- Hat economy refers to a niche and hidden marketplace that is centered around video games.
- The term was popularized by the sale of in-game hats in the FPS title, Team Fortress 2 or TF2.
- Why purchase a digital item that has no real-world use?
In 2020, video games are much more than graphics and gameplay mechanics. In-game cosmetics are increasingly playing a big role in how gamers approach the game. In fact, in any pub match today, it is common to see fellow players sporting snazzy costumes. While there is a chance they received the item through a loot box drop, it is highly possible that they purchased it.
Welcome To The Hat Economy
Hat economy is not a conventional term that you may hear in a university class or business lobby. Instead, it refers to a niche and hidden marketplace that is centered around video games.
The term was popularized by the sale of in-game hats in the FPS title, Team Fortress 2 or TF2. Realizing the interest in cosmetic items early on, the game’s developer, Valve Corporation, created a dedicated community market on Steam. Here, users could buy and sell game items for currency or trade for others.
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But Why Purchase?
Anybody sensible would ask a flurry of questions, like why purchase a digital item that has no real-world use? That too, for a video game? And, why pay for something that can be acquired for free as a drop?
For a non-gamer, this exercise might seem nonsensical, but to a dedicated gamer, this is a rewarding experience. As you know, in most games, the characters feature standard costumes or colors. This is akin to everybody wearing a uniform in real life. However, a gamer can choose to make their character look different by using cosmetic items. This move helps the player stand out from the crowd, and also make other players envious.
There is a lot more social value attached to purchasing in-game items rather than a purely intrinsic one.
How Expensive Can Items Get?
The Hat Economy is believed to be a multi-million dollar one. While there are no credible statistics available that can back up this claim, it is worth looking at some item sales.
Entropia Universe, an MMORPG, holds the record for the most expensive in-game item ever sold. In 2010, a virtual item called “Club Neverdie” exchanged ownership for a staggering $635,000.
Success stories are visible in other games, like the FPS title, Counter-Strike: Global Offensive, where a gun skin by the name of “AWP Dragon Lore” went under the hammer for $61,000. Likewise, in the MOBA game, DOTA 2, an item by the name, “Ethereal Flames Pink War Dog,” was sold for an impressive $38,000! Other sales involving in-game items can be viewed in this infographic.
Is This A Bubble?
Contrary to popular belief, the Hat Economy is not a fad or bubble. With video games increasingly becoming a part of our daily lives, it can be surmised that more and more digital items will go on sale. In fact, the global gaming industry is growing at a phenomenal rate. In 2019, the industry was valued at $151 billion, while other entertainment sectors like movies and music were pegged at $41.7 billion and $19.1 billion, respectively.
Moreover, several game publishers are increasingly adding micro-transactions and freemium models to their games. Now, it is common to see publishers market limited edition items that are later sold for higher prices in the community.
As the hat economy is becoming a serious business, it is also marred by controversy. It is not uncommon to hear about gamers getting scammed or losing access to their items in forums online. Hence, there is a need to create dedicated platforms where buyers and sellers can meet, inspect, and discover the best value for the items.
Blogband is one company determined to make this a reality. While other platforms do exist, Blogband will be one of the firsts to harness blockchain technology. This move will help gamers list their items securely and transact with verified participants. Additionally, the BIG Coin cryptocurrency will allow gamers to derive more value from their sales. They can use the BIG Coin for various purposes, including trading, fiat transactions, and more, besides purchasing other digital content.
To learn more about the Blogband project and the BIG Coin cryptocurrency,visit the official website.