In October 2020, Habbo—a virtual world for teenagers and young adults—announced that it was releasing a new update called “Habbo 2020," which would implement some new changes to the game. Such as an 80% wealth tax. A 400% increase in exchange tax. A nearly 6,000% increase in sales tax.

As news of Habbo’s plans filtered through to the general public, the markets began to panic. Users offloaded tens of thousands of dollars worth of virtual assets in fire sales as the value of rare items, virtual currency, and entire accounts plummeted overnight. In total, it’s estimated that the market crash wiped out over $30 million, entirely eliminating Habbo’s economic growth during the pandemic.

PATREON:
  / trolligarch  

TIMESTAMPS:
00:00 Introduction
03:52 Habbo 2020
11:07 The Sellers
16:25 The Buyers
20:37 The U-Turn

MUSIC:
I Had a Feeling - TrackTribe
Gemini - half.cool
Burlesque - National Sweetheart
Temple of Treasures - Patrick Patrikios
Mirage Melody - Patrick Patrikios
Rinse Repeat - DivKid
Rains of Meghalaya - Hanu Dixit
Target Fuse - French Fuse
Digifunk - DivKid
Final Girl - Jeremy Blake

METHODOLOGY OF ESTIMATED EXPENDITURE CALCULATION:
HC Payday is a program where Habbo pays (1) a 10% rebate for eligible in-game purchases made by Habbo Club members and (2) a fixed number of credits (between 5 to 30) depending on how long a player has continuously held Habbo Club membership (“streak” credits). User-to-user trades (including the Marketplace), the purchase of premium memberships, and currency exchange are ineligible for the HC Payday rebate.

Monthly statistics were previously disclosed by Habbo on X/Twitter and have been compiled by, inter alia, Puhekulpa’s Habbo Statistics and Habbox Wiki’s HC Payday page. To calculate the estimated monthly expenditure by Habbo Club members, I used the formula of (110 * HC Payday) * Conversion Rate, with 10 * HC Payday representing eligible in-game purchases and 100 * HC Payday representing user-to-user trades. The latter is based on the assumption the value of user-to-user trades makes up 10 times the value of in-game purchases, per Ahvelampi (2011):    • Habbo with Osma Ahvenlampi at Game Ho...  

The black market conversion rate was calculated as the average of rates available for that month. If data was missing for a particular month, the previous possible month’s data was used. Data for March to September 2018 was unavailable, so the figure for October 2018 was used instead.

The $30M headline figure was calculated by comparing the six-month period of September 2020 to February 2021 with the previous six-month period (March 2020 to August 2020).

The estimated expenditure calculations do not take into account—
Black market conversion rates outside of Habbo.com (e.g. Habbo.com.br, Habbo.es), which may lead to an overreporting of the black market conversion rate and, thereby, an overreporting of all figures
Expenditure on premium memberships, namely Habbo Club and Builders Club, which may lead to an underreporting of all figures. This underreporting is partially offset by the payment of streak credits in HC Payday, which is also not accounted for
The disruption to user-to-user trade in January 2021 when trading was disabled for around 10 days, which may lead to an underreporting of January and February 2021 figures
Expenditure by non-Habbo Club members, whose figures Habbo does not report, which may lead to an underreporting of the total amount lost as a result of the Habbo 2020 market crash

ADDITIONAL INFORMATION:
SBT GAMES interview with the Habbo Brazil Community Manager
   • HABBO HOTEL: THIAGO MARTINI, O ATARI7...