Non-Separable Digital Objects as an Alternative Investment

This article investigates digital objects in video games as an alternative investment from 2015 to 2020. The authors use the Steam Community Market of the Counter-Strike Global Offensive game publisher, a database that contains 19,717 observations divided into knives, machine guns, machine pistols, pistols, rifles, sniper rifles, and stickers. They use a hedonic approach to construct indexes for each category and an overall index. The sharp increase in the overall index is due to the transition from pay-to-play to free-to-play in December 2018. The stickers index is very high due to the scarcity of some stickers and the use of specific periods. In addition, the returns are correlated with risks differently depending on the skins category. Given the low correlation between the returns of skins and those of financial and nonfinancial markets, the risk-adjusted returns of skins reveal a potential value for portfolio diversification. However, testing this potential through a CAPM approach for different portfolio risk profiles confirms only some interest in stickers and possibly Sniper rifles and pistols. Implications of these findings are discussed for individual and professional investors, gamers, and game publishers.