Introducing the Initial Game Offering (IGO), a new business model that combines the video game sector with the crowdfunding system. With the integration of these two sectors, IGOs can connect with their users and gain additional revenues from selling virtual items, which will assist them in reaching their audiences.
Gamers can pre-purchase titles through the initial game offer (IGO) crowdfunding model before the completion of the games. By taking advantage of the early access program, developers can benefit from attracting more funding and securing early access to the game.
Thousands of these projects have been funded by millions of backers on Kickstarter, where thousands of these games are available. Some developers do not meet their obligations, and others make promises they cannot keep.
There could be more appropriate game offerings for some forms of video games. This is especially true for games close to completion or are part of a limited edition collection. As well as being helpful for developers, they can also be beneficial for marketers who wish to be aware that they are not missing any aspects of marketing or development.
Developing a project before making it available to the general public is not always ideal. In such cases, the initial offering and the amount of work remaining before release can give a false impression regarding the final product. Even though developers offer unlimited refunds and multiple updates, there continues to be skepticism about the process.
Cryptocurrencies began to gain popularity in society in 2013 when ICOs were introduced.
People with limited resources would not be able to invest in many similar companies because they did not do much research.
Due to this, lots of money mostly went to the large, successful companies rather than to the smaller ones with a higher probability of success. When people engage in an initial coin offering, they can invest any money they wish on various projects that interest them. If their preferred company becomes a success, they will be able to make a return on their investment.
IGO stands for Initial Game Offering – it means that to participate in an IGO, you are buying into a project even before you know exactly what product will be released onto the market. For example, you can purchase tokens from a company that develops games even though the game has not yet been released.
If the released game becomes popular after its release, it is sometimes possible for an investor to make a lot of money from their investment. It is, however, a risk that such companies may not generate returns for their investors to invest in them.
Nevertheless, with excellent marketing and details on how the funds will be spent, any organization should be able to convince some investors to invest.
One of the primary advantages of an initial game offering is that it is open to the public instead of traditional investing. It is mainly geared toward corporations and high-net-worth individuals. Furthermore, investors have more access to research material and information on new ICOs and IGOs to make informed investment decisions.
Initial Game Offering Explained
Initial Game Offerings (IGOs) are primarily fundraising events conducted through crowd sales for game sector projects and gaming startups.
Participants in this type of investment model are eligible for project tokens and various other benefits, including discounts on the release of the game. In addition, pre-registered investors receive access to exclusive features for those attending the event.
Aside from being able to generate money for gaming projects and startups, IGOs are also known to be alternative methods of generating funds. We believe that we referred to IGO; we used the term ‘pre-sale.’ It does not necessarily correspond since “pre-sale” might also refer to other private sales and crowdfunding activities.
Token sales are sometimes referred to as IGOs. An investor generally purchases a token to grant access to a service or platform, and it can also be traded on cryptocurrency exchanges depending on demand. Because of this, the initial concept for the game offers services such as free passes, discounts, and early access to content.
However, as soon as the project goes live, the tokens are not accessible to investors. Each pass is unique and tied to the specific project regarding authentic digital tickets, and they may have to use their services or platforms to refer back to them.
In cases where a project needs funding to go live and become fully operational, IGOs seem to represent a viable option. If someone has an excellent idea for a blockchain-based social network, but the software needed is not easily developable or inexpensive, an ICO may help raise funds.
When the platforms go live, the media are typically able to sell their tokens on crypto exchanges if demand warrants it. Investing in tokens is primarily speculation that, later, the tickets will become popular and increase the value even if they aren’t used on the platform.
How Do IGOs Work?
Usually, IGOs occur online, where developers allow investors to get a sneak peek of their upcoming project and interact with it if time permits. This can be accomplished via several mediums:
- Word of mouth and forums: One of the first things a developer will probably do when coming up with an idea for a gaming project is to reach out to its potential player base by using press releases, forums, and online chats/podcasts. This does not always result in significant funding for the developing company. Still, it does allow them to determine whether the product they are proposing is suitable for the market.
- Artwork and project note: In the past, developers have sometimes presented artwork for their game to investors and notes about how they intend to operate the game. However, if a project is still primarily composed of artwork and messages instead of something more substantial, this may indicate that the project is in very early stages and may change in the future.
- Graphical showcase: Providing online graphic showcases for investors to access is another way developers can give investors a sneak preview of their upcoming video game projects. These are usually presented as trailers, non-playable demos, or even what is essentially moving art.
- Interactive model: Developers sometimes allow investors to play a pre-release version of their upcoming video game as a way toney for their IGO. These may be small sections of a completed game (like a playable demo) or large portions of an unfinished one. Both options allow investors to interact with proposed systems.
In most cases, participating in an initial game offering helps an economy boost market access, increase tourism, attract foreign direct investment (FDI), and provide access to new technologies. Yet, participating in a game offering can also have negative consequences. In some cases, these IGOs help investors avoid tax in certain jurisdictions and ease international trade in some cases.
Furthermore, weak institutions present a greater risk of being manipulated by more vital partners of their NGOs.
A regulated blockchain-based process offered by IGO lets people outside the issuing companies purchase pre-release shares of the company. Taking part in an initial game offering can enhance public awareness of cryptos and increase demand since IGOs often offer bonuses for buying tokens early.
Whitepapers that describe the IGO business plan, technology and how these tokens will be distributed are usually included in the initial game offerings. Initial game offerings may hold risk for investors as anyone can create cryptos without a regulator’s permission, and they might also violate other legal obligations and regulations, such as prospectuses.
Therefore, it is impossible to know whether investing in an ICO is ethical or legal before doing so. There have even been some Ethereum ICOs that were fraudulent. So, consumers should only use cold storage wallets where hackers and other criminals can’t access their funds.
It is advisable to research ICOs beforehand to prevent any risk of financial loss when participating in an ICO. Due to the nature of IGOs, which are usually decentralized, open-source, anonymous, and accessible from anywhere, the market has increased.
Traders and investors may become more interested in IGOs if their popularity flourishes as it did in 2016-2017. Because most initial game offerings are not regulated by governments, taking part can be risky. In other words, issue-specific organizations may be compromised if consumers aren’t protected from scams and frauds.
Differences between IGO, ICO, IEO, and IDO
The crypto world offers several methods of fundraising. These include Initial Coin Offerings (ICO), Initial Exchange Offerings (IEO), and Initial DEX Offerings (IDO). These are all similar methods of crowdfunding, but they operate differently.
- · Initial Coin Offering (ICO)
Cryptocurrency’s first fundraising approach was the Initial Coin Offering (ICO). Cryptocurrency is used to raise funds by blockchain-based project teams. Since Ethereum introduced the ICO method in 2014, it has been a prevalent means of crowdfunding. Events that offer ICO support can help projects during their early development stages.
- · Initial Exchange Offering (IEO)
In contrast to the other offerings, an Initial Exchange Offering (IEO) happens within a cryptocurrency exchange rather than by an external team. In addition to benefiting from the project, IEO participants can also benefit from partnering with reputable crypto exchanges. Before a project can be listed on a business, it goes through a rigorous review process. One of the most popular IEO platforms is Binance Launchpad.
- · Initial Dex Offering (IDO)
Decentralized exchanges (DEX) host Initial Dex Offerings (IDO). The ICO and IEO models were redesigned to address their flaws by creating IDOs. Because the project’s token is launched on a DEX, projects generally have lower listing costs than IEOs. Passes can be listed immediately after an IDO has been completed, thus providing immediate liquidity.
Since DEXs are decentralized, IDOs that operate on them do not undergo a rigorous due diligence process. Several IDO projects could have questionable reputations or lower quality. Rug pulls should also be avoided as many IDOs are scams and steal money from investors.
Currently, these IGOs are hosted on several launchpads. Platforms such as launchpads facilitate the raising of funds and the offering of investments for creative projects. In most cases, an investor must buy the native coin to participate in an IGO.
These are usually locked in a pool for investors. As a result, they would receive project tokens or NFTs required for gameplay, depending on the algorithm. GameFi, Game starter and Seedify are popular launchpads.
GameFi first introduced the concept of IGOs. Both of the projects are offering their initial token offerings. GameFi’s offerings include $KABY Pool and Deathroad IGO. It is up to the participants whether they want to store the coins and wait for the price to rise or use them.
What to consider before investing in an IGO
A launchpad should also provide guaranteed allocation if it does not. There are instances when token distribution on IGO launchpads is based on a lottery system, meaning distribution is not guaranteed and might be risky.
The launchpad tokens provide holder benefits as well. One will be better able to make better and more informed decisions by researching the previous IGOs of the platform. Furthermore, studying the project itself is beneficial, as well. Taking a look at their websites and social media accounts can help you get a better sense of their plans.
Gaming industry growth has already been tremendous, but it’s only going to increase when Metaverse and NFTs become a reality. For example, Axie Infinity earned nearly a billion dollars. The second benefit of GameFi is that it allows people not just to play but also earn simultaneously, taking gaming out of the category of just being a leisure activity that people do for fun.
Game developers are showing the potential of their industry and are poised to grow even more. IGOs can undoubtedly assist in this effort. By doing so, more and more projects will be able to grow to their full potential while at the same time providing investors and participants the opportunity to earn rewards, increase their income or simply get early access to a game, enhancing a sense of exclusivity.
How Do IGOs Impact NFTs and Cryptocurrency?
A large part of why IGOs can affect in-game NFT sales is that they offer consumers a chance to interact with and fully realize the potential of upcoming products. In some extreme cases, this has caused the value of in-game items – notably the digital currency used to buy them – to be inflated. Additionally, IGOs and cryptocurrencies are intrinsically linked because games that rely on IGO methodology for full release are often blockchain-based.
It seems more likely that an emerging IGO will not last as the opportunities are still limited since this is a very new concept. Developers will be able to exploit a wide range of options provided by shared, online, and digital spaces, including pre-existing MMO games and even the Metaverse itself. Investors and developers both require platforms to bridge the gap; developers often need investors to achieve their ambitions, just as investors need developers to conduct their own. Developers and investors alike benefit from IGOs because they provide that platform.
Mobile game developers can gain many benefits from offering initial game offerings. Game developers can raise money through initial game offerings without relying on venture capitalists and publishers. IGOs have several advantages, including:
- Quick funding – It might be possible to get immediate financing from an IGO if one has a great pitch and a lot of followers on social media. Since the strategy is not tied to venture capitalists, it is beneficial.
- Publishing companies want a slice of the company in exchange for their investments, so they don’t need to give up the company’s equity. As a result, developers lose some control over their business, but an IGO does not force them into these extremes.
- Total control of your game – You can retain equity ownership in an initial game offering. As a result, your development decisions are solely yours.
- Funding future games – As a result of IGO, it is possible to raise money in increments for several projects while also building up a loyal audience. In addition, an IGO could improve the application of Initial Public Offering concepts, such as listing on public stock exchanges as part of an IPO via an ICO prospectus.
Offering a free version of the game at the beginning is a perfect way to generate funds and enjoy the game. IGOs can sometimes provide developers with the funds they need to fund future development, upgrades, etc. A coin or token released to the public through initial game offering exchanges can be bought or sold on exchanges.