-We’re going to get
started with Kyle Davis, talking about in-game economies. -Morning, everyone. I want to thank you everyone
for coming out this early. This is a really
big, exciting room. OK so, my name is Kyle. I’m going to be talking
about the in-game economies that we have in “Team Fortress”
and “Dota” and also on Steam. There’s going to be a lot
of information in this talk and it’s going to
go by pretty fast. We fit in as much as
we could, so there isn’t going to be room for a
Q&A immediately after this talk. But the questions
are really valuable, and the conversations that
come out of those questions are really valuable, so we’re
doing a whole Q&A follow-up session afterwards at
2:00 this afternoon, that I’ll remind you about
again at the end of the talk. So really, this is
a talk about how to make your product
better, focusing on using things like economic
systems and micro transactions, as tools that you can use
to improve the product. It’s our belief,
and we have a lot of data to back up this
believe, that products that use micro transactions
or economic systems as tools for other things, like
maximizing revenue extraction from unhappy users, will
lose in the marketplace against products that use
these tools to actually improve the customer experience and
make the product better. This talk is going to be
broken into two parts. First, we’re going to go over
some of the basic lessons that we’ve learned in
the last couple years, working with our economies. You can think of these
as important things that we’ve learned or tools
that we use internally, when we’re coming up with new
systems are evaluating systems. Or, you think of these
as recommendations that we’re comfortable making
to a large group of people like this. The second part of
the talk is going to focus on individual
case studies, where we look at specific features,
how users interacted with those features, the data
we collected, how well they map onto our recommendations,
and what we learned. So to jump right into it,
the first recommendation that we have, and maybe
the most important one, is focus on systems
and ideas that generate persistent
value for customers. Really, this is one of the
core philosophies for Valve, in general. Our interest is in
having long term customers that are really happy. So anything that comes at a
cost of customer happiness is something we, at all
costs, would like to avoid. So to be really
concrete, we would rather not have someone become
a customer of ours, then become a customer and be
unhappy about that decision. Later on, we figure,
we can find a way to provide a service
or offer something that will make them into
a happy customer. And we’d much rather wait until
we can do that, rather than have them as a customer
in the short term, and then lose them because
they regret their purchases. Avoiding regret is
actually something that we focus a lot on. We have something internally
that we call the regret test. When we’re coming up
with a new system, we sit down people internally,
who are working on it, and we have them interact with
it and we find out a day later, a week later are they still
happy with their interactions. When we ship systems
to the public space, we continue to collect data and
look at the people who interact with the system and
find out, do they continue interacting with it? Are they happy with
their interactions? There are a bunch
of tools that we have to avoid customer
regret in this space. We communicate really
clearly around what a customer will be purchasing. We do a bunch of work
to maintain that value, after a customer has purchased
through systems like Trade, that we’ll talk
more about later. A bunch of really pervasive
micro transaction systems in the gaming industry
right now violate this. So things like putting
artificial barriers into your game and then
charging users to remove them, when it’s clear that those
exist only to generate revenue for you, and provide no
service to the customer. Using things like
virtual currencies to obfuscate pricing, or trap
user value inside the system. All of these things, they lead
to regret, and regret leads to effectively
training your customers to stop buying things from you,
which is incredibly damaging long term. So to summarize this
in one sentence, we view any system
that generates revenue at a cost of customer
happiness, as a broken system that we need to fix. So the second
recommendation we have is to focus on systems
the generate positive externalities. It’s probably easiest to
describe positive externalities by describing the opposite,
negative externalities. So, any time you’ve
ever been playing a game and you found
yourself on a server with someone else
and your experience was worsened– you
were having less fun, enjoying the game less, because
they had spent money– that was an example of a system
the generated negative externalities. In fact, when we think of the
common customer complaints against pay-to-win
games, the problem isn’t, fundamentally, that
users can pay for power. The problem is that everyone,
except the guy who actually paid, everyone
else’s experience get worsened when
somebody does this. So we like to focus
on the opposite. What are systems
that we can come up with where you, as a
customer, are happy when the customers that
you’re playing with decide to invest in this? What are systems where you
want other people, or yourself, to spend money,
because they improve the quality of the
game for everyone? This isn’t just an abstract
philosophical concept. This is a tool that we can
use both to evaluate existing designs for systems
that we’re looking at, but, also, that we can
use as a starting point to come up with entirely
new system designs. And we’ll see a couple examples
of those in the case studies. So if we were giving this
presentation to ourselves a couple years
ago, this probably would’ve been the
most surprising of the recommendations. Trade is an incredibly
valuable system. Trade makes every item that
is tradable more valuable. It makes every
system that interacts with trade more valuable. It makes every user that
interacts with trade more valuable to
every other user. Fundamentally, trade is a system
by which valuation differences between customers can become
a positive thing for everyone involved. Trade is a system by
which two customers can interact with each
other and both improve each other’s experience. And this interacts
with other systems in really, really
surprising ways. And so, when we get
to the case studies, we’ll be looking at
some of those as well. Our fourth recommendation
is to, when possible, distribute value randomly. Many games, right
now, use systems where we call them static
distribution systems. So, if you play the
game for an hour, you’ll earn 100 experience
points or 100 gold pieces. And you can then choose from
a preset selection of rewards that you want to spend it on. And we don’t think there’s
anything fundamentally wrong with that kind of system,
but random distribution gives you a lot more tools. And you can use these tools to
increase customer engagement, or interact with other systems
in really positive ways. As a concrete example, if you
have a static distribution system and you let users pick
from one of three rewards, you’re really limited in
what you, as a game designer, can offer in terms of value
distribution for those three reward or power distribution. But if you’re distributing
item content randomly, you can have one item that’s
10,000 times, 100,000 times, more valuable than another item. And this is part of the
system, and that’s OK. This combines with trade in a
bunch of really positive ways that are so
interesting, I’m going to a whole slide
on just that later. So our last primary
recommendation is to come up with systems
that let users generate value for each other. Fundamentally, this is
about enlisting the internet to fight to improve
your product. There are millions
of people out there that are interested in the
games that we’re all making. And some of them are amazingly
good at art, or good at design, or creative in some space
that we haven’t even fully explored yet. If you have millions
of people that are all fighting to improve
your product, your product is going
to get better and grow in really interesting
ways that it isn’t capable of doing if it’s
only being worked on by the 20 or the 200 people
inside the office. Fundamentally, if you
don’t allow your customers to improve your
product, they’re going to go improve someone
else’s product. So if you can have them on your
side, you benefit, effectively. There’s a lot of different forms
of value generation can take. Some of these are
really concrete. We have a bunch of
them listed up here. So, users can produce
content like mesh content for the games. They can produce levels. They can do community
organization work, where they write
tutorials or they organize groups of like-minded people. This can be more abstract,
where users can give items to each other or
help out new players. These are all forms
of value generation. And a critical part of this is
that users who generate value, need to be rewarded in
some way for the value that they’re generating. And wherever possible,
we mean that concretely, as they get financially rewarded
in proportion to the value that they’re generating. So this is the end of
our recommendations. The more interesting
stuff is when we actually see these being applied, but
just to go over them again really quickly. Focus on persistent
customer value. Whatever you’re
asking users to buy is something that they will
be happy that they purchased and continue being happy that
they made that purchase, down the road. Focus on systems that create
positive externalities, so that everyone is happier when
anyone choose to spend money. Make everything
tradable, and there’s a bunch of good
stuff coming on that. Distribute value randomly
because it gives you a lot more tools to
generate player engagement and expand other systems. And let users generate value
for each other, and by doing so, improve the quality
of your product. So let’s look at
some case studies. Specifically, as we
go through these, we’re going to be
jumping around a lot, because we have years
of data to cover, and we’re trying to pick out
really, really interesting ones that make compelling points. So I apologise in
advance for some of the rougher transitions. So we’re looking
for what happens when we follow our
recommendations. What happens when we take
some of these recommendations that we thought we were globally
applicable when we learned them in “Team Fortress”,
and applied them to drastically different games? What’s the actual concrete data? How many users? What percentage of users are
interacting with these systems? So we’re going to start
with something really simple and really, really positive. We have a system
in “Team Fortress” that we call gifting,
very creatively, maybe. So the initial design
discussion for gifting was a couple guys sitting in
a room asking the question, if I’m a “Team Fortress”
player, what’s something that you can buy that
I start celebrating when you make that purchase? So it’s a really simple system. You can go to the store. You buy a big bundle of gifts. It’s a one time consumable. You go onto a server, you use
this consumable and everyone you’re playing
with on the server gets a free item from you. So you get no direct
value from this, but you get social recognition. You’re generating happiness
in a bunch of other customers. We were curious, will players
be interested in this? Will it be a tiny
portion of players? Will people do this
more than once? Will it be focused
around events? So the results of
this are up here. This is data from last week. So at this point in TF, we
have a little over a million accounts have ever given
out at least one gift. And a little under
two million accounts have ever received a gift. And this is great for us. This is really exciting, because
it means that not only do we have a million
customers who think this is a good use
of their money, but even so we have almost
another million customers who didn’t spend money directly,
whose experience is still being improved by
the people who did. If you sort the
1,000 or so items that we’ve ever sold
in the in-game TF store by lifetime revenue
generation, the bundle of gifts but I’m describing is the
10th highest lifetime earner. So, put together,
we have millions of accounts that
are participating in this, that are opting
in financially and saying this is something
they want to do. We have millions more accounts
who aren’t directly opting in financially, but
who are benefiting, because other people have. And we’re making millions
and millions of dollars off this system. Like, this is what a successful
system looks like for us. When I was pulling
this data, there were a couple other fun facts. The current number
one user in terms of gifts distributed
in TF has individually handed out almost
12,500 presents. And we have more
than 140 accounts who have handed out
more than 1,000 each. And so these are people–
this is a system they like. So the takeaway from
this slide is not put gifts into your game. The takeaway from this slide
is we got here entirely by sitting down
and saying, what’s a system that can generate
positive externalities, and then implementing a
version to see what happened. OK, so now we’re going
to look at something that went a little less
well when we launched it. When we launched the
store for “Team Fortress”, we shipped it with a system
that we called Crates and Keys. So crates are items
that drop for free to every player
that plays the game. Every crate contains a
specific set of content. So you can see, for
example, this crate contains one of these weapons
or one of these hats, or more special, more rare item. If you’re interested
in opening a crate, you can go to the store or trade
another user for a single use key. You use the key,
the key disappears, the crate disappears,
and you get one of the items
that come out of it. So our goal for the system
was to let players opt in financially, if they
were interested, to a random distribution
system, to find out are players interested
in opting in financially to random distribution systems,
or are they more interested in buying specific items,
or are they more interested in something else. This was the launch
of the store, so we were trying to cover
really broad strokes. So this generated more negative
feedback than any other feature when we launched the store. There were a bunch of
perception problems, where the community ascribed
intentions to our actions. For example, they
thought that we were attempting to
capitalize on poor player judgment, or poor
understanding of statistics. Or that we were trying
to, in the short term, maximize the revenue extraction
from every individual user as we burned them
out on the system. And this is exactly
opposite to what I was talking about
a couple minutes ago. For real player value, happy
customers avoiding regret. So clearly, we had a lot of
work to do with this system. So we started trying to
address customer complaints and improve the system so
it was a reasonable value proposition for these users. So one of the first things we
did was we realized that some of the initial crates contained
contents such that you could go to the store and spend
$2.50 and buy a key, use the key on a crate, and
have the item that you would get randomly be an item that you
could have bought in the store for $0.50. And in hindsight, this was just
a huge oversight on our part. There was no way, as
a customer, to look at that transaction besides I
just lost $2 of actual value. So we established
a really clear rule that any items that
comes out of the crate that you could buy in the store,
has to, at a bare minimum, cost more than the
value of the key. And oftentimes, this is they
cost 10 times or 15 times more than the value of a key. The goal is not to put
users in a position where they were gambling, it
was to put them in a position where they had random chances. And there’s a fundamental
difference there. We did a bunch of research
around what specifically about the system users
liked or didn’t like. So we experiment with different
types of crates– crates that were available to all
users, crates that were available over a long
time period or a short time period, crates that contained
five items versus crates that contained 50 items. One of the most important
things I think we did was we looked for systems
that could add value to every item that
came out of a crate. So there’s one example
of that listed up here, where weapons that
come out of crates have the same
gameplay as weapons that you would buy in the
store or find for free playing the game, but they track a
gameplay statistics for that the current owner
of that weapon. So this particular guy,
he has a scatter gun that he’s killed almost
1,000 people with. He’s interested in tracking
the number of heavy weapons players he’s killed and
the number of buildings he’s destroyed. And so, that’s a service
these crate weapons provide. So as a result of all of
this– these and many, many other changes we’ve
made to the crate system over the last several years–
participation is higher. More players are opening crates. The players that
are opening crates choose to open more of them,
over a longer time period. Some of the crates themselves,
not the actual items that come out, but just the crate
itself– the opportunity to play the random
distribution game, so for $20, $40, $60, $80 between users. There’s increased engagement
from our customers, where forum threads will pop
up saying, what do you want to see in the next crate? What new stats do you
want to see them tracking? What new hats do you want
to see in the next instance? One of the best
indicators is probably that when we, for reasons
not worth going into here, don’t ship crates fast enough. Our users send us
angry emails saying they’re tired of these
existing crate content. They want us to ship
more new crates. So all of this to is
seems like an indication that both qualitatively and
quantitatively the system is better than it’s ever been. And this doesn’t
mean that we’re done, that we’re going to stop
iterating, at this point, but, it does mean that
we’re making improvements and we’re moving in
the right direction. So I told you I would talk about
some of the interesting ways that trade interacted
with these systems. This slide is the only time
in this entire presentation I’m going to talk
about conversion rate. And my hope is that by
the end of this slide, you will join us in thinking
that conversion rate is actually not that useful
thing to talk about. And in fact,
focusing on it can be more damaging than it is useful. So we pulled data
from “Team Fortress”. We had approximately
a 13% conversion rate for users buying keys directly. So 13 out of every 100
players, at the point we collected this data,
had gone to the store and bought a key directly. 15% of players had used
the key to open a crate. So this means that at bare
minimum, 2% of our player base doesn’t buy keys,
but trades for keys, so that they can play the
crate mine game on their own. And there could be a
lot of reasons for this. The 87% of people who aren’t
buying, they could be people without access to credit cards,
or living in parts of the world where we have poor
payment services, or they could just not be
interested in spending money directly in this way. But the most
interesting number is that 75% percent
of our player base contains, when they
log in, at least one of these items that only
comes out of a crate. So three out of
every four people are generating
demand, and consuming the content that
comes out of this. So what we see all the time
is that you , as a user, will generate demand. You will trade value for someone
that eventually down the road results in a purchase
or another trade. And everyone along this
chain is happier for it. So again, to be
really concrete, this is a way by which
we’re effectively monetizing free players. You, as a free player,
generate demand. And you’re willing
to trade value for someone that makes
a purchase in the store and generates revenue for us. And especially, everyone
along that chain is part of those
transactions, is happier as a result of completing
those transactions. So, the statistics
counting weapons that I was just talking about
are a more specific example. The general case is
that trade combines with random distribution
systems in a way that’s just incredibly positive
for, effectively, everyone who plays
the game, and also you, as the developer
of the game. So the general case
of this is that you’re in some way distributing
items randomly across your player base. So, you may be granted an item
through some system that’s not very valuable
to you, but that’s extremely high value
to someone else. And that someone else will go
out and purchase, or trade, or in some way generate
value, so that they can trade to you for the
item that they value highly. Like I mentioned, we
have some random drops in “Team Fortress” that sell
for $80 or $100 between users. “Dota” has items that
go into the thousands. But this isn’t us placing
valuations on these items. These are users, who
say, you’ve got something that I’m really interested in. I’m going to go buy $1,000 worth
of value and trade it to you . And at the end,
both of these users are happier for that
transaction having taken place. And again, this is a
way by, fundamentally, we’ve monetized free players. This is not an accident. This is by design. As more and more time passes,
we see more and more blogs popping up, and more and
more emails from our players saying, I’m not really
sure what happened, but I’ve been playing “Dota”
for the last week or two, and I made $100 selling
these items that I got. This is hugely
successful for us. This means that the guy who
did the selling is happy. The person who did the
purchasing is happy. We’re happy because we,
somewhere along the way, generated $100 worth of value. So this is a system that
everyone wins, basically. So let’s look at a
more concrete way that users can generate
value for each other. So I’m going to go over
community generated content, really quickly, in this talk. This is an incredibly
interesting topic to us. And in fact, the
entire talk after mine is going to be
Tom Bui up here going into a lot more detail on this. But for purposes
of this talk, we’re going to focus on community
generated content, user generated content,
as a concrete way that users can add
value to your game, and to other users
who are playing. So at this point, more than 90%,
significantly more than 90%, of the item content in
“Team Fortress” and “Dota” comes from the community. So this is the actual production
work, where they make the mesh content, they make
the art content. This includes the
marketing work, where they will
make animated videos to advertise their new item set,
or contract 2D artists to do really, really,
incredibly amazing art to get the community
excited about their sets, so that they can
generate more sales. The community also
does the evaluation on what they want
to see in the game. So through tools like the
workshop, you, as a player, can vote and say, I want to
see this content and my game, or I don’t want to see
this content in my game. If the content is positively
received by the community, it goes into the in-game
store, and the contributors who made that content to
get a portion of all of the revenue derived
from direct item sales. So one of the best
ways that we can look at how much value these
guys are actually generating for us and for the
community is by looking at that portion of direct item
sales that they’re taking home. So when we launched
the TF store in 2010, we had about 100
items in the store, coming from about 60 different
contributor accounts. And we paid out about
half a million dollars, by the end of the year. So, last year, in total,
we had about 2,500 items, 660 accounts, and the
total community contributor take home was a little
over $10 million. And this is incredibly
exciting for us. Like, this isn’t
us saying, we think you made a really
interesting career in “Dota”, we’re going to
buy it for $5,000. This is the
community’s evaluation of what this content is worth. These guys have very clearly
generated millions and millions of dollars of
value for our games and for the other
people in the community. And they get to take
home millions of dollars, because that’s the value
that they generated. When I was putting together this
slide, I also ran the numbers. The total community
contributor take home for the first week of
this year was about $400,000. And so, I hope it comes
across, but this is just incredibly exciting for us. We have the community
producing content. The community
evaluating that content. And the people in the community
being rewarded in proportion to the value that
they’re generating, as determined by the people
they’re selling it to. The last side I’m going to
talk about, community content, I want to make a
special mention. We did something
for the first time last year in TF, where
as time has gone on, the community has
grown and focused on building more and more
different types of content. And so, last year,
for the first time, they built an entire
“Team Fortress” update. So they built the
marketing materials for it. They built the animated
short that described it. They made the comic. They did the writing
and the art for it. They had 2D artists doing
interesting 2D sketches and different styles of
the characters wearing these new items to
get people excited. And then, all of these
people collected revenue based on their work. So this is the first
time in TF history we have a comic book
artists generating revenue, by generating excitement and
value for the TF community. The game has grown since then. But at the time we
shipped this update, this was the single highest
grossing day in TF’s history. OK so we’re going
to transition now. We’ve been talking a
little bit about trade. And trade is a system by
which, fundamentally, value is added by increasing
the number of players who are capable of consuming
a particular piece of content. So we had a lot
of success there, and we asked ourselves,
what are other ways that we can increase
visibility, so increase the potential
number of consumers of a particular piece of
content, and also demand. So a lot of this takes the
form of features on Steam. If you have an item
inside your TF backpack or inside your
“Dota” backpack, you can link to it
from your web page. You can link to
it in Steam Chat. You can trade
items across games. So the hat that you
really like in TF, you can trade for the sword
that you really like in “Dota”. We’ve done things like implement
the Steam Marketplace, which allows users to, in a
reliable and secure way, trade any in-game items for
Steam wallet funds. We have a whole lot more ideas. The important thing
for this isn’t that we wrote these features for
“Team Fortress” or for “Dota”, but that these are
Steam level features. We think,
fundamentally, the value of every item in the economy
increases, as more partner games and more items
join the economy. So if your game
joins the economy, “Team Fortress” items
become more valuable, because they can be traded
for the items in your game. The items in your game
become more valuable, because they can be traded
for “Team Fortress” items. And there’s no fall off. The more participants there
are, the more valuable it is for everyone. So if you have any interest in
this, please come talk to us. We think it’s incredibly
valuable for us and you and all of our customers. One concrete example of
this increased visibility demonstrating that it works
just as well in partner games is when we did the
Steam winter sale. So as users participated in the
most recent Steam winter sale, they had the ability to
acquire free-to-play items for free-to-play games,
including ours and our partner games. So overall, we handed out
a couple million items to a ridiculous
number of accounts. All of the value
they got was free. And overnight, partner games
saw huge spikes in interest just because players had more
visibility into these games, and they had vested
value in these games that they could trade with other
players or get a head start on. Some of these partner names,
overnight, their daily revenues went up by 50 or 80%. OK, now we’re going
to transition again. We’re going to talk
about a system that exists in “Dota” that
has no analog in TF, and see how the recommendations
that we talked about at the beginning apply here. So, we have something that
we call leagues in “Dota”. These work similar to– you can
think of it as pay-per-view. A user can go to the
store and buy a ticket, and they can consume that
ticket, which will give them in-game access to a
tournament or a league that they’re interested
in following. So, they can watch the games
live from inside the client. They get historical
access to all the games for the lifetime of the account. They can pick a player that
they’re really interested in, watch those player’s mouse
movements in real time, as they’re playing in a game. There’s just a bunch of
actual concrete value there both immediately
after the purchase, but also in perpetuity. The actual funds
that users generate in purchasing these items
is split with the league organizers, and
get used for things like increasing the prize pool
or increasing the production budget. So, I don’t think a lot
of people, including us, when we did the system, would
look at this as a system and say, this is a system
that will benefit greatly from implementation of trade. But when we actually
ran the numbers, we found that on,
average, one out of eight consumers of
these league tickets, had traded for it, and not
done the purchase directly. And for some of the bigger
more popular tournaments, that number went as high
as one out of every four. So concretely, this means
that because these items were tradable, all of these leagues
have bigger prize pools, they have bigger
production budgets, they have a bigger
audience that they can use to communicate with. So again, this is an example
of us monetizing free players in a way where the player
who did the purchase, and the player who
consumed the content, are both happier for it. We have another system in “Dota”
that we call battle boosters. The design for this came
from the exact same place as the design for gifts
in “Team Fortress”. A bunch of guys
sat down in a room and asked the question, “Dota”
is a really competitive game, I want something where
I’m super excited to see a guy on the other
team has decided to invest in this
particular thing. What is that thing? What does that look like? So the way battle boosters work
is, when they are consumed, they increase the rate at which
players acquire random drops. But specifically, they
increase the rate for you, as the consumer,
but also everyone you play with in every game. And so, what we noticed was
that we shipped the system, and overnight– but
in a longer tale, over the next couple
weeks as well– there was a huge sea change
in how players communicated at the starts of
rounds in “Dota” . Where, if I joined the game and
I saw that someone on my team or someone on the enemy team
had activated a battle booster, I was excited to be
playing with them, and so I would say
positive things and I would stop
saying negative things. I would lower the rate at
which I said negative things. So, since we
launched the system, we’ve done work to clarify the
value proposition to players, so that they know
really clearly, if I spend my money
on this, what will it generate for me
in terms of value? What will it generate
for other users that I’m playing with
in terms of value? So again, like gifts,
this is a system where we have millions of
players are participating. Millions more players
are benefiting from their participation. And we’re making millions
of dollars off of it. So this is the last
specific case study that I’m going to talk about. It’s complicated. It’s a really fun
everything, so. We run a tournament that
we call The International. It’s so far been a once a
year “Dota 2” tournament. For last year’s, we decided
to try something new. So again, thinking back
to our recommendations, we tried to look for ways we
could hit as many of those as we could. So we came up with
this idea of selling a digital, interactive
program book. So if you think of
going to play and you’ve got a little pamphlet
that says, here are the actors in the play. Here’s the background for it. This would do that sort of
thing for the tournament, so you could see the players
and the history of the teams and things that you
were interested in. But it was also interactive,
so you have the ability to make predictions. You could set up
your fantasy league. Especially, you could show
your predictions after the fact to your friends to
prove it you were the most right player in
the entire game of “Dota”. You also had the ability
to affect the events. So you could do things
like vote on who you wanted to see in the
all-star match, which would turn into something
in the real world. So there was just
a bunch of value that you’ve got just
for purchasing this. But there was also a bunch
of positive externalities that were generated in a wide
variety of interesting ways. So they were stretch goal set
up around the total number of purchases for this book. So this is had the
effect of meaning that if I had
purchased a compendium, my purchase became
more valuable, the more other
users purchased one. Mine would become more
powerful, more things would unlock as more
stretch goals were met. One of the stretch goals was
an incredibly valuable battle booster, which meant
that even if I wasn’t purchasing the compendium
directly myself, if I found myself in a
game with someone who had made the purchase,
I was happier to be playing with them. And in fact, I was
happy that everyone had made these purchases,
because now there was a really powerful
battle booster on behalf of all of these people who had
decided that this was where they wanted their money to go. So this was a $10 purchase,
of which $2.50 would just be immediately added
onto the prize pool– the total prize pool
for the tournament. In this method, even if
you weren’t playing “Dota”, you were benefiting as
people purchase these books, because the tournament prize
pool would grow and grow and become more
exciting, and the games would become more exciting. So the end result of this is
that we sold just under half a million of these books, which
meant that the community’s excitement, they would
rally around wanting to hit the next stretch
goal, or wanting to get all of their friends
a copy of this book, or wanting to hit a
specific prize pool amount. And so, the community
organized itself into a group that added $1.2
million to the prize pool for The International last year,
which meant that they turned that into the single largest
prize pool for any e sports event in history. This is something, this
is a brand new item, this is a new space. This doesn’t fit into
any existing models that we have for
micro transactions. This came from sitting
down and saying, what are the things that
we have found valuable? What are our recommendations? How can we come up with a
system that hits as many of them as possible, for as
many users as possible? One of the big
takeaways– so this is our recommendations, again. I sort of snuck a sixth
one at the bottom. One of the big things
that we learned from doing the compendium
is that there are so many ideas out there that
don’t fit into existing models. The space is still
relatively new, and we have a lot of
exploring left to do. We have a huge number
of ideas for things that we think would be valuable
systems to put in the economy. We would like high
skill “Dota” players to be able to offer training
services inside the client, and get paid by their
students to improve them. We’d like programmers and
game designers and animators and every other type
of content producer to be able to make “Team
Fortress” a more interesting game, in the same way that
modelers can, right now, on and on and on. Fundamentally, we have a
lot of data that backs up the idea of that
we could be making our customers a lot happier
by making improvements in these systems,
and in doing so, we could be making
a lot more money. So our hope is that one of
the things that will happen, as a result of
this presentation, is that you’ll join us. You’ll run your own experiments. You’ll learn about your
customers and what they like. And we can all explore
the space together a lot more quickly than
we could independently. So, one thing I haven’t
really talked about is, concretely, what sort of
successes has this resulted in. So the longest running economy
we have is “Team Fortress”. And also, some of
the “Dota” numbers are too big to
fit on the slides, in terms of the numbers
of items in the economy and things like that. So we have about
17 million accounts that own at least
one item in the game. There’s about half
a billion items that are active right now. There’s been about
four billion actions, since we started
the economy, that affect the item in
some persistent way– so turning it to
another user, doing a permanent customization,
something like that. So this is just to give
you a sense of the scope. But really, the
interesting numbers are that, over the last couple
years, since we launched the store in TF, the player
bases continue to grow. So, more people
are playing TF now than they were six months ago. More people were
playing six months ago than they were six
months before that. The game just continues to
grow and continues to grow. And so this is one
of the indications we have that we’re
making decisions in this space that keep
our customers happy to keep coming back. But one of the other
really interesting things is that as time
has gone on, users are choosing to buy more
items than they had before. Users are choosing to spend
more money in the game than they had before. And so, we were curious
when we started seeing this. Is there something
fundamentally– is there an intrinsic property
of “Team Fortress” that enables this kind of growth and this
kind of economic behavior, or are these general principles? And so, we applied the
same thing into “Dota”, and you saw how some
of those examples went. We had success there. And we’ve been working
with partners recently, as we develop more confidence
in these recommendations, and they’ve been seen
the same sorts of success that we’ve been seeing. So really, what’s the take
away from all of this? Fundamentally, we
reject the premise that micro transaction
systems must come at a cost of
user happiness. This is a space where
everyone can win. There are no trade
offs to be made here. It’s possible to come up
with system designs, such that your customers are
happy to interact with them. Your customers, who
are producing content, make money from
their interactions. Your customers, who are
just playing the game, also make money from their
interactions with the system. And you, as the
developer of the game, also make money off the
happiness of your players, in a way that’s sustainable
and beneficial for everyone. So I hope this was useful. If you have any questions, z no
matter how small or how silly, please email me at
[email protected] More seriously, though,
we have the talk immediately after mine is all
about user generated content, and is super, super interesting. We’re doing a whole Q&A just on
economy and economic features at 2:00 PM in the room I
totally didn’t write down, but I believe it’s 611. And then, we’re
doing another Q&A on user generated
content at 4:00 PM. So, if you can make to
those, that’s great. If you see me in the
hallway or you just want to send me an email
at my actual email address, that also works. I hope this was
useful for you guys. I look forward to
the conversations, and thanks for your time.

Tagged : # # # # # # #

99 thoughts on “In-Game Economies in Team Fortress 2 and Dota 2 (Steam Dev Days 2014)”

  1. I wish blizzard would have watched something like this when they were developing Diablo III. I'm sure I'm not the first to say that.

  2. This is what makes Valve a winner developer. It's hard not to get excited about it. I'm looking forward to more games joining the economy and new systems.

    The only thing I don't like is how crates are a bit too common, and clogs up people's inventories. They're marketable, but impossible to sell. Please add a way to turn them into something of value.

  3. "To be really concrete: we would rather not have someone become a customer of ours than become a customer and be unhappy about that decision. Later on we figure we can find a way to provide a service or offer something that will make them into a happy customer and we would much rather wait until we can do that rather than have them as a customer in the short term then lose them because they regret their purchases."
    EA could learn a lot from that. 

  4. I am 1002 crates opened over the last year and a half and I would consider it to be a gamble.  THIS GUY IS A LIAR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  5. but they don't do the simplest thing like lettingus form a 5-man favor stack easier
    or not letting those who didn't buy or spend a lot of time to get reward from event

  6. This is why the internet is so important. I would never learn this information without access like this, and I'm forever grateful. 

  7. crates are still considered the worst thing in the game as the items you get from the crate may be worth more in the store but to the in game trading community its still worth a scrap (0.11 refined comes in at about 2 pence currently) although this is mostly due to the abysmal rarity that these items have I hope at a later date valve will try to make items that keep their trading value.

  8. +xTraceDesingnsx
    Dota 2 is a direct copy dota warcraft – it is supposed to be that way it's just a updated – different engine – new graphics version of dota. You cannot fucking say that Valve copied LoL because they haven't – they have copied dota. LoL is largely it's own thing with the base template being dota then the rest being shity balance paywalls grind and just basicly a massive cash grab.
    While Valve respect and appreciate their community and also sees the huge valvue and advatanges there is to being ptacticly good friends with their community/fans and thus let their community have an impact on what gets added to their game – user generated content is good for Everyone including valve themselves.
    Honestly you seem to be in denial of how bad Riot is in handling their game and community – they have moderately good support but the rest of riot smells of pure greed.

  9. I really disagree with Valve's opinion on random value distribution. I hate that lottery crap. It's only fun if your one of the few that win big. But what of the normal people who open a crate, and get complete useless **? I don't think they are having fun. The recent steam sale event is a good example. I crafted one badge, and got a common item that wont even sell for 3 cent on the marketplace. Versus the summer camp badge sale event where I could earn DLC I wanted for games I actually played. For me the superior system is obvious. But i'm not a gambling type of man.

  10. Will you please fix all the issues with CSGO before adding another 100 useless things? 😐 Thanks. I don't mind this stuff in TF2, but Counter-Strike is a delicate game. It would be like adding extra pieces to chess, don't act surprised when everyone gets angry at you for not fixing MM issues and audio postioning faults while you were adding more crates -_- sighs I find it harder and harder to have faith for CSGO recently 🙁 Valve is my favourite game devs and they are SLOWLY improving CSGO back to where it should be but it's so slow and on top of each good thing that happens, an unnecessary waste of time comes with it! 😐

  11. Considering how big Valve is at this point, they could easily get away with being the worst company the industry ever seen like EA and Riot. But they choose not to, they may not be perfect, but you have to give them props.

  12. I like this, kinda wish valve was in charge of Mech Warrior Online, would be really cool to see how it would be run. A lot of the current players are hard core fans but are slightly disenchanted by the in game economy employed by pgi.  

  13. I prefer being paid and not to pay for trading cards and certain items, but I'd like to programm something for the company.
    But buying games itself is very convenient and nice.


  15. all what you said is fine. Uncrating is fun but not beneficial. Its only great for those lucky few. But opening 700 boxes and getting 1 unusual is not something that Valve should allow to happen to Any 1 person. there needs to be a cap on actually Guaranteeing an unusual after a certain number of boxes. example your guaranteed to receive 1 unusual after 100 boxes. Please adopt a Fix ratio for unusual drops  for example : 1/100 guaranteed and any more than 1 depending on your luck…..Just like how you implemented a no duplicated system on dota 2 items.
    I dont see any harm in this approach and will leave people who actually unbox a little more happy. Some people just unbox for the sheer joy of getting that 1 unusual. and opening 700 boxes and receiving just 1 unusual is really harsh. It should not be allowed to happen to any one. Its wrong. —- thanks

  16. 7:32 there's a sign saying moonbase and has a picture of it now we already know about this but if you've read all those tf2 comic where did the Australiam go (administrator took it ) and we know that Australiam powered the rocket in special delivery could the admin have took and made the moonbase?

  17. This year's Dota2 The International Compendium started at a prize pool of $1.6 Million and Just crossed $9 Million in 28 days! There is still 46 more days to go….

  18. This man speaks with an abundance of intelligence and a noticeable lack of ego.

    It's like listening to good music.

  19. 6:26 "Distribute value randomly" HEY! I need to get keys to for that matter! Atleast, people that are premium should be rewarded with keys. I don't need to get all that fancy unusuals, but ATLEAST have keys dropped randomly (they should be the RAREST drop in the game.)

  20. Still appalled that they charge 10 dollars for an eBook, which in itself generates interest towards the game/tournament, both inside and outside. Also that they are charging their content creators for 75%, who holds the risk and the work. Valve may be one of the better companies, but they are very much still an American greed company.

  21. This is why I don't mind giving my money to steam year on year, certain companies will never get a penny from me ever again, EA, Bioware, Carbine,Trion. Cash grab games and derpy games built on lies to get our attention.
    Keep your community happy they will constantly return

  22. Almost 1 year later, Valve has completely abandoned this business model for DotA.  "All items will always be tradable" – Valve

  23. Even tho this is only Dota 2 and TF2, i think they should have made some big changes to the CS:GO trading a long time ago. I say this because the Dota 2 system is really nice, exept ofcourse the "not tradeable" part. For example, in CS:GO we have the skins that everyone wants. They cost extremely much, compared to the skins you want in Dota 2. Of course this may be because in Dota you have a lot of heroes, and in CS:GO you have a skin for 1 weapon each.

    But, the point is, that they should have made a standard price to everything, like they did in Dota. In the CS market, the players had to experiment with the prices, they didn't make a ground price like in Dota, and that is what i think they should add. A nice knife should not go for 500 Euro, but maybe a really nice looking for 50 Euro at MAX.

  24. 3:42 "using virtual currencies to obfuscate pricing, or trap user value inside the system." Steam gems and auction – Dec 2014.

  25. "all items will be always tradable" – hmm what about dota items atm. u cant trade them or sell them after u bought them. pls change this back to the original. i dont wanna have all these "nontrade/sellable" items in my amory, they just take space.

  26. Valve and their management of the dota economy (maximizing their profits at the expense of market worth generally) has "trained me to stop buying their items" incredibly well.  Persistent value my arse!  "Invest in us" he says.  

  27. These all are great idea. Too bad it was shut down less than a year after this video was published. Year ago I bought every single new chest, because I could trade it if i didnt like the hat. But now I don't buy anything in Dota. The community tradeplace is now dead.

  28. All item drops you earn by playing Dota 2 are now non-marketable. You fuckers got greedy and now the playerbase hates you for it. So much for adding value to the game for the customers. Even when we fill your pockets with TI money from compendium sales and treasure chest sales, you made the main TI chest only contain non-marketable items. Fucking greed to the max. And as if that wasn't bad enough you force a 3 month non-tradable/non-marketable restriction on all items bought from brand new chests. Fuck you for fucking the customers Valve. Greedy assholes!

  29. "Make everything tradeable, and there's a lot of good stuff coming into that"
    -Makes everything untradeable.
    Well played,Valve.

  30. Note how he talks about value and happiness, thereby excluding all of the communities of TF2 and DOTA.

    If I can make money off of something, but I'm gonna need Zoloft to do it? I'm not gonna do it. Sorry.

  31. Since now everything is untradeable in Dota 2 I take that to mean that Valve accepts that free market capitalism does not work.

  32. The Item System in TF Has Changed alot. Now they put the Item's in Tiers wich tell you if an item is good or not.
    Its a controversy to what he did say in the Video, i wonder if there are different people working on the system right now.

  33. Honestly, this could be something Niantic must understand as well if they want to make Pokemon Go something that the Millennials can treasure. From what we see so far, they have some things they can improve on the micro transactions of some Pokemon Go players. If you are to ask me, if you live in a city. In most instances, you do not really need to spend real money to get Poke Coins if there is a gym where you can either get cash if your team own it or battle the enemy gym and earn PokeCoins.

    If you ask me, Pokemon Go's current micro transaction function is way better than PvZ 2's handling of MT.. For one, being a static choice, only 4 plants can be obtained by in-game gems (ones where you can also spend with real money if one so wishes.) while the rest of the plants and upgrades can only be spent ONLY with real money. Not cool Popcap. Had you put the option of getting these extra upgrades and plants using gems, or converting a free player's in game coins into Gems, then maybe it wouldn't be that discouraging to play the game.

  34. I have been playing TF2 since it's release and all i have to say is FUCK YOU FOR RUINING THIS GAME BECAUSE OF YOUR GREED FOR MONEY !!!

  35. So much bullshit. Improve your game by adding microtransactions…. So much crap.
    Also all the bad things valve says are bad and doesnt want to do are all implemented in their games. Hiding content behind payment walls, forcing players to lock their money in steam eco system and much more.

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