Blockchain Gaming - A Gateway for Mainstream Crypto Adoption
Blockchain Gaming - A Gateway for Mainstream Crypto Adoption
VYSYN Weekly Release #107: Gaming platforms record steady growth in users and transaction volume
The blockchain gaming industry is fast attaining global acceptance as more mainstream gamers show interest. Over the past few months, the blockchain gaming ecosystem weathered the market downturn better than other niches of the digital asset industry. It is currently one of the most resilient during the crypto winter and is poised to accelerate mainstream adoption of digital assets.
In the latest edition of the VYSYN Release, we will analyze the increasing acceptance of blockchain gaming by mainstream gamers. We will also consider how gaming has outperformed other niches of the digital asset industry and how it affects the future.
Blockchain gaming adoption goes mainstream
The online gaming industry is currently one of the biggest industries in the world. Over the past decade, gaming overtook the music and film industries to become the primary mode of entertainment. With over 3 million gamers worldwide, analysts predict that the industry will attain a $250 billion valuation in the next three years.
(Source: Statista)
The emergence of play-to-earn games like Axie Infinity has highlighted the possibilities of blockchain-based gaming. The integration of NFTs, crypto, and other earning opportunities on the blockchain into gaming is fast increasing gamers' interest. A new survey by YouGov revealed that approximately one-third of traditional gamers would like to get into the Metaverse. About 41% believe that the Metaverse will have a positive impact on the gaming industry.
According to the survey, 40% of the respondents expressed interest in pursuing a mix of both the playing and earning aspects of the Metaverse. A greater percentage of gamers were more interested in the playing aspect of play-to-earn games than in earning.
49% of gamers said they were more interested in playing than earning while 11% admitted to being more interested in earning. Blockchain gaming platforms offer players rewards in a variety of digital assets, including in-game currencies, NFTs, and more.
Commenting on the speed at which blockchain gaming projects are dominating the global gaming industry, Robbie Ferguson, the co-founder, and president of Immutable said, "Gaming is bigger than music, movie, and TV combined. It is compounding 10% year on year. The $100bn a year spent 'renting' items is going to turn into a trillion-dollar ownable economy. All of it will be built on web3."
Blockchain games retain active users and transaction volumes
In the past few months, gaming has been one of the more resilient niches in terms of keeping users engaged during the current crypto winter. Recent data from DappRadar reveals that while other sectors of the digital asset market saw a massive decline in monthly active users, gaming experienced the opposite. DappRadar noticed that an increasing number of active users in the crypto ecosystem are found in gaming.
(Source: DappRadar)
According to the data from Dappradar, Alien Worlds is currently the best-performing gaming platform based on the number of active users. The gaming platform has over 196,000 users. It is followed by Splinterlands with almost 150,000 active users. The data revealed that users are more drawn to games on the WAX and BNB Chain networks.
(Source: DappRadar)
Further proof of the steady engagement by gamers is the surging number of gaming transactions. Approximately 25.7 million in the last 30 days, the number of gaming-related transactions is significantly higher than any other sector of the market. The DeFi sector comes second with a little below 1 million.
(Source: DappRadar)
While Axie Infinity has moved down on the list of active users, the game is still a leader in terms of the value transacted. Once again, the WAX and BNB Chain networks take the lead as they record the most gaming transactions. They are closely followed by Hive, Solana, and Ronin.
Games and ecosystems that pay attention to accessibility are also attracting a lot of attention. Nakamoto Games is an excellent example. In addition to its multiple blockchain games allowing sustainable income, the platform offers some games which can be played without connecting to a web3 wallet. Gamers who are not crypto-savvy thus have a chance to try out blockchain gaming. It also has a free-to-play gaming model that allows anyone to earn from GameFi without an initial investment.
Building a sustainable blockchain gaming ecosystem
Gaming is a proving ground for the future of the blockchain industry. The rising popularity of blockchain gaming among mainstream users in recent times is a testament to its potential. However, it is imperative to remember that the blockchain gaming sector is still a nascent niche and is far from perfect. To attract more mainstream players and institutional investors, blockchain gaming must evolve into a sustainable ecosystem.
Currently, the earning potential offered by many sub-niches, including play-to-earn, move-to-earn, and learn-to-earn, is unsustainable. The meteoric rise and fall of the earning capacity in Axie Infinity is a perfect example. At its prime, Axie Infinity served as a source of livelihood for several households in the Philippines during the COVID pandemic. As the game's popularity increased and more players joined the platform, it created an imbalance in the game's economy. In Axie Infinity, players are rewarded for performing in-game activities with the platform's native token, SLP. Since the token has no fixed supply, the lucrative opportunity it presented led players to earn SLP and sell it for cash without reinvesting it back into the game via breeding Axies. This action resulted in an inflated supply, causing the price to crash. The token has been on a free fall over the past year. At its peak, SLP was worth $0.038 but now it is worth $0.003.
(Source: CoinMarketCap)
To create a sustainable blockchain gaming ecosystem, developers must strike a balance between playing and earning. Gamers want to have fun, learn, and socialize. While blockchain integration enables earning, developers should put more attention to creating projects with captivating gameplays.
According to Phil Ingram, the CEO of Lepricon, most blockchain games have unappealing gameplay and are used as a cover to sell NFTs. He noted, "The problem is that blockchain is dictating the gaming and not the other way around. Indeed, many blockchain games seem to be glorified ways to sell NFTs. And what about those limited NFT runs – how does the 10,001st player get to play?"
The rising popularity of blockchain games shows that there is a growing appetite among gamers to own in-game assets and participate in gamified economies. But to sustain this niche long-term and attract more mainstream users, blockchain games must be engaging and enjoyable so that players have the motivation to play and purchase in-game assets.
The blockchain gaming industry is still in its earliest stages but its immense potential will accelerate the move into a digital-first world, fulfilling the Web3 vision. Presently, it is difficult to imagine a world without the Metaverse and its components, including blockchain gaming. Blockchain games will continue to get better and attract more mainstream players and institutional investors, driving the global adoption of digital assets. It is going to take some years to get there but the future of blockchain gaming is bright.
About VYSYN Ventures
VYSYN Ventures is a longstanding venture capital company that specializes in funding and supporting disruptive startups in the blockchain and cryptocurrency industry. We have provided early-stage support to several projects that have grown USD market capitalizations of hundreds of millions and even billions. Our incubation program focuses on providing capital allocation, versatile marketing support, and tech assistance.