( coin rattling ) ( game sound effects ) Alex: I've been playingvideo games for about 25 years.
One of my first memorieswas begging my parents for a quarter at the arcadejust so I could get a littlebit further at “Galaga.
” Games used to be simple.
You pay for the game, you play the game.
But eventually, that all flipped.
Instead of paying to play.
– ( machine gun firing )- .
you could be playing to get paid.
Whether that's from streaming or e-sports.
Emcee: ( shouting )He just made history! Three million dollarsin prizing! Alex: But there's another economy at work, where players can buy in-game items for real cash.
This flaming maceis in “Echoing Fury.
” In 2012, it was sold for roughly10, 000 real American dollars, making it one of the mostexpensive video game itemsever sold.
Which brings me to my question: “Why would you spend money in a video game?” ( music playing ) ( light buzzes ) Games have taken upyears of my life.
I've spent more than a year on the games “Counter-Strike” and “World of Warcraft, ” and as you can see, I was a pretty serious gamer.
No! Over the last 20 years, developers have made it possible for you to spendmore money on games.
I sold my first-ever Quest account on eBay for about a hundred bucks.
And years later, I paid my rent by playing “World of Warcraft” and selling the gold I made.
( thunks ) What's up? – Oh, are we doing this?- Yes! Welcome! So when we talk abouta virtual item, – in a video game.
– ( laughs ) .
these are a range of itemsand collectibles that can be bought, sold, traded, all depending on – the game that you're playing.
– These are things like.
– skins and weapons and.
Sometimes they can makeyou more powerful, but – sometimes it's just clout.
– Showin' off.
– Yeah, exactly.
Take “World of Warcraft”.
In that game today, you can buy this.
This is Hogrus, a flying pig that you canride on.
– A flying pig?- Yeah.
Is this also $10, 000? This is only $25.
You can get the snazzy”Fortnite” dance.
It's called “Tidy, “for about 500 V-Bucks.
That's “Fortnite's” currency.
And those V-Bucks canbe purchased for 5 realdollars in the game.
What–what is the Tidy? Uh.
it's like a window-wipedance move.
– I haven't actually seen it yet.
– ( laughs ) This is a skinin the game and basically it'sjust like a– it's a visual accessorythat changes the waythis gun looks.
And this particularskin sold for$61, 000.
– $61, 000?- Nuts.
It's just a commemorative, special version of a skin that was very rare.
There are many ways to buy virtual items.
Free-to-play games like “Fortnite” allow you to buy items directly from the game using an in-game store.
– ( coin rings )- But other games use online marketplaces, usually run by the gaming companies.
In this case, players buy and sell items among themselves, and the game company takes a cut.
But there's also another way.
And it largely exists beyond the control of gaming companies.
These transactions take place on third-party sites.
They're unregulated and mostly against the rules.
But players still use them to buy and sell items.
Back in 2012, only somegame makers allowed you tobuy, sell, and trade items in-game with real cash.
And the total sum of virtualitems in the market was $15 billion.
And some investorsestimate that today the total value ofthese goods could beas high as $50 billion.
– To put that in perspective, that is more than theglobal box office ofthe same year.
Why is this worthso much? My guess– I–I actuallyhave no idea.
– ( laughs )- I have no guesses.
Essentially, things are worthwhat anybody will pay for them.
So, if I have a fictional castleand you want it, and you think it's worth $5, then it's worth $5.
So an in-game economy is thesame as a real-world economy.
You've got a lot of people, you've got a lot of goods, and you've got currency.
What's the difference?Nothing.
Alex: Games are designedto give you a better experiencethe more time you spend in 'em.
In some games, like “World of Warcraft, ” there are daily quests where you have to log inand do the same thing time after time after time.
But in most games you just have to grind and spend a lot of time to be at the top of the game.
On average, a player over 18 will spend more than seven hours a week in these digital worlds.
I have a weapon in this gamethat took me 14 years to get.
14 years! But what if you could buy a better experience instead of just grinding out the game? Then a new thing started to happen when developers offered items that you couldn't even earn in the game.
I'm talking aboutflying pigs.
I'm gonna show youhow to get one.
So, to get Hogrus, I'm goingto go to the main town, and I'm going to openup the store.
It's really easy.
You just hit “Buy Now, ” it connects you to the shop.
Find my credit card.
And it says, “Thank you, you have just earned Hogrus, Swine of Good Fortune.
” I earned it, guys! Oh, he's in a little gift box.
So, let's see what happenswhen I click him.
– ( mouse clicking )- Hello? Are you there? “Unwrap.
” And there he is, he popped out.
( music playing ) So, he runs–oh! Look at him.
Look at those wings.
So this is the joy that spending $25 in avideo game can bring you.
So this is pretty cool.
I'm going to goto a “Counter-Strike”tournament and see why other players are buyingvirtual items.
I'm headed to Skokie to talk to some gamers at the national championship series for an online shooter called, “Counter-Strike: Global Offensive.
” Today, we're gonna see players compete for $10, 000.
– ( explosion )- Yeah! Whoo! So we practice almostevery night.
Those guys look kindaintimidating over there.
Player: Singularity is number fourth in the U.
Anything that you're, like, prepared for, excited about, afraid of? “MAC-1”: We're not reallypreparing for anything.
It's kinda like, the skill-gap between us and even the secondbest team is so, likehigh, that we really shouldn'teven draw up a map here.
Alex: “Counter-Strike” is a game that's been around for as long as most of these players have been alive.
But the latest version of the game only recently adopted a new free-to-play model, where instead of paying for the game, players are encourage to buy and sell their skins in it, by using a marketplace inside the game.
( “Ride of the Valkyries”plays ) – ( character screams )- Emcee: Well, okay, Osee making his expense, knows where the remaining two players are.
He's going to force the issue.
He's going for this.
If he pops one more head–this is so deadly–there it is! Osee can win this.
The one-v-one–oh, he gets it! Osee! Whoo! So Osee just got afour-kill clutch play.
Basically he just killed theentire other team that was stillalive, by himself.
– Alex: Oh.
– Whoo! So this is an AK-47in the game.
And you've actually putstickers on it as well, so that's like, Rosie the Riveter.
One player has an AK-47that's got, like, goldfoil on it.
Another player has a gunthat looks like a water gun.
These are all differentskins that you can getin the game.
Within the first two years of adding skins to the game, the “Counter-Strike” player base jumped by 1500%.
I actually spend a lotof money on skins.
I spent like, 2, 000.
– Like, dollars? Wow.
And it just helps mestay motivated, I guess? – Do those help you play better in the game?- ( laughs ) No.
– So, what's the point of it?- Uh, just to look cool.
– You can always resell 'em.
It's not like an asset that you're not able to invest intoand then sell.
And, uh, if youdo it correctly, the price market fluctuatesin a way, where like, you can buy it at a low pointand sell it at a high point.
If you're smart aboutit, at least.
So what that “Counter-Strike”player was talking about was buying and selling itemsin “Counter-Strike” to makea profit.
Players have always found a way to make money.
And early versions of online trades date back to at least the late '90s.
Alsoknown as Marcus Eikenberryin real life.
I got into business, buying, selling, and trading of intangible goods.
I saw somebody that had like asword for sale for $20 on eBay.
And I'm like, “Holy ( bleep ), I can do that?” Then actually developed the website, Markee Dragon.
– Essentially operating as a broker.
Most of the game companiesdidn't want it legal.
Four of the different gamecompanies started gettinginvolved, and then you know, thingswent south.
Alex: After game developers worked to end third-party marketplaces like Markee Dragon's, they began creating their own.
They formalized the exchange of real money with virtual goods in currency and games.
But these developer-run marketplaces brought out a key concern with these virtual economies, and that's risk.
I'm not sure if you'refamiliar with the”Diablo III” auction house.
Oh, my God, yes.
It was the wrong time to do it.
And everybody and their mother said, “Oh, my God! I'm going to make some money playing a video game!” But it imploded on them.
So this auction houserepresents the game”Diablo III's” auction house.
The only difference betweenthis game and other gameslike it, Blizzard, the creator ofthe game, decided that theywanted to experiment with making the auction houseconnected to real money.
Now I'm going to giveyou some coins.
These are so cool!( laughs ) – That's your face on a.
– ( laughs ) .
Glad You Asked penny.
This is the greatest propwe've ever made! So, Cleo, you've got20 gold.
Buy whateveryou want.
– Let's get this started.
– All right.
– I probably want a shield— Ooh.
for 10 gold.
And I really likecurvy red one.
Ah, the scimitar.
Now you're out of money.
But you were only able tobuy two items, and that's reallynot enough.
But imagine for a secondif somebody found out a wayto create their own gold.
– I'd want to know how they did that.
– Hey, Joss? – Yes?- Alex: Yeah, come on in.
What's up? – Money?- Yes.
And pretty soon – you're gonna have a ton of it.
– So in this case, Joss is a cheater.
– ( laughs ) .
who found a way toduplicate this gold.
And she's going to be ableto buy everything she wants.
– How do I duplicate this?- So there was a bug in the auction house that allowed their playersto duplicate their gold.
And that's exactly whathappened on May 7th, 2013.
You have all the gold you want, so you can buy whatever youwant now.
I'm just gonna take it all.
I mean, that's what you do, right? And I'll leave two swords, how about that? Okay.
Since you just bought outeverything of value, even the middle quality itemswere highly sought after.
So, eventually, what happened washyperinflation, and those prices changedbecause people could spendanything on it.
The dollar valuesare just dropping so rapidly.
One area of itspins out of control, the whole thing collapses.
Nobody knew what to dobecause, remember, you could sell this goldfor real money.
Wait, wait, wait, wait.
That– you can sell thatfor real money? – Yes.
– Can I sell this for real money? – Yes.
– Oh, good.
I clearly want to selleverything for real money.
We want real money, Alex.
Let's do this.
So Joss puts all of her itemson the auction house before the game maker can figure out what's going on.
Joss gets a boatloadof money.
Joss does geta boatload of money.
– So that's for you.
( trilling ) Alex: Within just a few hours, Blizzard shut down the game.
This whole thing only lasteda few hours.
But before Blizzard could go inand correct the bug, a lot of damagehad been done.
They couldn't go back and changeor reverse the real money tradesthat had taken place because people like Josshad already gotten their money.
So, they deleted player accounts.
– Oh, my God.
– Oh, no! I just got banned! Some people who weren't evenduplicating gold got caught upin this.
And I know thatbecause it happened to me.
I had a lot of gold on oneaccount, and it got banned, and I lost an itemthat was worth about 400 bucks.
– 400 real dollars?- 400 real dollars.
– Alex!- Yeah.
The “Diablo” crash shows us how virtual economies can be riskier than real ones.
They just don't have the same guardrails and protections, and a simple design bug could cause a catastrophe.
So when people say that, “Oh, you bought somethingin a video game.
” It's like throwing your moneydown a pit that you'll never see againbecause you don't own it.
So is the popcorn you boughtat the movie theater.
It's the experience.
Alex: And that's so true.
For most gamers, it's not about the money at all.
Jared: In the first place, you shouldn't even be playing “Counter-Strike” for money.
– Whoo!- You should be playing it to reach the top and succeed and win.
There's probablyno better example of this than in the battle arena game”Dota 2.
” It's annual competitive tournament, The International, has the biggest prize pool in all of gaming.
$34 million in 2019.
I decided to come to this”Dota 2″ tournament pub stop.
This is in New York.
I couldn't fly out to China where the game is actuallytaking place.
( music playing ) ( cheering ) In “Dota, ” players could buy a virtual item called a Compendium for the tournament.
It's a bundle containing numerous quests, achievements, and earnable rewards.
25% of the sales went on to fund the prize pool for the tournament, and that's right.
The biggest prize pool in all of gaming was almost completely crowd funded by the fans.
People who actually watch”Dota” itself feels like bybuying the Compendium, they're actually supportingthe professional playersthemselves.
We all are, like, literallyfinancially investedin this tournament.
It's kind of moreabout the social aspectof getting together, sharing the passionfor the game that we love.
all: Oh! So at the end of this, why would you spend moneyin a video game? There's so many reasons why, but it just really comes downto investing in what you love.
We're gonna talk about other.
Beneath the surface.
( laughing ).