Gaming is a multibillion-dollar market that has been dominated for decades by giant corporations such as Atari, Sony and Microsoft.
These major companies have strived to offer entertaining gaming experiences throughout their history to attract new players, expand their market share, and increase their market share.
Nonfungible tokens (NFTs), however, are intended to provide a gaming environment that is engaging and offers gamers a financial incentive to play games.
These games, also known as play to earn (P2E), are played in a Metaverse which is basically a fictional universe. According to the P2E gaming model, the players of the platform get a financial reward for their efforts and time spent in the game. According to Newzoo, this model could potentially gain a share of the $175.8billion global gaming market, which is expected to reach more than $200 billion by 2024.
Minh Doan is the co-founder and CEO of Warena, an NFT personalized game. He spoke to Cointelegraph about the importance of the model. He stated:
“The play-to-earn model, which we call on the blockchain GameFi, is a combination of decentralized financial and game mechanics. Users receive tokens that can grow in value by tens to hundreds of times during gameplay.”
Protocols in the NFT gaming sector have seen a lot of interest in terms of both users and volume. The native tokens they are associated with have also been performing extremely well. Axie Infinity, the native token of Ethereum-based NFT gaming Axie Infinity (AXS), has led the charge for this sub-sector. The token has seen 83.35% growth in the past 90 days, 706% gains over the last 180 days, and more than 73,000% annual gains.
AXS is currently changing hands in the $120 area and has risen as one of the top 25 cryptocurrency in terms of market capitalization according to data from CoinMarketCap. It is the only NFT-related token to be included in this list. Since its inception, the platform has seen impressive growth in both users and volume. Dappradar data shows that the platform has seen $2.6 billion in trading activity with 836,149 participants. The platform also announced a staking program to its native token.
Related: The Metaverse and play-to-earn.
Cointelegraph spoke with Alex Salnikov (co-founder and chief product officer of Rarible), an NFT marketplace. He explained how the NFT gaming platforms have grown in both volume and user growth. He stated:
“This growth is in line with the larger acceleration of NFT markets and seems to emphasize the variety of uses for NFTs.” Gamification is a popular trend in crypto, and it fits well with NFTs that are closely linked to engaging and fun community engagement experiences.
He added that blockchain technology’s value proposition is easily understood and natural for the gaming industry. This includes P2E experiences, in-game assets and provenance.
NFT gaming platforms are growing
Although Ethereum is the most widely used blockchain network for decentralized application deployment (DApps), there are many other blockchain networks such as Binance Smart Chain, Polygon, Hive and Harmony that are also gaining large user base along with increasing volumes.
Salnikov also mentioned that Polygon was generally considered one of the top blockchains for gaming because it is EVM-compatible, high throughput, and low gas costs. It is also connected to layer one of the NFT ecosystem, making it the most important sidechain of Ethereum.
Cointelegraph spoke to Jesse Reich, co-founder and CEO at Splinterlands. He discussed the reasons Splinterlands chose the Hive network for their game. He stated:
People have been thinking that our selection of Hive was bizarre from the beginning, but it does offer a freemium model. Sign up now with your username and password to get started. It is difficult to duplicate that on POW blockchains, which are charged gas fees.
Binance announced on Oct. 12 a $1 billion accelerator funding for the development of the BSC ecosystem. This fund will ensure that the BSC ecosystem is adopted by a large number of popular games like MOBOX: NFT Farmer and Faraland.
The growth in NFT gaming could be at risk despite the various platforms and networks that have been established. Traditional gamers are used to games that are well-designed. These games also have impressive gaming ecosystems because the majority of them are supported by large corporations with extensive resources and infrastructure.
This is not possible for games that use native tokens, NFTs, or other incentives to reward users. They are still at the infancy stage of development, and are therefore less sophisticated. It is therefore important to assess the effort and time that users are putting into these games to earn rewards.
Reich added that “First and foremost there must be a game that is fun to be a huge hit.” Grind-to earnn, I’m certain, will be a popular option alongside play-to earnn. It’ll all come down to the minimum wage that someone is willing to pay for computer click work.
Doan said that these games were a new generation that is hard to compare to traditional PC games. He stated:
This is a kind of leisure economy where users get paid to play games, and then can multiply their income like real traders. NFT games are a great way to make sure that you understand technical nuances and trends that may be difficult for others.
Blockchain gaming faces challenges
The traditional gaming industry is still struggling to adapt to NFT integrations or blockchain technology, despite the rapid expansion of the NFT gaming community. A few have even explicitly denied the possibility.
Valve recently removed blockchain games from Steam. They also asked users not to publish content that is related to NFTs and cryptocurrencies. Steam Marketplace hosts thousands of popular games such as Counter-Strike and Battlefield, Halo, Resident Evil, Halo, Halo, Halo, and Battlefield.
In 2016, the corporation was open to crypto payments and announced they would accept Bitcoin (BTC). However, they soon stopped accepting Bitcoin payments due to high fees, volatility, and other issues.
Tim Sweeney (CEO of Epic Games) announced that he is open to hosting or supporting games using cryptocurrencies and other blockchain-based assets in the wake of the ban.
Epic, the company behind Fortnite, has made it clear that developers won’t be able use the platform payment service in order to accept cryptocurrency. Instead, developers will have to create their own payment systems. This could be a barrier to the adoption of games that do not have this infrastructure.
Valve’s perception extends to regulators within the gaming industry. The Gambling Commission of the United Kingdom opened an inquiry on Oct. 14 into Sorare, one of the most loved NFT fantasy soccer games. The Gambling Commission of the United Kingdom is currently evaluating whether the platform requires an operating license or if they are gambling.
Sorare stated categorically that it is open to dialogue with regulators and engage in discussions to explain its game. It does not offer any form of regulated gambling. The platform is valued over $4.3 billion, and is growing rapidly.
The ecosystem is still in an infancy stage, so it appears that there is more to come.