ByJosh, writer at Creators.co
Josh is the owner of Game-Wisdom, where he examines the art and science of games through posts, podcasts and videos.
Josh

Digital goods have been becoming less virtual and more about real money over the years. Starting with Team Fortress 2, the ability to buy and sell virtual items was innocent enough at the time. Lately, it's become a big deal and a huge moneymaker; with a huge scandal involving Counterstrike GO skins and gambling.

It's no longer simply about fun and games, but gambling and real money at stake. And this presents today's topic: Should video games be set up for economy systems?

Economics 101

Let's start with defining what we're talking about. An economy system in a video game is where developers implement a vast variety of items; they can be game changing or not, and allow players to buy and sell them while setting their own prices for it. These items are generally categorized by rarity: Rarer items look better and/or have better stats (if the case may be).

These games are mostly on Steam, thanks to the use of the Steam inventory for sorting and managing items. While you can use the Steam marketplace to buy and sell these items, many sites are popping up with third party means. It goes without saying, but if there is real money behind something, then it's usually possible to set up a gambling system around it.

Team Fortress 2 was one of the first examples
Team Fortress 2 was one of the first examples

The recent scandal surrounding Counterstrike GO was around a site where people could gamble their weapon skins on a pot, with winner takes all.

It was discovered that two Youtubers who promoted the site were in fact the owners of said site. At this moment, the fallout from this is still going on, but there's more to discuss.

Economy systems are big deals for video games and developers, and why we're seeing more games make use of them.

Making Money

Lately, we're seeing a trend in multiplayer competitive/co-op games having economy systems. Besides Team Fortress and Counter Strike, Payday 2 dabbled in it until the fan backlash was so great that they rescinded. Killing Floor 2 also put one in during the early access period, much to the backlash of their fans.

The reason why developers are implementing economy systems is simple: It brings in a lot more money for less work. While yes, there is time and energy that goes into making skins, it’s far less compared to making new enemies, levels, weapons etc. The developers passively set up pricing via the rarity system, and then they can sit back and let the money roll in.

Because these games are on Steam, the marketplace acts as a third party to protect the users while giving Valve and the developer a piece of the pie. Due to the transactions running separate from the game itself, it allows the economy system to function as long as there's interest in both the game and the items.

The slot machine atmosphere is a part of economy systems already
The slot machine atmosphere is a part of economy systems already

This is why games built around long-term development work so well with economy systems. You need a game that's worth playing, the items to sell, and a community who's in it for the long run.

It also allows you to continue earning money from people who have already bought your game.

All this sounds great, but it presents a serious ethical issue for developers and Steam.

The Matter of Money

Money changes things when we're dealing with virtual goods or services. The act of allowing real-world profits and lost to happen with a video game is a serious concern. There are laws and regulations from country to country that must be followed when you allow people to spend and make money off of your game. Earlier in 2016, I spoke with Linden Labs, the makers of the hit Second Life. Second Life has had a digital economy for more than a decade, and there was a lot of work put in to make it fair for everyone.

There have been talks about mobile games and using monetization and gambling mechanics to get people to keep spending money. With the PC and economy systems, developers are designing content with the intent of giving it real world value. It's safe to say that Valve, Overkill and Tripwire are against gambling on their goods, but that doesn't stop them from creating that avenue with their games.

With the CS:GO scandal, Valve has known about these gambling sites for a long time, but that hasn't stopped them from perpetuating an environment that caters to it. The debate of virtual gambling is a serious deal, and presents two sides of economy systems in games.

The prestige from owning rare items has been a major part of the economy system's popularity
The prestige from owning rare items has been a major part of the economy system's popularity

Playing these games and earning these items is not considered gambling, as the player has to make use of skill in order to even earn them in the first place.

However, when you then take said item to a site that takes that value and translate it into a commodity that can be wagered, then we have another matter entirely.

These issues go back to a common problem we're seeing with the game industry.

The Law on Gambling

Laws for gambling have been around for a very long time. These are designed to protect the consumer and hold gambling facilities to standards. The reason online gambling is so popular today is that it presents gambling in a form that courts and lawmakers are not used to.

With the video game industry, that's even more pronounced. The game industry has moved rapidly over the last decade and ahead of the law when it comes to the digital environment. We're still having discussions as to virtual ownership of games and the first sale doctrine; we're not even at the point yet to talk about gambling in games.

And while lawmakers are still trying to make official rulings, it's left the field wide open for people to make money off of these goods and offer developers the option to create that atmosphere.

Making Money or Making Games?

This is a very sticky issue and I think you know where my thoughts lie. I'm not a fan of gambling or gambling systems in games. I know that they bring in a lot of money, but the ethical concerns are just too much for me, belonging to a family with serious gamblers in it.

There's a difference between allowing people to buy and sell goods in your game, and presenting it in a way that practically says, "These items can/should be gambled on." Blizzard has been tirelessly cracking down on gold farming, as it happens outside of Blizzard's control and can upset the game's economy.

Killing Floor 2 has earned some backlash from fans thanks to its economy update
Killing Floor 2 has earned some backlash from fans thanks to its economy update

There should be restrictions both in terms of design and selling items to protect the consumer and stop this from happening. When serious money is at stake, it can bring in illegal elements and should be one Pandora's Box we should stop from opening.

Figuring out what those restrictions and deciding what to do with implicated YouTubers is a bit too big for this post, but this is one of those topics that I think we're going to keep hearing about as time goes on. So, what do you think about the situation: Should economy systems continue to function, or should they be downgraded or regulated?

For posts and podcasts on game design and the industry, check out Game-Wisdom, along with my Youtube channel for daily videos. You can follow me on Twitter @GWBycer, and my Patreon campaign to help keep Game-Wisdom ad free, while continuing to put out great content.