The Emerging GameFi Market
Since the creation of video games, developers have attempted to create the most engaging and rewarding experiences for their players. And, as technology has grown, so have the games. Now, even casino games utilize gaming mechanics and styles to immerse gamblers into the theme of each machine.
Still, for most players, there have been very limited opportunities for games to be more than entertainment in their lives. While there are esports tournaments and events, most players who invest hundreds of hours into a game are not getting anything out of it except their own enjoyment, socialization, and entertainment.
However, as technology has begun to change more rapidly, the gaming industry has also begun to take into account these changes and a new type of gaming genre has emerged and become popular recently: GameFi.
The term Game Fi combines the concept of gaming with the DeFi (decentralized finance) technology represented by the new blockchain and cryptocurrency markets. This new model allows players to earn real assets and money while they play. With more and more light being shed on the cryptocurrency markets with the mentions of metaverses and truly immersive worlds for players to explore, the gaming industry is becoming integrated with much of this new technology.
Even the CEO of EA, one of the larger gaming companies known for games like Battlefield V and Star Wars The Old Republic, has shared his thoughts about GameFi and how it can revolutionize the gaming industry, creating a new opportunity for companies that are looking to the future and what it might hold.
GameFi games are ones in which players can utilize blockchain technology that is integrated within the game, meaning the prizes, items, tokens, and more in the game can be bought, sold, lent out, or borrowed against using cryptocurrency. Additionally, players have opportunities to take these in-game currencies that are used in transactions and “cash out” in cryptocurrency wallets that they can then use however they choose.
For gamers, this means that if they spend their money on an in-game item, like a unique skin or something to boost their stats, they actually own it. Then, they can lend it out for a rental fee, sell, or trade it just like they would with a real-life object. With the potential to use these items to not only earn more through their own gameplay, but to also interact with other players, these NFTs and digital assets take an important role in the future of the gaming world. Now, players can potentially make enough money to not only supplement their real-world incomes, but potentially use GameFi games as a means to create a solid income for themselves.
This play-to-earn model does, however, require players to put up a fee at the beginning of the game in order to be able to partake in the in-game economy. Depending on the game’s mechanics, players may be required to purchase tokens or even creatures, like in Axie Infinity. These initial investments can range, and Axie Infinity, being one of the most successful GameFi platforms to date, requires about $600USD or more before players can begin their play-to-earn experience. Not all games require such a huge investment, but the ones that do, like Axie Infinity, may be because of their recent rise in popularity.
In 2021, Axie Infinity’s in-game tokens, called AXS, went from 54 cents per token to a whopping $94. This means that those who had been able to purchase AXS before the game’s popularity skyrocketed were able to capitalize on the raise in price, just like someone would in the stock market. There are more and more GameFi games being created and with the gaming industry pairing with the cryptocurrency industry, the GameFi market doesn’t show any signs of slowing down any time soon.
However, it is important to note that while these GameFi games may take the shape of adventures or collection-building games, the blockchain technology does put a very real risk on players. In a traditional video game or even an MMORPG, the currency in the game was virtual and fake, holding no real value. This means that even if a player decides to spend all 10,000 of his accumulated gold coins on a shiny new piece of armor that doesn’t end up suiting his gaming style later on, there isn’t any real-world repercussion outside of frustration or regret at the purchase.
With GameFi, players are investing real money, and each transaction that they make will either increase or decrease their real-world currency. For some, these games can be a fun and new take on gaming, but for others, the focus is more on the earning than on the playing. It is important for players, especially those new to the sector, to understand that they are taking risks when they invest in these games. Already, there have been a few instances where token values have decreased tremendously, losing people a lot of money. Other instances like bots being used to “play” and earn or even just bugs in the game’s codes can create big problems for people with money tied up in those games.
The GameFi industry creates a new opportunity for game lovers and investors to become one and the same, but that doesn’t mean that those who decide to join these games are ready for the ups and downs that they might face. There can be a lot of issues for gamers and investors in figuring out which play-to-earn game might be the best fit for them, but a new company, called GameFi, has begun creating a launchpad and yield guild specifically for play-to-earn games. Not only do they help players and investors find new games, but they offer templates and other tools for companies looking to jump into the play-to-earn space.
With the gaming, investing, and crypto worlds merging together, the audience for the GameFi industry is huge. As more technology begins to develop, there will be no telling how far this emerging industry will end up going. Those looking to get started should make sure to do their research on the variety of platforms that are currently available and continue to spring up to find the ones that work best for their goals, whether they be more focused on the gaming side or the earning side, or somewhere in between. Either way, the potential of GameFi platforms is creating a lot of interest.
