Since the decline of the ICO market around 2017 and the cooling-off period of cryptocurrency hype for about two years, the Crypto investment community has ushered in a moment of recovery. Developers and technology entrepreneurs create new industries designed to interest investors. If the ICO market is dead, a whole new risky asset class must be created for the Crypto market to transcend the boundaries of a few blockchain platforms like BTC and ETH. Decentralized finance and staking markets are one, new blockchain protocols are another.
And over the past few years, GameFi has emerged as the newest category in the crypto economy.
Of course, this isn't just for gamers. If only gamers are involved, there is limited room for investment. But there are already enough blockchain games and supporting projects in the NFT space to give investors a new place to gamble the dollars in their Coinbase accounts.
GameFi is no more an investor prank than a marijuana ETF or venture capital fund. Consistent with the start of a new venture, some projects are bound to fail.
It's a real market, with billions of dollars, largely designed around the massive rise of blockchain-based video games in the Web 3.0 universe (or Web3), where developers can come in and Create your own world. And make money that way. If you don't know about it, they call it "playing and earning".
GameFi has a market capitalization of more than $11.6 billion and a daily trading volume of about $2 billion, though that number is rapidly declining due to the general sell-off in the market.
Imagine this: you're playing Minecraft, you create your own worlds and characters in Minecraft through the Creator Engine, and you sell them for a profit. That's GameFi in a nutshell.
Games are also important. "I should feel compelled, drawn, and stay because I enjoy playing the game, not just because I can earn tokens," said Arunkumar Krishnakumar, chief growth officer at Bullieverse in London. They have their own Creator Engine for serious gamers looking to build their own worlds and monetize their creations within Bullieverse games.
"As a gaming platform, an immersive experience can make players more engaged with the game. When they feel more engaged, they tend to promote the game and become ambassadors for the game," he said. "That's where we are at the moment."
There are approximately 3 billion online gamers worldwide, with Asia accounting for 55% of this market. By 2024, the mobile gaming industry is expected to generate $116 billion in revenue from players' online spending.
In the traditional Web2.0 world there are 2.5 billion online gamers, but in the Web3 world it is estimated that there are only about 5 million. Web3's game player base is believed to be rising rapidly due to the developer and consumer incentives that Web3 provides. In terms of gaming experience, Web3 gaming still lags behind what we're used to on the X Box, but that's about to change, and if GameFi is part of the game, that's where the growth story begins.
Play and earn Web3 models are all about creating and extending games that others originally made. Many games are still figuring out the right economic model to achieve the mission, which will accumulate more value for gamers, especially loyal high-quality gamers, and bring investors to their tokens.
Dan Nisanov, co-founder and CEO of Florida-based Silks, said: " From a macro perspective, GameFi is the fusion of video games, gambling and investing, and it will become a new form of entertainment. Silks is an online horse racing collection, in a GameFi style. "We are building a spin-off game-money metaverse that mirrors the real world of thoroughbred racing. Our vision is to provide the real economic experience of owning a racehorse in real life...just in Metaverse. When your horse wins the $100 jackpot prize in real life, the horse's owner NFT wins the same prize.
Nisanov said game theory and token economics drew him to GameFi a few years ago. He earned a degree in economics from California State University, Northridge. He is also a gamer. "I've dabbled in games like Zedrun and Axie Infinity ," he said. "I don't yet know of any major traditional game publishers that offer games to make money from, but I can tell you that they're trying to figure out how to reinvent themselves and their business models to include GameFi before they get left behind. Think What Netflix did to Blockbuster," he said
He likes Axie (AXS) and Pegaxy (PGX), however, both have been on the decline recently. PGX was trading around $0.2 a month ago. It's about 1 cent now. AXY was around $67 a month ago, and is now closer to $30.
"The value of an investment can go up and down, depending on how popular a game is, and its ability to attract new players while retaining existing ones," said Vijay Pravin, CEO of BitsCrunch in Munich, Germany, which provides NFTs. Blockchain analysis company that provides solutions in the ecosystem.
Pravin’s favorites are AXS, True Flip Token, Sandbox, and Decentraland, and he owns Gods Unchained, AXY, and MANA , none of which are current earnings.
"These games allow users to earn their playtime by acquiring rare items or creating powerful characters with unique looks," Pravin said, which also includes Silks horse racing. "It's a potentially lucrative industry. It just needs fine-tuning how deliveries are exchanged between buyers and sellers."
What is GameFi, and is it a broad industry? It's a real industry, fused with one of the most lucrative industries in reality -- video games. Some games will fail, but some won't. Investors will have to pick their spots, and there will undoubtedly be plenty of gambling in GameFi.
GameFi is a more streamlined game earning model that allows gamers to easily connect with other gamers on blockchain networks and gamer platforms dedicated to trading in-game assets -- whether virtual land, Weapons, or thoroughbreds.
The big publishers of traditional games have items to sell in their games, but most of them are just value-added for the publisher, and maybe the platform itself may also get a cut - such as Microsoft's X Box.
And blockchain games that allow players to create characters, scenarios, and possibly entire games will allow for monetization.
For example, I play golf on 2KSports on the X Box. I did a golf course in Sao Paulo, Brazil. In GameFi, in theory, if it's popular enough, I could sell the pitch or charge people. But 2KSports obviously doesn't allow me to make money from this. User creations of this type are free, although this may change in the future.
"We're still in the early days of GameFi," Nisanov said. "The game is monolithic, the experience is complex, and there's a lot of conflict because it's not easy to get players who have never bought Crypto before." He predicts: "As the tools become more streamlined, the applicability and It is more understandable that this situation will change in the next few years, which will drive demand to rise rapidly, separate the winning projects from the losers, and let investors get a return on investment.
"I think next year we're going to see a massive GameFi explosion," Nisanov predicted. "Watch out for major acquisitions in the gaming space." "
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