Despite being a global phenomenon in recent years, cryptocurrency and Blockchain technology adoption still has a long way to go before it becomes mainstream. While everyone may find it difficult to dive into crypto trading or demystify Blockchain technology, they tend to embrace anything that simultaneously promises fun and money. In other words, many people are more likely to be conversant with play to earn gaming than cryptocurrency or blockchain technology.
The gaming industry is one of the fastest-growing sectors in the world. Reports show that the global gaming market was valued at $173.70 billion in 2021, and it is estimated to reach a value of $314.40 billion by 2027, registering a compounding annual growth rate (CAGR) of 9.64% over 2022-2027. While the global cryptocurrency market size, valued at $1.49 billion in 2020, will reach $4.94 billion by 2030, growing at a CAGR of 12.8% from 2021 to 2030.
The significant drivers of the increases recorded in the gaming industry are mobile gaming with 2.5 billion global players, console gaming with 800 million players, and PC gaming with 1.3 billion players, all in 2020. In 2021 alone, PC gaming generated a revenue of $2.6 billion, smartphone games generated $79 billion, and console games amassed $49.2 billion, all contributing to the growth in the gaming industry.
Even with these convincing figures, most traditional games still use the pay-to-win model, making players susceptible to losing money while playing and resulting in a dwindling interest in gaming. By integrating cryptocurrency into gaming, we can expect accelerated and pervasive publicity for Blockchain technology, incentivizing gameplay. So, let’s dive in and learn about a more appealing and lucrative sector – crypto gaming.
What is Crypto Gaming?
Crypto gaming is simply the integration of cryptocurrencies into gameplay. It is a decentralized form of gaming where players can own unique in-game assets, sell them to anyone interested, or convert them to real-world money. The crypto gaming industry, although still young, is worth billions of dollars. This is because of the role Blockchain technology is playing to enable players to earn — receive in-game currency that can be used to trade non-fungible tokens (NFTs) or transferred to a crypto wallet for real-life payments — and have fun in the process. Unlike traditional pay-to-win games, crypto games use the play-to-earn model. It also uses blockchain technology for storing information and assets owned by players.
Blockchain technology in its entirety is a vast system of cryptographic networks perfectly fit for secure smart contracts, enabling interoperability. Items could be transferred between different games, and users can own and use unique digital assets as they please outside the confines of the gameplay. Experts also suggest that blockchain technology could completely revolutionize the gaming industry, disrupting the monopolized console market and making immersive games more accessible.
Crypto games can implement blockchain technology in two ways. Developers can create the whole game on a blockchain or use it to develop an in-game currency. The former allows for the verification and storage of every interaction within the game as new blocks in the blockchain. At the same time, the latter will enable players to use non-fungible tokens (NFTS) as in-game digital assets. The crypto gaming industry is still experiencing a lot of resistance despite its potential, as gamers and the general public are not fully aware of how things work in the sector. But once learned, understood, and eventually adopted, crypto gaming will become the new standard.
How does Crypto Gaming work?
Crypto games have native tokens to aid trading between players and other in-game purchases. How much you earn normally depends on the amount of time you invest in the gameplay and the demand for the underlying tokens and in-game digital assets. The value in crypto games stems from the currency players earn within the platform, which relies on a constant inflow of players to benefit others in the ecosystem.
Well-known games with a solid player base are more valued than others. For example, Axie Infinity now expects players to make a huge upfront investment in Axies (the game’s NFT) in order to play. Then they can trade these digital assets at an appreciated price with other gamers who contribute to the gaming economy, and the cycle continues. This means that if every player leaves to exchange their game-based tokens for other digital currencies, the token value may decline.
Furthermore, crypto gaming is developed on a blockchain network where information is decentralized, and players have total ownership of all items acquired during the game. Players can also use fiat currency to buy more in-game assets.
How does the game benefit from all this? Transaction fees are the primary source of revenue for most crypto games, with assorted business models fueling economic flow. New players are obliged to pay a fee when purchasing in-game currency. Consequently, the lack of new players can slow down operations which can ultimately be a limiting factor of some new games. Experts believe that people will continue diving into the sector because digital assets ownership is making waves, and gameplay is becoming more immersive and more lucrative.
Why Players Should Learn About Crypto Gaming
Times are changing, so are people’s interests. Who wouldn’t want to have fun and legitimately earn while doing so? The status quo for gaming is changing; players can no longer afford to lose their hard-earned money without a guaranteed win or means of getting it back. The surge in the crypto and gaming industries is also a valid indication that gamers need to transition into more simplified and rewarding fun activities. Here are other reasons:
- It is pertinent to learn about crypto gaming because while the traditional gaming sector remains alive and growing, crypto games will continue to improve in quality of gameplay and become more attractive to the mainstream gaming market. As this continues, play to earn games could become more popular due to their gameplay alone. The current resistance to NFTs and crypto gaming is in part because of the lower quality gameplay attributed to a new technology. As this improves, both sectors will coexist and more significant overlap may occur. Crypto gaming has the potential to catch up with traditional gaming standards, while still adopting blockchain technology and the play to earn opportunities that come with it.
- Crypto gaming operates on a decentralized server. Unique ownership of assets acquired is allowed even when the user no longer plays a game. This means that you don’t have to lose your in-game assets when you stop playing a game.
- Moreover, this is an excellent time to learn crypto gaming to bridge the gap between developers and players. It is also time to dissolve the monopoly game developers have. A crypto game built on a blockchain network has no central authority; hence, the code is open for analysis and community members can suggest changes through collective governance strategies. Some crypto games propel forward a community-driven model where the opinion and expertise of every member matters.
Traditional gaming companies generate funds from their free-to-play games, demanding players to perform mini transactions to win or have things like an extra life, weapons, etc.
Sadly, wins recorded in such games are not convertible. Within this framework, players are unable to claim total ownership of their success, except for an elevated status within the game with no value outside the game. In other words, you pay to get nothing tangible for your time.
In crypto gaming, there are opportunities for players to earn from playing the game without having to invest a lot upfront. However, many of these low investment opportunities take significant time and gameplay to earn proportional rewards. From an investment standpoint, it is now common to find games that have a higher initial buy-in, but can then yield profitable results quickly. Both low investment and high investment games can sometimes give a chance for players to use assets acquired in one game on other gaming platforms.
It’s time to take power away from monopolistic game console-publishing industries by encouraging cloud game development over a blockchain network. The cost of playing traditional games is rising quickly as the gaming industry struggles to remain competitive and relevant. Learning crypto gaming gives players autonomy, and it’s less ambiguous.
Why Investors Should Learn About Crypto Gaming
In recent years, crypto gaming has gained a lot of publicity and investors’ interest. The crypto gaming market brings an avalanche of investments, especially in prevailing regions like China, Mexico, the USA, Germany, India and South Korea.
As mentioned earlier, the gaming industry is currently worth billions of dollars and may be worth more as the Metaverse continues to gain traction. Crypto gaming and the Metaverse provide long-term investment opportunities, especially for tech companies, and advertising/e-commerce opportunities for non-tech firms. For example, Coca-cola is already buying real estate and creating a spot for themselves in these games.
Gamers are often the propellers of upgraded tech products. And with tech companies like Google, Microsoft, SONY, Ubisoft, and ATARI, vying to have a place in the industry, crypto gaming may extend to console gaming. But to ensure it is devoid of an all too familiar monopoly, more investors need to key into the sector to handle the production and distribution of new tech tools. The higher the number of investors, the higher the value of crypto games.
What’s more? Investors can also create Gaming Guilds, gathering as many players as possible (both skilled and beginners). Then employ game veterans or mentors to teach those lacking gaming tactics, and earn massively by having these players play for them. They can also invest in non-fungible tokens with colossal potential, engage in inter-guild wars, and earn in return. The NFT gaming market only contributes less than 20% of the industry. Crypto Gaming is value-based and not a get-rich scheme; it has many monetizable layers for investors. Put in the work, and earn big!
Risks in Crypto Gaming
The long list of advantages doesn’t negate that the crypto gaming industry has its fair share of disadvantages and risks. Learning about crypto gaming means knowing the benefits and drawbacks. Here are a few cons:
- Crypto gaming is not always feasible for an average gamer, and established games can be expensive to buy into. Some crypto games have rigid access policies that deter gamers. For example, Axie Infinity requires at least three Axies before playing the game. The floor price for Axies start from $50- $100, which means players have to spend at least $300 to acquire Axies with average to less favorable stats. In order to start properly earning, players need to acquire Axies with better stats and more experience, and these NFTs cost closer to $1000 for three Axies. For gamers who are unaware of the potential profits, or have no desire to play to earn, these buy-in costs can be unattractive. Traditional games cost less, and gamers looking for more entertainment will likely avoid crypto games with high buy-in.
- Gamers are at risk of losing their digital assets and tokens. This can occur when they fall victims to a scam or send assets to an unverified wallet. In July 2021, the founder of Hedgie (a popular crypto game) reported that he was scammed of more than $1m in NFTs. Cryptocurrencies exist outside traditional banking systems, and this provides less financial security. If a hacker breaks into your crypto wallet, there are no protections or a money-back policy. Always check if a crypto game offers any compensation in the event of system infringement. Players and investors can also lose money via market volatility. Like everyday cryptocurrencies, crypto game tokens are susceptible to price fluctuations. While there are insurance options becoming more readily available for various crypto-based investments, gamers and investors alike should be aware of the risks involved in a decentralized ecosystem.
Some Successful Crypto Games
With the influx of decentralized games, it is safe to say that crypto gaming is here to stay. And as the industry opens its arms to new developments, we are bound to see more games. Until then, here are a few successful crypto games that are worth looking into.
- Axie Infinity
- Pegaxy
- Alien Worlds
- Decentraland
- Splinterlands
- Farmers World
- The Sandbox
Crypto Gaming In a Nutshell
Cryptocurrency in the gaming industry is emerging as a successful combination. Axie Infinity, one of the most popular crypto games, has amassed a staggering $1.2bn in revenue. However, the recent conversations around the Metaverse show that game world fluidity would require unprecedented cooperation between studios; if successful, the universe of network gaming could be the new fun.
https://www.alliedmarketresearch.com/crypto-currency-market/amp
