You’ve probably heard of Initial Public Offerings (IPOs) and Initial Coin Offerings (ICOs), but how about Initial Gaming Offerings (IGOs)? This relatively new idea has taken the gaming industry by storm, and it’s quickly becoming one of the most promising avenues for game developers to pursue to raise money and gain visibility for their projects.
Initial gaming offerings (IGOs) are essentially initial public offerings (IPOs) that involve video game stocks instead of non-video game stocks. They're quickly becoming an increasingly popular way to invest in the blockchain gaming industry.
IGOs are often coordinated using launchpad platforms. Investing through launchpads often requires users to lock the platform's native token for a set amount of time. Then, depending on the initiative, participants may earn early access to the game's tokens or NFTs. Tokens and NFTs obtained via IGOs can sometimes be exchanged outside of the game environment on decentralized exchanges and NFT markets. Here’s everything you need to know about IGOs to get started in the world of gaming investment.
Not all IGOs are the same, so it’s important to understand what they are, how they work, and how you can find one that’s right for you if you want to explore this option as an investment avenue.
Settle the Definition
Before we get too deep into what an IGO is, let's ensure we're on the same page about terminology. When you hear the word IGO, that's an acronym for initial gaming offering. Other common terms you might see include token sale or crowd sale.
These terms refer to the same concept: a company offers digital tokens to investors in exchange for funding. These tokens are then used as currency by customers of the company. With this form of crowdfunding, startups can skip venture capital firms and instead raise money from people who use their products or services with every purchase.
Investors hope to be rewarded with new business and exponential growth. The goal of an IGO is to raise money without having all-in requirements like equity dilution and lockups that would hinder other types of fundraising efforts.
The Difference Between IGOs and ICOs
IGO is a crowdfunding platform for blockchain gaming entrepreneurs. It's similar to an ICO, except instead of cryptocurrency tokens, IGO participants earn early access to in-game assets while helping to shape the game's early development. These in-game assets are frequently represented by NFTs and can represent any item or feature in the game. Examples include skin, weaponry, armor, character traits, distinctive units, automobiles, etc.
IGO is distinct from ICO in that it does not indicate the mechanism of the first offering i.e. centralized or decentralized, but rather explains what is initially supplied, which is the game.
Another significant distinction is that ICOs are more speculative. In contrast, IGOs are more concerned with the actual product or service.
Things to Look for When Choosing an IGO
When seeking an IGO, select a provider with a solid reputation and reasonable pricing. You should also ensure that the IGO is legal and that you comprehend the terms and conditions. The launchpad is crucial to the growth of an IGO. Of course, whether your investment pays off depends on how the project is pieced together. When deciding on an IGO to invest in, there are a few factors to consider.
- Are there enough projects that have also met their crowdfunding objectives?
- How long did it take a project to do this?
- Is there a good action plan in place with a clear direction?
- Who are the players in the game?
- Who are the project's investors and partners?
- Have they worked on several projects, and are they experienced enthusiasts who understand what they're referring to?
A sense of community is essential. The game has a stronger chance of success if a huge group of individuals is thinking along with it and looking forward to its release. It is equally fantastic if the idea gets high-profile investors and partners on board. These well-known funds, angel investors, platforms, and businesses have confirmed their participation.
How To Participate In An IGO
The key method is that your wallet address must be on the whitelist, which is normally announced a few hours or even a day before an IGO (for example, on the launchpad's Telegram channel).
There are two ways to be added to the whitelist. The first is winning a lottery seat, and the second is by assured allocation (usually by holding a specific amount of launchpad tokens). Winning a lottery slot might be purely random, but in some situations, possessing a particular quantity of launchpad tokens increases your chances of winning. This is the case, for example, with GameFi and Trustpad.
Many individuals are presumably interested in just having a guaranteed allotment. It's typically fairly simple - you only need enough launchpad tokens in your wallet to qualify for a specific tier. The disadvantage is that the sum is generally rather significant, particularly for bigger allocations.
Final Takeaway
IGOs provide a novel approach for game creators to fund their games using blockchain technology. While IGOs can be useful for investors to assist early-stage gaming ventures, they also involve substantial financial risk. Before putting your money at stake, you should always do your homework.
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