@drl21, Being better than analysts is one thing and being correct most of the time is another. What I'm saying is that there's typically a fairly large error with GLS prediction, not that they're worse than analyst predictions.
When I say delisting a game is unfair, I mean that delisting assumes that the GLS prediction is correct, though it almost always will have a relatively wide margin of error. The last article I read on the SimExchange quoted an error of 16%, which is hardly what I'd call correct. It's more of a ballpark estimate like most estimates of this kind.
As an aside, what are you basing your assessment of the SimExchange's accuracy on? You're saying that we're pretty close 90% time then what is standard deviation of the error assuming the GLS prediction error roughly follows a normal distribution?
When we're talking about inference, we typically want to know with at least 95% confidence that a particular hypothesis is correct. Say our hypothesis is that the SimExchange's GLS predictions within 1 year are within 10% of the actual final value, can you prove to me that this is true with 95% confidence?
Getting back to the topic at hand, predictive markets are useful when no better method exists. The most common critique is that there is a tendency for those participating in predictive markets to abstract their predictions. Instead of trying to predict say what the GLS will end up being, people will try to predict what the average prediction of the GLS will be -- or in essence people will attempt to game the market. That's why awarding correct predictions is important.
Saying that predictive markets are a decent way of predicting the GLS of a game is fine. But claiming that this same prediction should be how we measure the accuracy of our predictions is just flat out wrong. Delisting a GLS prediction before the GLS is known with a high degree of confidence is tandem mount to awarding speculative investment, attempting the predict the prediction instead of the actual GLS.
That being said, the methodology behind the shorter term measures seems fine since they're awarding DKP on the basis of an actual measure.
"There's a decent chance that we'll be completely wrong about what the GLS will end up being. "
Ah, but that's where your wrong. The whole point of SE is that statistically, we as a large group, are far far FAR more accurate and consistent in predicting the life time sales a game then any analyst in on the market. Cool, huh? Seriosuly though, it's true. In fact, game analysts will often use the data and numbers that we settle on as part of their determination. So while we may be off slightly, 90% of the time were pretty close. So once we settle on a number that everyone can agree on, theres almost no point in waiting, because the chances of us being off are fairly small.
I actually discovered the SE when I read an article detailing all of that. I thaught that sounded awsome, so I joined.
@apujanata, I don't really get that -- say everyone eventually settles this stock to say 3000 DKP, who's to say it really will reach that point? There's a decent chance that we'll be completely wrong about what the GLS will end up being.
It seems somewhat unfair, or maybe cheap, given the Metacritic score guessing is pretty hard and fast -- whatever score it reaches it reaches; no if, and, or but. I can see how de-listing the average games would be reasonable since they have fairly quick right tailed distributions, but some games like Diablo have less predictable distributions hence it's far more likely that we'll just get it wrong.
I see how it's pragmatic in a sense, but it seems inelegant.
I believe that lots of simEx stock will get delisted about 1-2 years after release, unless there are still lots of activity in that stock (market still couldn't agree on the right price). However, don't worry about the actual delisted date, since we will always refer to Lifetime #, not current #.
Even if, say, by 2 years after release Diablo 3 only get 5 Million sales, if all of us agree that it will reach 7 Million eventually (another 8 years), it will get delisted at 700 DKP pricepoint (last price point when delisted).
While that's true, and while I apologize if my terminology was misleading or incorrect, Blizzard is a well known developer and Diablo 3 will be disc based. Therefore, based on your own argument, my comments are still legitimate with reference to this situation. Regarding the market that Diablo 3 will enter, the PC game market is shrinking.
Question: How long does GLS last? It took Starcraft ten years to almost hit 10 million units sold, and if my break down way below is right, it will have taken Diablo II at least 8 years to have almost reached 10 million units.
I don't know about you, but I do not see myself frequenting this site a decade from now.
@apujanata, Yeah, I was basing my claims off of the older numbers and gaming site guestimates of how large the PC gaming industry had grown since them. Now that there's an actual numbers to look at, it seems like 10 million is possible, though it'll probably take quite awhile to get there.
I most certainly wouldn't mind zukaus retiring for at least 5 months, since that mean I can try to catch up to him. Trying to catch up to him is very difficult.
When I first join simEx, his networth is "only" 217 Million. Today, it is 340 Million. He increased his networth by 123 Million, while I only increase my networth 28 Million (only 20% of his networth increase, based on amount).
@Kentor, Based on your calculation, which could be wrong or could be right, it seems that Diablo 2 figure could be between 7.7 - 10 Million (rounded up), which mean my original hunch / estimate of 8 Million - 10 Million of Diablo 3 mean zero percent increase over Diablo 2.
I also covered some of my short at 8xx price point, but unfortunately I didn't go all the way (completely neutral), otherwise, I would have gained more profit :D.
@drl21, I don't agree that Diablo 3 are going to have bell curve. If Blizzard release it yearly or every 2 year, then this could be true. However, since the latest release is a long time ago (2000 for Diablo 2, and 2001 for Diablo 2 : Lord of Destruction) I think it could follow bell curve, or it could also follow linear (either up or down) regression.
I am leaning more toward down (hence my current short position) since there are lots more competition now (IMO) than before.
@drl21, Obviously, you did not understand my comment. Your view of the PC gaming market is too narrow. You are only focusing on titles coming from well-known developers/publishers and that are traditionally disc-based.
The PC gaming market is increasing in size - it has never been larger. However, like I stated, the PC gaming market is continually changing.
Everything from Steam to Live to FPS disc-based games to indie downloadable games to the smallest flash based game is part of the PC gaming market - even solitaire is part of the market. What you may be referring to is the traditional gaming market on the PC. However, there are plenty examples of successful flash-based PC games, indie games, and even traditional PC games. The PC gaming market is just experiencing some shift away from the traditional titles to some of the more smaller niche titles, MMOs, casual titles, and more.
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Being better than analysts is one thing and being correct most of the time is another. What I'm saying is that there's typically a fairly large error with GLS prediction, not that they're worse than analyst predictions.
When I say delisting a game is unfair, I mean that delisting assumes that the GLS prediction is correct, though it almost always will have a relatively wide margin of error. The last article I read on the SimExchange quoted an error of 16%, which is hardly what I'd call correct. It's more of a ballpark estimate like most estimates of this kind.
As an aside, what are you basing your assessment of the SimExchange's accuracy on? You're saying that we're pretty close 90% time then what is standard deviation of the error assuming the GLS prediction error roughly follows a normal distribution?
When we're talking about inference, we typically want to know with at least 95% confidence that a particular hypothesis is correct. Say our hypothesis is that the SimExchange's GLS predictions within 1 year are within 10% of the actual final value, can you prove to me that this is true with 95% confidence?
Getting back to the topic at hand, predictive markets are useful when no better method exists. The most common critique is that there is a tendency for those participating in predictive markets to abstract their predictions. Instead of trying to predict say what the GLS will end up being, people will try to predict what the average prediction of the GLS will be -- or in essence people will attempt to game the market. That's why awarding correct predictions is important.
Saying that predictive markets are a decent way of predicting the GLS of a game is fine. But claiming that this same prediction should be how we measure the accuracy of our predictions is just flat out wrong. Delisting a GLS prediction before the GLS is known with a high degree of confidence is tandem mount to awarding speculative investment, attempting the predict the prediction instead of the actual GLS.
That being said, the methodology behind the shorter term measures seems fine since they're awarding DKP on the basis of an actual measure.