The future of gaming between F2P, GaaS, Crypto and Play to Earn

The world of gaming is vast and ever-changing, encompassing a variety of games for consoles, PCs, and mobile devices, as well as a global community of gamers. Indeed, online gaming allows players to compete and cooperate with people from all over the world.

It is also a growing form of entertainment, with a market of $184 billion by 2021, more than the film and music industries combined.

Suffice it to say that the highest-grossing movie ever is Avatar (2009) with $2.8 billion, which is nothing compared to the $8 billion of Grand Theft Auto V (2013), a video game that is very popular but not even the best-selling movie ever.

The Free-to-Play (F2P) model is a business model for multiplayer video games under which you do not pay an entrance fee to play.

Most of the most played video games to date are F2P, in fact we live in a market in which being a video gamer means not spending a single penny.

But this was not always the case.

Let’s go back in time: we are in South Korea, it is 1999, and the software house Nexon releases QuizQuiz, the first F2P in history.

QuizQuiz is a free massively multiplayer title based on entertainment and education in which players challenge each other with questions, answers and mini-games, but the peculiarity is that the entire economic model is based on a system of micro-transactions that allow you to buy cosmetics to customize your avatar.

Making a strong impact on the market will be Nexon’s next game released in 2003:MapleStory, a freeMMORPG(massively multiplayer role-playing game, ugly translation) that, riding the wave generated by other MMORPGs, manages to climb the eastern download charts and gross mind-boggling figures thanks precisely to micro-transactions.

The explosion of the F2P formula would occur in 2007with the unveiling of the first iPhone and then the rise of Apple’s App Store, and with theresurgence of browser games such as Zynga’s Farmville, which welcomed a huge slice of users into the entertainment software niche.

Thus began the Golden Age: in 2013 the PC and mobile gaming charts were dominated by F2Ps such asLeague of Legends and Crossfire, while in the smartphone market impacted titles such asCandy Crush Sagathat recorded numbers completely alien to industry standards.

In recent years there is also resistance from industry titans: AAAgames–generic classification for defining titles produced by large publishers–fail to embrace the F2P philosophy, costing too much in development to be released for free.

Support-post-launch is then introduced, which is based on the release of expansions and extra content also called “Game-as-a-service.” Thus are born games capable of transporting players into the heart of persistent and constantly evolving universes to justify paying full price for the game itself. Titles such asDestiny,Rainbow Six Siege,Overwatch are part of this category.

In 2018, the free release of Fortnite Battle Royaletakes place, marking a turning point and shaking up the entire industry: the game is free, new features – also free – are introduced every week, and it is full of cosmetic items that can be purchased with V-Bucks(in-game currency) or unlocked by playing.

The game becomes so successful that publisher Epic Games transforms itself within a few months into a financial giant capable of embarrassing the budgets of entire states.

Finally, a little further down the road, even the giants of the industry give in and releasetriple AAAs in the same modes – among others:Destiny 2, Overwatch 2, Warzone.

The logic of operation of the F2P model is very simple:if the installed base of users reaches a certain threshold, it is enough for a tiny part of it to choose to spend to make the project sustainable.

An example comes from a report on mobile games that says:50 percent of the average product’s revenue comes from 5 percent of the installed base.

In other words, this means that5 out of every 100 people account for the largest slice of total revenues.

But so will F2Ps be the future of gaming?

There is no certain answer, it will depend as much on the developers as on the gamers and especially on thegaming experience.

Because it’s nice not to pay for fun, but it becomes less nice if the demand for micro-transactions is too aggressive or even necessary – like the bad case of Pay-to-win, a category of F2Ps in which in order to get stronger or pass a level you have to buy upgrades.

Themetaverseseems like a new concept, but it is not really: the idea of creating one’s own digital alter ego, connecting with other avatars in virtual worlds is an idea that is more than two decades old that has only been slightly updated.

It may sound strange, but the ancestors of the cryptocurrency market-now worth more than $2trillion-reside in World of Warcraft, a paid MMORPG game released in 2004.

In 2009, World of Warcraft had 10 million players and would generateabout $9 billion to date.

By playing the game, it is possible to buy items using in-game Gold currency (like Fortnite’s V-Bucks), but in-game coins were not common at the time and Gold could be bought throughfiat currency, so euros, dollars, etc…

Certain items that could be obtained from some of the hardest bosses soon became extremely valuable, then traded for Gold. Accounts with lots of Gold were then resold for fiat and so vi.

This whole process generated a veritable “black market,” into which Fortnite also fell years later. Even reports came out on World of Warcraft of Chinese prisoners being forced to play for Gold, while Fortnite was accused of money laundering.

One possible solution to the problem could come from the use of a blockchain.

By decentralizing the in-game currency as well as the items, it would no longer be useful to sell the account, and you would certainly track the transactions and thus the source of the money.

The user will be able to collect, either by buying them from the marketplace or by obtaining them in the title, the in-game items and carry them with them in their digital wallet (e.g., Metamask). Then in a system based on valuing individual items, the key word that emerges isdigital scarcity, that is, the limitation of available items in order to create a proper distribution by supply and demand, something that is more difficult to control in a centralized system.

So let’s take a look at two Crypto games born with the “Play to Earn” formula.

This formula can be summed up as an evolution of the F2P seen a moment ago, combined with the economics of World of Warcraft: it allows you to play for free and also obtain items and coins exchangeable for fiat currency.

A prime example isAxie Infinity, the most famous of the play-to-earn.

Born in 2018, it is inspired by popular games such as Pokémon and Tamagotchi, where Axies are the main characters who can fight and level up.Each Axie is an NFT, and is therefore unique and non-reproducible. New Axies can be generated from breeding, and they can inherit some traits from their parents, so the combinations of Axies are endless, so as to make NFTs truly unique.

The AXS coinobtainable by playing, which started from a value of $0.18, has reached a maximum of about $160 and is now worth about $13.

The second play-to-earn game is Star Atlas, by ATMTA Inc.

Star Atlas is set in a futuristic universe where spaceships and star travel are the order of the day. It is currently in the pre-alpha stage, but it has all the makings of the first triple-A crypto game.

You cannot yet earn money by playing the game, but there is the marketplace where you can already buy your own spaceship and equipment in the form ofNFTs, which you can send out to advance and orbit to return with rewards and ATLAS, which is the in-game currency.

The release of Star Atlas is still unknown, but when it comes out if it delivers on all its promises, it will surely mark a new frontier in gaming.