( coin rattling ) ( game sound effects ) Alex: I’ve been playing
video games for about 25 years. One of my first memories
was begging my parents for a quarter at the arcade
just so I could get a little
bit 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 dollars
in prizing! Alex:But there’s another
economy at work,where players can buy
in-game items for real cash.This flaming mace
is in “Echoing Fury.” In 2012, it was sold for roughly
10,000 real American dollars, making it one of the most
expensive video game items
ever sold.Which brings me to my question:“Why would you spend money
in a video game?”( music playing ) ( light buzzes ) Games have taken up
years of my life. Literally.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 spend
more 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 about
a virtual item, – in a video game…
– ( laughs ) …these are a range of items
and collectibles that can be bought, sold,
traded, all depending on – the game that you’re playing.
– These are things like… – skins and weapons
– Yeah. Totally. Sometimes they can make
you more powerful, but – sometimes it’s just clout.
– Mm-hm. – Showin’ off.
– Yeah, exactly. Take “World of Warcraft”… In that game today,
you can buy this. This is Hogrus,
a flying pig that you can
ride 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 can
be purchased for 5 real
dollars in the game. I’m sorry. What–
what is the Tidy? Uh… it’s like a window-wipe
dance move. – I haven’t actually seen
– ( laughs ) This is a skin
in the game and basically it’s
just like a– it’s a visual accessory
that changes the way
this gun looks. And this particular
skin 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 buyitems 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 controlof gaming companies.
These transactionstake 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 some
game makers allowed you to
buy, sell, and trade items in-game with real cash. And the total sum of virtual
items in the market was $15 billion. And some investors
estimate that today the total value of
these goods could be
as high as $50 billion. – Wow.
– To put that
in perspective, that is more than the
global box office of
the same year. Why is this worth
so much? My guess– I–I actually
have no idea. – ( laughs )
– I have no guesses. Essentially, things are worth
what anybody will pay for them. So, if I have a fictional castle
and you want it, and you think it’s worth $5,
then it’s worth $5. So an in-game economy is the
same 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 designed
to give you a better experience
the more time you spend in ’em.In some games, like
“World of Warcraft,”
there are daily questswhere you have to log in
and do the same thing time after time after time.
But in most games you just haveto 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 weekin these digital worlds.I have a weapon in this game
that took me 14 years to get. 14 years!But what if you could buy a
better experienceinstead of just
grinding out the game?Then a new thing started
to happen when developers
offered itemsthat you couldn’t even
earn in the game.I’m talking about
flying pigs. I’m gonna show you
how to get one. So, to get Hogrus, I’m going
to go to the main town, and I’m going to open
up 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 earnedHogrus, Swine of Good Fortune.” I earned it, guys!Oh, he’s in a little
gift box.So, let’s see what happens
when 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 a
video game can bring you.So this is pretty cool.I’m going to go
to a “Counter-Strike”
tournament and see why other players are buying
virtual items.I’m headed to Skokie
to talk to some gamersat the national
championship seriesfor an online shooter called,
Offensive.”Today, we’re gonna see players
compete for $10,000.– ( explosion )
– Yeah! Whoo! So we practice almost
every night. Those guys look kinda
intimidating over there. Player:Singularity is
number fourth in the U.S.Anything that you’re, like,
prepared for, excited about,
afraid of? “MAC-1”: We’re not really
preparing for anything. It’s kinda like,
the skill-gap between us and even the second
best team is so, like
high, that we really shouldn’t
even draw up a map here. Alex:“Counter-Strike” is a game
that’s been around for as longas most of these players
have been alive.But the latest version of the
game only recently adopteda 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 a
four-kill clutch play. Basically he just killed the
entire other team that was still
alive, by himself. – Alex:Oh. My. God.
– Whoo! So this is an AK-47
in the game. And you’ve actually put
stickers on it as well, so that’s like,
Rosie the Riveter. One player has an AK-47
that’s got, like, gold
foil on it. Another player has a gun
that looks like a water gun. These are all different
skins that you can get
in 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 lot
of money on skins. I spent like, 2,000. – Like, dollars? Wow.
– Yep. And it just helps me
stay 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. – Okay.
– You can always resell ’em. It’s not like an asset
that you’re not able to invest into
and then sell. And, uh, if you
do it correctly, the price market fluctuates
in a way, where like, you can buy it at a low point
and sell it at a high point. If you’re smart about
it, at least. So what that “Counter-Strike”
player was talking about was buying and selling items
in “Counter-Strike” to make
a profit.Players have always found
a way to make money.And early versions of online
trades date back to at
least the late ’90s.Hello. Markee Dragon. Also
known as Marcus Eikenberry
in real life. I got into business, buying,
selling, and trading of intangible goods.I saw somebody that had like a
sword 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.
– Correct. Most of the game companies
didn’t want it legal. Four of the different game
companies started getting
involved, and then you know, things
went south. Alex:After game developers
worked to end third-party
marketplaceslike Markee Dragon’s,
they began creating their own.They formalized the exchange
of real moneywith virtual goods
in currency and games.But these developer-run
marketplaces brought out
a key concernwith these virtual economies,
and that’s risk.I’m not sure if you’re
familiar 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 house
represents the game
“Diablo III’s” auction house. The only difference between
this game and other games
like it, Blizzard, the creator of
the game, decided that they
wanted to experiment with making the auction house
connected to real money. Now I’m going to give
you some coins. These are so cool!
( laughs ) – That’s your face on a…
– ( laughs ) …Glad You Asked penny.
This is the greatest prop
we’ve ever made! So, Cleo, you’ve got
20 gold. Buy whatever
you want. – Let’s get this started.
– All right. – I probably want a shield–
– Ooh. for 10 gold. And I really like
curvy red one. Ah, the scimitar.
Great choice. Now you’re out of money.
But you were only able to
buy two items, and that’s really
not enough. But imagine for a second
if somebody found out a way
to 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.
– Awesome. – So in this case, Joss
is a cheater…
– ( laughs ) …who found a way to
duplicate this gold. And she’s going to be able
to buy everything she wants. – How do I duplicate this?
– So there was a bug in
the auction house that allowed their players
to duplicate their gold. And that’s exactly what
happened on May 7th, 2013. You have all the gold you want,
so you can buy whatever you
want 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 out
everything of value, even the middle quality items
were highly sought after. So, eventually,
what happened was
hyperinflation, and those prices changed
because people could spend
anything on it. The dollar values
are just dropping so rapidly. One area of it
spins out of control,
the whole thing collapses. Nobody knew what to do
because, remember, you could sell this gold
for real money. Wait, wait, wait, wait.
That– you can sell that
for real money? – Yes.
– Can I sell this
for real money? – Yes.
– Oh, good. Wait. I clearly want to sell
everything for real money. We want real money, Alex.
Let’s do this. So Joss puts all of her items
on the auction house before the game maker
can figure out what’s going on. Joss gets a boatload
of money. Joss does get
a boatload of money. – So that’s for you.
– Ha-ha. ( trilling ) Alex:Within just a few hours,
Blizzard shut down the game.This whole thing only lasted
a few hours. But before Blizzard could go in
and correct the bug, a lot of damage
had been done. They couldn’t go back and change
or reverse the real money trades
that had taken place because people like Joss
had already gotten their money.So, they deleted
player accounts.– Oh, my God.
– Oh, no! I just got banned! Some people who weren’t even
duplicating gold got caught up
in this. And I know that
because it happened to me. I had a lot of gold on one
account, and it got banned, and I lost an item
that was worth about 400 bucks. – 400 real dollars?
– 400 real dollars. – Alex!
– Yeah.The “Diablo” crash shows us
how virtual economiescan 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 something
in a video game.” It’s like throwing your money
down a pit that you’ll never see again
because you don’t own it. So is the popcorn you bought
at 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 probably
no 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 actually
taking place.( music playing )( cheering )In “Dota,” players could buy
a virtual itemcalled a Compendium
for the tournament.It’s a bundle containing
and earnable rewards.25% of the sales went on
to fund the prize poolfor the tournament,
and that’s right.The biggest prize pool
in all of gamingwas almost completely
crowd funded by the fans.People who actually watch
“Dota” itself feels like by
buying the Compendium, they’re actually supporting
the professional players
themselves. We all are, like, literally
in this tournament. It’s kind of more
about the social aspect
of getting together, sharing the passion
for the game that we love. all: Oh! So at the end of this,
why would you spend money
in a video game? There’s so many reasons why,
but it just really comes down
to investing in what you love. Boop. We’re gonna talk about other. Beneath the surface.
( laughing )