GameFi track growth slowing down
In December, the GameFi circuit, which has been hot since the second half of this year, began to “die down”, and the growth trend dropped significantly; some chain games began to collapse or the coin price dropped significantly, and even some well-known GameFi projects were not spared, and were hit hard one after another. Such as CryptoMines, Cyber Dragon, Metamon, Farmers World, etc., both from the in-game Token, NFT transaction amount, or player users, have dived one after another.
The Block data shows that the current trading volume of NFT assets in blockchain games mainly comes from five games, namely Axie Infinity, Sorare and Alien world, CryptoKitties, and Gods Unchained, but it started to gradually decline after entering December. Even Axie Infinity, the leading chain game project accounting for 90% of the total transaction volume, has also seen its transaction volume drop again and again to $19.23 million, down 90% from its peak of $215 million.
According to DappRadar, the number of players for all blockchain games began to decline after peaking at 1.477 million on Nov. 30, while total single-day transaction volume took a sharp turn for the worse after peaking at $500 million on Nov. 8. In addition, the top three games in terms of transaction value of a single game are Axie Infinity, DeFi Kingdoms and Bomb Crypto, which are located on different chains, Ronin, Harmony and BSC, respectively.
In terms of Token market value, according to Coingecko’s December 15 data, the total market value of global GameFi project Token is currently $25.72 billion, which is also a big drop compared to the peak, and the valuation of projects in the track is being tested greatly.
Indeed, the GameFi circuit was previously in an overheated phase, with irrational funding and an influx of new users supporting the value of projects. And as the market began to enter a correction, even as the overall crypto industry fluctuated, the value of game assets and coin prices within the GameFi project began to gradually return to their true price points.
But thankfully, after the short ebb, the GameFi space was not left with a mess, but with a number of projects that the industry is proud of. For example, the leading project Axie Infinity, which popularized the concept of Play to Earn, successfully ignited the GameFi boom, and many residents of Southeast Asia even started playing the game to make a living due to the blockade restrictions of the new crown epidemic. Another chain game, Thetan Arena, has injected more playability into the game, no longer overly focusing on gaining profit and neglecting the playability that was originally important to the game, thus gaining a wide range of players, and has already exceeded 6 million users after one month of launch.
What are the characteristics of quality GameFi projects?
So after this round of GameFi boom, what are the characteristics of the quality chain game projects that have survived?
First of all, GameFi games are still in the early stage of Play to Earn, and whether a game can earn revenue in a certain period of time is still the most important concern for users. In addition, many of the top GameFi games are strong in marketing and promotion, and whether they can first gain recognition in local communities and game guilds is a matter of early players joining and whether they can motivate new users to keep coming in and investing money into them to maintain a healthy balance of the game ecosystem economy.
The payback cycle, which is also of greater concern to users, has to be stable, and project owners cannot change the rules at will. For example, Axie Infinity is well designed in its various values, and by lengthening the chain of players’ economic activities and the cycle of getting paid, each user needs a certain amount of investment and time deposit to have a way to get long-term benefits.
For the present, the game’s picture sophistication as well as storyline and playability, though not the most important, is just the icing on the cake, but it should not be overly overlooked. Manufacturing rough game in the revenue gradually reduced, it will inevitably lead to a large number of users lost, and thus can only rely on the initial high earnings to attract users. But the risk often goes hand in hand with the reward, and such projects are mostly similar to the earth mines in DeFi, which will become short-term speculative tools for a small number of high-risk enthusiasts.
The advantage of single Token model is that it reduces the difficulty of resource integration, facilitates players’ transactions and promotes the flow of funds in the game. However, when early players benefit and sell a large number of Token, the value of Token will depreciate rapidly, and later players will lose the motivation to play due to the decrease of income, thus accelerating the in-game economic ecology into a death spiral.
The multi-Token model is divided into in-game Token and platform governance Token, which can be used to motivate players to earn Token in PvP battles and other tasks to gain governance over the community, thus strengthening user stickiness and increasing the economic consumption of players in the game. In addition, the multi-Token model can also realize self-adjustment through resource integration to reduce the influence of the secondary market on the game and increase the stability of the in-game economic system.
In addition, there are some head chain game platform projects that are building up the economic ecology of multi-game interoperability. For example, Gala Games, Mobox and other projects have released multiple games on their platforms, attracting developers to develop using platform tools through traffic and platform funds, which not only enhances the richness of games within the platform, but also makes the economic system of Token more stable throughout multiple games within the platform, instead of being limited to a single game.
Decentralized Web3 Games
How will the current GameFi games evolve and what has changed compared to traditional games so far?
In the traditional gaming space, there are many drawbacks in both the design of the game mechanics and the ownership of the assets. The game is often controlled by developers and third-party operators, and the data lacks transparency, which can cause substantial damage to players’ interests once game manufacturers change the game parameters; at the same time, players cannot own the game assets, and their trading behavior is severely restricted. On the other hand, for players, playing games is simply a form of entertainment and pastime, which cannot bring them actual revenue and lacks investment value.
In the crypto field, games built with blockchain technology can well solve these problems of centralization and data opacity, and players can gain ownership of game assets issued by NFT, as well as play to earn in the game to bring them real income.
GameFi is still evolving and iterating, and it is still unknown what the future of Web3 games will look like. The trend is to solve the problem of transparency by uploading some data in the game to the chain, but whether GameFi can bring players stable income and truly earn while playing is still a big test for many project owners.
Is the ownership of the assets in the game the most important thing? In the case of fiat currency, we have the ownership of our own fiat currency, which is unique, traceable, and even visible and tangible. But the value behind these fiat currencies is constantly escaping us with inflation. Perhaps for Web3 games, ownership is still not the most important thing, and without decentralized empowerment, there will be no decentralized ownership.
In the future, Web3 games may still be dominated by DAO, from the initial idea of a game, to the development and production, as well as promotion and publicity, all will be done by the fans of a game, and then the corresponding Token and in-game NFT assets will be distributed according to everyone’s contribution.
The good thing is that the giants in the traditional game field also see this trend and are rushing in to accelerate this process. Among them, Ubisoft, a major game maker, has already laid out its plans for crypto games in the early years, not only releasing a number of blockchain games, but also recently launching an NFT-enabled game platform. Andrew Wilson, CEO of Electronic Arts, has also expressed his interest in NFT and Play-to-Earn, describing it as an important part of the future of the gaming industry. In addition, Twitch co-founder Justin Kan has also announced the launch of a Solana-based NFT marketplace for games.
What exactly is the shape of Web3’s games may still be in the blind, but it is getting closer to its real face, and it will need to be explored together.