June 19, 2013 in Daily Bulletin
Diablo III’s real money auction house has been having issues for a while now. In the truly excellent Ivy Business Review William Meneray provided a broad overview of how the makers of the game decided to agree upon a real money auction house, and why things have been disastrous since:
- Before Diablo 3, Blizzard – the company behind the game – had released World of Warcraft, a game which required users to pay a monthly subscription to play.
- While the venture was exceedingly profitable, soon many games adopted a subscription pricing model, and it was clear that gamers had grown tired of paying fees.
- At the same time games on Facebook that allowed users to purchase in-game items for real money were meeting with incredible success.
- Blizzard decided to use this model for its next game – Diablo 3. Players would be allowed to exchange real money for digital items.
- In the earlier installment of the game – Diablo II – there had been a black market, where users could essentially exchange real money for in-game items. The practice was banned but the market persisted.
- By having its own real-money auction house Blizzard was effectively legalizing something that had previously been banned. By doing so it was hoping to control it – and make some profits on the side (around 15% per transaction).
- However the economy has been suffering from hyper-inflation. While players can get money there’s nothing that effectively takes money out of the system, fuelling high prices.
- Gold farmers – those who are paid to play the game for the sole purpose of generating profits, like workers in a factory – also upset the economics of the game by making up to $60 million per hour.
- Gamers, meanwhile are not only upset by the failing economy of the game, but also because the game is now less fun to play. Blizzard had made it harder for players to find good items, reasoning that they could easily obtain it themselves through the new auction house. With the inflation making prices unaffordable players have trouble advancing in the game.
The full article is very well written – you should also check out the rest of their site and expect to see us link to more of their content in the future. This article on Diablo was also the first in a multi-part series, so look out for the next installment.
Source: Ivey Business Review
June 18, 2013 in Daily Bulletin
Movoto is a blog that advertizes itself as ‘the lighter side of real estate’. Randy Nelson demonstrated why by looking at the cost of 3D printing a house:
- The MakerBot Replicator 2 is a $2,199 machine that can be used to 3D print bricks.
- The materials for a standard brick would cost about $12 per brick and would take the printer 2.9 days to print. In contrast Home Depot sells bricks for 30 cents.
- To use the machine to print the bricks for an entire average sized house would require over 220 years and $332,820.
- If you wanted to speed things up, you could purchase 2,000 of the 3D printing machines and have your house built and ready to go in four months…at a hardware cost of $4.4 million.
Find a calculator that allows you to calculate the length of time it would take, and the money it would cost for you to 3D print your own dream house, and why clogged print heads could throw everything off over here.
Via: Nick Johnson
June 17, 2013 in Daily Bulletin
Before going to market with a new product, companies generally use focus groups to test the reactions of potential future customers. Pity then that focus group participants frequently lie . Will Leitch talked about how and why he does it:
- Focus groups can pay up to $300 an hour just for sitting and talking.
- Technically individuals are only allowed to participate in focus groups every six months – but there are no explicit checks to make sure this is happening. Rather, it depends on the honour system. Leitch himself has done four in a week.
- Before placing you in a focus group there is generally an interview where individuals will be asked questions such as “have you purchased a treadmill recently” answer yes and the individual will be a part of the group.
- Generally those behind the focus group make it obvious what answer they want to hear. Individuals simply have to let the focus group lead them – ensuring that they are pleased and hear what they want.
- During the focus group it is also important to be as invisible as possible. If the individual is tagged as an outlier whose views don’t reflect the mainstream, then they are less likely to be invited back.
Read more about how to manipulate focus groups and make some extra cash on the side over here.
Source: New York Magazine
Via: Newmark’s Door
June 17, 2013 in Daily Bulletin
If you’ve travelled out of a major airport recently you might have seen a hologram providing various instructions. Joanne McNeil did some background research on them:
- The holograms cost the same amount as the annual salary for a customer service representative – and is advertised as working 24 hours a day, 7 days a week, and not requiring a background check.
- The holograms currently loop the same pre-recorded segment over and over, but the companies behind the hologram are developing technologies that will let them respond to questions.
- Those in the holograms are usually professional actors since “facial expressions are everything”. The holograms might outlive the actors as swapping recordings is expensive.
- Soon the holograms might also be seen at doctor’s offices, museums and more.
The full article looks at the societal implications of the holograms, how they work, and what experts have to say about the technology. Read it here.
June 16, 2013 in Daily Bulletin
Ron Moreau described the economics of the Taliban:
- The Taliban used to secure a large amount of its funding from rich Gulf States. However those countries are increasingly shifting their money to support other causes in Palestine, Egypt and Syria, making the Taliban desperate for new sources of cash.
- The Taliban leadership has turned to the production of drugs. Just three years ago it used to make up to $120 million a year taxing poppy farmers 10% and providing drug convoys with protection.
- Now however the Taliban have realized that they can increase revenue by having their own operations – from production to distribution – instead of taxing the efforts of others. Earnings are thought to have increased to $200 million.
- The Taliban’s governing body has decided that 70% of drug profits are to be given to them, and 30% are to be kept by the commanders and fighters – who are actually on the field, risking their lives to produce the drugs.
- The massive increase in Taliban wealth is evident in the luxury cars and homes that Taliban leaders are buying. They’ve also started to live in elite Pakistani districts – sharing neighborhoods with film stars, businessmen, and even senior political figures.
Read more about how the Taliban has allied with an old enemy to sell drugs, why neither America nor Afghanistan has been able to stop the production of opium, and what this all means for Afghanistan’s future over here.
Source: The Daily Beast
June 16, 2013 in Daily Bulletin
Game publishers are locked in an eternal battle with pirates who seek to illegally download free games. In a light hearted article Andrew Heaton looked at some of the funnier ways that publishers have tried to combat piracy:
- Pirates who played Crysis Warhead found that instead of bullets their guns shot (harmless) rubber chickens.
- Grand Theft Auto IV loads up normally for pirates but slowly, over time, the camera begins to shake uncontrollably to the point of making the game unplayable.
- Spyro: Year of the Dragon had several layers of anti-piracy protection. After pirates figured out how to crack the first layer, subsequent layers would trigger. At various times the game would show the menus in German, randomly delete saved files, and more.
- Game Dev Tycoon is a game where the player is a game developer trying to make good games and a profit. Those who pirated the game found that over time, their in-game profits would evaporate because…pirates would illegally download it, forcing the company into bankruptcy, and the game to end.
The full article is funny and informative, and contains many more examples. Read it here.
June 15, 2013 in Daily Bulletin
In recent times a series of science prizes have been launched that aim to rival the Nobel prizes in prestige – and have already exceeded them in terms of monetary compensation. There are various motives behind launching these prizes – sometimes they are political with Asian powers wanting to better recognize their own achievements in the field – in addition to promoting science and research. Yet Zeeya Merali writes that these prizes can do more harm than good:
- The money could do a lot of good if it was being used to fund science, but instead a fair amount of it goes into the personal bank accounts of the scientists.
- The money could be used to drive future innovation rather than reward past success. The X-Prize Foundation, for example, is offering $10-million to the first team that makes advances in sequencing the genome.
- The money generally goes to scientists who are already successful in their fields, and don’t have a lack of money for their projects – depriving lesser known scientists of needed funds.
- The prizes are usually modelled on the Nobel prizes and thus ignore valuable fields such as ecology and evolutionary biology in favour of physiology and medicine.
- The prizes have a tendency to award those who make progress in solving problems of the developed world – such as progress against cancer – rather than those who ultimately have a greater impact by working with developing countries.
- Supporters of the prize argue that they help encourage children to go into science. However there are already individuals who inspire millions of children by making interesting educational YouTube videos. These people are rarely recognized.
- Such prizes might mislead budding scientists by reinforcing the myth that scientific innovation is driven by lone geniuses.
The full article is far longer, has many fascinating examples, and is well worth a read. It looks at the catch-22 of awards recognizing existing funding trends, why the prizes can be both too risky and too conservative at the same time, why nobody will go into science for the money, and much more. Find it here.
Via: Marginal Revolution
June 14, 2013 in Daily Bulletin
The Economist reported on a new way that students can help manage the costs of college:
- Companies such as Upstart and Pave allow individuals to sell a stake in their own earnings.
- In exchange for an initial sum of money, students agree to pay a portion of their pretax earnings for a specified period of years.
- There is normally a cap of around 10% on the proportion of their incomes that students can promise to give up.
- One service also caps the payback amount so that if the next founder of Facebook uses the service, they don’t hand over exorbitant sums of money.
- The idea is an attractive value proposition for students, since, unlike with a student loan, if their income falls, then the amount they have to pay back also falls.
- Investors also have an incentive to contribute to a student’s success – one user of the service reports receiving free study materials from a backer who is hoping to ensure their investment provides maximum returns.
Read more about how it works, what the founders of the services have to say, and how it relates to poker over here.
Source: The Economist
June 13, 2013 in Daily Bulletin
UPS is rolling out a new delivery management system. Marcus Wohlsen used it as an opportunity to look at some of the unbelievable numbers behind the package delivery company:
- The average UPS driver makes 120 deliveries a day. There are 15 trillion, trillion possible routes that the driver could take to make those deliveries – far more than the age of the earth in nanoseconds.
- And UPS has 55,000 delivery drivers. Those calculations have to be made for every single one of them.
- Figuring out a better delivery management system is a lucrative initiative for UPS – reducing the average amount driven by just 1 mile can save $30 million.
- UPS also has a meticulous truck packaging system that minimizes the number of inches a driver has to reach to grab a package to deliver.
Read more about the delivery efficiency manual that UPS uses, the importance of human intuition, and the new delivery management system that it is developing over here.
June 13, 2013 in Daily Bulletin
Twilight Greenaway took a look at modern day small farmers:
- The median farm in the United States consistently incurs a net loss.
- Farms have thus become creative in identifying new sources of revenue.
- Some use their produce to create unique products such as goat milk paint or specialized jams, cheeses, and soap.
- As society has moved away from agriculture it has also become more interested in farms as a tourist attraction, and farms have capitalized on this through the addition of attractions such as corn mazes and hay rides.
- Farms have also become popular wedding venues, generating lucrative fees for farmers.
Read more about the creative ways that farms are generating revenue, how small farms compare to industrialized mega-farms, and more over here.
Source: Modern Farmer