Home News How Crypto Games Make Money?

James Carter

11 Jan 2023

How Crypto Games Make Money?

Crypto games, also called cryptocurrency games or blockchain games, are a new type of online game that uses blockchain technology and cryptocurrency transactions to improve the gameplay and player experience. They are made to work on a decentralized, distributed digital ledger, and most in-game purchases and transactions are made with cryptocurrencies like Bitcoin or Ethereum. (Also Read: Is Shiba Inu dead?)

The blockchain keeps an unchangeable record of who owns what, so players can buy, sell, trade, or even use their in-game assets as real-world assets. Crypto games also give players full control and ownership of their in-game assets and disrupt traditional gaming business models. The genres of games that can be found in this category range from collectible games, trading card games, virtual worlds, real-time strategy games, etc.

What Kinds of Crypto Games Are Available?

There are various types of crypto games available today, each with unique gameplay and features. Here are a few examples of the main categories of crypto games that are currently available:

  1. Collectible games allow players to collect, trade, and sell unique digital assets, such as CryptoKitties, Sorare, and Gods Unchained. These games are based on non-fungible tokens (NFTs), representing a unique item, and players can buy, sell and trade these assets in the open market.
  2. Trading card games: Similar to collectible games, trading card games allow players to collect, trade, and sell digital cards, but with more emphasis on gameplay and strategy. Examples include Axie Infinity and Splinterlands.
  3. Virtual worlds: These games allow players to buy, own, and develop virtual plots of land, and they can use them to build and decorate, such as Decentraland, Somnium Space. Players can also monetize these assets by renting or selling them to other players.
  4. Fantasy sports games: These games allow players to build and manage virtual teams and compete against other players, such as So rare, a fantasy football game.
  5. Casino games: These games offer players the chance to gamble with cryptocurrencies, such as Satoshi Dice and CryptoGames.net
  6. RPG and Adventure games: These games combine elements of strategy and exploration, such as 9Lives Arena and ChainGuardian

As the field is still relatively new, more crypto games will likely appear as the technology, and its use cases evolve.

How Crypto Games Make Money?

1:In-game purchases

In-game purchases are one of the main ways that crypto games generate revenue. These purchases allow players to buy virtual items, currency, or other assets within the game using cryptocurrency.

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Different in-game items can be purchased, depending on the game. Some examples include:

  • Virtual currency: This can buy other in-game items, such as weapons, armor, or vehicles.
  • Virtual goods: These items can enhance the player’s experience, such as new clothing or accessories for avatars or special abilities or power-ups.
  • Virtual land or property: Some crypto games have virtual worlds where players can buy and own virtual land or properties, which can be used to build and decorate.
  • In-game ads: Some crypto games allow players to view and interact with ads in the game to earn rewards.

Players can purchase these items directly within the game using cryptocurrency or through a marketplace where they can buy and sell items with other players.

This allows the game developers to have a new revenue stream, and it could disrupt traditional gaming business models since the items that are purchased can be unique and have value beyond the game world. Players could resell them to other players or in the open market.

2:Cryptocurrency transactions

Cryptocurrency transactions are another important mechanism for generating revenue in crypto games. These transactions involve using cryptocurrencies like Bitcoin or Ethereum to buy, sell, or trade in-game assets with other players.

There are a few different ways that cryptocurrency transactions can be used in crypto games:

  1. In-game currency exchange: Some crypto games have their in-game currency that can be exchanged for real-world cryptocurrency. This allows players to buy in-game items and assets using cryptocurrency and allows players to cash out their in-game assets into real-world currency.
  2. Trading and bartering: Some crypto games allow players to trade in-game assets directly with one another, using cryptocurrency as the medium of exchange. This creates a player-driven economy and allows players to buy and sell assets without going through an official in-game marketplace.
  3. Decentralized autonomous organizations (DAOs): Some crypto games use blockchain-based decentralized autonomous organizations (DAOs), which allow players to hold a stake and vote on game-related decisions using cryptocurrency.

These cryptocurrency transactions in the game can increase the players’ sense of ownership and control over their assets and allow for more transparency and security.

These mechanisms may change or evolve as blockchain technology and the crypto industry continues to develop and more ways to leverage it appear.

3:Initial Coin Offerings (ICOs)

Several crypto games use an initial coin offering (ICO) to collect funding for the game’s development and promotion.

In an ICO, game developers create a new cryptocurrency token specific to their game and sell it to investors in exchange for cryptocurrency, usually Ethereum or Bitcoin. The game developers use the funds raised from the ICO to develop and promote their games. The tokens are often traded on different cryptocurrency exchanges, where investors can buy and sell them. If the game is popular, the value of the tokens can go up.

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ICOs are a new type of crowdfunding, and the tokens are often sold as a way for investors to participate in the game’s development and future success. Some ICOs give their token holders certain rights within the game or the project, like access to certain features or a share of the project’s revenue.

It’s important to note that ICOs are not regulated in many jurisdictions, and as such, they are a high-risk investment. Some countries have already banned them altogether or have strict regulations in place. Before you join an ICO, do a lot of research and think carefully about the risks.

It’s also worth noting that many jurisdictions are still figuring out how to regulate these kinds of activities, and laws and regulations are subject to change over time.

4:Advertising and Sponsorships

Advertising and sponsorships are other ways that crypto games can generate revenue. In this case, the game developers can sell advertising space within the game, such as banners or video ads, to companies looking to reach the game’s player base.

A car manufacturer, for example, might promote their latest model in a racing game, or a fast-food restaurant might promote its newest menu item in a cooking game. These ads can also take the form of branded items that players can purchase or use in the game.

Sponsorships are like ads, but the companies give money directly in exchange for promoting their brand during the game or even outside of it. This could be accomplished by branding, in-game merchandise, and events, among other methods.

Advertising and sponsorships can be good ways for companies to reach their target audience and make money. They can also be good ways for game developers to make money. Additionally, this revenue stream could also be used to finance the game’s development and as a way to pay influencers and ambassadors that can help promote the game.

It’s worth noting that advertising and sponsorship can be subject to regulation, like advertising laws and regulations, and game developers should be aware of this and comply with it.

Demerits of Crypto Games

While crypto games have the potential to offer many benefits, some significant drawbacks should be taken into account. Some of the main demerits of crypto games include the following:

  1. Complexity: Crypto games can be complex to understand and play, especially for people unfamiliar with blockchain technology and cryptocurrency. This complexity can make it difficult for new players to get started and limit the potential player base for the game.
  2. Volatility: Cryptocurrencies are highly volatile, making it difficult for players to predict the value of their in-game assets. This volatility can also make it difficult for game developers to price items and assets within the game.
  3. Regulation: As crypto, games involve the use of blockchain technology and cryptocurrency, and they can fall under different laws and regulations depending on the jurisdiction. This can make it difficult for game developers to operate and can also limit the potential player base.
  4. Security: The decentralized nature of blockchain technology can make it more difficult to secure player data and assets. There have been several instances of hacks and thefts of cryptocurrency, and the same could happen within a crypto game.
  5. Limited players: As the field is new and the adoption of blockchain technology and crypto assets has yet to be widespread, the pool of players is limited and still has a way to go.
  6. Scalability: The scalability of the game, in terms of the number of players, transactions, and data storage, can be a challenge for blockchain-based games. This is an issue that developers are currently working on solving.
  7. Complex tax implications: As crypto games involve real-world assets, they may be subject to tax regulations, which can be complex and change over time. This may also cause a lot of uncertainty for players and developers.
  8. Legal risks: Due to the newness of the technology, laws, and regulations are still catching up, and many legal risks may arise, which can pose a challenge for the game developers, and also for players.
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When considering playing or producing a crypto game, it is vital to keep these drawbacks in mind and be aware of the risks and difficulties associated with it.

Conclusion

In conclusion, crypto games are new online games that improve the gameplay and player experience using blockchain technology and cryptocurrency transactions. They generate revenue through various mechanisms, including in-game purchases, cryptocurrency transactions, initial coin offerings (ICOs), advertising, and sponsorships. (Also Read: What Are The negative impact of cryptocurrency on the economy?)

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