Web3: The Rise of GameFi and the New Blockchain Gaming Landscape.
Once upon a game:
The gaming industry has enjoyed a rich history. “The brown box,” launched in 1967, marked the beginning days of commercial gaming. Over the years, we have gone from arcade games to high-powered multiplayer systems offering immersive experiences. Today, there are millions of games available on the internet featuring different play modes and storylines but all sharing the same quality; a chance for gamers to enjoy the thrill and adventure of an imaginary world with no holds barred. Now the gaming world is set for another exciting development, GameFi, and Web3.
Sony, Nintendo, Microsoft, and Activision Blizzard are some of the top names in the gaming industry, with good reason. For a long time, these game providers have held the keys to the gaming universe, and with Microsoft set to acquire Activision Blizzard, the plot only thickens. They provide the software, the gadgets, and the entertainment, while gamers access all of this for a price. This comes from subscription fees, software/gadget purchases, and in-game buys to unlock new items, features, and power-ups.
Once the game is over, however, all expenses incurred in-game; special powers, cool gadgets, and other extras bought in the game stay in the game land. The companies smile to the bank with millions, and the gamers look forward to the thrill of adventure in the next game. For years, this has been the norm that laid the foundation for a $300 billion gaming universe.
Well, until the rise of GameFi.
GameFI is simply the integration of two previously different industries; the gaming industry and decentralized finance (Defi). To understand this, let’s look at the working mechanics of Web3. The Web3 ecosystem is primarily community and people driven. So GameFi logic is simple;
“Why shouldn’t gamers get rewarded for their time and efforts?”
Statista 2021 reports show an average global gaming time of 8.45 hours per week, and this is only on average. Core gamers spend long hours daily playing their favorite game. What if gamers derive financial benefits in addition to the gaming experience? A win-win for the whole ecosystem.
GameFi approach was the implementation of the Web3 tokenized economy. Avatars and other in-game items have unique identifiers (NFTs) that can be exchanged for fiat or digital currencies. In the real sense, gamers do not only earn tokens but also own the items purchased in the game, and they can choose to reserve, swap, or rent their collections.
Take, for example, Splinterland, a collectible game where players can engage in card battles. The cards can also be rented, traded, or exchanged for fiat. Axie Infinity is perhaps one of the biggest names in GameFi, with over $2.5 billion in transactions. The value of the tokens in the game skyrocketed, especially during the 2021 bull run, making it one of the more ‘high-end’ games.
Getting started in the Axie infinity universe will set gamers back almost $1000 bucks, even though, at face value, the game is far from the highly immersive experience of games like Call of Duty. It is more or less a strategy where players breed and battle characters in a perpetual pet universe.
In the Philippines particularly, the game’s rapid growth and lucrativeness kicked up a lot of dust, with many employees resigning from their jobs to focus on a new career; gaming.
Such is the potential that a booming GameFi industry can unleash.
More to come:
DappsRadar, a company that monitors and tracks DAaps on the Web3 internet, estimates that more than 50% of active cryptocurrency accounts linked to decentralized applications were GameFi platforms. Despite the currently rough crypto terrain, investment has continued to pour into GameFi, with names like Mark Cuban and Justin Sun joining the growing list of investors.
Of course, there are still challenges in the path of GameFi. Critics have argued (not without reason) that the growth of game models like the P2E (play-earn) may relegate game experience to the background. This can range from poorly conceptualized games offering fast cash to a possible increase in scams. Also, to exploit the financial benefits, GameFi may see a flood of the bots-players rigged to win at all cost, with human gamers standing no chance.
Not to mention that the current financing structure of many of the games available is only reminiscent of a multi-level marketing scheme, doomed to crater with time.
GameFi developers still struggle to find the perfect blend of profitable gaming models interesting enough to retain users and justify any upfront cost. This has led to game models like Play-To-Earn, which seek to place a premium on actual game experience with financial rewards as additional perks.
But all is not bleak.
GameFi will reign:
Increased interest in the metaverse continues to spell bullish signals for the GameFi industry. Intensive efforts and capital investments have brought gaming into the Metaverse. Projects like Decentraland allow users to buy and sell virtual lands, making a profit, while metaverses like Sandbox and Bullieverse offer gaming as a feature. Interoperability across GameFi will allow players to use their characters and other items across different games and metaverses.
GameFi offers a new opportunity for gamers to make a few bucks and for the decentralized vision. In this incentivized community, the people and not a set of Mega-companies are in charge.
Flux offers the perfect infrastructure to power the Web3 gaming universe, providing the needed computational power, speed and interoperability to bring your game into the Web3 reality. We are changing the world by providing unparalleled tools for Web3 accessibility.
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