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The video game industry is a giant in the entertainment sector, surpassing the revenues of music and film combined. projected reach a market size of $363 billion by 2027. While traditional video game models such as Games as a service (GaaS) has long been the gold standard, but the industry faces significant challenges that require innovative solutions.
Historically, the free-to-play (F2P) GaaS model thrived by allowing users to access a base game for free and monetize it through in-game purchases, such as cosmetic items or gameplay advantages. It’s easy to see the appeal of the F2P model for gamers: with no upfront costs, and therefore no risk of paying for a gaming experience of unknown value, as was the case in the past, there was little downside to trying out new games.
The success of the GaaS F2P model over the past decade has been so incredible that it has become a staple across the industry. From casual games to the industry’s biggest publishers, GaaS F2P games are on everyone’s books. However, the sustainability of F2P GaaS is in jeopardy because margins are shrinking across the board. This is due to a perfect storm combining an oversaturated market with rising user acquisition costs, exacerbated by recent strict changes to privacy policies.
As the industry searches for a lifeline amidst these mounting challenges, blockchain technology is, for many, a beacon of hope, with its promise to revolutionize gaming monetization via the web3. However, initial forays into web3 gaming focused on nft collectibles had a critical flaw: the games required a continuous influx of new players to exist. It was an exciting model, but unsustainable in the medium to long term.
The second wave of web3 games took the initial nft collectibles mode and enhanced it with play-to-earn (P2E) and tokenomics. Unfortunately, these systems not only failed to solve nft collectibles games’ dependence on acquiring new users, but also raised new problems. P2E games quickly evolved into play-to-earn (P2W) schemes, which demoralized most players and hurt retention. Worse, many tokenomics systems raised concerns about their resemblance to gambling rather than traditional games due to their randomized reward distributions.
This divide is still evident in the web3 gaming community today. It is split between speculators, attracted by the financial incentives of P2E models and eager to turn gaming into a business, and traditional gamers, who are increasingly disillusioned by monetization strategies that tend towards a P2W model and have yet to see truly engaging games that give them what they want: real entertainment value.
Furthermore, the broader gaming community, which reaches billions of people worldwide, remains largely unaware of or interested in web3 games. For many of them, web3 remains a futuristic proposition, a wild west of possibilities that only the bravest dare to explore. The fact is that there are significant gaps between the current quality of web2 games, the current realization of web3 games, and the true potential of blockchain in gaming.
At GFAL (Games For A Living), we plan to bridge the gap between web2 and web3 gaming through an innovative business model that integrates the best of both worlds. GFAL’s business model focuses on GFAL’s in-game collectibles and turns them from in-game assets into real-world valuables by focusing on ownership, seasonality, and standardization.
The first element of our business model is ownership. At GFAL, we make it possible for players to become the legal owners of the collectibles they acquire in-game. In other words, once players mint or purchase a collectible in the GFAL game, they acquire a license to exploit its intellectual property (IP) rights. This means that players can use and potentially monetize these collectibles in ways never before explored, beyond the gaming environment, if they so choose.
Secondly, all games must follow a “Battle Pass” seasonality system, like those often seen in Gaas, designed to keep gameplay engaging, fresh, and constantly running. GFAL takes this further with merging mechanics and combines them with our unique approach to collectible ownership. On a practical level, this means that games require the use of existing collectibles to create new ones, cleverly encouraging healthy market trading between games and avoiding inflation within the game economy.
The third element of the business model, standardization, enables collectible ownership and a seasonality system with merge mechanics. All collectibles in the game must follow a standardized system that assigns them a rarity and level based on the time spent in the game. This allows for the creation of unique collectibles with their own individual history and gives each collectible in the game a comparable and fair value that is also transferable to all other GFAL games.
This pioneering business model, which combines ownership, seasonality, and standardization across different games, addresses many of the current concerns about video games. The approach, designed to foster a fair, stable, and sustainable gaming offering that benefits players and developers, may become what blockchain gaming needs to transcend its niche status and achieve mainstream adoption.
However, we know that beyond the business model, products must offer an exceptional gaming experience. That’s why developers must remain committed to creating games that are enjoyable in their own right, with blockchain elements that enhance the gaming experience rather than dominate it.
To support this, we are also developing a robust ecosystem that includes a unique personal identification system and a multi-game marketplace. These features are designed to support a community-focused gaming environment, encouraging interaction and engagement beyond the games themselves. This comprehensive ecosystem, open to third parties, is part of GFAL’s strategic approach to reduce friction for players moving from web2 to web3, ensuring a seamless integration of new technologies within familiar gaming contexts.
As we prepare to launch new titles later this year, we are aware that the gaming industry is watching us closely. No doubt, many want to see if this new model can set a new standard for how games are played, owned, and monetized. We believe that this approach could herald a new era for the gaming industry, one where the line between Web2 and Web3 is not just blurred, but effectively erased, creating a unified gaming experience that respects both the roots of gaming culture and its future potential.