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Skin in the game: The returns of digital assets from computer games

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  • Reichenbach, Felix

Abstract

A large community of traders, gamblers, and investors is involved in trading items from computer games. This study analyzes the risk and return characteristics of portfolios constructed from over 3000 cosmetic items (“skins”) from the most popular game on Steam, Counter-Strike. The results show that rapid player growth and limited supply contributed to exceptionally high historical returns over the last decade. Between 2015 and 2025, diversified portfolios of these items significantly outperformed stocks, achieving an average annual return of up to 66.9 %. However, high transaction fees, high volatility, and uncertain long-term prospects also pose considerable risks to players and investors.

Suggested Citation

  • Reichenbach, Felix, 2025. "Skin in the game: The returns of digital assets from computer games," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009298
    DOI: 10.1016/j.frl.2025.107670
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G50 - Financial Economics - - Household Finance - - - General

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