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Blockchain-based video games are emerging, offering crypto investors an opportunity to enter further into the profitable gaming world. The entire video game industry is simply massive. And it will likely exceed $200 billion by 2023.
As a result, several different entrepreneurs and companies are thinking about starting a new platform of their own to get a portion of this lucrative market.
And offering an Initial Game Offering (IGO) is one of the most common methods to start a new blockchain-based video gaming platform. In light of this, let’s take a closer look at it.
An initial game offering or IGO is a crowdfunding approach that blockchain game teams use to crowdfund an early-stage game. In return for that, you may receive attractive in-game tokens and assets at a discount before the public sale.
Besides reducing the barrier to entry, an IGO grants participating retail investors an opportunity to secure in-game tokens and assets before they are publicly available.
An IGO is a method to raise capital for new blockchain gaming projects. To support a game’s early development stage, the participants of an IGO buy in and receive early access to in-game benefits and game assets. These participants can also get the tokens engineered for the game before its public release.
The assets provided during an IGO include skins, weapons, characters, mystery boxes and accessories. Often, these assets live as non-fungible tokens (NFTs) on the blockchain. Some of the assets provided through IGOs are necessary to play or access the game.
An Initial Coin Offering or ICO provides emerging cryptocurrency organisations an opportunity to assess the market for a specific product they want to release. Also, they allow developers to raise money to fund and facilitate the start-up procedure.
In simpler terms, an ICO refers to an IGO for emerging cryptocurrency organisations. Looking at it from a different perspective, an IGO essentially refers to an ICO of a video game platform. While there are several similarities between these two, an IGO and an ICO differ in the way they conduct their operations:
ICO investors receive little to nothing tangible in the form of early returns. On the other hand, the primary purpose behind providing IGOs is to offer early access to gaming assets that potential investors can rely on and look forward to a substantial return on investment.
Perhaps the biggest difference between these two is the product that they sell. Usually, an ICO markets a product that has considerably limited usability. On the other hand, an IGO sells digital accessories and items which can be used within a video game ecosystem.
It is common for a specific video game to be in the final stages of development before acquiring funding through an IGO. But that isn’t the case for an ICO. Instead, crypto organisations often put out the product early to determine viability and the opinion or interest of the public.
An Initial DEX offering or IDO is another common fundraising approach in crypto gaming. Similar to an IGO, it is used to publicise upcoming blockchain projects. The difference between IGO vs IDO is in their scope.
Any project launching on a decentralised exchange (DEX) can be categorised as an IDO. However, with an IGO, the investment is particularly directed towards developing a blockchain game.
Tokens announced via an IDO are instantly listed on the decentralised exchange from where their launching occurred. Also, the projects secure immediate token liquidity. But it is worth noting that an IDO lacks a thorough and robust review procedure. Consequently, compared to an IGO, it has a higher rate of low-quality and fraudulent projects.
An IGO launchpad is a platform hosting several early-stage blockchain gaming projects. After buying the token native to the IGO launchpad, you can use it to fund contributions to the selected initial game offerings.
Depending on the launchpad platform, you either have to stake the tokens to invest in the project or lock them in a pool.
Then, you would receive NFTs or in-game tokens, which are necessary to play the game. Some popular IGO launchpads are TrustPad, BinanceNFT, GameFi and Seedify Fund.
There is a respective procedure in place for every IGO launchpad. In this process, typically, the first step involves linking a wallet to the launchpad. Then, you need to choose a tier which reflects the investment value and identify an initial game offering to invest in.
The details regarding how to execute the steps mentioned above can vary across launchpads. While several launchpads focus on games, others provide blockchain games in addition to other projects.
Notably, it is possible to host an IGO launchpad on any blockchain like BNB Chain (BNB), Ethereum (ETH), or Cardano (ADA). Also, every launchpad has a different criterion regarding incorporating new projects and different procedures to accept investors.
In exchange for their investments, publishers look forward to owning a segment of the organisation. Therefore, developers forfeit some of their business’s ownership. However, an initial game offering does not push developers to such extremes.
An initial game offering allows you to seek funds for several projects simultaneously, as raising funds is easy in increments while still building up a loyal audience base.
If someone has a lot of social media followers and a great pitch, an IGO may provide a channel to acquire funding within a short period. This is a beneficial strategy as it does not feature any conditions linked to venture capitalists.
An IGO allows you to retain complete ownership of the firm’s equity, implying you are the only individual making all development decisions.
The major disadvantage of an IGO is that it is an all-or-nothing scheme. This implies that if you begin a funding procedure and that round fails to go through, you will have to return all the invested money to every investor before trying once more. This further means that you may go through an entire round and receive no money.
One more shortcoming is that finishing a successful IGO can be quite challenging. This is only because of the time this process takes and the number of individuals you need to inform.
An IGO is risky as no one knows whether or not it will succeed. The initial game issuers need to invest money, effort and time before raising the funds required for their IGO launch.
IGOs in blockchain prove to be a meaningful way to raise funds for cryptocurrency gaming projects. Also, they may create sufficient buzz to secure an audience before the release of a game.
Generally, you will encounter a video game in its IGO stage when it is close to completion.
This is partially because, in the past, unscrupulous developers gave the backers false advertisements and an inaccurate sense regarding their investments. That is why the IGO business model often faces a significant level of scepticism, although developers issue regular updates and refunds as well.
Still, IGOs are a viable and popular option for developers who want to get a project off the ground. The IGO space keeps growing. An increasing number of quality projects are launching through IGOs, gradually becoming a mainstay in cryptocurrency and blockchain gaming.