Bloomberg - Virtual Weapons Are Turning Teen Gamers Into Serious Gamblers 5-15min

The video game Counter-Strike: Global Offensive, in which players form teams of terrorists and counterinsurgents and shoot at one another, is a favorite of the professional e-sports circuit. A tournament in early April sold out Nationwide Arena in Columbus, Ohio, where the NHL’s Blue Jackets play, and generated 71 million online views over four days. In May, TBS and WME/IMG will launch their own league for CS:GO, as the game is called, streaming games online and broadcasting them on TV on Friday nights. ... The game’s current success has made it easy to forget that CS:GO wasn’t an immediate hit for game maker Valve. It was the latest in the aging Counter-Strike series and came out at a time when there was no shortage of other shoot-’em-up games to choose from. Everything changed when Valve introduced something new: decorative virtual weapons, known as “skins,” that could be acquired in the game and sold for real money. ... In-game purchases weren’t new, but the cash trade was Valve’s special twist. Within two years, the number of people playing CS:GO had grown 1,500 percent. Today, there are 380,000 people around the world playing the game at any given time. ... People buy skins for cash, then use the skins to place online bets on pro CS:GO matches. Because there’s a liquid market to convert each gun or knife back into cash, laying a bet in skins is essentially the same as betting with real money. ... By one estimate, more than 3 million people wagered $2.3 billion worth of skins on the outcome of e-sports matches in 2015. ... The best way to get players deeply engaged in games, the company had determined, was to give away virtual items of random value and encourage a robust market to trade them.

ESPN - Skin in the Game 18min

The first-person-shooter game pits terrorists against counterterrorists and was played by an average of 342,000 people at once in 2016. Its biggest tournaments, such as the ELeague Major scheduled for Jan. 22-29 in Atlanta, can have million-dollar prize pools and as many as 27 million streaming viewers. An estimated 26 million copies of the $15 game have been downloaded since its debut four years ago, helping make its manufacturer, Valve, the world's leading distributor of PC titles. ... While other titles such as Call of Duty offer similar gameplay, one distinctive feature has helped fuel Counter-Strike's growth: collectible items in the game called "skins." Although they don't improve anyone's chances of winning, the skins cover weapons in distinctive patterns that make players more identifiable when they stream on services like Twitch. Users can buy, sell and trade the skins, and those used by pros become hotly demanded. Some can fetch thousands of dollars in online marketplaces. ... Valve controls the skins market. Every few months, it releases an update to Counter-Strike with new designs. It decides how many of each skin get produced and pockets a 15 percent fee every time one gets bought or sold on its official marketplace, called Steam. Valve even offers stock tickers that monitor the skins' constantly shifting values. ... Some $5 billion was wagered in skins in 2016 ... roughly $3 billion worth flows to a darker corner of the internet -- one populated by fly-by-night websites that accept skins for casino-style gaming.