use that to buy something else you think might be worth something in the future.
    • nkrisc 1y ago
      So kids aren’t actually spending any money?
• solsane 1y ago
  > $1.84 billion in value Correction. $0 in value. Skins do not exist and are worth exactly $0. If you spend money on skins, they are worth… $0. It’s all a large scale grift money incinerator where the only winner is Valve. + whatever pleasure you derive from it, ig. I can understand loot box addiction, but paying $20,000 for valve character dress up? Not even like a Peter Griffin player model or something, but a slightly different looking knife? Madness Persp: tf2 enjoyer
  • bluecalm 1y ago
    The problem here is that's not only Valve that is a winner (that would be expected and fair as that's their game) but also scam casino operators.
  • deleted 1y ago
    [deleted]
• TheServitor 1y ago
  Yeah if you're paying someone's yearly salary for a tiny patch of cosmetic pixels in a game I basically don't GAF what happens to your money. We deserve this timeline.
• SwtCyber 1y ago
  It's wild how a virtual knife in a 20-year-old shooter can have more volatile market behavior than some national currencies
  • tonyhart7 1y ago
    "It's wild how a virtual knife in a 20-year-old shooter can have more volatile market behavior than some national currencies" it literally not, not until latest update its even better performing than stocks, thats why china invested millions into this
  • Cthulhu_ 1y ago
    How is that wild? Currency values are controlled by governments and international market forces, virtual knives by the publisher and trading platforms. Valve can collapse the whole market with one proverbial press of a button, you'd need to be an autocrat to do that in real life and even then it wouldn't be easy.
• Raed667 1y ago
  Can someone explain to me how such an "economy" can grow so large ? How many people actually care about the skin of the CS knife or gun?
  • strix_varius 1y ago
    This is what I'd like to know as well. $20k - $12k at "dumping stock" prices! - for a digital item for a video game is just incomprehensible to me. But clearly it's happening, so I'd like to understand better the venn diagram of people who have $20k completely disposable and people who are so highly motivated by their appearance in a video game. My assumptions are obviously wrong.
    • xboxnolifes 1y ago
      There is a number of wealthy individuals who whale on video games. Thats at least a part of the venn diagram. Having money doesn't remove your vanity. But the skins are also used as a money substitute for gambling and as an intermediate item to exchange money between currencies. The skins "just happened" to be a stable enough store of value to create secondary markets.
  • BOBOTWINSTON 1y ago
    Short Answer: The whys can just be boiled down to gambling, weird investing, flexing wealth, sports fandom stuff, or wanting to invest in your hobby. Long Answer: It is a bit of a perfect storm, and you'll get a lot of mixed answers to this, however these are the reasons I see roughly in order of their impact. 1. Skins are the vehicle for gambling (you bet them instead of $). The loot boxes definitely get people hooked, but the skin gambling arena is a whole different beast. 2. Valve, whether by luck or skill, created a perfect system of scarcity. I can elaborate a lot on how this is done. The rarity of the skins is one thing, but the float system giving each drop a mostly unique appearance causes a 2nd tier of scarcity that adds a lot of value. They hired a bigwig Greek economist to develop this system. 3. The market has been stable-ish for long enough that some people view it as a legitimate safe investment. I have heard this is very popular in China, but I really don't know how this behavior is spread out globally. I have a friend with over $100k in the market (well, he did before this). 4. Almost everyone I know who plays seriously has at least invested a small amount in the game. I play with roughly the same 8 people, and 7 of us all spent $1-2k on the game, with inventories ranging from $1-5k.
• imchillyb 1y ago
  Building a business off of another’s business is risky. There is a non zero chance that the original business will take steps to manipulate, change, alter, or outright control the outcome. That’s what Valve did. Tomorrow Valve could decide that the value of crates is too high so they drop the price of crates to a penny a piece. What would that do to this 3rd party market? Poof.
  • Ekaros 1y ago
    I doubt they will touch crates. There are hundreds to hundreds of thousands of transactions on each type each day. And they take their cut on each of those. One example I checked was about 0.20 going to Valve on each sold on market. And they sold 280 thousand of them in last 24 hours. So 56 thousand in single day by minimal effort.
• lunias 1y ago
  Make a regulation that if you have RMT in your game then you have to prefix the official title accordingly, i.e. "RMT: ${my_game_name}". It appears that Valve has made a change that is good for the game, but bad for the merchants. Gambling mechanics in a game are fun, but actual gambling needs to be very explicitly flagged as such and come with a lot more restrictions. I'll surely defend a person's right to gamble, but I find it insidious how culturally acceptable actual gambling has become.
  • xboxnolifes 1y ago
    Every game made after 2010 would just have RMT in the title.
• lenerdenator 1y ago
  Video games shouldn't have economies.
  • epolanski 1y ago
    Unless it's MMOs, then those having economies is unavoidable.
    • Cthulhu_ 1y ago
      I think the previous commenter meant real-life economies, not in-game ones so much. Although with any MMO or any multiplayer game with trading for that matter, there will be a grey market of trading items, gold, or characters for real money, and a bot market to go with it.
• brachkow 1y ago
  1) My childhood which coincided with peak of unregulated lootbox-skin markets (around 2013-2015). And I and my CS-playing peers had a happy childhood because of… skins gambling. Most of us were able to earn money to buy a pizza or some additional snack betting on teams, or trading keys. Some exceptionaly lucky or with natural born trading skills were earning serious money — from quater to multiple salaries of an adult. Maybe because casino-tourism in Belarus made people here slightly less prone to gambling, or maybe parents were not used to gift their children micro-transactions — e-sports betting, gambling and trading was financed mostly via in-game drops, returns from these bets and trades, and of course, sometimes, pocket money (which, on average were like 3$ per week). That said, in modern times where micro-transactions are so common that you are ok with giving your kid V-bucks as birthday gift, I want say that anti child gambling narrative is a good thing. 2) At that time, and afaik it is true even today — you could use skins as a virtual currency to pay for a real things. It was proto-cryptocurrency/NFT in terms of being KYC and AML free. This is really big market. There are aritcles on NYT about real life terrorists buying real guns for skins. But without US-centric sensationalism, I beleive you can still pay for VPN or ChatGPT in very sanctioned Russia in CS skins. This can be also done with crypto (and mostly done now), but crypto has learning curve and you already playing CS.
  • AgentMatrixAI 1y ago
    Reading this makes me sad at how different my generation was compared to the new ones. I remember when Counterstrike 1.3 came out and everybody at my school were talking about it and playing it. We would line up at computer labs before lunch started, pay a toonie and entire room would crackle with in-game radio comms, AK47 and HE going off with a room full of people side by side excitedly shouting for an hour until lunch was over. When classes finished we would head back to the lab again and we would play endless round of de_dust 1 & 2, de_rats, fy_iceworld and the occasional as_oilrig and the rush of being the VIP and experiencing my first headshot. Sometimes the admin running the labs would add fun mods like no gravity and weird stuff.... It was such a memorable and social fun time and it runs in complete contrast to the everything-gambling culture that has taken foothold....
  • hhmc 1y ago
    > Most of us were able to earn money to buy a pizza or some additional snack betting on teams, or trading keys. Unless I'm missing something, this is zero sum -- so it follows that a bunch of people mostly lost money (perhaps also during their childhoods)
• Beijinger 1y ago
  Play it here in the Browser: https://play-cs.com/en/servers https://play-cs.com/en/servers
  • Beijinger 1y ago
    Why the downvote?
    • bangaladore 1y ago
      Because it's not discussion, but more importantly, this post is referring to Counter Strike 2 on Steam. Not CSS in browser.
• zzixp 1y ago
  The Steam Deck has essentially enabled money laundering through Steam. Before the Deck, if you sold skins on the marketplace you could only use your Steam credit to buy games on the platform, or you had to do a shady 3rd party Paypal exchange. Now, you can use your Steam credits to buy a device with value that you can resell IRL.
  • hackernewds 1y ago
    How does that enable money laundering? Steam deck is also bound to AML rules
    • dewey 1y ago
      If you are in that business the question isn't really if it's against the rules or not, but if it's possible. You can use your in-game currency that you've gotten through whatever means to get a physical product that you can then resell for cash.
  • Antelope13 1y ago
    Before that, you could also buy the Index VR set, which probably aren't as liquid as a Steam Deck. I won a Dota chest that could only be acquired by watching tournament games in-person, and after letting it appreciate for two years it nearly covered the cost of an Index. I was thankful because I had no idea what to do with hundreds of dollars in Steam credit.
    • azemetre 1y ago
      Nice haul, I remember thinking I was so slick for trading a TF2 hat for Civilization 5.
  • y-curious 1y ago
    I think most people are fine with the “shady” selling sites when it comes to laundering. I sold my CS inventory a week ago (lucky me!) and I had no problems with getting the cash. Reselling steam decks feels very inefficient
• ge96 1y ago
  I briefly looked into this, there was a freelance job of making proxy bots to scrape the steam page for prices, the number mentioned here is even crazier than what I saw eg. $12K for something vs. $2K for a Karambit knife skin. I didn't get far with the project, was harder than I thought as the proxys you can rent were blocked at least the few I tried at the time. The problem was the rate of checking it was I can't remember hundreds of times a second to provide a "real time" ticker.
• GNOMES 1y ago
  This article is making me laugh. Guy I used to play Diablo + Destiny with mentioned once that he had just sold a knife in CS for 4k, and was going to buy his first (used) car with it. We thought he was joking.
  • simlevesque 1y ago
    I sold my old skins CS from 2013 last month. I bought a Pixel 10 Pro with the proceeds and I still have some cash in my wallet. So this article is very funny to me too. edit: I did try to warn you all: https://news.ycombinator.com/item?id=44943123 https://news.ycombinator.com/item?id=44943123
• DataDaemon 1y ago
  Deflation.
• Ekaros 1y ago
  I think this is smart move. Basically any item with price higher than 1800 is useless for Valve. As that item can not be transacted on Steam's marketplace. As such forcing prices lower than this means more transactions can happen there and Valve gets to take their 15% cut on each of them.
  • a3w 1y ago
    1800 what? USD, steam points, EUR?
    • Ekaros 1y ago
      USD. Then converted by some rate to local currencies.
• rewqaz555 1y ago
  I get why they wanted to do this, but I don't get why they made it this way, I mean yeah it makes a bit money in short term, but creates terrible problems long term. First of all having 3 billions less in economy means we are 3 billions closer to recession. Worth keeping in mind that games are not essential. Second thing is trust, without it whole steam can implode. Whole business is based on infinite purchases. Third thing is people may do harm to themselves and this usually brings eye of Sauron.
  • mikkupikku 1y ago
    People holding virtual cosmetic items that nominally had some value as collectables doesn't mean the whole thing was actually worth that much to society. If everybody tried to cash out their collection they would have soon found there was nothing close to 3 billion in value. The prices of these things were inflated by gamblers using them for speculation. And generally speaking, anything that teaches gamblers a lesson is good for society in the long run. As for it collapsing Steam; not a chance. They didn't take away anybody's games, and that's what Steam is for to the overwhelmingly majority of users. The gambling addicts are a small minority and generally an annoyance to everybody else.
• wnevets 1y ago
  "video game player economy" shouldn't be a phrase that exist.
  • asacrowflies 1y ago
    I mean a lot of games entire point/gameplay is economy like Eve online.... There is such a thing as a fun pro player version of this.... But real life money incentive makes it gross or scammy.
• CivBase 1y ago
  > Prior to the most recent update, some Knives, like a Doppler Ruby Butterfly Knife, could fetch around $20,000 on third-party storefronts like CSFloat. > Now, that Butterfly Knife mentioned above? It's going for around $12,000, as people are essentially dumping their stock, with 15 sold over the past 16 hours at the time of this writing. Why on earth would anyone think an item in a video game is a good store of real-world value? Who are the people buying these items right now for $12k? How the heck did we get here?
• PeterStuer 1y ago
  It's complicated. Many "loot" systems in games fall somewhere between pure gambling (roulette, lottery) and a skill/effort based component. E.g. in popular MMOs "mobs" have loot tables, usually dropping worthless stuff on kill, but with a 0.0001% chance of "awsome". You can kill these 5/sec when geared up. Is this "gambling"? You can also buy "gold" for real dollars to buy those items of the "auction house" from people that have grinded the farm.
  • klustregrif 1y ago
    Poker is also skill based and also gambling. The concept that gaming lootboxes isn’t gambling because there’s some tangential element of skill involvement is just a strange way trying to protect something that is obviously gambling. It’s not complicated. The only complicated element is that these business grew large enough to get lobby orgs influencing politicians before the law got effectively enforced. You won’t ever see a casino with kids running rampant getting away with a shrug and “how are we going to enforce age restrictions” yet gaming companies get away with this all the time.
  • Cthulhu_ 1y ago
    It depends on the game; notably, FFXIV does not allow trading most of the drops you get from the boss fights, so anyone that has a rare mount from one of those "earned" them themselves. Of course, there's also a market for characters - there's bot / player farms of people leveling characters and acquiring these rarities which then get sold to whales. I don't believe it's a particularly big market though. There is also a market for leveled characters, as people don't want to spend the time to do so themselves, but they (and I'm sure all other MMOs too nowadays) offer a paid for level boost that takes you to the current max level - 10, at a price point that directly competes with bots. One issue XIV still has is gold farming and selling bots, they don't offer a means to directly buy gold. Closest thing is buying pure white/black dyes for real money, which can be sold in-game. I suspect it's a PR tradeoff, that is, "boo at people just buying gold". Of course, XIV has a bit of an inflation issue I think, not enough money sinks. They'll add a new mount that costs 7.5 million in an expansion which will remove some money from the economy, but I don't think it's enough.
• rcx141 1y ago
  I must be really old now, I read that story without the slightest clue what it was talking about
• riotnrrd 1y ago
  I used to work at Valve -- on the CS:GO team, no less -- although I left nearly a decade ago. I don't know what prompted this change but I have some suspicions. Even when I was there and the loot box system was new to CS:GO, there were concerns that a lot of trading was happening outside of the marketplace. The trading happened elsewhere because you can't have more than $300 in your Steam wallet (more than this would trigger some banking regulations that Valve wanted to avoid), so anything more valuable than that had to happen on 3rd party sites. We didn't want this for three reasons: we'd lose out on the marketplace cut (10% of all sales I think?); we didn't want people grinding the game to earn money from rare drops; and finally because 3rd party trading ended up creating a lot of scams and therefore angry players. At the time, we didn't see any way around it: we couldn't prevent people "gifting" items to each other, and despite omniscience and omnipotence in the game and Marketplace, we weren't confident that we could rejigger the drop rates and rarities to lower the maximum perceived value of the fanciest knife to be under the $300 limit. I suspect that the CS:GO team finally decided to do something about it and chose this. If the team is anything like I left it, they probably modeled this extensively (we had data on nearly every game ever played in CS:GO and complete Marketplace data), and discussed the change with the TF2 and DOTA teams, who also have to deal with this, and decided that the short-term fury of a small fraction of the playerbase was worth it. I wonder if TF2 and DOTA are having similar problems and, if so, whether this change will be rolled out for those games, too.
  • Hikikomori 1y ago
    >we couldn't prevent people "gifting" items to each other Why not remove trade and use an auction system with a limit? Or not allowing trades under market price?
    • babypuncher 1y ago
      Or just skipping the predatory gambling crap entirely and selling the skins directly like every other live service PvP shooter these days
    • kiddico 1y ago
      Because people literally want to give gifts to each other sometimes. A friend I met playing CS get each other a skin every year for Christmas.
• sleepybrett 1y ago
  My Tulips!
• nyeah 1y ago
  This is exactly why my family never hoarded tens of thousands of dollars worth of arcade tokens back in the 1980s. Creating a secondary cash market for tokens wouldn't have changed my parents' minds about that.
• gadders 1y ago
  I wonder how long until we get the first prosecution for someone insider trading on game loot knowledge.
  • mmooss 1y ago
    What stops Valve from manipulating the market for their benefit?
• rldjbpin 1y ago
  a few days removed, this felt like a knee-jerk overreaction from the market. similar things have happened around other major changes related to the skins economy in the past. [1] prices have slightly recovered in some cases, but indeed the new inputs for the trade-ups have been inflated beyond measure. in the past, before trade restrictions, one could "trade up to a knife". now it is literally possible through trash skins you can receive in drops in game. if the lower prices these items are here to stay, then the highest tier stuff will become even more attractive and valuable in the long run. [1] https://news.ycombinator.com/item?id=21392007 https://news.ycombinator.com/item?id=21392007