Today, the videogame skins have become one of the most profitable marketing business strategies for gaming companies. The history of video game skins is fascinating, and it’s worth reading up on all of the different changes that have happened since their inception.
What are video game skins?
They are in-game graphics that you can apply to your characters in the video game. There are two ways a player can get a skin, by completing in-game challenges or by buying using the money.
The first game to have skin was Sonic Adventure 2 (2001), where the players could download the free Christmas theme costumes, but it was Elder Scroll 4 Oblivion game (2006) that made it famous after the launch of horse armor as DLC (downloadable content). The first game to use microtransaction was Oblivion. The phrase “microtransaction” wasn’t even commonly used at the time, and it was simply referred to as “Bad DLC” by some game enthusiasts who thought it was merely a money-grabbing gimmick by the firm.
However, it resulted in the birth of one of gaming’s most hated and most lucrative business strategies.
Microtransaction
Microtransaction is the purchase of virtual items for a small amount of money in a game.
Video-game Double Dragon 3 (1990) was the first game to use microtransaction in-game items to purchase power-ups, characters, health, weapons, and special moves by inserting a coin in the arcade.
Free-to-play games usually use the microtransaction model & are also referred to as “freemium.” Many games like Fortnite, Apex Legends & Warzone makes most of the money by selling battle pass in the game.
A battle pass is a business model that a player buys; that rewards the player for completing in-game challenges through skins. This model was first made famous by Dota 2 (2013).
The rise of eSport had a significant change in buying skins because seeing their favorite team playing with special skins made them buy them.
Gambling
The gaming industry is growing at an exponential rate every year, with 2.7 billion gamers worldwide, and will reach 3 billion in 3 years. The rise of the videogame has started other problems such as skin gambling. To begin, the inception of skin betting was made famous by Counter-Strike: Global Offensive in which the players would go to the Valve marketplace to sell or buy the rare skins going as expensive as 3000$.
The game used loot boxes where players could open them using money and get randomized skins making it even more challenging to get rare skins.
According to Statista “In 2025, loot boxes are projected to generate 20.3 billion U.S. dollars in annual revenues, up from an estimated 15 billion U.S. dollars in 2020.”
Conclusion
According to DMarket, a skin trading website estimates: “the skin market is $40 billion a year.”
The skins are popular because they give players a feeling of ownership over the game, and they can also allow them to show off to other players what they have accomplished.