By Leo Ni (University of Melbourne)
Counter-Strike 2 (CS2), formerly and popularly known as Counter-Strike Global Offensive (CS:GO), is a first-person shooter competitive video game developed and published by Valve. One of the key features that differentiates CS2 from the majority of other competitive video games is its skin marketplace. Similar in style to a real marketplace, the CS2 marketplace allows users to buy, sell, and trade virtual goods, primarily weapon skins that can be equipped in-game. Players obtain skins from opening cases they receive in-game, as a reward system built to incentivise players to keep playing. Valve earns revenue from taxing 15% of all transactions that occur in the marketplace, and also earns $2.50 USD from selling keys that allow users to open the cases they obtain for the virtual goods. In 2024, Valve’s revenue from CS2 reached a staggering $6.7 billion USD, with one of the primary revenue sources being nearly $1 billion USD generated from case openings. Although I personally have minimal experience playing CS2, I’ve noticed that my friends who frequently play the game often spend large amounts of money on opening cases or trading in the marketplace, all with the same reason of “I’ll make money out of it” or “I get both a skin in-game and own it as an asset”. However, from simply observing and asking my friends about the results of their investments, I discovered that they were largely filled with regret and had significantly less cash. Therefore, it is evident that certain behavioural biases and heuristics are at play, influencing my friends and other people to act irrationally.
At the very core, the CS2 weapon cases are very similar in structure to gambling. Different weapon cases have different names, with a different set of skins that can be obtained from opening a case. In a case, different weapon skins ranging in rarity can be found. Higher rarity skins tend to have a higher value in the marketplace, with the most expensive skin going for over $1.5million USD. CS2 skins traded on the market have their price determined by simple economic demand and supply. The rarest skins have the lowest supply; therefore, due to the law of supply, they’ll have a higher price. Skins for certain guns gain more attraction when the gun is used more in-game or has celebrity endorsement when equipped by popular streamers or influencers, which affects the demand for the skin, further influencing its price. Due to the fluctuating price of weapon skins in-game, their respective cases’ prices also fluctuate, and cases with a higher expected value when unlocked will have a higher market value. [VK1] The market value of a case is generally lower than the expected value of the skin obtained from unlocking, with a further added cost of $2.50 USD to buy a key. However, as there is a chance to receive a skin worth an extremely large amount of money, people are tempted to act irrationally for a chance of winning the gamble. It is evident that consumers are still purchasing and opening cases due to the presence of behavioural economics heuristics and biases, similar to gambling at a casino.
Many CS2 players are drawn towards opening their first case due to the interface of CS2 being set up to exploit the availability heuristic and the familiarity bias. The availability heuristic is the tendency to use information that comes to mind quickly and easily, whereas the familiarity bias (or else known as the mere exposure effect) is the increased incentive to do something from being exposed to it often. Once a week, CS2 rewards your playtime with a free case. As more of these free cases gather in your inventory, the constant exposure reminds you that opening a case is a possibility, hence enticing you towards spending your money.[VK2] This is an effect of the familiarity bias, where even if you enjoy the game for the game and not the skins, the constant temptation often gets players to open their first case. Furthermore, when friends talk about their pulls from cases and clips of case openings circulate online, often only situations where extremely rare skins are obtained are highlighted. As there is greater exposure to people winning, due to the availability heuristic, players often overestimate their chances of winning on a case, therefore further enticing them to spend money opening their first and subsequent cases.[VK3]
Once the players are drawn into opening their first case, subsequent cases are often bought after [VK4] because of loss aversion and the gambler’s fallacy. Loss aversion is a bias where the absolute value of the loss of utility is more than the gain in utility from an equivalent gain. [VK5] Whereas the gambler’s fallacy occurs as individuals expect previous results of a random event to influence the results of future occurrences of the random event.[VK6] When a player obtains a skin that has a lower market value than the cost of opening the case, the gambler’s fallacy often influences the player to expect the next case they open to have a higher chance of containing something good. Furthermore, loss aversion requires the player to pull multiple equivalent wins to offset the loss. However, as the expected gain from opening a case is below the cost of opening a case, it is very rare for a player to be able to offset the loss and feel satisfied at the end of their case-unlocking journey.
Availability heuristic, familiarity bias, loss aversion and the gambler’s fallacy are still only a few of the behavioural biases at play to ensure the consistency of the CS2 marketplace. However, with this scenario as an example, we can see how behavioural biases can influence our decision-making. This can be seen even in situations where we least expect it, such as when we are playing a game. As an entrepreneur, it may be of interest to use these biases to your advantage. Contrarily, if you’re an avid gamer, by looking for these behavioural heuristics and biases, you might just be able to avoid losing some money.
