Guest post by Ian Scarffe, who is a serial entrepreneur, investor, key opinion leader and Blockchain consultant with business experience from around the world.
Blockchain Games in the Builders’ Market
In 2023 and beyond, the deployment of blockchain technology will be essential to the growth of co-creative and co-governance gaming ecosystems. Its incorporation into the gaming business will allow overcoming obstacles inherent to conventional game ecosystems through the addition of GameFi (Game and Finance) projects, boosting player involvement, and creating new sources of revenue for all parties involved. This article offers some further in-depth insights and new technologies emerging in the current outlook of the blockchain gaming industry.
What will the GameFi Market Look Like in 2023?
2022 Key Findings on the GameFi Industry
GameFi continues to expand with great potential by combining elements of Blockchain technology, gaming, financial liberalization, and non-fungible tokens (NFTs). There has been a consistent increase in GameFi projects, which stood at 1,551 games as of June 2022.
Additionally, the number of players of blockchain-based games continues to rise, with statistics ranging between 2.94 million and 2.49 million people as of 2022. According to another research report, projections in the next six years, 2022-2028, of the GameFi business indicate play-to-earn nonfungible token (NFT) game business will have a value of $2.8 billion, with a compound annual growth rate of 20.4% during the same period.
DappRadar data shows that the blockchain-based gaming ecosystem had dramatic growth in November 2022, with over a $320 million inflow of financial resources. The fact that players in the conventional gaming ecosystem cannot own anything in a game is a big factor in the surge in GameFi. By allowing players to spend tokens associated with blockchain-based games, GameFi blurs the distinction between virtual and actual property.
Besides the financial incentive, GameFi provides users the opportunity to own digital assets in the virtual world, as well as the choice to engage in interconnectivity by transporting these assets between other digital environments.
What is the Current Outlook of the Blockchain Games Industry?
Some sectors have a long way to go before they can use blockchain technology to its full potential. However, the gaming industry continues in developing newer business models and cutting-edge innovations with the use of blockchain technology. It is anticipated that the incorporation of the metaverse, Web3, non-fungible tokens (NFTs), play-to-earn (P2E), and tokenization of gameplay into console gaming investments in 2023 will give the industry an additional boost, transforming it into something more than just an entertaining hobby for players.
Players can also protect their time and money interests in games, independent of the decisions taken by the developers. Additionally, the technology behind blockchain makes it possible to construct decentralized systems for gaming. These platforms allow players to compete in a transparent, truthful, and unbiased setting.
The distributed ledger technology (blockchain) contributes to reducing the issue of item theft brought on by cybercrime and the buying and selling of fake in-game goods, accomplished by rendering the ownership of in-game items unchangeable or immutable.
Challenges facing the GameFi Industry
Gaming finance, abbreviated as “GameFi,” refers to a service that enables gamers to earn virtual currency while playing video games. The GameFi industry has significantly aided the growth of the cryptocurrency market over the previous several years.
The rise in popularity of the gaming industry has led to the emergence of a large number of mobile gaming app stores and large corporations competing for the top positions in digital distribution platforms.
Widespread participation in gaming
According to the opinions of industry professionals, the root of the issue is games that place excessive importance on features of tokens and income rather than gameplay. Complicated onboarding experiences for new players are also a contributing factor.
The ability to play to earn money and the creation of actual player ownership of virtual goods are both commendable goals that strive to improve upon some of the shortcomings of the existing gaming business.
Reduced financial gain
Chainplay, an aggregator gateway platform for GameFi, gathered data from investors worldwide and found that 58% of them believe that bad in-game economic design is the primary cause of GameFi’s profitability falling.
The aggregator platform also stated that 81% of GameFi financiers value entertainment over a financial return when considering funding for future GameFi initiatives, stressing the necessity for blockchain gaming companies to enhance the fun element for users.
The gaming Routine
GameFi is complicated, laborious, and just plain impossible because there is little consolidation across assets and cross-border transactions from game to game. GameFi must feature compatibility to facilitate easier access across borders to establish it as the dominant gaming infrastructure.
The role of NFTs and Tokenization
The use of non-fungible tokens, often known as NFTs, has emerged as a significant development in the gaming industry. Through blockchain technology, NFTs can address various issues, including actual possession, decentralization, cybercrime, and the stealing of objects. NFTs can also bring further perks for gamers, companies, and developers, enabling them to transcend the existing boundaries of Web2 gaming and transition into a new phase.
Tokenization ensures that the hours and massive financial investments players put into securing rare in-game assets can translate to actual ownership rather than just a character with no worth outside the gaming environment. With the decentralization of NFTs, players can rest assured that their virtual possessions will always be in their hands even after a game discontinues.
The Adoption of the Play-2-Earn Model in Gaming For 2023
Play-to-earn (P2E) games are a relatively recent development in the gaming world. However, the games are becoming more popular in the GameFi industry. The premise of P2E combines having fun and making money, which are attributes that every gamer hopes to achieve at some point in their lives.
Players receive a reward each time they interact with the ecosystem by either making a move or interacting with other players. The value of a player’s in-game token is determined by how much real-world currency it represents in most play-to-earn games today. Because of this, many people utilize NFTs to bolster their tokens.
Wrapping Up
The application of blockchain technology is expanding into various markets, but the gaming industry is where it has shown the greatest potential for revolutionary change. Blockchain games market size business has grown tremendously over the last few years, moreover, it is still expanding today with millions of gamers from a wide range of backgrounds worldwide. Some driving forces to the expansion of the blockchain gaming industry are NFT generating abilities, metaverse, Web3, free-to-play, GameFi, or play-to-earn models.
About the Author
Ian Scarffe is a serial entrepreneur, investor, key opinion leader and Blockchain consultant with business experience from around the world.
An expert in Startup, Investment, Fintech, Web3 and Blockchain industries. Ian currently consults and advises for a range of multi-million dollar companies.
Ian’s overall mission is to foster a society of economically independent individuals who are engaged citizens, contributing to the improvement of their communities across the world.
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Resources:
https://www.playtoearn.online/2022/05/24/2022-q1-gamefi-industry-report-by-footprint-analytics-and-degame
https://www.businessresearchinsights.com/market-reports/gamefi-market-102420
https://thebusinessofesports.com/2022/08/04/number-of-gamefi-projects-continues-to-rise/
https://s3.coinmarketcap.com/uploads/CMC-Footprint-GameFi-Industry-Report-2022.pdf
https://www.lexology.com/library/detail.aspx?g=e0dd3e07-b83f-403a-9be7-ea8884dd3077
https://tokengamer.io/the-rise-and-fall-of-gamefi-the-worst-word-in-web3-gaming/
https://www.businessofapps.com/insights/mobile-gaming-industry-statistics-and-trends-for-2021/
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