The popularity of cryptocurrencies has not only changed the financial industry but has also opened a new gateway for other fields to utilize blockchain technology and do wonders. After cryptocurrencies, Non-Fungible Tokens received immense praise and adoption from the users. The next big thing from the use case of blockchain technology that seems promising and is picking up pace among the masses is blockchain games. The gaming industry is huge and generates billions of dollars in revenue each year, as we move forward this revenue can be almost tripled by introducing blockchain and NFTs in the video games to indulge players in the game economy and make them more decentralized. Multiple games have already made their mark including Axie Infinity, Crypto Blades, Splinterlands, etc. and now more and more projects are working on launching better and more engaging games based on blockchain technology. Developing a good video game with interactive gameplay and graphics is not an easy task and requires a lot of investment and skillset. Crypto projects have been raising money through Initial Coin and Exchange Offerings and now following the trend, many platforms have introduced the concept of Initial Game Offering to assist the developers and startups to raise capital effectively.
Defining Initial Game Offering:
IGO refers to a method of raising capital from investors for a blockchain gaming project. Instead of buying the coin at a pre-sale price like in Initial Coin Offering, investors get access to the in-game assets i.e. NFTs. These NFTs can include virtual land inside the game, characters, weapons, skins, mystery boxes, and many other items. IGOs also give exclusive pre-launch access of the game to the investors so they can experience the game and remain updated with the latest developments. IGOs are conducted by different platforms through their Launchpad i.e. Binance Launchpad, Enjin Starter, GameFi, etc. These platforms carefully review the gaming projects and then allow investors to invest in them. Some of the blockchain games also feature tokens like Axie Infinity having an AXS and SLP token which can also be sold to investors for fundraising.
Most of the Launchpad platforms like Binance restrict these Initial Game Offerings to the holders of their native tokens i.e. BNB. Investors or those users interested to participate in the IGOs hold BNB for a specific period and are then offered NFTs or the game token upon investment. Some of the games require investors to hold NFT for a while before they are eligible to experience the game or utilize those NFT inside the gameplay.
Why IGOs are necessary?
Initial Game Offering is very much similar to an ICO or IEO and is conducted in a similar manner. This fundraising method actually gained popularity back in 2014 when Ethereum raised capital by offering ETH coins to investors. With the changing nature of projects in the crypto space, the fundraising methods have also changed like Initial Exchange Offering replaced ICOs because of frauds, rug pull, and scam projects, so cryptocurrency exchanges took the responsibility of reviewing new projects and then offering its customers a chance to invest in that project. Now the NFT projects are on a rise along with blockchain games and IGOs help these blockchain games to raise the necessary funding for the smooth operation and development of their video games. Investors are mostly interested in joining projects in their early phase of development so they can enjoy good profits when a project succeeds. IGO is an opportunity for people to invest in some promising ideas related to the gaming industry.
Blockchain games are now becoming extremely popular because of their play-to-earn aspect that is attracting users from the traditional gaming space as well as crypto enthusiasts so IGOs are a perfect place for both the developers and investors to play their part in the development and launch of exciting NFT-based games. Not only play-to-earn, another aspect of blockchain games is the in-game NFTs, investors are also interested in buying these NFTs at a lower price before the launch of the game and then selling them on NFT marketplaces after the game has gained adoption and popularity.
Factors to be kept in mind before participating in an IGO:
Just like Not all Initial Coin Offerings were successful like Ethereum, IGOs can also be very risky in terms of investment. Many cryptocurrencies that received a lot of capital failed badly and this can happen with blockchain games too. In the current times, almost 100 games are already launched in the market that have the play-to-earn aspect and also feature NFTs but not all of them are successful due to a variety of factors. Before participating in an Initial Game Offering, you must carry out your research regarding the project keeping in mind various factors. Some of these factors are briefly discussed below:
· In an IGO, the Launchpad matters a lot. If the IGO is being conducted on a popular platform like Binance then it is more likely to be successful. You should research the Launchpad platform, its success rate in terms of previous projects, and the chances of getting allocation in the offering.
· Just like you do with any new cryptocurrency, you should look for the team behind the game that is being launched. If the team members have experience in the blockchain and gaming industry and have worked on similar projects, then they are more trustworthy as compared to a blockchain game whose team is anonymous.
· Most of the blockchain games have already set up accounts on social media platforms and groups where they interact with the users even before the launch of their game. You should carefully review the community behind any project, its followers, advisors, developers, and partners engaged with it before choosing to buy its NFTs or tokens in an IGO.
· You should also review the benefits being offered in the IGO and compare them with other projects that have also raised capital. If the benefits are extremely low or surprisingly a lot, then it must raise eyebrows and you should conduct more research.
· Also, do a fundamental analysis of the game being launched, check the total supply of their token, and the number of NFTs being offered in the collection as a very high supply usually doesn’t reap profit in the long run.
Many investors took advantage of participating in ICOs of the current popular cryptocurrencies a few years back when cryptocurrencies were not so famous, IGOs are a wonderful opportunity for investors and users to be early adopters in the blockchain gaming industry. The number of users playing blockchain games like Axie Infinity, Crypto Blades, etc. is constantly increasing and new projects have now picked up the pace to introduce their fascinating games. IGOs not only help developers to raise capital but also help investors to gain early access to the game and the in-game assets like virtual land plots, characters, weapons, etc. Participating in an IGO can prove to be very rewarding however risks are also involved and you must carry out the necessary research before choosing to invest in any new blockchain or NFT game through an initial game offering.
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