It Costs How Much?! Unraveling the Economics of Gaming Skins
Even though gaming skins aren’t tangible objects, they are flying off their digital shelves. While most players spend just a few bucks on skins, there are some pricier digital collectibles. From changing your avatar’s appearance to slapping a design on a gun, the options are endless and vary in cost.
Figure out exactly why these virtual cosmetics are so popular, what makes them sometimes so expensive, and how to navigate smart financial investments in video game skins.
Understanding the Games Market
To understand why video game skins sell, you must first understand the broader gaming landscape. While game developers can’t predict exactly what will be popular with gamers, they can capitalize on trends and feedback from the gaming community. Free-to-play (FtP) games are highly coveted at the moment. If they are easily downloadable and have high-quality gameplay, there is a great chance of success.
Take, for example, Fortnite and Apex Legends. These games are FtP, but they include microtransactions. Microtransactions are in-game purchases that are made by players that ultimately have turned the gaming skin market into a $50 billion industry. People spend real money to upgrade their cosmetics in the game, and this often means several players will far outspend what they would have initially on a paid game. Over time, their microtransactions turn into hundreds of dollars spent.
Some skins, however, cover that investment all at once. They may even come at a higher cost. It just depends on what gamers are willing to spend. To understand gaming consumer behavior, you must understand how market forces shape financial trends. Supply and demand are heavily influential on the pricing of items, including digital goods.
Rarity and Exclusivity
Designers of game skins must have a firm grasp on what is popular in their particular game. Then, they can make those items hard to come by. This increases the demand, in turn, because people are looking for the rarest, most exclusive skins. Obtaining and equipping these skins serves as not only a status symbol but also a major dopamine hit.
For example, skins could be acquired by opening randomly generated loot boxes. Each skin will have a rarity factor, and the most coveted skins will be doled out scarcely and at random. People assign greater value to scarce items and tend to seek them out to feel powerful or get in on something exclusive. This can incentivize players to keep coming back and completing missions or joining events.
Another way players can acquire rare skins is to earn them by doing increasingly harder tasks. For instance, you may have to beat a high-level boss to earn the rarest skin for your character. This is a rewarding experience for gamers, and the skin is a visual cue to other players that they have earned their keep. However, this is a difficult task and not everyone is guaranteed to be able to get the skin, so that’s where pricing comes in.
Community Dynamics
The price of skins also depends on the discourse within the gaming community. As a whole, gamers dislike it when there are too many internal ads, prompting them to spend money at every turn. If it’s impossible to progress in a game without spending money, this feels unfair and like a cash grab. Conversely, well-placed collectibles can be extremely successful.
For example, Counter-Strike: Global Offensive (CS GO) has some of the most expensive skins in the gaming game. CS GO skins are so expensive because they have assigned a rarity scale that is enticing and fun for the community to follow. Players can speculate on which skins will be discontinued and what will come next, leading to an enjoyable experience bonding with community members.
Skin Betting and Skins as Currency
Aside from purchasing or earning skins in-game, there is the option to get into skin gambling. Skin gambling is a controversial practice that involves buying skins to then use as virtual tokens when betting on eSports or other games. The popular PC gaming platform, Steam, tried to integrate skin gambling in 2011, and external sites like CS GO Lotto followed suit.
However, the ethics of allowing young players to essentially participate in sports betting have been called into question. Even if you are old enough to gamble, the addictive nature of gambling can have you spending money to buy skins that you don’t see a return on.
How To Invest Wisely
If you’re going to put money into the gaming skin arena, it’s best to be keenly aware of your money personality. Financial behavior may feel unrelated to gaming, but in-game transactions will quickly find a way to sneak into your gaming experience.
The four main types of financial personalities include spender, saver, optimist, and investor. If you are a spender, you tend to spend for instant gratification. This can lead to in-game skin purchases that could lead to financial trouble down the road if you aren’t careful.
Similarly, optimists believe that every financial decision they make will turn out OK in the end. This could also wreak havoc on your finances if you aren’t acutely in tune with the gaming market and how to spend your money on skins wisely. Savers are less likely to spend money they “don’t have” on gaming skins, and investors are more likely to buy skins with long-term returns in mind.
If you want to purchase the pricier skins, an investment mindset can help you make your money back and more down the line. You may just want a one-off skin to make your avatar feel more like you or look cooler. Just be aware of your financial tendencies, and research the gaming skin market to stay abreast of trends. This way, you can decorate virtually to your heart’s content while staying responsible.
