Secondary Virtual Markets

Welcome to my 5th blog. This will be about a Facebook page group which is called MyDota2Community which will be talked about at the latter part. I joined it over a year ago because I am fond of DOTA 2 also known as Defense Of The Ancients. As I have used DOTA 2 in previous blogs, it is interesting to know that there are aspects of it that are not just for gaming. One of which is DOTA 2 cosmetics. These were introduced back in 2012 with the implementation of the in-game store of DOTA 2. The cosmetics do not affect the gameplay at all. Having cosmetics for your heroes would not affect how you interact with the game objectives. (Destroy the enemy’s main structure. There are two teams, namely radiant and dire. The objective is to destroy the enemy’s throne or main structure. The team is composed of five members controlling unique heroes individually.

Cosmetic items are sold for real money in the Steam Store and depending where you are it adjusts to the currency. If you are in the Philippines, the currency used for buying is Peso. Before these cosmetic items are made available for sale, itmust be submitted to the Dota 2 Workshop on Steam. Only submissions approved by Valve (a Video game developer and digital distribution company headquartered in Bellevue, Washington, United States) are added to the store. Creators of approved contents receive a portion of their sales proceeds. Users can rate submissions, although a higher rating does not guarantee its approval. In here we can see a discourse in which a company may arguably be exploiting the creators of content. The creator only gets 25% of the content he made. Valve gets 75% which is arguably unfair.

I believe that Valve earns a lot through the purchases of these. Take for example events such as The International, an annual tournament in which the top DOTA 2 players compete for a large sum of money. Beginning in 2011, the first place winners get an insane amount of $ 1,000,000. If you think that is a lot, the latest rendition of the International that happened last 2015 makes the 2011 International look pathetic.

dota 2 table
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As seen above the first place of the 5th version of the International awards the first place winners a whopping amount of $ 6,634,661. The winners, Evil Geniuses, were from America. They defeated the Chinese team called Chinese Dota Elite Community. If you are interested in watching the road to victory of Evil Geniuses, watch the video located below.

It has been established that Valve gets a lot of money from cosmetics. There are also other factors of them getting money. It’s not just cosmetics. Going to the International requires the purchase of tickets. The tickets for this year’s International got sold out in just a matter of six minutes. Last year it took almost an hour for the tickets to get sold out.  The tickets went for $ 99.99 each.

Digressing from the International, let us go to the Philippine context of DOTA 2 in which I live in. There are smaller tournaments called Majors that Valve hosts. Majors have a smaller prize pool than Internationals. The prize pool is fixed at $ 3,000,000. The winners of the Major get $ 1,100,000 while the rest of the teams partition the $ 1,900,000 into whatever place they got. Obviously, higher rank of winning merits higher partition of the prize pool. This 2016, Valve was already done doing two Majors namely the Frankfurt Major in Germany and the Shanghai Major. I was so happy when they announced about the Manila Major. GOOD LORD we are gonna have a DOTA 2 tournament sponsored by Valve. Aside from the Manila Major, an earlier tournament by ESL called ESL One Manila will mark the first ever important DOTA 2 tournament hosted by our country. ESL One Manila will begin April 22 and will end at April 24.

Watch the Manila Major trailer first found below.

The tickets were cheap. The Major will occur June 7 to June 12 in Mall Of Asia Arena. From June 7 to June 10 the tickets will cost P 200. The ones from June 11 to June 12 will cost P 400 each. I was happy that I was able to get some for June10 to June 12. The later dates are more important because these are the times when the teams show their best and use their secret strategies in order to not get eliminated.

Given the way DOTA 2 economy works (through the cosmetic items market and tickets sold), I will now show you one of the facebook groups that formed a secondary market. In this market, people trade, sell, and buy cosmetics. As I have said in my introduction, MyDota2Community is a page I joined over a year ago. It has admins that served as the middleman for each transaction (may it be a trade, selling, and purchasing). Every group has its own certain stickied or pinned post. MyDota2Community own pinned post focuses on the rules. We can see here the interaction of the admin namely Michael Vincent Vallejos to the members in the photo below.

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Here is a clearer picture of the rules:

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The punishment for not following the rules is usually a kick. You are permanently removed from the Facebook group and you cannot join again. This occasionally happens to people who create alternate Facebook accounts in order to scam newbies for their cosmetics.

The secondary market in this group fueled by betting sites such as dota2lounge and vpgame made the cosmetic items cheaper. Items such as Arcanas (rarest item in DOTA 2) which are normally sold in the main store for $ 39.99 are sold cheaper. If you convert this to peso it is around P 1,800. In the MyDota2Community it is sold in bulk and is cheaper. Most expensive ones in the group are P 1,300, while the standard ranges from P 1,100-P 1,200. Sometimes, if you are lucky members would sell at P 900.

Below is a print screen of how a betting site looks like (dota2lounge). You choose a team and there are certain odds for each team. Picking the lower odds team and winning gets you more expensive cosmetic items. It follows that picking a higher odds team will merit you with less cosmetics items.

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What is important to note here is that a secondary market created more jobs for other people. Middleman, usually the admins, gain a certain percentage in transactions with members. Capitalism at its finest. The page basically created a new market in which they control and manipulate the price. I don’t think it affects the players at all. It might affect Valve but I don’t think the damage is noticeable since Valve is a big company and it does not only have DOTA 2 as a game. It has other games such as Counter Strike and Team Fortress 2.

Below is a photo of the percentage of what middleman in MyDota2Community get:

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It is truly interesting that a virtual community has evolved into a business. It has become a secondary market for cosmetic items which are virtual in nature. There is an aspect of which real money is traded for virtual goods (such as cosmetics) and used for betting. The rise of these markets showcase that the interaction of the virtual and real have confused the boundaries of the internal and external worlds. Furthermore, confusion is not the only result, there is also a created illusion in which the virtual reality in terms of goods are one and the same with external realities such as real money.


Secondary Virtual Markets

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