Status game is a sequential procedure for the improvement of relative position of individuals or groups in a specific system through interaction, dispensation of resources, and strategic behavior. Take social media, for example, Meta’s platform alone has more than 1 billion units of content per day posted by its users, but the algorithm only push 0.5% to 3% of them to the top traffic, and the users must compete for visibility in the form of high-frequency interaction (e.g., liking rate ≥8% or comment density ≥2 / min). For example, if TikTok creators encourage the value of “completion rate ≥60%+ share rate ≥5%” in 30 seconds, there will be 70% more opportunity their content will enter the recommendation pool, one thousand plays a video can earn a revenue of $1-5, and the head account annual advertising share exceeds $1 million. This is related directly to the underlying premise of Status game — quantifying influence in terms of data metrics and optimizing rankings through competitive conduct.
In business, Status game finds expression in the establishment of industry dominance by firms in terms of market share, brand premium or technical hurdles. In the smartphone market, for instance, with 40% global market share of premium phones (unit price ≥ $800) and user retention (iOS retention rate 92%), Apple’s App Store yearly revenue is over $85 billion, and developers are charged 15%-30% commission for the privilege of traffic access. By employing the strategy of “hardware comprehensive net interest rate ≤5%”, Xiaomi forms an ecological chain with the interconnections of IoT devices (more than 500 million units globally), and the Internet service revenue ratio increases to 12% in 2023, and the gross profit margin amounts to 72.3%, which is far greater than the 9.7% of the hardware business. The essence of the “low-profit hardware + high-value-added services” business mode is to redescribe the dimension of competition on user scale density (average intake per user ≥1500 yuan).
The Financial market Status game emphasizes more about capital efficiency and risk game. High-frequency Trading firms such as Jump Trading, with sub-millisecond latency (≤0.0003 seconds) and algorithm optimization, produce more than 20% of the US stock market’s trading volume, and the return on an annual basis can be as much as 15% to 25%, which is much higher than the 7% to 10% of the S&P 500. In the bitcoin mining market, bitcoin miners need to balance the cost of computing power (per TH/s power consumption ≤0.03W) and block rewards (the present 6.25 BTC/block, about $380,000), when the total network computing power exceeds 200 EH/s, the proportion of individual mining pools less than 0.5% will face the profit threshold imbalance, and the mining mines with more than 60% electricity will be cut off.
Psychological research has shown that the maximum rate of dopamine release evoked by Status game in human beings is directly correlated with “perception of comparative advantage”. For example, with every 1% increase in the winning percentage of a player in ranking of the game League of Legends, his or her daily active time increases by 18 minutes and pay rate by 3.2%. Upscale fashion designer Louis Vuitton creates scarcity through a limited edition strategy (global premiere quantity ≤500 units), making consumers wait in line for 6-12 months, but the high-end resale margin is still 300%-500%. This type of design uses a power-law distribution of “the top 10% get 80% of the resources” to continuously challenge the competitive contribution of the players.
Technical iterations continue to improve the precision of the Status game. A/B testing of Netflix recommendation algorithm proves that adding each “TOP 10” to the user interface increases click-through rate by 35% and subscription renewal rate by 7%; Amazon’s dynamic pricing algorithm adjusts commodity prices over over 2.5 million times a day, and stabilizes the gross margins to 25%-30% by monitoring competitor price fluctuations (response time ≤5 minutes) and demand forecasting models (accuracy ≥90%). These examples suggest that Status game has evolved from a social phenomenon to an optimizable and quantifiable system engineering, and the intrinsic logic of it is always focused on the double goals of “maximizing the efficiency of resource allocation” and “optimizing the game behavior of participants”.