The Misunderstanding
Unity entered the market in 2005 and revolutionized the gaming industry. What was once a cumbersome task became a smooth experience with Unity, and the gaming world flourished. However, recent news regarding Unity's pricing system shook the industry to its core, leading to prophecies of the demise of the Unity engine. While Unity did indeed make changes to their pricing system, the backlash was fueled by a list of misunderstandings and an emotional element, which often plays a key role in the virality of false claims.
What changes will we see in the gaming industry due to Unity's decision?
Who will be affected by these decisions, and who will remain unaffected?
Where does Elympics stand in all of this?
The Real Change
To begin with, let us emphasize a fact that seems to have been lost in a storm of virality: the first 1,000,000 installations are free of charge, including the consideration that multiple installations and removals on the same device still count as a single installation. Another vital point is the need to differentiate between developers, gaming studios, and the types of games they create. For simplicity's sake, we will categorize games into Free-to-Play (F2P) games and Premium games, i.e., those we must purchase to play.
Premium and F2P games differ significantly in their monetization models and various statistics, such as Cost per Install (CPI) and Lifetime Customer Value (LTV). This is where the root of the misunderstanding lies. When discussing Premium games created by either individual developers or gaming studios, we will likely see little to no impact on their revenue model. Premium games generate revenue with every installation, effectively covering the costs imposed by the Unity pricing system, assuming the game surpasses the threshold of 1,000,000 installations. Achieving this milestone is not an easy feat; only close to 1% of premium games reach the threshold of 1,000,000 installations, rendering the new pricing system rather insignificant for this gaming niche.
On the other hand, we have creators who have chosen the F2P route and hyper-casual games that focus on generating revenue through in-game ads. This approach differs markedly from the Premium games model. The first distinction lies in the significant difference in numbers representing Cost per Install and Lifetime Customer Value. These differences result from quick gameplay sessions and extremely low player retention in the hyper-casual genre. Consequently, F2P games often amass more than 1,000,000 downloads while bringing in relatively little revenue per installation, leaving the game on the brink of profitability.
While the F2P game model based on long-term player’s engagement is by no means inferior to the Premium games model, over the years it evolved into numerous branches, one of which became home to applications that resemble games but, in fact, introduce low-quality gameplay in between ads. This monetization model found in the given branch neither promotes quality nor sustains long-term success, ultimately exerting a negative influence on the gaming industry. We believe the change introduced by Unity is the first step toward addressing this issue, compelling game creators to implement quality monetization mechanisms that engage players in enjoyable gameplay for longer durations.
The Solution
The core issue that contributed to overreliance of hyper-casual games on monetization model focused on the number of users instead of their retention was closely related to the lack of proper incentives and monetization mechanisms, which in turn led creators to rely heavily on ad revenue. Elympics addresses this problem by providing a comprehensive set of tools and infrastructure. With these resources, developers and gaming studios can now create games with appropriate incentives and innovative monetization mechanisms. Consequently, hyper-casual games can significantly increase their Lifetime Customer Value by positively impacting user retention. This shift moves the focus away from relying solely on in-game ads and towards creating competitive games that users will eagerly engage with repeatedly, creating a positive cycle that ultimately raises the overall quality of games.
Players actively seek meaningful competition, which is not easily found in hyper-casual games. Elympics creates an environment where competition thrives via its skill-based gaming model, where the only way to gain an advantage and secure victory is through game mastery. Competition can be introduced in various ways, ranging from standard duels, where two players compete for rewards from a shared prize pool, to well-known Leaderboard models where scores are updated in real-time, further fueling the competitive spirit. Intelligent Matchmaking creates an environment where players can compete with others based on their skill level effectively introducing skill-level rankings into the system where new players would be competing against someone close to their skill level instead of situations where newcomers are playing against highly skilled individuals. Even more, all game modes are highly configurable meaning games can take place in various setups, such as 2 vs. 3 or 1 vs. 4, allowing highly skilled players to test their abilities while being outnumbered.
The concept of a shared prize pool is where the notion of creators' revenue comes into play. The concept of Paid Competitive Gaming introduces a configurable fee that both parties must pay before each match, contributing to the creation of a shared prize pool. After the final results and the settlement of a match, the winner receives the prize pool, with a small percentage going to the developer's wallet. This incentivizes creators to design games that encourage players to engage in multiple forms of competition, as each prize pool settlement generates revenue effectively shifting the business model from quick sessions with in-game ads to long-term engagement in a given title.
Summary
Elympics is dedicated to assisting creators in boosting their revenue by facilitating the development of quality games that prioritize meaningful competition, a feature often lacking in hyper-casual games. The transformation of competitive gaming is already taking place, and we firmly believe that developers and gaming studios focused on the creation of Free-to-Play (F2P) games are at the forefront of this evolving paradigm. With the new offering by Unity we may see an accelerated growth of web3 gaming as more and more creators will look for new ways to monetize their games. This is where Elympics awaits with ready-to-use tooling to help developers enter the realm of competitive gaming where incentives are aligned with player’s needs.
If you’d like to start building with Elympics right away, come and meet us!
.png)
