What GameFi Can Learn From Twitch
GameFi has failed in the marketplace because its business model shifted gaming from entertainment to making money, removing the gameplay experience. By shifting the business model away from players and onto viewers, as Twitch has done, GameFi may have a chance at cornering its target market. Indeed, developers can learn from Twitch how to reinvent GameFi.
Twitch’s revenue model
Twitch’s business model revolves around providing a platform for content creators to share live streams with a global audience. Streamers generate revenue through the Twitch Partner Program using two primary means: subscription and advertising.
Viewers can pay to subscribe to a streamer’s channel, where they are provided exclusive benefits such as emotes, chat badges, and ad-free viewing, all of which have proven very popular on the platform.
Twitch also provides a third form of revenue for streamers through bits, virtual goods viewers can purchase to cheer on their favorite streamers during gameplay. Twitch’s website says, “Cheering is another to support Partners and Affiliates, similar to subscribing.” Streamers can redeem bits into real money, and Twitch takes a percentage of the transaction.
Applying the Twitch model
The most important thing GameFi developers can learn from Twitch is to shift the burden of revenue generation away from the gamer and onto the viewer.
The problem with P2P and P2E is they are money-centric games that need to be played for the player and developer to make money. Using Twitch’s model, GameFi companies can generate revenue from viewers while preserving the gameplay experience. Gamers can also have the option to
By applying Twitch’s revenue model, GameFi games can be viewed as sports entertainment; viewers can pay subscription fees, ads can be placed in front of viewers and away from gamers, and a community of gamers and viewers can be built up organically. This model encourages gamers to be immersed in their gameplay while providing viewers with the desired content.
Adaptable models
GameFi companies could use models similar to Twitch to generate revenue from other sources besides gamers.
Increased exposure: The Twitch business model is based on a large user base of gamers and enthusiasts because its platform caters to both parties. The platform easily matches gamers with viewers and provides easy-to-use services for transactions, chat, and other interactive engagement.
Third-parties: Twitch generates revenue through monetization options such as ads, subscriptions, and donations. GameFi companies should consider these third parties as a primary source of revenue.
Community building: Twitch’s streaming service instantly connects viewers with gamers in real-time. With this structure, communities are built, and audiences are engaged. Similarly, GameFi could offer tokens that access different tier levels to engage with particular gamers.
Incentivization: Twitch incentivizes content creators to produce high-quality content that attracts viewers. Likewise, GameFi could incentivize players to engage in specific in-game activities by offering their viewers rewards such as cryptocurrency, unique in-game items, or other premium benefits.
GameFi should learn from Twitch
GameFi companies should consider gaming enthusiasts as their target market before assuming gamers will foot the bill for GameFi products. With engaged communities, native web3 products, and a blockchain architecture that increases security and privacy for all parties, GameFi could become a dominant force in the gaming community.
GameFi companies could create an engaging and profitable experience for players and viewers by integrating these elements into their business models. If these companies ignore the economic power of these opportunities, GameFi will continue to go nowhere.
