In 2022, the gaming market will be valued at $220.79 billion and is constantly growing. Traditionally, the game industry uses a couple of business models, including premium-priced games and free-to-play (F2P) games.
The adoption of Web 3.0 and crypto technology is revolutionizing gaming by changing the traditional notions held by the industry. But are these changes working both ways? Are the games influencing the crypto markets?
Free-to-Play and Play-to-Earn Games
The free-to-play model departed from the previous approach, sometimes known as premium-priced games, in which users paid for the game’s cost upfront, and game performance was based on the number of units sold. In contrast, F2P games allow users to access a significant chunk of their material for free and may not demand payment to continue playing.
These games’ business models are based on the onboarding of new players for free. However, they are encouraged to make in-game transactions to access the additional content. The F2P game model was first applied in early massively multiplayer online games (MMOs). It was later adopted by big game publishers to fight piracy.
The most significant aspect of free-to-play games is the number of players a game can keep consistently engaged and get them to purchase additional content. Web 3.0 technology brought new concepts into the gaming business, such as ownership of in-game elements and play-to-earn games.
The non-fungible token (NFT) technology enabled the creation of an in-game economy and asset ownership. Using NFTs, the players are empowered to obtain proven ownership of digital assets, which was impossible before.
Play-to-earn games offer real-world value to players in exchange for their time spent playing. The adoption of blockchain technology has made the essential link between the in-game winnings to real-world value in the form of cryptocurrencies and NFTs.
Can Games Affect the Crypto Industry?
The gaming industry is changing, but can gaming also influence the crypto markets? In an interview with DailyCoin, Matvey Diadkov, the CEO of NFT gaming metaverse Chainers.io, claims that the crypto world can benefit from the gaming industry because it presents a “massive way to attract new audiences.”
On the other hand, it is difficult for traditional game developers to escape the crypto world. They have to adopt it for payments or as a method for exchanging assets where necessary. Like any other successful crypto project, crypto-based games need to have good mechanics and provide value for the players. Diadkov believes that pump-and-dump games are becoming a thing of the past as new games invest in long-term goals.
"I would say that there is a trend change and a departure from the play-to-earn model. At least from the one on which popular projects were launched last year. Crypto did not come up with anything new in the economy - it's just a good tool. And if your game does not create added value in the form of entertainment, then the value of your token or NFT will be approximately zero," says Diadkov.
According to Diadkov, crypto games will not replace the traditional approach to the gaming industry and game development but will most likely become a “separate class of games.” As crypto projects are, in most cases, community-driven, with their own economic system, the games will adopt the same principles to their core in-game mechanics.
On the Flipside
While free-to-play games that bring real world value to players are on the rise, some experts believe that the current play-to-earn economic model is unsustainable. Some play-to-earn models rely on a steady stream of new players, which resembles a pyramid scheme in which the older players earn based on how many newcomers they bring. Game developers will need innovative gameplay mechanics to sustain long-term value.
Why You Should Care
The free-to-play model is becoming the main approach in the gaming industry. With the adoption of Web 3.0 technology, the gaming industry is moving towards new types of game mechanics where players earn rewards with real-world value. Some predict that within the next five years, play-to-earn games will account for 90% of the gaming market.
Read more about play-to-earn gaming that teaches users about crypto mining:
Learning about Bitcoin (BTC) Mining with Play-to-Earn Games: A Review
Read more about top play-to-earn projects:
Top 10 Play-To-Earn Projects to Watch Out For In 2022