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What to Consider When Building an In-Game Secondary Market

Here's an overview of what to consider when building an in-game secondary market for your next game.

For a long time, game developers went out of their way to discourage the formation of secondary game item markets. Their stated reason was that those markets were illegitimate and hotbeds of fraud and other illicit dealings. And while that was certainly true in some cases, their protestations left out another unstated issue they had with them: they weren't capturing the revenue from those sales.

In reality, it's the same reasoning that pushed game development studios to try and shut down used game sales a decade ago — the supposed loss of revenue from missed new game sales. But as subsequent data dives on the subject proved, the developers' fears were — in a word — hogwash. And the good news is that this time around, game developers don't seem bent on fighting a losing battle against the tide.

Instead, more and more developers are monetizing their games by building their own secondary markets, often inside the games themselves. And there's little doubt that this is the right approach to the current market dynamics that dominate the game industry. But for indie developers or others with no experience with secondary item markets, knowing where to start isn't easy. To help, here's an overview of what to consider when building an in-game secondary market for your next game.

Game Design Considerations

Before deciding to create an in-game secondary marketplace for your next game, you must first give some thought to how that should influence your game design. The reason is simple. To build a thriving marketplace, your game must almost totally revolve around it — at least enough to create an endless supply of valuable items for resale.

But you also have to dream up game mechanics that keep item supplies in balance. For example — imagine an in-game item that is critical to progress through your game. If that item is too hard to obtain, it will drive up its price on the secondary market and potentially drive players away from it. That means you have to think through how your game handles item drops, and you may even want to give yourself a way to adjust item supplies when you notice a market problem.

Plus, you'll have to put some thought into how much of an ongoing commitment it'll be to keep churning out new items for your game. Doing so is somewhat time-consuming, especially if you're doing the proper research to figure out what your audience wants at any given moment. It's a task you've got to be ready for — or all of the work you're putting into your marketplace will be for naught.

Optimizing for Engagement

After figuring out the design implications involved in adding a secondary market to your game, the next thing you'll have to do is to work out how to keep players engaged over the long term. Without such engagement, your secondary market can't succeed because there won't be any real incentive for players to buy, sell, and trade items on it. And that will also increase the likelihood of non-players coming to dominate your market looking to make a quick buck.

The solution is to look for ways to optimize your game for engagement. These days, adding a rewards system and some mechanism for social sharing are common methods game developers use to boost engagement in their games. But those things only go so far. For real long-term engagement, you need to give players a real incentive to keep playing after the novelty wears off.

An excellent example of a way to do that is found within the massively popular World of Warcraft. In that game, players don't run out of things to do once they've hit the game's level caps. Instead, they get the chance to participate in challenging group raids and daily quests that keep the game feeling fresh and rewarding.

And another strategy you might use to boost player engagement is to work to build a community around your game. Doing this provides a natural gathering point for fans of your game, and creates a kind of ongoing momentum that will keep it relevant. Of course, this isn't something you can accomplish overnight. Your best bet is to make it a deliberate part of your development strategy. You can use social media and other platforms to report on your progress and give fans a sense of ownership over the game. If you succeed, your game's community will help keep engagement strong for as long as your game is still worth playing.

Choosing a Marketplace Partner or Going it Alone

The next thing you'll have to think about when it comes to building a secondary market is whether or not to build something custom for your game or to partner with an existing marketplace. For example, The Steam Community Marketplace is the favored partner for most small or solo developers. And that makes sense. It's well-curated, safe, and exists on a platform that your game may be sold through anyway.

But the downside to going with a partner is that you'll need to surrender a chunk of your revenue to do it. The alternative, of course, is to build a marketplace from the ground up. But going that route has some downsides, too. Principal among those is cost — you'll have to front money and time on a project that you can't guarantee will succeed. But, the big upside is that you'd get to keep the vast majority of revenue generated, and will end up with a functional marketplace model you can replicate for later games.

It's also important to consider the legal and liability concerns that come with operating a game item market. One of the biggest among these is the possibility that your secondary market could become a hub for illicit activity. At the time of this writing, there aren't many laws or regulations governing how game markets operate — making them a natural choice for people looking to move money around unobserved. But there's no telling when that situation will change. If you go it alone, you could one day become responsible for policing your secondary market or face legal consequences for not doing so.

The Takeaway

Even if there are plenty of things to think about if you're considering an in-game secondary marketplace for your next game, the takeaway here is a simple one. It's that gamers are willing to spend money on game items, and they're going to do it whether you sanction the behavior or not. One need only look at the thriving market for FFXIV Gil and Square Enix's ongoing — and futile — efforts to stop it.

What they've failed to grasp is that the best way to stop third parties from monetizing their game is to do it themselves. Only then can a game developer control and shape the secondary market for their in-game items and currencies. And by doing so, they're not only giving gamers what they want, they're creating a viable new revenue stream for themselves. Just as long as everything's done fairly, everybody wins.

So, the bottom line is simple. If you're a developer building a new game that might spawn a secondary market for its items, it's a good idea to consider building one yourself. If you put the proper thought into it and dedicate the right resources to it post-launch, you'll make players — and your bottom line — happy. And who would say no to that?

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