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Since the early 2000s, the video game industry has grown steadily. Every year, more consumers join the world of gaming and a constant stream of new games gives gamers reasons to keep spending money. While it may feel like the industry has downgraded its formula, I think that’s all about to change.
From Pay To Play to Paid To Play
There’s a big issue looming in the gaming industry right now: people aren’t being compensated for the time they spend playing games. Players will invest countless hours of their time into a game, and when they’re done, they’ll have nothing to show for it—all the items and status they’ve earned in-game are gone. Additionally, many of these games require you to spend money to get different items and perks that are only related to their game.
Fortnite and PlayerUnknown’s Battlegrounds (PUBG) are two great examples. These two games flipped the normal gaming model, where instead of requiring players to buy the game, they gave away their game for free and charged players microtransactions to get in-game items. This new strategy has worked in the billions, with PUBG earning between $1 billion and $2.4 billion each year from 2019 and Fortnite earnings even more with annual revenues of $3.5 billion to $6 billion over the same time frame.
I have no problem with this business model. In fact, I think, for its time, it was very clever. However, a new alternative is presented to consumers and has the potential to make this model a thing of the past.
This new model rewards consumers for time spent in-game, where players are paid to play. This does not mean that players are paid every hour to play the game. What this looks like in practice is giving players incentives, such as cryptocurrencies, for completing certain tasks or allowing them to sell their in-game items for cash.
All of this will be handled on the blockchain, where every transaction can be made with security and verification. Whether gamers are familiar with blockchain or not doesn’t matter because gaming will act as a ramp for them to Web3. Right now, in the current microtransaction model, once a player has purchased items for their game, they can’t do much with them beyond that. If you spend money to get a new skin or weapon in a game like Call of Duty, you have no way to recoup your cost. All the money flows to the publisher and none of it goes back to the player.
But now, all that has changed thanks to Web3, not only because the technology allows it to work in a secure way, but also because of the mindset that the founders of Web3 bring to the industry. According to the crypto wallet Changing mask, Web3 is “an umbrella term for the vision of a better Internet. an Internet with added identity, money and social status. An Internet based on open protocols that value transparency and innovation.” Metamask also adds that one of the key themes of Web3 is “giving power and agency to the everyday people who build, maintain and manage online platforms.” It is this mindset that has led to this innovation in the gaming space and will continue to keep user experience and reward distribution at the forefront.
Web3 games to watch out for
The only caveat is that the games themselves must be good. Players will not play bad games purely for financial incentives. However, when presented with two games that are equally fun, one makes up for it and one doesn’t, then the choice becomes obvious. Below are some notable Web3 games and how they handle player compensation,
Parallel is a free sci-fi based digital card game where players build decks and face off. Although not required, players can buy and sell cards and earn in-game PRIME currency (for ranked wins). With the intention of turning the game into a multimedia franchise (comics, collectibles, etc.), Parallel raise 50 million dollars in 2021 and entered recently Open test platform earlier this month. Despite being in beta, the game secured 3 Game of the Year awards in 2023.
Axie Infinity is a universe filled with collectible creatures called Axies. “Axie features a player-owned economy where players have full ownership of their digital assets and can buy, sell and trade them just like physical trading cards and collectibles.”
Illuvium is “built as a fully decentralized protocol and offers players a triple-A blockchain gaming experience.” Players of the game have the ability to shape the future of the game through a voting system. In addition, in-game bets receive regular payouts and distribution of game revenue, giving them an incentive to stay in the game for a long time.
Shrapnel is a game designed with player-generated content at its core. Of all the companies listed, they are the earliest in development, but their roadmap shows plans for players to be able to create skins that they can then cut and sell as NFTs, create maps that are accessible in-game And much more.
It’s about the Customer Market
The ability to shape your experience, be rewarded for your long-term investment in a game, and monetize the items you craft and acquire makes for a better overall experience for every player. This is why I think the current gaming model is in jeopardy because this new model makes more sense for everyone. Players are rewarded while developers turn casual players into die-hard fans.
There is a valuable lesson here whether you are a Web3 founder or not. By giving your users the ability to shape, configure and be rewarded for their loyalty to your product, it creates lifelong fans in a way that other products don’t.
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