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Show HN: Free video game trading, a year after I launched it

vgfive.com

39 pointsmathgeek26 comments

This was the first "successful" site that I launched. Took me about a month to develop originally, and launched it last year on Black Friday. Subsequently sold the business to a competitor and still operate it for them as a side job. Have put quite a bit of time into it over the past year and just had a relaunch with a new backend system.

Basically direct user-to-user trading via the postal service. You sell your games for virtual currency that you use to buy games from other folks. We used to charge for it, but now it's free with a limited ability to get cash for your currency if you can't find anything to buy.

Running on Heroku, RoR, Bootstrap (as if it isn't obvious), with plenty of other open source tech behind it.

Any questions, feel free to ask.

>Any questions, feel free to ask

How do you make money?

Under the "old" system, there was a $1-$2 fee per trade. Back then, we were doing automatching. You listed what you had, and what you wanted, and the system would match up buyers with sellers (which is what you paid the dollar for).

Now, the currency (credits) can be purchased at a rate of $1 per 100 credits. You don't have to buy any, as you can get them in return for the games you want to get rid of, but it's an option if you see something you want to grab right now at a good price.

There's also a limited currency buyback program that anyone can use once a month if they don't see any games they want, but want to get case back. That's under maintenance right now, but will be launching again next week.

Your answer is a little unclear. If you're essentially printing money (i.e. "credits") and then guaranteeing to buy them back at the same rate, it seems like you would net nothing. Unless you're counting on credits never getting cashed back in or making interest on the deposits.

From your FAQ, it seems like the profit comes in the form of a $1 buyback transaction fee. Am I mistaken?

Sorry, hope this clarifies. Not every credit that's sold ends up getting cashed out (it's a limited program as far as how many sales worth of currency you can get in cash). That $1 difference helps, but in the end the currency sold is still the main revenue. The buyback is merely a way of ensuring that if you sell games but can't find anything to get back for them, you can get cash. That's limited to 5 games/month.

So the model is hoping people end up with leftover credits? Isn't this similar to a stored-value model, with state laws mandating that any leftover credit has to be returned? I must have misunderstood.

No, it's simply a model where you continue trading those credits for games. Naturally there is some risk involved, but you can simply buy games to spend down your balance.

This is awesome and I plan to use it in the future.

I'm curious how you deal with possible fraud or how you insulate yourself?

From an infrastructure perspective, how long did it take you to break even on your costs with Heroku? What kind of configuration did you start with to keep the site's availability under control? Feel free to provide as much or as little detail as you would like. Thanks!

Fraud really hasn't been an issue, at least as far as we've been alerted to it. We hold the credits until the buyer confirms receipt and that the game works, so anyone sending out fake games would need to make them pretty convincing. There's only been one person that I'm aware of doing that, and that was discovered pretty quickly thanks to the buyers alerting me of the situation.

Heroku's been one of the main reasons I was able to launch the site and iterate new features so quickly. 99% of the time the site runs on a single web dyno using unicorn to serve more than one request at a time, plus one worker for sending emails, popping up site notifications (using Gritter for that), etc. It's been that way since launch.

So what happens if Alice sends Bob a legit game, but Bob claims it's a fake? Didn't Bob just get a game for free?

In that case Bob is required to send the game to us for verification. Nothing change hands until that is resolved. Bob gets credits to cover the shipping costs to send the game to us, if it's a legitimate claim.

What if Bob sends a different game to you?

Same result. In the end we guarantee you if you provide images of the game pre-shipment, and a tracking number in case it never arrives. If your account becomes a repeat offender (whether as buyer or seller), then you risk getting banned from the site.

I love the concept. However, I don't necessarily love the layout or the flow of the whole interface. The overarching goal of the whole app is trading games. However, I'm multiple clicks into the app before I can get to a search bar. The "list of available games" on the front page looks impressive, but it does little good for a user looking for a specific game, which, I would wager, is > 80% of your use case.

I'd love to see a search bar on the home page, maybe even a "google instant" style mechanism that shows me whether or not you have what I'm looking for at the moment, and allows me to rapidly re-query for other titles. I'd wager it might even moderately boost your conversion.

Anyway, love the concept and how it all works. Keep up the good work.

Thanks for the comments. The search bar is definitely something I'm looking in to. Something along the lines of a recommendations dropdown as you search, with a "X copies available" note, sounds like an awesome idea. Much appreciated!

This is exactly like 99 Gamers, which is also free. It was started about a year ago too, according to the original launch post on reddit. I recently started using it to get rid of Xbox games collecting dust. The experience has been painless and is an excellent way to try out other games.

Interesting to see there are other video game trading websites out there.

I am not a video game player, but this seems like such an obvious site (and awesome), are there a lot of competitors? I see ads for video game stores, and how they screw you on trade-ins, which this seems to fix.

There are two or three major competitors that I'm aware of (other than the GameStops and Amazons of the world), and a handful of smaller ones. We're currently, by my estimates, the third largest. The folks who I now run the site for own the largest (as far as I'm aware), but we're mostly independent since I still operate it day-to-day.

One of the major points of the site is that you get 100% of the value you sell the game for. If it's going for $40 used, and you sell it for 4000 credits (the site's currency, valued at $1/100), you get 4000 credits to spend on something else.

First, let me say I love the idea and the site. My question: Why bother with the credits? Is it a legal workaround for currency? Why not make credits equivalent to dollars?

There were already a lot of sites doing the "keep your cash in our system" model. I was also sure there were some legal issues with a cash system, but in the end it was mostly about differentiating.

I only ask because it seems like the only barrier to entry. I know the math is easy, but it still is math for the user. Are you comfortable sharing numbers about how many users are repeats? It seems like a very sticky system.

True. It does take some getting used to. I think it's better now that it's a simpler $1/100 translation.

Among users who complete at least one trade, the raw average is 15 trades/user (that just a trades/users calculation). Right now, 91% of users who complete at least one trade come back to trade again.

There's a fairly stark divide I've seen while using this and other game trading sites between users who want to see a dollar equivalent and users who want to see a micro economy like this function independently of real currency. The direction that the major sites seem to be moving is more closely aligning with actual dollars, so VGFive explicitly stating 100 credits == $1, for example. Its initial model tried to act more independently, following what was more or less an economic collapse in the competitor site that first used that model, but after VGFive was bought, its internal economy also suffered massive inflation. Mathgeek obviously has more internal knowledge of how the economy reacted to the various changes that were introduced, but from a user's perspective it seems likely that trying to create something like this with an "independent" economy is more or less unsustainable (much to my dismay because I actually don't like the credit/dollar equivalence and much preferred the queue & supply/demand system).

Been a VGFive user since launch, and while there was a big spate of Application Error downtime in the early days, the fact that it's still up right now speaks volumes for your infrastructure improvements!

I know it's nitpicking but the footer keeps getting pushed away.

I didn't even see the top nav but found the search from there. I know what I'm doing after work now.

Do you get a lot of users refering others?

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