Online gaming is an increasingly popular pastime: 70% of people report having played one. This popularity is driving increased interest by Silicon Valley in how to monetize this area and use it to increase social engagement. Tokens and initial coin offerings are proving to be, in many ways, much better than advertising as a way to attract investment; especially for small startups.
One of the biggest draws of online gaming is the chance to enter tournaments and compete with others. Game creators also have the chance to connect directly with their customers using these contests: the use of tournaments and online contest campaigns simply increases interactions. New online contests, for example, usually net an audience increase of 34% on average. And since a whole third of people who participate in these contests opt to get information from brands and their partners, it builds social engagement and allows for deeper user data insights, as well as boosting the effectiveness of regular advertisements.
Where the token or ICO plays into all of this is in allowing gamers to purchase advantages–think superior weapons–or access special content that gives them an edge. This allows players who cannot invest the time to personally excel in a game to still compete at an engaging and entertaining level. Players can expend cash for game-specific tokens that may allow them to, for example, start the game at a higher level, or purchase upgrades for a savings, or access special levels or content open only to those who pay by token.
Tokens are also a great way for small startup game developers to get an initial income stream by allowing interested players to invest in exchange for tokens or ICO rewards. A token purchased early can be made worth more than those purchased earlier, or bought at a discount in comparison to later token purchases. It’s also worth considering limiting the number of available tokens for purchase. The fear of missing out is a strong motivator for those who love social fantasy games.
The tokenization of online gaming has been very successful. Studies indicate that gamification strategies can increase brand engagement metrics by 100% to 150%, and, according to HubSpot, mobile contests increase the number of people who will enter by as much as eight times. Gamers who are intrigued by a contest or who are doing well are also very likely to talk about it on social media, increasing social media engagement for a company. This is key, since Social Media Examiner reports that 92% of marketers say one of the important things for their business is definitely social media.
There are really only two big downsides to be wary of. First, directly reaching out to the community rather than to the venture capital world for startup funding is great in terms of allow a project to retain control. However, venture capitalists are typically attuned to the market and may have insights into what’s missing from a game or campaign that an inexperienced developer might miss until it’s too late. The second big risk is simple fraud. If too many gamers lose money on games that never come to fruition, or feel their investment was not worth it in the end, they will simply stop participating.
Despite these caveats, the tokenization of online gaming and development has been, overall, a huge success. It builds loyalty, allows for better customer data analytics, and has allowed smaller developers and start ups to access a market previously dominated by big name developers. It remains to be seen how all this will play out in the long term future.