Supply Chain in the Game Industry

The supply chain in the gaming industry has gone through many stages of development, from production to distribution and marketing. The emergence of GameFi – a variation of Game Finance – has brought significant changes to this supply chain.

Stages of supply chain development in the gaming industry

In the early stages, the supply chain in the Game industry was quite simple, consisting of the main components being the manufacturer and the publisher.

Game studios play an important role in producing game products and then bringing them to players by finding publishing partners or publishing them themselves on platforms like Google Play and the App Store.

In addition, publishers play an important role in distributing and marketing game products. However, publishers also face challenges such as high advertising costs and transaction fees. Therefore, some publishers have chosen to self-publish games on domestic platforms where costs are lower.

GameFi 1.0 Model and the Birth of GameFi 2.0

GameFi 1.0 is the first GameFi model to be born, based on the blockchain platform and allowing players to earn money through playing games. However, this model has faced major challenges, especially instability and unsustainability.

GameFi 1.0 challenges include:

• High level of competition: The number of GameFi games is increasing, leading to fierce competition between developers and players.
• Low liquidity: The value of GameFi in-game assets often fluctuates sharply, making it difficult for players to recover their capital.
• Security issues: GameFi often uses complex blockchain technologies, leaving players vulnerable to attacks.

To address the challenges of GameFi 1.0, GameFi 2.0 was born with a new and improved supply model, bringing significant changes to the supply chain in the gaming industry.

Specific changes in GameFi 2.0

GameFi 2.0 has brought the following specific changes to the supply chain in the Game industry:

• Player role: In GameFi 2.0, players play an important role as not only consumers but also investors. Players can pay to play and have the opportunity to receive rewards when they win.
• Role of marketer: In GameFi 2.0,Internal Marketers can be potential investors, receiving revenue commissions from affiliate marketing programs
• The role of game businesses: In GameFi 2.0, the game business is often called CG Studio, which takes on tasks such as game design, programming, publishing and operation.

Web3 and AI Technology in GameFi 2.0

Besides the new supply model, GameFi 2.0 also applies new technologies such as Web3 and AI to bring unique and engaging experiences to players.

• Web3: Web3 technology allows players to own NFTs and bring them into different games, helping players to own and use in-game assets sustainably.
• AI: AI technology helps design and program games quickly, creating dynamic experiences with exciting effects.

Diversified revenue streams and cost minimization

GameFi 2.0's revenue, like Heroes TD, comes from a variety of sources, including advertising, item sales, NFTs, tokens, and toy production. This helps diversify revenue streams and minimize issuance costs, facilitating development.