Author Archives: glennon

As I touched on in a previous article, the market for digital items in video games is complex, lucrative, and rapidly changing. One particularly notable change has just come into effect. Last year, a Chinese law was introduced that would require video game publishers to release the item drop rates from in-game “loot boxes”, and as of May 1st this law is now in play. The “loot box”-based model of microtransactions has gained tremendous popularity among video game developers in the last handful of years, with games like DOTA 2, League of Legends, Overwatch, and others making extensive use of Continue reading Chinese Law May Show Trend Towards Tighter Regulation of Microtransactions→

Over the last decade or so, more and more goods and services seem to be adopting a two-part pricing strategy as a way to maximize their profits. Two-part pricing (also sometimes known as a two-part tariff) is a strategy used by firms with market power in which the price of a good or service is composed of a lump-sum fee, as well as a per unit cost. The benefit of this technique is that firms are able to capture more of the consumer surplus (the monetary gain that consumers get when they are able to purchase a product for less than Continue reading Expensive Juicers and Two-Part Pricing: A Cautionary Tale→

As so-called “free-to-play” video games continue to gain popularity, the business models funding them are undergoing significant scrutiny. Popular games like Dota 2 and League of Legends have somewhat similar business models, largely centered around the sale of digital cosmetics, sometimes known as “skins”. These items give in-game characters a different look of some sort, and for the most part can only be acquired with “real” money. For Dota 2, the cosmetic market is integral to the game’s existence, essentially keeping the free-to-play model a plausible way for publisher and developer Valve to make money. Artists and 3D modelers design Continue reading For Free-to-Play Games, Balancing Digital Markets Can Prove Challenging→

Have you ever wondered how the ads you see online are selected? When you’re shopping online or watching a video on YouTube, odds are you aren’t seeing a random advertisement, but an advertisement that has been specifically chosen for you through an auction process that happened in the fraction of a second it took the webpage to load. Many companies, including Instagram, YouTube, Google, and Facebook don’t just serve up ads that might be relevant to your interests, they hold an auction for your attention. Behind the scenes, the type and quality of the ad, your personal browsing history, and Continue reading How Digital Ad Bots Bid for Your Attention→

President Trump’s lack of interest in the opinions of professional economists is causing concern. According to a February report by the Huffington Post, President Trump was concerned about the value of the dollar. Unsure of whether a strong dollar or a weak dollar is good for the US economy, he made a 3 AM call to (now) former national security advisor Michael Flynn, to ask what is essentially a question about macroeconomics. According to the report, Flynn admitted to not knowing, and advised the President to consult an economist instead. This piece of information was picked up by the New Continue reading Trump May Struggle to Deliver on Economic Campaign Promises→

There is no doubt that Amazon is a massive company, with sales accounting for more than half of every new dollar spent online in America. According to The Economist, many shareholders believe that this is just the beginning for Amazon’s dominance, as the firm’s share price has increased by 173% since early 2015, and Amazon holds a market capitalization of approximately $400 billion, making it the fifth most valuable firm in the world. The Economist also notes that despite these incredible numbers, 92% of Amazon’s value comes from profits that are expected to be made after 2020, indicating that investors Continue reading Can Amazon Meet Investors’ Massive Expectations?→

The interaction between health and money is well-established in America. Money does not necessarily imply perfect health, but rather that should a serious illness crop up, wealthy individuals have the resources to address it with the best treatments available. Of course, this approach is not possible for all Americans, and a series of recent studies have begun to investigate just what happens to patients when the cost of prescribed cancer treatment is out of reach. A recent article published by NPR provides a number of truly stunning statistics, and I strongly encourage readers to give it a look. The research Continue reading Medical Professionals Begin to Weigh “Financial Toxicity” in the Balance for Cancer Patients→

So far, this series has examined recent trends in digital advertising, and covered various approaches to increasing digital ad revenue. This installment will take a look at the apparent trajectory of this industry, and some of the challenges that publishers and content creators face. At the moment, the future direction of digital advertising is in question. Agencies are being founded with the express purpose of selling unblockable advertising, while other companies opt for paywalls or simply barring adblock users from accessing their sites in the first place. Some companies such as Twitch have found success with new ad serving technology, Continue reading The Uncertain Future of Digital Advertising→

This is a continuation of our ongoing series investigating unblockable online advertising. Last week we took a look at Twitch.tv’s successful attempt to rework their site to support unblockable ads, and this week will be examining Facebook, the challenges they face, and their less-than-successful attempts to circumvent adblockers. Facebook boasts a tremendous number of active users, surpassing 1.86 billion in the 4th quarter of 2016. A recent article from TechCrunch (linked at the end of this piece) states that Facebook earned $8.81 billion in revenue in Q4 2016, vastly exceeding analyst estimates. Despite this tremendous success, Facebook has warned that Continue reading Facebook Struggles with the Future of Digital Ads Despite Massive Revenue→