Founder & CEO at WebPick Internet Holdings Ltd.
Skill-based games are gaining in importance. As a co-founder of gaming publisher AppCentral and with over a decade of experience in mobile advertising, I believe this burgeoning category will explode over the next few years if current growth trajectories continue.
Success in games of skill is determined by a player’s physical abilities, such as reaction or dexterity, or mental abilities, such as logic and knowledge. Examples of skill games are Solitaire Cash and Bubble Cash by Papaya Gaming. Bubble Cash, for example, mixes the classic bubble shooter game with modern matchups and tournaments.
There is no element of chance or luck in the game of skill. It’s a way to showcase real talent with the added adrenaline that comes with the potential to reap rewards for top performers.
The future of skill-based gaming
There are six major market shifts that will see skill gaming grow in the years to come.
1. More games: Four years ago, skill games consisted mainly of solitaire. Skillz, one of the major players in this space, generates more than 70% of its revenue from the top three games on its platform. Over time, more games will be developed that offer challenging and immersive experiences. Skill-based gaming will span the entire gaming spectrum in the coming years, from AAA games to hyper-casual.
2. Other platforms: Currently, most skill games with a rewards-based model are on iOS devices. For example, popular skill games found on the App Store today, like Bingo Boost by Ryu Games and 21 Blitz by Skillz, are not available on the Google Play Store. If Google and Android app stores and web applications start adopting these games, I think the market could quickly double or even triple.
3. Broader Geography: A market that was limited to the US three years ago is growing significantly in regions like the UK, Australia, Canada and India. Just as social networking started with momentum in North America and then expanded across the world, games of skill have yet to find significant acceptance worldwide.
4. Meta Driver: Despite their devoted fanbase, attachment to skill games remains low. Other existing cutting-edge games offer much more sophisticated reward systems and meta-games. As explained in a previous article, the metagame refers to the systems and mechanics created to wrap the main game in a set of rules and logic. Especially for skill games that rely on social gameplay and tournaments, the ecosystem and economy that frames the gameplay will be critical.
5. Personal Economy and AI: The gambling industry is becoming increasingly sophisticated on two fronts: creative and mathematical. A personal economy means the gameplay can adapt to your preferences. This is also supported by AI that will change the way the experience adapts and evolves uniquely to the player. For example, the AI can figure out a player’s ability or intent and adjust gameplay accordingly.
6. Innovation: As a young vertical, we’re going to see a lot of innovation in this market, both in gameplay and the technology around it. No one can predict how game developers will use their creativity, but look out for fresh experiences and a big wave of innovation in the space. The metaverse and AI are expected to continue disrupting space in 2023, and gaming experiences will be more epic and cinematic than ever. Game engines like Unreal Engine 5.1 and Unity are steadily catching up with the visual delights we’ve only come to expect from movies.
NFTs and Play to Earn
There has been a lot of talk in recent years about play-to-earn, which uses the blockchain to reward players with cryptocurrency or NFTs that players can convert into cash. Gaming giants like Ubisoft, EA, Square Enix and Sega have started developing games where NFT rewards are at the heart of the gameplay. It will be interesting to see how the play to earn market develops and how it intersects with skill games.
“Playing for fun” and “playing to make money” are not mutually exclusive. The Red Village explains in a Medium article how this mindset shift will be the catalyst for play-to-earn games to become play-and-earn games. Players can earn alongside the fun instead of at its expense.
The necessary infrastructure for expert gaming to thrive
Playing against other players increases the stakes and makes the gameplay more exciting. Players are keen to add a layer of excitement with rewards that can be monetized. However, new infrastructure needs to be built to enable this new type of gameplay. To allow for fair competition, the infrastructure needs to consider several elements to measure a player’s skill and performance, including difficulty curves, matchmaking, ranking systems, tournament simulators, and even anti-cheating systems.
Who takes over with a successful infrastructure? There are three main directions in which the ecosystem could thrive. First, some companies will provide widgets for developers to add to any games that would allow users to rally against each other. Second, some companies will create a hub where users can gather and play their favorite games and compete against each other. Third, there will be companies developing their own skill games, which is what we’re seeing today. It is impossible to predict if there will be a clear winning strategy or if we will see a hybrid solution. We’re also likely to see a lot of mergers and acquisitions in this space as larger players acquire smaller innovators.
How skill games compare to other types of games
Each game is based on its own economy and reward system. Some games allow you to trade NFTs for money, others like Roblox and Fortnite allow you to buy and gift game gear, and skill games allow you to earn money. Ultimately, skill games are more similar to other forms of gaming than you might think.
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