GameFi – the immense emergence of the gaming and financial category innovates the crypto space and impacts across other industries. It is forecasted that GameFi will generate over $260 billion in revenue by 2025. More than that, everything is possible in the digital world; since, the initial iteration of gaming blockchain will keep on moving, which gives GameFi opportunities to develop in the future. Let’s dive into the next steps of the GameFi space in the future.
GameFi is the combination of “Game” and “Finance” representing the mixture of cryptocurrency, NFTs (non-fungible tokens), and the Play to Earn (P2E) gaming mechanics to create a virtual environment. This category allows conventional gaming to complement potential financial returns by playing games Instead of interacting with difficult to use or boring financial interfaces.
As you may know, the GameFi works on the concept of Play to Earn that the players get rewards by completing missions. GameFi enables earning by creating a tokenized economic system. Users get rewards by playing and growing their level in games, which can be converted to fiat currencies or any other kind.
As GameFi develops, the models become more and more complex for it to become sustainable. However, primitive systems were relatively simple as the manifests of Gaming and Decentralized Finance exceeds in two ways:
There are differences between play-to-earn mechanisms and traditional play-to-play or play-to-win models in many conditions, which is essential for the GameFi business model. For upgraded items, players pay actual money in some traditional games for upgraded items. Therefore, it provides a financial foundation for the gaming industry.
As a result of the Covid-19 pandemic, people had to stay at home the whole time. That was a good chance to educate them to start playing P2E games. The interesting fact is that the Pokemon-inspired game – Axie Infinity has been proven to be the most downloaded application and helped people earn lots of money in the lockdown.
Token is a must-have feature to run a GameFi project. Some Play to Earn games have more than 1 token to maintain the business model. The native token is considered to be similar to DeFi when every protocol owns a token in the economic system, which businesses can benefit from.
Allowing real asset ownership to players and guaranteeing their monetization potential, there is an application of NFT into decentralized games. It is due to purchasing in-game items and moving on a distributed blockchain ledger. There are no game developers who own them and no counterfeited or altered in-game items.
The application of NFT into GameFi allows real asset ownership and guarantees the monetization potential for gamers. To solve the pinpoint problems of traditional games, every in-game item will be unique and transferable on a distributed blockchain ledger. That being said, this brings more value to the item itself and offers more versatility for owners.
Such decentralized online games accompanied with elements of DeFi provide financial chances for players. “A largely untapped economic opportunity in emerging markets to provide jobs by building a virtual economy in the digital world.” said by Arianna Simpson – The General Partner of Andreessen Horowitz. GameFi allows players to earn in the form of cryptocurrency and NFTs and even changes the definitions of employment. It is believed that the gaming zeitgeist is moving in a direction adopting a work and play mixture, so people may not get a job to make a living.
GameFi can now provide opportunities for community members to invest in and play games before the project is made available publicly, what is called Final Round. The investors can get access to game NFTs and gaming tokens. The crowdfunding is decentrally managed through a DAO-operated guild, which makes investing more transparent via the support of off-chain smart contracts. Therefore, this model allows games developed across several blockchains eligible for Final Round.
With the incredible growth of Axie Infinity, gaming guilds can be brand evangelists more effectively than any other industry. Moreover, removing a considerable amount of upfront cost for potential participants helps lower participation threshold.
The nature of esports gameplay including competition and monetization make it easier for play-to-earn guilds to develop communities and find ways to merge them with esports. GameFi projects can promote livestream gamers as influencers or KOLs as the incredible viewers of those, which hardens the level of engagement in setting the sights about new games for the market.
Axie Infinity – the big name in the market – is the Play to Earn (P2E) game with a larger crypto ecosystem compared with other existing games. However, let the door open for the industry and give it more space to move beyond with new approaches, tokenomics, design philosophies, ect. A new generation of blockchain games are listed below.
A NFT-powered game on the BNB Chain called Kryptomon picks up on the theme of 90s kids with Tamagotchi and Pokemon-style gameplay into the blockchain era. In player-versus-environment and player-versus-player challenges, it puts players in the role of Kryptomon trainers who hatch and care for their critters before setting out to explore the game's universe. The highlight is that the project aims to build a 3D world that players can explore from both desktop and mobile devices.
Terra-based Levana Finance goes above and beyond by integrating gamified apps and services to teach users about the fundamentals of DeFi. It provides users with a trading platform with leverage of up to 2X, as well as a wide range of games and items that rely on the mythology of its sci-fi setting. Levana strives to increase consumer exposure to Web3 and cryptocurrency by laying a wager on the entertainment aspect and provides its audience with special experiences.
Spielworks, a German blockchain software and service provider for gaming and finance, targets a different audience with its own foray into the edutainment space. The company's most recent multi-chain Wombat Dungeon Master NFT game teaches users about NFT staking and gives them the opportunity to profit from the non-fungible tokens they own.
There is untapped potential with not only the GameFi but also technology in general. Therefore, take advantage of the available niche and intricately design your ecosystem in a way which makes games fun to play and allows the community to grow exponentially with your strategy.
Credit: Kay Duyen Ma - Marketing Executive