about the simExchange
The simExchange is the virtual stock market for video games. No real money is involved in this stock market, rather the purpose of the project is to forecast the video game industry. Participants buy and sell stocks in video game proporties using virtual currency called DKP to predict how well games will sell or how they will be reviewed. This concept is commonly known as a "prediction market."
How does this work?
The stock's current price is the current forecast for a product. For example, if the PS3's stock is at 5,000 DKP, this corresponds to a forecast of 50 million units sold globally over the PS3's lifetime. If you think the PS3 will really sell 60 million units, you would be willing to buy the stock up to 6,000 DKP. If you think the PS3 will really sell 40 million units, you would be willing to short sell the stock down to 4,000 DKP. Through this trading, the simExchange generates forecasts for video game units sales and video game reviews.
How accurate is this?
Prediction markets are the fastest and most accurate means to forecast the future. Why? If a forecast is perceived to be incorrect to a participant, they will buy or sell the forecast in the direction they believe to be correct. Participants only express opinions if they feel strongly about their information, as opposed to a survey in which participants will answer every question regardless of their confidence. As soon as participants hear about news that will affect a forecast, they will quickly buy and sell stocks to reflect this new information.
Over time, a prediction market gets more accurate. Accurate predictors are rewarded with more DKP to make more predictions, while inaccurate predictors lose DKP and cannot make as many predictions.
Where's the proof?
The Iowa Electronic Market applies prediction market technology to predicting the US Presidency. Compared with 596 polls, the prediction market was more accurate 75% of the time.
HP applied prediction market technology to predict its printer sales. Over 3 years, the prediction market outperformed the company's own expert analysts 75% of the time.
Many Fortune 500 companies operate prediction markets to forecast product potential and make business decisions.
Over the past year, the simExchange's predictions have outperformed those of leading analysts in the video game industry.
August 29, 2006 - The simExchange concept was born.
November 9, 2006 - Open beta launched.
April 12, 2007 - NPD Futures for console hardware first launched.
July 2, 2007 - NPD Futures for games introduced with NPD Group support.
September 8, 2007 - Metacritic Futures are introduced.
September 10, 2007 - The simExchange Research releases its first report.
Brian Shiau, Founder & CEO
Brian develops and operates the simExchange. As an associate at Emerald International, Brian structured financial solutions for infrastructure projects in emerging markets. Previously, he worked at Susquehanna International Group (SIG) on the buy-side emerging markets fixed-income trading desk. Brian earned his A.B. in Economics and Certificate in Finance at Princeton University in 2005.
Jesse Divnich, Analyst & Director of Relations
Jesse Divnich has been working in the video game industry for over 10 years. During that time he has assumed many professional roles including: beta tester, programmer, publisher analyst, and for the last 6 years, a private analyst and consultant for buy-side investment firms. Jesse Divnich has received many awards for his work in the private investment sector as an analyst covering publicly traded video game companies. Currently, Jesse Divnich has switched from the private sector to the public sector as an Analyst for The simExchange where he writes analytical articles on various industry topics.