Gabe Newell and beard delivered approximately one interesting fact every 45 seconds or so over the course of his recent hour long talk at the University of Texas at Austin. Newell chatted a lot about success of the Team Fortress 2 barter economy and the huge amounts of direct income item makers have managed to turn around in the last year or so.
"To be really concrete, ten times as much content comes from the userbase as comes from us. We think that we're super productive and badass at making TF2 content, but even at this early stage we cannot compete with our customers in the production of content for this environment," Gabe began.
"The only company we've ever met that kicks our ass is our customers. We'll go up against Bungie or Blizzard, or anybody, but we won't try and compete with our own userbase, because we already know that we're going to lose."
Gabe threw out some really concrete and large numbers to illustrate his point. "The most anybody has earned in a single year is $500,000, so they're making content, selling it to other customers, and we have a revenue share with those people and their takeaway is $500,000.
"The first two weeks that we did this we actually broke Paypal because they didn't have - I don't know what they're worried about, maybe drug dealing - they're, "like nothing generates cash to our userbase other than selling drugs". We actually had to work something out with them and said "no ... they're making hats."
It sounds as though professional modelers from within the industry were making a killing. "We knew that people at other game companies had employees that were making more money being users in our framework than they were as employees at their company, so we're like, "okay, this is weird."
"We started to see things like inflation. We started to see deflation. We started to see users creating their own versions of currencies, mediums of exchange. Countries started to create regulatory structures. In Korea you actually have to create the equivalent of a W4 form for your players to account for the virtual income they get in playing your game."
And that was the moment that Valve decided to hire an economist. You can read much more about the intricacies of Team Fortress 2's complex, evolving hat economy on the Valve Economics blog .
