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Proposal. Pricing Virtual Assets In The Real World Ivan. Outline. Background Motivation Problem Related Work Methodology Experiment. Background. There are more and more free online games Ex. 天使之戀、跑跑卡丁車、楓之谷

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Proposal

Proposal

Pricing Virtual Assets In The Real World

Ivan


Outline
Outline

  • Background

  • Motivation

  • Problem

  • Related Work

  • Methodology

  • Experiment

Thesis Proposal


Background
Background

  • There are more and more free online games

    • Ex. 天使之戀、跑跑卡丁車、楓之谷

  • However, the game company sells virtual assets in the real market to make profit

    • Ex. Fashion clothes, items that will improve the players’ ability

  • “The market for virtual-asset trading could hit $1.5 billion in 2005 and $2.7 billion in 2006” [1]

[1] http://www.forbes.com/2005/10/20/onlinegaming-worldofwarcraft-gaming-cx_1021wharton.html

Thesis Proposal


Background cont
Background (cont.)

  • Use NTD to exchange the virtual coins

  • Ex. 1:1 exchange (from 天使之戀)

Thesis Proposal


Motivation
Motivation

  • The game company would like to make maximal profit

  • But how to set the NTD price of the virtual assets

    • Set too low is no economic benefits

    • Set too high nobody will purchase

Thesis Proposal


Problem
Problem

  • For game companies, how to set the NTD price of the virtual assets to maximize the profit gained from the free games

Thesis Proposal


Related work
Related Work

  • A few previous work show that the different user perceptions or designer strategies of the real-money trade of virtual assets [2][3]

[2] Vili Lehdonvirta, “REAL-MONEY TRADE OF VIRTUAL ASSETS: NEW STRATEGIES FOR VIRTUAL WORLD OPERATORS”, Proceedings of Future Play, 2005

[3] Vili Lehdonvirta, “Real-Money Trade of Virtual Assets: Ten Different User Perceptions”, Proceedings of DAC 2005

Thesis Proposal


Related work cont
Related Work (cont.)

  • Traditionally, price of real assets may be set by

    • Cost plus expected profit

    • Market Survey

    • Competition…[4]

  • Virtual assets is unusual

    • Physical cost is implicit (i.e. design cost)

    • Easy to distribute (i.e. copy)

[4]Harvard Business Review Feb 2005

Thesis Proposal


Methodology
Methodology

  • Use the data from game company to find the “Desire Degree” (DD) function of the virtual assets

    - Deeply depend on the data

    - Direct proportion to price

    - Inverse proportion to time in market

  • Find the NTD of the virtual assets, similar or the same ones, in real market

    - Similar “function” or “attribute”

  • Use statistic scheme to find the relationship between DD and NTD

    - Interpolation, Linear regression, Iteration…

Define DD func.

Data Set

Find NTD

Mapping

DD & NTD

Thesis Proposal


Challenge
Challenge

  • How to discover the base NTD, i.e. the reasonable NTD of items

  • Straightforward way

    DD X (200) Y (300) Z (400)

    NTD X’ (50) Y’ (20) Z’ (40)

    # low high medium

  • Use the correct DD func. to tune the NTD

     Maximize the profit

Thesis Proposal


Experiment
Experiment

  • Verify

    • DD func.

    • Mapping DD onto NTD

  • Confirm if the function can be applied to other games

  • Trace the profit of the game company

Thesis Proposal


Data set
Data Set

  • Get data from the game company (天使之戀)

  • Choose the items (virtual assets) that are representative (i.e. popular, common)

  • Characteristics of the chosen items

    • Transaction record

      • Between players and Virtual market (time, customer, price)

      • Between players each other (time, C/S, price)

    • Quantities of items in game (time, amount)

    • Attributes (level, attack, armor, restoration…)

Thesis Proposal


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