The simExchange
Encyclopedia
The simExchange is a web-based prediction market
in which players use virtual money to buy and sell stocks and futures contracts in upcoming video game properties. The main purpose of the web site is to predict trends in the video game industry, particularly how upcoming products will sell and how they will be received by the critics. For those who do not participate in the prediction market, the web site is a database of sales forecasts and game quality forecasts that are updated in real-time. The web site also features a number of "Wisdom of the crowd
"-type content collaboration and aggregation tools, including means for sharing information, articles, images, and videos about the games.
For global lifetime stocks, 1DKP equals 10,000 copies of that game sold. For example: If a trader thinks a game will sell 234,000 copies, that would correlate to a stock price of 23.40DKP.
releases on a monthly basis. These futures cover (1) console sales, (2) game sales, and (3) total software sales. These contracts cease trading one day before NPD reports and pay out the evening NPD reports. The price of NPD Futures Contracts is similar to those of stocks, with 1 DKP price corresponding to 10,000 units sold. For example, if the Xbox 360 November Futures Contract is price at 60.00 DKP, this corresponds to a forecast of 600,000 units will be sold in the retail month of November.
. These contracts cease trading and pay out 14 days after the game's release. A Metacritic Future's price is directly related to the Metascore. For example, a 90.00 DKP price would correspond to a forecast of a 90 Metascore.
, MarketWatch
, and TheStreet.com
.
Prediction market
Prediction markets are speculative markets created for the purpose of making predictions...
in which players use virtual money to buy and sell stocks and futures contracts in upcoming video game properties. The main purpose of the web site is to predict trends in the video game industry, particularly how upcoming products will sell and how they will be received by the critics. For those who do not participate in the prediction market, the web site is a database of sales forecasts and game quality forecasts that are updated in real-time. The web site also features a number of "Wisdom of the crowd
Wisdom of the crowd
The wisdom of the crowd refers to the process of taking into account the collective opinion of a group of individuals rather than a single expert to answer a question. This process, while not new to the information age, has been pushed into the mainstream spotlight by social information sites such...
"-type content collaboration and aggregation tools, including means for sharing information, articles, images, and videos about the games.
How it works
The prediction market works as a stock market game for players to predict the number of units a game or console hardware will sell or the reviews a game will receive. These predictions are made by trading global lifetime stocks, NPD Futures, and Metacritic Futures. These tradable contracts directly forecast the metric, for example: If a stock is priced at 100 DKP, this corresponds to a forecast of 1 million units. If a trader believes the product will sell more than 1 million units, then he would buy the stock, if he believes the product will sell less than 1 million units, then he would sell the stock.Types of Contracts
The simExchange aims to predict both the quantitative and qualitative sides of the video game industry. It originally launched with only stocks that forecast the global lifetime sales of gaming products. On April 12, 2007, the simExchange began public testing of monthly sales futures contracts. These later became known as NPD Futures.Stocks
A stock on the simExchange represents the total global sales a video game product will sell through to consumers over the product's lifetime. These stocks do not have a pre-determined expiration date as some games can sell for years.For global lifetime stocks, 1DKP equals 10,000 copies of that game sold. For example: If a trader thinks a game will sell 234,000 copies, that would correlate to a stock price of 23.40DKP.
NPD Futures
An NPD Futures Contract is a virtual contract that predicts the data the NPD GroupNPD Group
The NPD Group, Inc. is a leading North American market research company. The NPD Group consistently ranks among the top 25 market research companies in the independent Honomichl Top 50 report, which the media and the research industry acknowledge as a credible source of information on the market...
releases on a monthly basis. These futures cover (1) console sales, (2) game sales, and (3) total software sales. These contracts cease trading one day before NPD reports and pay out the evening NPD reports. The price of NPD Futures Contracts is similar to those of stocks, with 1 DKP price corresponding to 10,000 units sold. For example, if the Xbox 360 November Futures Contract is price at 60.00 DKP, this corresponds to a forecast of 600,000 units will be sold in the retail month of November.
Metacritic Futures
A Metacritic Futures Contract is a virtual contract that predicts the metascore, which is a weighted average of all of the scores assigned by individual critics to a particular game, that a game will receive from MetacriticMetacritic
Metacritic.com is a website that collates reviews of music albums, games, movies, TV shows and DVDs. For each product, a numerical score from each review is obtained and the total is averaged. An excerpt of each review is provided along with a hyperlink to the source. Three colour codes of Green,...
. These contracts cease trading and pay out 14 days after the game's release. A Metacritic Future's price is directly related to the Metascore. For example, a 90.00 DKP price would correspond to a forecast of a 90 Metascore.
Applications
Data produced by the simExchange has been noted as a resource for real-world investors. The metrics that are forecast are fundamental factors that drive the stocks of the companies that produce the games. The simExchange's prediction market data is used by Wall Street analysts, such as Michael Pachter, in their published notes and financial news outlets, such as ReutersReuters
Reuters is a news agency headquartered in New York City. Until 2008 the Reuters news agency formed part of a British independent company, Reuters Group plc, which was also a provider of financial market data...
, MarketWatch
MarketWatch
MarketWatch operates a financial information website that provides business news, analysis and stock market data to some 6 million people. MarketWatch offers personal finance news and advice, tools for investors and access to industry research. Along with its flagship website, the company operates...
, and TheStreet.com
TheStreet.com
-History:TheStreet.com, Inc., was co-founded in 1996 by Jim Cramer and Martin Peretz. It is traded on the NASDAQ Global Market. The company is headquartered at 14 Wall Street in New York City. Its stock was made public in May 1999 under the direction of past Chairman and Chief Executive Officer...
.
External links
- The simExchange Homepage
- SimExchange aims to predict video game market CNETCNETCNET is a tech media website that publishes news articles, blogs, and podcasts on technology and consumer electronics. Originally founded in 1994 by Halsey Minor and Shelby Bonnie, it was the flagship brand of CNET Networks and became a brand of CBS Interactive through CNET Networks' acquisition...