GameFi: Free or Paid?

Product-based games are becoming less and less common by the day. Gone are the days where gamers had to rush out to the high-street to snap up their copy of every newly released game.

Rather, a seismic shift is being witnessed in the gaming space where free-to-play games with integrated micropayments are changing the way revenue is created. This can be seen in games like Call of Duty: Warzone, which adopted the micropayments model after over a decade of selling games for a fixed up-front price.

The arrival of Web3 gaming based around NFTs sought to evolve aspects of the mainstream games industry, bringing ideas like player ownership of in-game items and monetization to the table. But at the moment, users are being forced to pay the cost of this evolution by forking out large sums for the NFTs required just to try these games. In 2021 alone, the average initial purchase price of NFTs for Web3 games ballooned from $128 to nearly $4,000 - potentially 50 times the cost of a leading console game.

Gaming NFTs representing in-game characters have sold for around $1 million dollars each, as was the case with popular blockchain game, Axie Infinity. Plots of land in metaverse worlds like the Sandbox, meanwhile, have already sold for sums as high as $4.3 million, despite the game still being in the early alpha stage. Gamers are being asked to take a huge leap of faith when splashing out such extravagant sums just to get started in the Web3 gaming world, but the question is, is this really the best way to drive mass adoption?

Industry Tilts Towards In-Game Purchases

The Web2 in-game purchase market had a global value of $76 billion in 2019, and is expected to reach $340 billion within the next five years. In-game purchases, particularly on mobile, have played a major role in game development in recent years, moving the pricing structure away from one large up-front purchase, towards micropayments.

This has allowed developers to create games that are completely free to pick up and start playing, which has expanded their audience to levels never seen before in the gaming space. Free-to-play games make up the top three most-played games of all time, and make up 16 out of the top 20. On mobile phones, where free-to-play games with in-game purchases truly flourished, the model’s popularity is even more pronounced, with games like PUBG Mobile boasting 1.1 billion downloads after launching in 2018.

In just two years between 2012 and 2014, Candy Crush, the popular mobile game which helped pioneer the free-to-play model, increased its revenue from $77 million to $1.1 billion. Manel Sort, founder of G4AL and Former FVP of King Studios, the team behind Candy Crush, believes the free-to-play concept was key to attracting new users to the gaming arena.

*“Lowering the entry barrier in terms of cost was one of the things that expanded the global gaming audience beyond its previous limits. Free-to-play developers had initially hoped to appeal to a core gaming audience, but by removing initial buy-in costs we ended up attracting people who would never otherwise have played games,”*said Manel Sort.

“Providing an enjoyable base game with the option of additional in-game purchases produces something for everyone. The ongoing revenue generated by in-app purchases also gives developers ongoing funding to develop new features and update the game over time,” Manel added.

Future of the Web3 Gaming Industry

Numerous Web3 projects have caught on to the potential for free-to-play games to grow the size of their core audience and deliver valuable revenue through optional in-game purchases. Projects such as Gods Unchained have achieved tremendous success by allowing new players to get involved without any up-front costs, instead delivering starting resources for free, and then allowing players to buy upgraded resources once engrossed in gameplay.

Combining intuitive gameplay with stellar graphics and a simple but engaging narrative under the free-to-play model has historically proven to be a winner for gaming projects. Manel Sort, First Vice President from the team is behind the Candy Crush phenomenon - G4AL - is currently working on a new game that aims to capture these goals in the form of Elemental Raiders.

The game is s free-to-play, turn-based PvP and PvE RPG game built on Unity game engine, while the transactions for in-game assets will be built on the G4AL private blockchain. To add to the anticipation, G4AL is releasing a series of triple-A cinematic trailers. You can watch the game’s debut trailer here: Elemental Raiders - Closed Beta Footage

https://www.youtube.com/watch?v=QMUD2e-rvIU

As the cost of metaverse land and avatars continues to rise, Web3 game developers are quickly becoming alert to the fact that they can garner greater player engagement by foregoing up-front pricing mechanisms in favor of ongoing in-app payments that are entirely optional.

Record-breaking NFT sales numbers are good for grabbing headlines, but have thus far proven ineffective at producing genuine gaming experiences that gamers are ready to flock to.

Given that the blockchain-gaming space is still in search of a large-scale audience, might it not be wise to employ the same strategy as the early free-to-play mobile games that created billion-strong playerbases almost overnight?