In the dynamic world of online gaming, in-game items offer a unique opportunity to both enrich the gaming experience and develop new business models. This policy paper outlines an innovative approach to introducing a circular economy for in-game items, inspired by established circular economy principles in traditional industries.
Distribution and initial sale of ingame items:
Game developers initiate the lifecycle of ingame items by designing and issuing them. These items can include anything from cosmetic skins that change the appearance of characters to functional items that enhance gameplay. The sale of these items is a primary source of revenue for developers and motivates the continuous creation of innovative and desirable items.
Use of the items by gamers:
Once acquired, gamers integrate these items into their game to personalize and enhance their gaming experience. This phase is crucial as it strengthens the player’s attachment to the game and encourages an emotional investment in the virtual property.
Secondary market and trading:
A key aspect of this model is the creation of an official in-game item exchange, such as FiPME, as platforms like FiPME create a vibrant secondary market for in-game items.
Players can freely trade their virtual treasures here, whether to optimize their gameplay or to derive real value from their game time. For developers and publishers, FiPME offers an additional source of income and a way to strengthen player loyalty.
How does it work? Players put their items up for sale or create purchase requests. FiPME acts as a secure platform that brings buyers and sellers together. As soon as a deal is struck, the trade is processed via a semi-automated system that coordinates the transfer of the item. No middlemen and no risk for the players.
This closed cycle, in which virtual goods constantly change hands, is in line with the principle of the circular economy and ensures the sustainable use of game content and can even help to extend the lifespan of game content and therefore the game itself.
Buy-back and recycling of items:
In analogy to models from the luxury goods industry (e.g. Rolex or Mercedes), developers can implement a buy-back program. This allows players to sell back items they no longer need to the developer. Alternatively, older or sought-after items can be repositioned as “vintage” or “collectibles” to increase their value. In addition, the exchange offers the opportunity to swap items for other values or items.
Changing gaming economy: RMT meets circular economy
While real money transactions for virtual goods (RMT) are becoming increasingly accepted in the gaming community, there are still concerns. Many players are reluctant for various reasons: fundamental objections to the commercialization of games, security concerns or simply a lack of funds.
Our proposed circular economy model with FiPME offers a solution to these challenges. By giving players the opportunity to sell their in-game items for real money, we enable those who have previously refrained from RMT transactions to participate in this market. This does not contradict the principles of many players who do not want to monetize their virtual game world, as they are merely utilizing the goods they already have.
In addition, our model levels out the financial differences between players, as even those who want to spend less money can obtain real money by selling their items.
Circular economy – a win-win potential in gaming too
The introduction of a circular economy for in-game items offers a win-win situation for developers and players. Developers generate continuous revenue through all phases of an item’s lifecycle, while players benefit from a dynamic and interactive market economy that further deepens and enriches the online gaming experience.
