A game-changing technical advancement that has an impact on many industries, including the video game industry, is still blockchain and NFTs. NFTs provide a mechanism to raise gamer engagement by allowing players to use tokens for in-game digital items. It will have a big effect on the entire gaming business. For game developers, the possibility that users will actually own game assets is creating entirely new business models and revenue prospects.
Possessing in-game digital assets opens up a world of possibilities for players seeking greater value and cutting-edge new experiences. The game designers who will succeed in this new environment will be those who see the opportunity to give players greater freedom, expand the ways in which they can acquire new assets, and advocate for the value that NFTs can produce.
The already booming video game industry is expected to grow even more
A recent study estimates that by the middle of 2021, more than 3 billion individuals worldwide will routinely play video games. A different analysis estimates that the global video game market generated more than $180 billion in revenue in 2016. The latter number shows an increase of 20% since the COVID-19 pandemic. The real world is less appealing to people than the virtual worlds of computer games, according to a broad perspective.
Notably, the main cause of this income rise is the continued dominance of in-app purchases in the mobile gaming sector. After researching the mobile gaming market, it’s not surprising that many video game companies think a similar economic model might be applied to games set in a metaverse. In addition, the growth of digital distribution networks for mobile apps and related stores offers a chance for smaller development companies to “play the game.” Hiring a Web3 Game Development Company will free you up from most of the labor-intensive work, provide you access to software that is outside of your price range, and give you knowledge of the best tools and solutions for the scale of your project.
The potential for worldwide growth in the gaming sector is enormous. The Asia-Pacific region, which accounts for 55% of all video gamers, dominates the market. China is where 25% of all gaming sales are made. Other global regions are also experiencing significant growth rates, ranging from 4% to 10%. Surprisingly, only North America shows slow growth, with only 0.7%.
Business models for video games are still evolving
Over the years, the video game industry has made money in a variety of ways. The Pay-to-Play (P2P) industry provided a fairly straightforward concept. You only needed to buy a copy of the video game for your favourite gaming system in order to play it. The market eventually recovered under Nintendo, Sega, and Sony, as well as during the ups and downs of Atari, Mattel, and Coleco, due to the environment.
Free-to-play (F2P) gaming really gained off in the late 1980s because to the phenomenal growth of smartphones. As was already said, in-app purchases and in-game advertising make up the majority of the revenue for these freemium video games. Again, blockchain and NFT enthusiasts who make games find the concept of purchasing additional content to unlock new characters or features enticing.
A relatively new business model for video games, the Play-to-Earn (P2E) model, fully utilises in-game blockchain, NFTs, and cryptocurrencies. Players have the opportunity to earn tokens or in-game cash while playing the game. They typically gain more as they progress through the game. Players can then purchase NFTs, such as new characters or items, using these in-game currencies.
The F2P business model is based on in-game economics, which are nothing new. On secondary marketplaces, gamers can resell these items by using NFTs. Players can now move items they’ve acquired through gaming outside of the game for the first time ever. As a result, increased gameplay ultimately generates higher revenue in both the metaverse and the real world. This way of combining enjoyment and profit brings fresh benefits to both game producers and the players themselves.
Blockchain’s Effect on Current Gaming Business Models
With the aid of NFTs, game developers may offer players a plethora of fresh opportunities to make the most of their digital assets and add value. Again, gamers have the choice to sell these products again on second-hand markets. This tactic makes it easier for players to use real money—albeit cryptocurrency—in the game and offers them a true sense of ownership. Additionally, it makes these novel virtual worlds more realistic, which is essential for boosting player interest.
While using the P2E paradigm, modern games also draw on more traditional concepts of playing and collecting. For instance, some games let users buy and sell in-game collectibles modelled after baseball cards. The original Pokémon follows a similar fighting and training paradigm to other games. Gamers can become more comfortable with more recent models and esoteric concepts like blockchain and NFTs by utilising more well-established business models.
Another cutting-edge blockchain gaming use is the use of NFTs as staking assets. NFT holders can monetize their digital assets in order to produce passive income in the form of tokens, rewards, or in-game advantages. This gives players new financial options outside of the simple purchasing and selling of in-game items.
Future of Blockchain-Based Gaming
As with any discovery in transformational technology, there is a high probability of failure as well as huge potential for growth. In a word, the current business environment is strikingly reminiscent of the late 1970s video game industry. Blockchain and NFTs provide game developers with significant revenue opportunities, but only if they provide users with a genuine interest-based gaming experience.
One distinction provided by blockchain is the concept of ownership. If a video game publisher decides to modify the rules or goes out of business, any in-game objects that players acquire in free-to-play games now just disappear. In a P2E game made possible by blockchain, these assets are genuinely owned by the player, which raises their value and transferability. In fact, gamers have the choice to trade these items for cash. Blockchain Consulting Firms must educate themselves on this cutting-edge technology if they want to be more approachable and future-proof. Blockchain beginners should start here.
The gaming industry is ultimately moving into a new Wild West. Game production companies still need to provide gamers with a compelling environment if they want to succeed in this new market. Better times than this one could be found in the late 2000s or perhaps the 1970s.
If your company has a great idea for a game that uses NFTs but lacks the technical know-how, get in touch with the Gigster team. We take pride in our state-of-the-art technical know-how and tried-and-true game creation methodologies. Work with us to ensure that your game idea reaches the widest possible audience and has a profound impact on the industry.