Comment by ultimatefan1

video game companies definitely have to deal with these same kinds of questions.

from https://www.bitsaboutmoney.com/archive/accounting-for-saas-a... :

Accounting for potions: This is fairly easy. If you sell someone a potion, revenue is recognized when they drink the potion. Or use their speed boost. Or skip the progress gate to get to the next dungeon. The fiction doesn’t matter. Reality matters, and the economic reality of the situation is that performance has happened after the temporary thing you’ve promised is delivered. (Technically speaking you do have to recognize the revenue over time if your potions last long enough to be close to monthly SaaS contracts, but practically speaking most are over with in a day and most accounting systems lose precision below that.)

Accounting for swords: If you trade gems for swords then you can ratably recognize the purchase price of the gems when you satisfy your obligation by giving the player a new sword.

Hah, just kidding. That would be way too easy.

You actually need to recognize the prorated cost of the gems exchanged for the sword over the economically useful life of the imaginary sword. “Economically useful life” is a concept with a lot of prior art on it in accounting. You are obligated to, and accountants can point to substantial work on, estimating the economically useful life of factories, cruise ships, CNC machines, bunk beds, Bitcoin miners, dairy cattle, and almost everything else that depreciates.

But there is not a huge amount of prior art on imaginary swords. So you get to pick one of two methods..

The first, by far less commonly used, is to put your head together with very expensive accounting professionals and rigorously answer the question “What events in reality, in the universe we actually live in, would cause the owner of this imaginary sword to believe it had no or de minimis future value to them?” And perhaps that conversation would involve questions like power creep, game balance changes, declining player preference for swords now that you’re offering a sale on imaginary nuclear weapons, etc.

Nobody has time for that conversation or the truly gargantuan amount of implementation engineering required to enforce the decision it comes up with, so they largely use door #2: the economically useful life of a virtual good is by nature upper bounded by the economically useful life of a player’s relationship with our game, so use that instead.

You are required to use your existing data to make a reasonable estimate of how long either the particular player or, failing that, the hypothetical spherical frictionless average player will continue to play the game after the purchase. Then you recognize the price of the sword ratably over that time period.

This causes many virtual goods companies to have bookings (player purchases) diverge sharply from revenue. That depresses the value of their companies, in the real world, and those companies then spend substantial amounts of professional labor taking their frustration out on imaginary swords.