The gaming industry is facing tremendous upheaval and the blame for this is blockchain technology – play-to-earn, the future of gaming?
Blockchain gaming has been a niche existence for a very long time, but that changed with the game Axie Infinity (AXS) at the latest. Thousands of people in the Philippines already earn their living playing the blockchain game every day. Indeed, the incomes of many Filipinos are now so high that the Filipino government has serious problems taxing its own people.
But not only is Axie Infinity booming, investments in blockchain gaming are also at record levels. From a recent report by Dove Metrics shows that in the third quarter of 2021, a large part of the investments went into the blockchain gaming sector.
According to the analysis, projects that were in the blockchain gaming space raised around 72 percent (around $ 1.1 billion) of all funds invested in the non-fungible token (NFT) sector. The vast majority of venture capitalists seem convinced that blockchain gaming has a great future ahead of them. But what is the traditional gaming industry doing wrong and what potential does blockchain-based gaming have?
The problem of the traditional gaming industry
The traditional gaming industry is also booming, with gamers spending over $ 54 billion on in-game assets in 2020 alone.
Gamers spend a lot of money buying skins, accessories, in-game items, or anything else in games.
It can be assumed that this trend will continue in the coming years. In an increasingly digital world, it is obvious that more and more people are spending money on things that are valuable in the virtual world.
The problem with the traditional gaming industry, however, is that only a few large game providers are currently benefiting from this development. These providers (Blizzard, Nintendo, EA, Ubisoft …) are becoming more and more powerful and richer, while their users get nothing.
If you read through the fine print in the terms and conditions of these companies, you will quickly see that the in-game assets earned or acquired are only licensed for the players. In other words, gamers do not really own their digital assets, but simply exchange their money and time for fun – but that could change in the coming years.
The play-to-earn blockchain game Axie Infinity shows that it is entirely possible to design an alternative to the traditional gaming industry. The blockchain game shows what the gaming industry of the future could look like, in which both the game provider and the users can benefit together.
As the graphic from the crypto analysis company Messari shows, a project like Axie Infinity can already play a role in the market capitalization of the big players.
But how is that possible and why could play-to-earn be superior to traditional games?
What blockchain gaming does better than traditional gaming
The combination of blockchain technology, cryptocurrencies and non-fungible tokens enable a variety of new options for game developers. An in-game cryptocurrency ensures that both game providers and the community are interested in the success of a game.
In addition, users can acquire digital assets in games in the form of NFTs and thus actually own them for the first time. No one can take this NFT away from them and players can trade these items with others via blockchain networks at will.
This gaming model has the potential to ensure that more and more people question the status quo over the next few years. Inevitably, this could mean that game providers will and have to jump on the play-to-earn bandwagon if they want to remain competitive.
If you want to learn more about how to make money with blockchain gaming and NFTs, then you should take a look at the crypto compass.
What the future of play-to-earn could look like
There are very few serious play-to-earn games out there right now. Users often have to choose between game quality and achievable profits. In addition, a large number of play-to-earn games are very difficult to access via crypto wallets such as MetaMask. For the masses, it’s still too complicated to dive into the world of play-to-earn at the moment.
It is very likely that this will change drastically in the coming years. At some point it is therefore quite conceivable that players will no longer even notice when they interact with blockchain games. In addition, one can assume that the big game developers will also venture into the play-to-earn sector.
In addition, the combination of decentralized finance and blockchain games could be extremely interesting. For example, it would theoretically be possible for players to exchange or lend in-game assets with other players via decentralized exchanges or lending protocols in order to generate returns. The in-game ecosystem of many new games could therefore face enormous growth that has so far been underestimated.