Play-to-win games enabled by blockchain technology have grown exponentially in recent years. Players have bought cryptocurrency or “non-fungible tokens” that have appeared in blockchain-based games. The advent of this new technology allowed players to generate revenue by selling in-game NFTs or earning cryptocurrency rewards that could be exchanged for fiat money. Because according to Absolute Reports, the game industry’s estimated value will grow to $2.8 billion by 2028, with a CAGR of 20.4% over the same period. However, such predictions may turn out to be incorrect. Given the exponential growth rate over the last few years, there is no reason to believe the trend wouldn’t continue well into 2023 and beyond. Right? Wrong.
As we saw with the nefarious fall of former cryptocurrency king Sam Bankman-Fried and the FTX implosion, a castle built on a weak sand foundation can easily be washed away when the tide comes in and rises again.
Or, as legendary investor Warren Buffett was fond of saying, “It’s not until the tide recedes that you find out who swam naked. We may be in the process of finding out who these people are. The money-making gambling industry is not built on solid foundations. The foundations are fragile, and this could well cause problems in 2023. The whole building seems about to collapse.
GameFi’s current market structure is token-centric, which can lead to several problems. Project owners spend their tokens listed on exchanges before announcing that they will create games. Games are a token issuance utility. So the tokens come first and the content second. Therefore, the quality and design of blockchain games are so underappreciated.
An environment has been created where gamers are not that interested in the games themselves, which is strange for the gaming industry. More and more players are investors who want investment returns. The current structure creates the wrong incentives, which is one of the reasons why the system needs to be fixed. 139; one of the most well-known play-to-win blockchain games has played relentlessly with their tokenomics itseate perverse incentives. Right now, the token market is generally downtrend, and speculation in the trading market is dead.
An industry can survive for some time with unjustified promises, expectations, and exaggerations. But you can only do it for so long. Eventually, people realize that they have yet to receive what was promised. Patience begins to wane. They become angry, frustrated, and withdrawn.
This starts as a trickle for the most intelligent players but can soon become a flood. Those who have planned to secure funds by listing their tokens need to rethink. Many will be forced to shut down their projects due to insufficient funds. The situation is coming to a head that previously bullish crypto venture capitalists (VCs) are pausing new investments.
So, who will make it through this investment drought? It appears unlikely that GameFi will do so. However, other blockchain games can do so. Unicorn. While many of its competitors are in trouble, Sorare continues to grow its user base and revenue even in the most challenging times. Their daily auction volume is impressive, around 300-400 inches. Ether and the number of users continues to grow ‘s back-end’ is based on blockchain, ‘users’ don’t take it as ‘ 139; GameFi Project: They don’t provide their native tokens, but they do make their content available on “Ethereum” first, which seems very likely the way to go for the industry. So GameFi could die in 2023, but that doesn’t mean all is lost. Death is a necessary part of evolution.
A new life can already emerge from it.