The first computer games were developed at the end of the 20th century with the sole aim of entertaining the audience. One of the first goals was to distract players from the routine work and give them access to a fantasy world. Very soon, games began to compete for users’ time with traditional forms of entertainment such as cinema, circuses, theater performances, zoos, etc.
Planet Earth has entered the new millennium with a population of more than 6 billion people, and according to forecasts, this number will reach 8 billion by 2023. Assuming that computer games are no longer a substitute for work and begin to complete it, by that time there will be 4 billion gamers in the world .
No wonder the traditional boundaries between gaming, media, sports and communications are rapidly eroding, creating new business partnerships and causing more and more mergers and acquisitions around the world.
The still-active virtual world of Second Life, which represented the first attempt to gate the metaverse with its own virtual currency on the platform, was an important example of this process between 2003 and 2006, during its period of fastest growth. Players in many countries have left their jobs and devote 100% of their time to the virtual world.
But why is the use of blockchain in games causing a real revolution in the gaming industry? This is what this article attempts to answer.
As of mid-2021, 3.2 billion people were playing computer games, and according to a Newzoo report, global gaming revenue in 2021 was about $180.3 billion, up 20% from pre-pandemic levels in 2019.
Digital distribution channels account for the bulk of this revenue. Mobile gaming is a major growth driver for the gaming industry, bringing this segment to $93.2 billion.
The game development industry has undergone profound changes over the past five years. With the advent of mobile app stores and digital distribution platforms, even small studios have been able to create games for the global market.
China remains the largest regional sector in terms of sales volume and number of players, accounting for more than a quarter of total sales. The Asia Pacific region as a whole has 55% of all players and offers the highest returns and fastest growth.
The introduction of new technologies such as artificial intelligence (AI), virtual reality (VR) and blockchain has become a major trend in the market. In recent years, many gaming applications and services that support blockchain technology have appeared, and the number of these projects promises to make a boom in the market by 2022.
Developing business models in the gaming industry
Paid Form (P2P)
From the 1970s to the 2000s, the most popular business model in the gaming industry was ‘pay to play’. In this model, development studios and publishers generate revenue from initial game sales and, in some cases, from subscriptions. Collaboration with advertisers for in-game advertising has been rare.
In this model, there is little or no chance for players to derive value from the games other than the satisfaction and pleasure they derive from the gaming experience.
Free Form to Play (F2P)
In the late 2000s and early 2000s, the free-to-play game model gained popularity. This model was once considered a disastrous business model that, at best, provided less revenue for a particular game and, at worst, decimated the entire gaming industry. However, it has instead turned out to be the best way to make money, as well as the main reason for the cultural emergence of games.
In the free-to-play model, the games are offered to the players at no additional cost. In this type of model, in-game purchases (items and optimizations that improve game features) and ads account for the vast majority of the publishing studio’s revenue. Energy and Sports Services act as a revenue lever for players, allowing “elite” players to earn rewards.
Fortnite is a great example of how successful some of these free business models can be. The game launched in July 2017, and generated over $5 billion in revenue in its first year of production. In addition, in 2018, the user base grew to about 80 million monthly active users.
Play to Earn (P2E) model
The “play to win” model is exactly what the name suggests: a model in which users can play and earn tokens or cryptocurrencies while playing. This model has a very powerful psychological stimulus because it combines two activities that have guided humanity since time immemorial: reward and entertainment.