The gaming industry is diverse, ranging from AAA games to casual games. AAA games, known for their high development and marketing costs, have dominated the initial phase of web3 games. These games appeal to core PC and console gamers who are typically more tech-savvy and willing to spend more. 

However, the high cost and complexity of developing AAA games have led to a shift in focus towards casual games, which are cheaper to produce and have a broader, more diverse audience.

Could the blockchain gaming space take advantage of it?
## The Casual Game Market
Casual games are relatively inexpensive to create, can be distributed on any platform, and have a promising future with [$25B in revenue forecasted by 2027](https://www.statista.com/outlook/dmo/app/games/casual-games/worldwide). The average session length for casual games is 5-7 minutes, and the demographic skews older, with social casino games being primarily played by middle-aged women. 

Despite these advantages, casual games face challenges in monetization, with low ARPPUs and a conversion rate amongst the lowest of all game categories at ~1%. Web3 could increase the LTV for those that convert but there is still a 99% gamers who won't convert. 

That's mostly the reason why most casual and hyper casual games monetize via ads. 
## Setting the Foundation for Casual Web3 Gaming

![Custodianship.svg](https://blog-cms.openfort.xyz/uploads/Custodianship_35b2f716a8.svg)

### Onboarding
The onboarding process for web3 games has become significantly easier over time. Initially, the process was complex and time-consuming, requiring players to navigate through multiple steps to acquire crypto and buy items. This was particularly challenging for casual gamers, who typically have shorter gaming sessions and may not be as tech-savvy as core gamers.

However, with the advent of account abstraction and fiat on-ramps, the onboarding process has become much smoother. Players can now join and buy into web3 games as easily as connecting with a social login. This is crucial for casual games, as it allows users to get started quickly and easily.

Moreover, this smoother onboarding process opens up the potential for reaching crypto-naive players. These are players who have spent years spending in games without ever being able to earn back some of their losses. By offering these players the potential to earn back some of their money, web3 games could tap into a currently untapped audience.
### In-Game Ads
In-game advertising has traditionally been a challenge for game developers. Banner ads and interstitial ads were often seen as obtrusive and detracted from the gaming experience. However, the in-game ad tech world has changed considerably in recent years.

Brands have recognized the value of gaming's 3 billion players and have invested major ad dollars into the space. New companies have emerged to make the ad experience more native. For example, platforms like Anzu allow developers to build ad real estate into the game, such as corporate logos on racing cars or branded tattoos on avatars. This allows ads to be integrated seamlessly into the game without disrupting gameplay.

Casual games are particularly well-suited for in-game ads due to their short session lengths and the likelihood that they are played on devices with usable browsers. This makes it easier for users to follow an ad link and convert. In fact, data shows that gamers look at integrated game ads twice as long as they do other kinds of ads, leading to better engagement and ad revenue.

With the future of in-game advertising looking promising, estimated to reach [$20B by 2032](https://www.globenewswire.com/en/news-release/2023/05/17/2671210/0/en/In-Game-Advertising-Market-to-reach-USD-20-7-Billion-with-a-12-30-CAGR-by-2032-Report-by-Market-Research-Future-MRFR.html), it presents a significant opportunity for casual web3 games. By integrating seamless in-game ads, developers can enhance the gaming experience for players while also driving revenue.

If you have more questions/ideas/queries, join our [Developer Discord](https://discord.com/invite/t7x7hwkJF4) and let us know there. Furthermore, you can follow us on [Twitter](https://twitter.com/openfortxyz) for our updates as we keep shipping. 

The opportunity of casual and hyper casual web3 gaming sustainable in the future by exploring novel approaches to in-game ads monetization.

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Casual Gaming in the Context of Web3

There are many opportunities that new models like "free-to-own" and "play-to-earn" models can offer, but currently, most of the available projects simply don't live up to their legacy counterparts. This has led to many doubting that this new generation of games can penetrate mainstream interest. However, this may be short-sighted. It's not the first time that a new technology has been dismissed based on its earliest examples.

Web3 games incorporate blockchain elements, including smart contracts and non-fungible tokens (NFTs), to create virtual assets that can be verifiably owned and traded by players without the intervention of a third party. This innovation puts a high degree of power back into players' hands.

## Early productions don't define the future potential

While many Web3 titles have failed to galvanize their fanbase without their once-lucrative financial boons, this has led to many detractors of the blockchain gaming genre who assume that current offerings are the zenith of what's possible, with the sector dismissed as a fad. However, looking at the recent past -particularly the monolithic rise of mobile gaming- demonstrates that the earliest products should not define future potential.

The classic game Snake was among the most popular early mobile titles when Nokia ported it to its line of mobile phones, with millions playing worldwide. At that point in history, anybody using their phone for gaming could only be called a casual gamer, and a similar story emerged as what we are seeing today.

There are many parallels between the rise of mobile gaming and what we see now. What killer apps may break open the scene to a larger audience remains to be seen, but in 10 years, it's likely that these types of titles will simply exist alongside their home console and mobile brethren.

## How "Blockchain Gaming" got started

![Diagrams.png](https://blog-cms.openfort.xyz/uploads/Diagrams_fd6303fa69.png)

From Kryptokitties and their lack of user engagement (despite having breeding capacity) to P2E with Axie, onboarding thousands of new players to the upcoming third generation of games will start bringing in the larger mainstream gaming community as production value increasingly aligns with traditional AAA games (together with the economic incentives that come with play-to-earn).

The third generation of games is here with the next level free-to-own. Free-to-play started because of piracy. It was a first step to distribution, engagement, etc. then you start monetizing by buying upgrades and items, etc. and finally you are locked in the system with assets you don't really own. 

The next evolution, proposed by [Gabriel Leydon](https://twitter.com/gabrielleydon) is free-to-own, which is free with a step further. It's not only free to play, but you can also own items that have value even before playing the game. Essentially, this extracts the items that everyone is already paying for, with $120B of items sold every year on mobile phones alone. 

## Evolution beyond free-to-play and ownership of in-game items

Players are incentivized to own the item, so they now own the item and can develop further value to it. Essentially, this democratises the free-to-play economy and gives it out for free.

But why stop here? Because of the crypto programmability, you can do pretty much anything with payments, new token types, new timeframes, variables, etc. It's a mistake to look at today's state of crypto and think that's the only thing we'll be able to do. It's an imagination problem.

The world we're going to is not limited to digital land availability, but rather 3M NFTs given out for free to 3M different wallets. What will be the intrinsic value of these NFTs? Probably zero! (everyone is going to have one for free!), but the most successful ones will be the most desired ones despite the fact that there are millions of them.

Virtual items cost literally zero to create, why wouldn't you just give this for free? Attention is the ultimate currency! People expect they'll need some token to buy some stuff, but actually, they'll get something for free and eventually move to crypto. That's the most probable end-game.

If you have more questions/ideas/queries, join our [Developer Discord](https://discord.com/invite/t7x7hwkJF4) and let us know there. Furthermore, you can follow us on [Twitter](https://twitter.com/openfortxyz) for our updates as we keep shipping.

Explore the potential of Web3 games, which incorporate blockchain elements such as smart contracts and NFTs, to disrupt the traditional gaming industry. It challenges the assumption that current offerings are the zenith of what's possible, drawing parallels with the early days of mobile gaming.

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Casual Gaming in the Context of Web3

Beyond the Early Game Examples and the Rise of New Categories