Some GameFi Users Want Fun, Others Look for Profit. Maybe There Is Something for Both

Sossi

Oct. 11, 2022

Let’s take a look at the gaming industry evolution before we elaborate on what players look for in games.

Traditional Gaming; P/C Games and Console Games

Traditional gaming or pay-to-play has been around for quite a while. People enjoyed playing games on consoles, computers, or mobile devices by purchasing them from a provider. These games were interactive and kept the players entertained at a reasonable cost. From the first video game in 1958, it took almost 20 years to release the first home video game console – the Atari 2600 in 1977.

This was followed by Nintendo’s portable console called Game Boy in 1983 and then Sony’s PlayStation in 1994, and finally, in 2001, Microsoft entered the gaming market with its first home video game console, the Xbox. Throughout these technological advancements, the backbone of data ownership and storage didn’t change. In-game assets were stored on a private server which was owned and managed by the game developers and/or player. There was no other way to store such data, until 2009, when something new was introduced that would change not only the financial industry but the gaming industry, as well. 

Enter Blockchain and Bitcoin    

In 2009, a person or group called Satoshi Nakamoto invented Bitcoin and blockchain technology. Very soon, people saw the potential of the blockchain outside of Bitcoin, as a decentralized, distributed ledger designed to record transactions permanently without needing to trust a centralized third party for authentication.  

NFTs & Blockchain Change the Gaming Industry Forever

In 2014, Non-Fungible Tokens (NFTs) were introduced, and in 2017, blockchain games made their debut, also known as crypto games or NFT games. One of the first games to incorporate NFTs was CryptoKitties, which launched in November 2017 as a play-to-earn game. Within a month, its sales reached $6.7M, and top-selling CryptoKitties went for $114,481. In 2018 several popular games were launched such as Axie Infinity, Splinterlands, and Gods Unchained.

Cryptokittis NFT game
Axie Infinity NFT game
Splinterlands NFT game

In 2021, NFTs became mainstream, and this growing technology was incorporated into the “metaverse” and more games. NFT volume (both gaming and non-gaming related) reached $2.5 billion in the first half of 2021 (Reuters). Given the broader bull market and the breakout success of Axie Infinity, play-to-earn gaming experienced a surge in adoption leading to the proliferation of new games and a rise in investment activity in the space.  These games led to enormous gains for early adopters, however, the bulk of the wealth collapsed with the start of the bear market (and unsustainable token economics). The rise and fall of the earnings potential of NFT games (or Web3 Games) brings the question, what is a Web3 game and what are Web3 players looking for? 

At its core, Web3 gaming is about the decentralization of the ownership of crypto tokens and NFTs which represent in-game assets and resources that can be traded and sold freely across blockchain-based applications. The idea that you can just connect MetaMask (or any digital wallet) and have access to this wide market from anywhere in the world revolutionizes gaming and opens up different value-creation opportunities. This brings us to the question of whether people play for fun or for profit.

The answer could be found in the results of a ChainPlay survey, with 2,428 GameFi investors participating.

ChainPlay Survey (2022)

  • Roughly half of the investors joined the GameFi (the fusion of gaming and decentralized finance (DeFi)) space initially for profits
  • However, the focus on profit seems to have changed. When it comes to future GameFi projects, 81% of GameFi investors have moved away from the traditional mindset and are prioritizing the fun factor over profit-making as they seek positive in-game experiences
  • 75% of the respondents joined the crypto space solely because of GameFi
  • 43% of female investors said they participate in GameFi out of sheer curiosity

Looking Forward

The gaming industry is a big market. A recent report from Newzoo suggested that the video games market will reach $196.8 billion in 2022. The report also states that the gaming segment comprises 3 billion players, which is much higher than the estimated 320 million crypto users worldwide and even larger than the less than million players that are involved in Web3 gaming. This demonstrates the massive potential for Web3 gaming as an engine for growth for its stakeholders as well as for the adoption of the broader cryptocurrency market.

Finally, it seems that the Web3 player started almost exclusively with profit in mind, however, these days they are mindful of the gameplay in addition to the potential to earn. In the past, gamers paid to play games and their reward was the satisfaction of the win and the pleasure of playing. Today, with NFT games, game participants have the potential to be financially rewarded for their in-game participation. As we know, the blockchain financializes everything it touches, so Web3 games have to fulfill both fun and potential to generate monetary rewards to satisfy the current user base.

Stay up to Date

Subscribe to our newsletter: Web3 Gaming News and Research

×