Blockchain and Rise of Business Model in Gaming Sector

• With establishment of assets based on blockchain, possibilities of innovative development and completely fresh business models come into existence.
• As per a data from 2021, 3.2 Billion people were involved in playing computer games, where industry generated $180.3 Billion in revenue.
• Business models in games has evolved, now it has different models like pay to play, free to play, and play to earn model.

Initial PC games were produced during 20th century, for entertainment purpose only. They were created to make distraction from a normal life routine and offer a fantasy world.

As we enter latest millennium, having a population of more than 6 Billion, which is anticipated to reach 8 Billion by next year. If computer games remain a work alternative, it is assumed gaming population will reach 4 Billion worldwide.

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Second Life was an initial effort to introduce a metaverse to people, and is still active. Game have its own digital currency. Many individuals left their employment to dedicate themselves completely towards this digital world.

But why blockchain games’ utilization is creating revolution in gaming sector.

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Gaming Markets based on Blockchain

As per some data from previous year, 3.2 Billion games were involved in playing computer games. Gaming revenue in 2021 reached around $180.3 Billion. 

Most of these revenue are because of virtual distribution channels. Mobile gaming played a crucial part in gaming industry, making $93.2 Billion of its segment.

Gaming development has evolved massively in previous 5 years, thanks to digital distribution channels and mobile application stores.

China stays largest in terms of total players and revenue, responsible for over 25% of total sales volume. Asia Pacific has 55% of players and provides greatest profits and swiftest rate of growth.

Launch of techs like AR/VR, artificial intelligence, and blockchain are now trending all over the globe. 

Business Model Evolution in Games

P2P

Pay to Play model was famous during 70s to 00s. Publishers and studios made big bucks through their gaming sales. Players in this model does not have or had just a slight chance to excavate value from games. All they could do is enjoy it.

F2P

The free-to-play earn model ruled from 2000s to 2010s. A model that was considered disastrous for whole gaming industry. But actually injected profits into industry. 

Call of Duty is greatest example for free-to-play games, as it has generated revenues in billions through its sales of various series, and still holds most extensive user base in FPS games, followed by Battlefield.

P2E

As its name suggests, Play to earn games offer individuals a chance to generate profits by playing them. This model integrates a couple of activities that drives a human being; Reward and Entertainment.

Prime motive behind this is to offer rewards to users as they engage more in these games, becoming an element of the in-game economy (tokenomics), generating profitability for self, participants, and for devs. They receives crypto assets to spend time in games.

Utilization of blockchain tech such an asset has created deficiency for in-game virtual assets.

Another core element is that P2E model allows ownership over specific virtual in-game assets, enabling them to escalate their value through active participation.

Concepts Adopted from Conventional Games

Gaming sector based on blockchain is still in its infancy, centered around numerous conventional gaming concepts. For instance, NBA Top Shot is developing a collect and trade model, available for baseball cards and other collectibles.

Axie Infinity uses breed and battle concept from 90s pokemon game. 

Sorare is based upon recruit and compete model, where users trade soccer cards. Similarly, digital universes like Somnium Space and Decentraland offers AR similar to famous Sims and Second Life.

These games utilize similar concepts from conventional games, but unlike them, they also offer opportunities to make yields for them.

Blockchain Gaming Overview

Benefits for Players

Blockchain gaming allows players to make indigenous in-game assets to go international, instead of just being trapped in some specific gaming platform.

Blockchain gaming allows virtual assets like NFTs to be viewable immediately and to be interoperable, across various wallet providers, to be tradable in Metaverse.

Players can explore NFT marketplaces to trade their digital assets to excavate value from their gaming experiences, through trading virtual assets.

Benefits to Devs

This business model is also advantageous to game developers. Under present in-game exchange framework, an activity called gold mining allows players to sell game coins or accounts on different markets, restricting monetization opportunities for secondary market for developers, making users prone to fraud.

With an extension of virtual asset marketplaces, devs can gather information regarding assets’ trade volume and encode royalties into non-fungible tokens, to earn through each subsequent sale.

In the end, I want to say that, for a gamer like me, monetization in games has been a revolutionary concept. It allows users like me to earn while enjoying activities I love. It has all just begun, and as soon as Web3 and metaverse will become mainstream, it would be a next-level experience, I hope its similar to “Ready Player One.”