It might be a little hard to fathom that an imaginary character could result in a $50-billion a year industry, but that appears to be exactly what is happening. Research company Juniper Research has released its report showing that in-game gambling in video games is proving to be a real moneymaker, currently producing around $30 billion a year. Juniper anticipates that this amount could rise to as much as $50 billion by 2020.
Skins haven’t been as controversial, but it will probably only be a matter of time. A skin is a cosmetic upgrade to a character in a video game that is purchased with cash. As such, they are considered to have real-world value and are becoming popular as a way to place wagers or gamble in casino-style games. They are also traded, with highly sought-after skins being sold for cash. The PC gaming platform Steam provides a marketplace for its games where users can bid on skins. Steam keeps 5% of the transaction amount, making it a lucrative endeavor. Valve, a third-party site similar to Steam’s marketplace, runs the same type of operation, and earns a small transaction fee from each trade.
Despite the regulatory blowback, it would seem that the industry isn’t going away anytime soon. The Juniper report, “In-Game Gambling – The Next Cash Cow For Publishers,” noted that “loot boxes are becoming an increasingly popular means of monetizing consumers and creating longer term engagement with titles.”