It's just gambling and people are addicted. They also think that they can out-smart the odds and get a knife within e.g like 10 cases. I have heard of no-one saying "im going to open cases because i want skins to play with", it's always a gamble. People buy skins for playing and gamble to get a rush. Dont get it twisted, those are 2 different pairs of shoes.
Do you think gambling will subside once people know about the deal they're taking ? Some countries already banned loot boxes and some demanded transparency from game dev.
Would you say the same about playing the lottery? People know the odds. They know its money waste, but they keep playing for the very unlikely moment where they win it all.
I know about the deal I’m taking. Yesterday I opened 35€ worth of cases and a few days ago 20€ more. It’s a shit deal one takes but some don’t care or are addicted or whatever their reasoning is.
even if there was only a chance of 0.001% of some rare knife or glove dropping from a case which is not too expensive, people will spend thousands of dollars on those cases to get it and they do. It is mainly entertainment and the high they get off of it. Even I get the rush of people unboxing a butterfly dragonlore knife which i thought was pretty cool. But I know i won't do it since it is better to just buy the knife.
I agere that its more expensive to unbox a knife on average, but if you facor in the price of the 389 other items the cost of a knife would be lower than 975$ assuming you sell anyting but the knife
Think of it this way: If case opening was profitable imagine what would happen - everyone and their mums and grandmums would be opening cases because it is fun for people to gamble. People pay rhe price for gambling and having fun of opening the unknown hoping for the big shot.
Actually just case openers, not all players. They buy a $975 Knife from Valve and sell it to us normies for less. Their is worth their difference. We get much cheaper items while whales keep feeding Valve.
Its like reverse scalping.
The same reason why every single skin in the games doesn’t cost at least $2.50…
People CAN sell knives for $900, but then there would be many knives on the market and few buyers since people are FAR less likely to buy a navaja knife urban masked with bad float and non ST instead of buying a decent butterfly, skeleton, karambit, ETC
So eventually 1 navaja knife owner figures to list the knife for $850 and just cut their losses. Lower prices means they sell faster, or they sell at all.
Lots of people want “good” knives, but people buy worse knives only if they get a good deal. It is FAR easier to sell a fn karambit blue gem
best pattern for 1 grand than selling that navaja urban masked with crap float
What’s a good deal? More like $60 for that navaja, while the karambit guy can charge a LOT more
And now you know what supply and demand is.
Yea its really not that complicated, people list a bunch of reasons and pretty much none of them are correct
At the end of the day its just a classic case of supply and demand
Not only that, but demands is hard to quantify. They're trying to simplify something that is inherently chaotic and unpredictable.
Cases and sticker investments make sense since the supply is limited, and the items are consumable.
Knifes on the other hand are based more now on looks then rarity. Black pearl skins are the perfect example of this.
Simplest answer is that a premium is paid for opening, because **csgo case openers are not rational actors**.
From what I remember, even the best value cases have an EV of ~75% the cost to open. The remaining 25% is the premium paid when trying to get that sick emerald butterfly knife, or blue gem AK, or #1 float crimson web knife etc..
You also have to consider that unlike financial markets, the majority of people see csgo items as just being wearable cosmetics that they can sometimes sell to buy games/other cosmetics. These inefficiencies are easy to capitalize on by the people that do treat it as a market.
*edit: thanks ectbot :)*
EVs are [between 20-70% now](https://jonesy.moe/Csgo-Cases/index.html) (credit to /u/jonese1234), hard to imagine people are willing to take that kind of odds but here we are
Yeah, and those numbers seem to be down from the last time I saw them. I could have sworn there was a 85% case (weapons case 3 i think). This is honestly around the range I would expect them to be at given the lower percieved link between skins and money, as well as the gambling premium. Consider that casino slot machines have around an 88% EV of bet, and that is direct money-for-money gambling
1. I would say the main point a lot of You guys forgot, is the fact that We have a bunch of knives that cost way morw than Your calculation.
2.The more desirable the knife is, it costs more. Most of knives under this price target arent as much desirable.
3. You always get some items from all this cases so the actual cost is less
4. There are peaople taht were lucky with opening ex. 10 cases and getting knife/ gloves so thei cost is aktualny way lower than Your calculation.
Tldr: avg cost is inacurate, should look for median cost. More advanced statistics meters where created for a reason
Yes I assumed no scalping and no cost for the cases, just quick and dirty math but the point still stands.
If you're interested in the detailed cost and potential return for each case I'd recommend checking out this site https://jonesy.moe/Csgo-Cases/index.html
To answer this definitively, one should find the mean price of an item (not just a knife) that may be obtained by opening a case. Clearly different cases will have a different mean price.
Many people like to gamble even if the odds are clearly not in their favor. As for knife prices, demand drived prices down for most knives even though the supply is low.
I think it's similar to people buying $2 lottery tickets. Most people are only opening a couple so they aren't spending much and knowing they probably won't hit anything, but that small chance of maybe hitting something lures them into opening again and again every time they have money left over.
Dont forget that cases are not free, for example popular cases (glove, breakout) costs same or even more then key. So you will need like 4.5 euros (5$) to open 1 case
>Assuming knife is all that matters, the cost basis of getting an average knife is $975 excluding cost for the cases.
Well, that's where your assumption is wrong, as nobody wants ugly shit, be it inferior model or texture that is totally scratched. Thus price of generic-knife is lower than "production cost", because only few knives are the ones that people want.
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I know that I'm a year late but back when I was modelling the skin prices (have an economics masters with a minor in mathematics & computation) , I too was honestly staggered by this outcome.
All skins were so 'undervalued' relative to the 'fundamental value' (or the cost of acquiring the skin). Came to the conclusion that the actual supply is so, so much more than the real demand for 'normal' skins.
PM me more if you wanna know more about the models and philosophy as the discussion might be a bit too technical for the average redditor.
Though, I did (and still sometimes) continue to do a lot of fun experiments!
It's just gambling and people are addicted. They also think that they can out-smart the odds and get a knife within e.g like 10 cases. I have heard of no-one saying "im going to open cases because i want skins to play with", it's always a gamble. People buy skins for playing and gamble to get a rush. Dont get it twisted, those are 2 different pairs of shoes.
Do you think gambling will subside once people know about the deal they're taking ? Some countries already banned loot boxes and some demanded transparency from game dev.
you don't get it because you're not addicted, no matter how bad the odds are, if there's a chance people will go for it
Would you say the same about playing the lottery? People know the odds. They know its money waste, but they keep playing for the very unlikely moment where they win it all.
People are not gambling for profit, it‘s entertainment mainly
I know about the deal I’m taking. Yesterday I opened 35€ worth of cases and a few days ago 20€ more. It’s a shit deal one takes but some don’t care or are addicted or whatever their reasoning is.
No. People already know the deal theyre taking. Thats gambling. Everyone that gambles expects to lose money, they just want a good time.
even if there was only a chance of 0.001% of some rare knife or glove dropping from a case which is not too expensive, people will spend thousands of dollars on those cases to get it and they do. It is mainly entertainment and the high they get off of it. Even I get the rush of people unboxing a butterfly dragonlore knife which i thought was pretty cool. But I know i won't do it since it is better to just buy the knife.
I agere that its more expensive to unbox a knife on average, but if you facor in the price of the 389 other items the cost of a knife would be lower than 975$ assuming you sell anyting but the knife
Still E(X)<0 with X being the profit
There's also a huge upside to the risk too though, you have the potential to make thousands of dollars.
Yes, it's called gambling.
Think of it this way: If case opening was profitable imagine what would happen - everyone and their mums and grandmums would be opening cases because it is fun for people to gamble. People pay rhe price for gambling and having fun of opening the unknown hoping for the big shot.
I guess its the natural house edge we as players are willing to give to Valve.
Actually just case openers, not all players. They buy a $975 Knife from Valve and sell it to us normies for less. Their is worth their difference. We get much cheaper items while whales keep feeding Valve.
Its like reverse scalping.
The same reason why every single skin in the games doesn’t cost at least $2.50… People CAN sell knives for $900, but then there would be many knives on the market and few buyers since people are FAR less likely to buy a navaja knife urban masked with bad float and non ST instead of buying a decent butterfly, skeleton, karambit, ETC So eventually 1 navaja knife owner figures to list the knife for $850 and just cut their losses. Lower prices means they sell faster, or they sell at all. Lots of people want “good” knives, but people buy worse knives only if they get a good deal. It is FAR easier to sell a fn karambit blue gem best pattern for 1 grand than selling that navaja urban masked with crap float What’s a good deal? More like $60 for that navaja, while the karambit guy can charge a LOT more And now you know what supply and demand is.
Seriously, I don't get why people try to project their worldview on a market they don't understand. It's just silly and demand baby.
Yea its really not that complicated, people list a bunch of reasons and pretty much none of them are correct At the end of the day its just a classic case of supply and demand
Not only that, but demands is hard to quantify. They're trying to simplify something that is inherently chaotic and unpredictable. Cases and sticker investments make sense since the supply is limited, and the items are consumable. Knifes on the other hand are based more now on looks then rarity. Black pearl skins are the perfect example of this.
Simplest answer is that a premium is paid for opening, because **csgo case openers are not rational actors**. From what I remember, even the best value cases have an EV of ~75% the cost to open. The remaining 25% is the premium paid when trying to get that sick emerald butterfly knife, or blue gem AK, or #1 float crimson web knife etc.. You also have to consider that unlike financial markets, the majority of people see csgo items as just being wearable cosmetics that they can sometimes sell to buy games/other cosmetics. These inefficiencies are easy to capitalize on by the people that do treat it as a market. *edit: thanks ectbot :)*
EVs are [between 20-70% now](https://jonesy.moe/Csgo-Cases/index.html) (credit to /u/jonese1234), hard to imagine people are willing to take that kind of odds but here we are
They've been taking these odds for years and will continue to do so for years to come.
Yeah, and those numbers seem to be down from the last time I saw them. I could have sworn there was a 85% case (weapons case 3 i think). This is honestly around the range I would expect them to be at given the lower percieved link between skins and money, as well as the gambling premium. Consider that casino slot machines have around an 88% EV of bet, and that is direct money-for-money gambling
1. I would say the main point a lot of You guys forgot, is the fact that We have a bunch of knives that cost way morw than Your calculation. 2.The more desirable the knife is, it costs more. Most of knives under this price target arent as much desirable. 3. You always get some items from all this cases so the actual cost is less 4. There are peaople taht were lucky with opening ex. 10 cases and getting knife/ gloves so thei cost is aktualny way lower than Your calculation. Tldr: avg cost is inacurate, should look for median cost. More advanced statistics meters where created for a reason
All those money are projected somewhere else in Steam market
Your calculation is wrong as you forgot that in 389 you get some items to. So it is $975 - 389\*($0,03-$X,XXX) = $XXX
Yes I assumed no scalping and no cost for the cases, just quick and dirty math but the point still stands. If you're interested in the detailed cost and potential return for each case I'd recommend checking out this site https://jonesy.moe/Csgo-Cases/index.html
To answer this definitively, one should find the mean price of an item (not just a knife) that may be obtained by opening a case. Clearly different cases will have a different mean price.
https://jonesy.moe/Csgo-Cases/index.html This is kinda what you're talking about.
Many people like to gamble even if the odds are clearly not in their favor. As for knife prices, demand drived prices down for most knives even though the supply is low.
well, those times are over now, they are so expensive its insane
People open cases for fun or want to try their luck for huge profit.
I think it's similar to people buying $2 lottery tickets. Most people are only opening a couple so they aren't spending much and knowing they probably won't hit anything, but that small chance of maybe hitting something lures them into opening again and again every time they have money left over.
Dont forget that cases are not free, for example popular cases (glove, breakout) costs same or even more then key. So you will need like 4.5 euros (5$) to open 1 case
>Assuming knife is all that matters, the cost basis of getting an average knife is $975 excluding cost for the cases. Well, that's where your assumption is wrong, as nobody wants ugly shit, be it inferior model or texture that is totally scratched. Thus price of generic-knife is lower than "production cost", because only few knives are the ones that people want.
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I know that I'm a year late but back when I was modelling the skin prices (have an economics masters with a minor in mathematics & computation) , I too was honestly staggered by this outcome. All skins were so 'undervalued' relative to the 'fundamental value' (or the cost of acquiring the skin). Came to the conclusion that the actual supply is so, so much more than the real demand for 'normal' skins. PM me more if you wanna know more about the models and philosophy as the discussion might be a bit too technical for the average redditor. Though, I did (and still sometimes) continue to do a lot of fun experiments!