The Rise of Virtual Economies: How Skins Became the Currency of Competitive Gaming

Avid Fortnite, Call of Duty, and Counter-Strike 2 players know how important it is to have a wide selection of character customisation options. More specifically, having seasonal or rare skins is vital, adding an extra layer of excitement to an already thrilling game. However, obtaining skins has gone from being a solely aesthetic part of the game to holding actual monetary value. In fact, it has become a multi-million-pound sector, creating a new target market of individuals who spend to look cool in-game. Naturally, this has players in the competitive gaming sphere treating skins like a form of currency. 

The Catalyst and the Marketplace

The transition from casual player-to-player skin trading to the rise of third-party marketplaces was instant. Before anyone noticed the shift, it had already become the norm, with websites such as Skins Luck becoming more prominent amongst gaming communities. Sites like these cater to the skins trade across a range of famous titles like CS: GO, Roblox, Dota 2, Rust, and Fortnite players stand a chance to win rare skins without needing to spend any money. 

Players open a case, deposit their own skins as collateral (as you would basically be gambling), and go up against other players to win rare skins. There is a wide selection of classic casino games to choose from (Blackjack and Roulette), and players are privy to sign-up bonuses and free daily prizes. Of course, there are similar platforms to these, all brought on by a demand from gamers looking for safe and new ways to trade or sell their skins. 

From Cosmetics to Capital

To better understand where the shift happened, it is essential to go back to the early days, when gaming started becoming a more popular hobby. Titles such as Team Fortress 2 and Dota 2 were the main contributors to the current trend of grinding for or purchasing in-game skins. Of course, the emergence of skins (and other cosmetics) ranging from common to rare gave players a new motivation to keep playing and spending money. Team Fortress 2’s best original class cosmetics include Heavy’s Tough Guy’s Toque and Hound Dog alongside Soldier’s Team Captain, which still go for a pretty penny in these skin markets.

Enter CS: GO into the mix, and now the skin economy has forever changed, with the game completely revolutionising the trade. In fact, CS: GO is the reason there is a “skin economy” in the first place, with its introduction of loot boxes and in-game marketplaces. This allowed players to either buy or claim a random selection of cosmetics (knives, stickers, guns, character skins, etc.). 

Simultaneously, it also introduced a new gaming archetype into the market, with many studios following in Valve’s footsteps and mimicking this design. Even more, the in-game marketplace meant players now had a safer and more structured way to buy, trade, and sell their skins to other gamers.

That brings us to the current state of the cosmetics market, which has given players complete control over their virtual assets. Delving a bit deeper, it is easy to understand that the value of a character or weapon’s skin is determined by its rarity (think of these as limited edition handbags or cars). Naturally, the same is true for other in-game cosmetics such as character clothing items, specific weapons (think of the mythic weapons in Call of Duty: Mobile), and specific emotes. The latter is widespread in games like Fortnite, PUBG, and CODM, as character emotes can also vary in their rarity, ranging from standard to those which are extremely hard to obtain. 

The Currency of Status and Skill

A large part of why gamers enjoy purchasing or grinding for rare skins stems from the status associated with having such an item while playing. Generally, character and weapon skins are the most common in this category, with certain ones showing off a player’s dedication or wealth. Although it might sound vain, it ties in with player identity and expression and acts as a great way for gamers to stand out, especially in a crowded game. Additionally, these rare skins draw more attention to the player, allowing others to note their skills in-game. Sometimes, this might run deeper than just wanting to get a status boost, with players wanting a skin because they may have a genuine connection with the patterns or overall design.

Professional eSports players, large YouTubers, and streamers added to this trend by normalising the idea that a rare skin equates status. With eSports players specifically, they tend to use rare character skins when participating in tournaments, further reinforcing this idea. 

YouTubers and Streamers also tend to do this, presenting rare skins to their viewers as high-value assets that should be coveted. With such a large number of popular eSports players and other influential gamers, it is to be expected that trading platforms and marketplaces for skins would blow up. For players who cannot afford to purchase pricey cosmetics, these sites are the perfect way to gain the skin they were eyeing without needing to spend the money. 

The Mechanics of the Market

This revelation raises a few important questions: are official or third-party marketplaces better for cosmetics trading and selling? Are these platforms really safe to use? When comparing the two options, it is clear that official marketplaces (usually in-game or on the official game website) are easier to access. 

Even more, it can be assumed that these would be much safer to use, as they would be available in a game you legally bought from a retailer or game store. At times, these in-game marketplaces usually offer players various means of obtaining a rare item without spending any money. In comparison, third-party platforms have other added perks (such as sign-up bonuses or daily prizes) and allow players to focus solely on trading.

If you are conducting transactions with your in-game currency (e.g., your cosmetics), would a separate platform not be preferable? In addition, these third-party marketplaces allow “investors,” who are people who do not play the game but purchase and resell cosmetics based on market trends. This allows for an actual profit to be made from virtual assets, while still giving gamers their desired cosmetic at a discounted price. 

Of course, the regulatory side of things forces you to acknowledge the darker side of this trade, which includes fraud and scams. However, the growing popularity of skin trading has resulted in more scrutiny from regulatory bodies.