The Future of Blockchain Gaming on Solana

The?blockchain gaming?industry is one of the most promising technology sectors today. However, what’s lacking are games that can get people to really get excited about blockchain technology.

It all starts with this problem:

Many games are centralized around the ‘token economy’ model, which prevents us from finding accessible ways to tackle more lucrative and sophisticated blockchain gaming problems.

Here’s our proposed solution:

Solana’s goal is to change how the existing gaming industry operates by doing something differently. This article will discuss the current state of the industry and Solana’s potential to revolutionize blockchain gaming.

The global gaming market

According to Fortune Business Insights:

• The global gaming market was USD 203.23 billion in 2020, representing a stellar growth of?38.24%?YOY.
• The global gaming market is projected to grow from $229.16 billion in 2021 to?$545.98 billion in 2028?at a CAGR of?13.20%?in the forecast period, 2021–2028.
• The shooter, role-playing, and action segments contribute to almost 50% of the entire gaming market by popularity.

Here’s what that tells us:

The mobile gaming market?demonstrates unprecedented growth due to the development of 5G technology and more people owning smartphones.

Therefore:

• According to Mordor Intelligence LLP, more than 200 million mobile game players lived in the United States last year alone.
• In 2020, the global mobile gaming content market was worth 121.1 billion U.S. dollars and is projected to reach?169.7 billion U.S. dollars in 2025?(Statista).

Top markets by game revenues

International gaming markets show different patterns, and it is crucial to be aware of these differences and their impact on players’ demand and spending habits.

Take this tidbit, for instance:

Developing nations often contribute to a relatively high volume, but this is often at the expense of low average spending per user (ASU).

As a result, some game developers focus on mass adoption and volume rather than attracting higher-paying players by creating continuously evolving gameplay.

Now, let’s look at this table by Newzoo.

This shows that countries like the United States, Japan, South Korea, and some EU countries have the highest game revenues per capita of the internet population. As a result, these markets have?the highest potential?for attracting and retaining high spenders.

Moreover, there are about 2.6 billion gamers across the globe. They are constantly looking for new ways to have fun and are ready to pay for it.

At this point, we notice this issue:

The current blockchain games do not appeal to this audience, mainly attracting gamers from the developing world who see them as their secondary or even primary source of household income.

The geography of crypto

Following the top spenders in the gaming industry, it makes sense to look at the geography of cryptocurrencies.

Compared to the rest of the world, here are the shares of cryptocurrency value received by region for the period from Jul ’20 to Jun ’21.?Source: Chainalysis.

• Central, Northern & Western Europe is?25%, where the United Kingdom leads by a wide margin at $170 billion, 49% of which is from value sent to DeFi protocols. France, Germany, the Netherlands, and Switzerland round out the top five. However, we need to note that large institutional transactions contribute to more than 50% of this activity.
• North America — 18%
• Central & Southern Asia and Oceania — 14%
• Eastern Asia — 14%
• Eastern Europe — 10%
• Latin America — 9%
• Middle East — 7%
• Africa — 3%

Regional highlights

North America

North America’s monthly cryptocurrency transaction volume grew significantly during the period studied, rising?from $14.4 billion in July 2020 to a high of $164 billion in May 2021?— an increase of over 1,000% — before a slight dip in June.

Why?

Well, much of this growth was driven by the growing popularity of DeFi.

But there’s another essential factor to consider:

FTX is among the 25 biggest cryptocurrency services?by transaction in North America. Therefore, this concludes that Solana-based projects are being more widely adopted and welcomed by this market, with Solana chosen as the blockchain for Serum, a new decentralized derivatives exchange built by FTX.

Eastern Asia

In Eastern Asia, FTX is among the ten biggest cryptocurrency services by transactions, indicating very high potential for projects built on Solana to gain popularity quite quickly.

What does it mean for the Solana blockchain?

From the top markets by game revenues, we can conclude that North America, Japan, and South Korea are the markets where users tend to spend the most on gaming per capita.

But something else makes these markets even more interesting for Solana-based games:

They have the highest potential for the adoption of Solana-based projects sooner than other markets, thanks to the popularity of FTX.

What about other regions?

Germany, the United Kingdom, and France represent so far untapped markets for Solana. However, with their average spend on gaming and wide adoption of crypto, institutional investments, and the popularity of DeFi overall, those markets have tremendous potential for attracting high-spenders to Solana-based games.

Blockchain gaming market overview

The Blockchain Game Alliance reports that Blockchain-based gaming is seeing a boom that’s outpacing NFTs and DeFi:

• In Q3 2021, blockchain games had an influx of 140% more players than in Q2 2021, making it the top-performing sector in the industry.
• Games were one of the biggest drivers behind the steady rise of daily UAW, attracting 754,000 daily UAW on average during Q3 2021.

There is also a significant shift to the NFT and games categories if we look at the new dApps launched from Jan to Sep 2021:

According to InvestGame, Blockchain gaming companies raised $476M in the first half of 2021.

75% of the funds were raised by:

• Forte ($185M)
• Animoca Brands ($89M)
• Mythical Games ($75M).

Axie Infinity

Axie Infinity?keeps breaking its own records as the game became the most traded NFT collection ever, surpassing $2 billion in historical trading volume.

According to Sky Mavis:

• This game has surpassed 1.5 million active users during Q3 2021.
• During the same quarter, the game generated over?$776 million?in revenues, more than entire blockchains like BSC and Bitcoin.

This doesn’t stop here:

Axie Infinity’s market cap is more than the market caps of the top 5 game tokens combined:

Other up and coming blockchain games

Let’s start with number one: Splinterlands.

This is a trading card game on the Hive blockchain. This game attracted 238,000 UAW in September 2021, bringing the Q3 2021 average to 108,000 unique wallets with a quarterly user growth of 1,376%.

Upland is the runner-up.

Fast-growing Upland follows Splinterlands?on EOS and Alien Worlds on WAX. In September 2021, the user count of Alien Worlds was as high as that of Splinterlands.

The bronze medal goes to Farmers Worlds.

A newcomer,?Farmers Worlds, an NFT-farming game running on Binance Smart Chain, broke the 40,000 DAUWs mark in September 2021.

NFT gaming — an overview

Let’s see what’s in store for NFT gaming. Hint: it’s only good stuff, especially for Axie.

• NFT game space will achieve $4.3 billion in volume by the end of 2021
• Experts forecast Axie to end the year with ~$3.5 billion in total NFT trading volume.
• Axie has ~80% of the gaming market share.
• We can assume that ~37% of this NFT gaming revenue is speculative because the model of Axie means that token owners play to make money or pay scholars to pay for them. It is not the same as someone buying a Punk as an avatar or a skin in a first-person shooter.

That leads us to this conclusion:

Even with one-third of speculative volume, gaming is the largest NFT category outside of gambling, with $4.3 billion in total NFT volume forecasted by the end of 2021. However, this amount still represents ~1% of the entire gaming industry.

What current blockchain games are missing

With 43% of Axie Infinity players based in the Philippines and others in Venezuela, Brazil, and other developing economies, we can assume that the current top blockchain games target emerging markets for their volume.

Why adopt this strategy?

According to several reports, players from those markets are attracted to the potential earnings rather than the fun gameplay experience. This approach leads to speculations and a lack of diversification as in-game assets are being bought by the revenue generated in-game.

Here’s why that’s a problem:

Despite very high volumes, spendings per player are way below established economies, like North America and Europe. For example, in 2020, crypto?players from Asia-Pacific generated $6.9 in revenue per gamer vs. $24,3 generated by each player in North America (+250% difference).

Why Solana is the future of blockchain gaming

The purchasing power of users from established economies shows the need to develop a competitive and fun gaming experience that encourages players to:

• Play longer.
• Buy more valuable in-game assets, and:
• Invest their income from other sources into the game to continue enjoying the experience.

But more importantly:

These users also need to trust the team behind the game and see it as a part of a large, established ecosystem.

Here’s where Solana comes in.

There is no better blockchain to build a game that appeals to passionate, high-spending gamers than?Solana, backed by FTX and large DeFi projects. Despite being a relatively new network, Solana is the winner in the Layer-1 space because:

• DeFi protocols on this blockchain are securing?more than $10b of assets?in total value locked.
• Solana Labs is backed by a solid team across engineering and is executing very quickly and efficiently.

This is what we propose to do:

We will bring a fully immersive, realistic experience to blockchain gaming by building a metaverse on Solana blockchain for real gamers to enjoy. The Solana ecosystem offers a unique opportunity to create exciting, competitive gameplay that leverages the economic value distributed among creators and users.

Here’s the reasoning behind this solution:

Such a model reduces the need for aggressive monetization or other intrusive practices such as pay-to-join. The goal is to have gameplay superior to existing blockchain games by taking advantage of Solana’s $5M creator fund and the ecosystem of innovative projects built on this blockchain.

And if you need other reasons, take a look at this:

• Solana is the fastest and the most scalable decentralized blockchain that exists today, making it a perfect network to build immersive metaverses, engaging gaming experiences, and NFT projects.
• It is on top of hot trends, such as NFTs, via platforms like Metaplex and Audius.
• Solana offers unprecedented ETH cross-chain capabilities with its recently launched wormhole.
• Compared to games like Axie Infinity that run on ETH, Solana has its own blockchain ecosystem and a market cap of almost?6X higher than Axie’s,?thanks to the diversity of projects backing Solana blockchain.

Of course, you may want to see some background data regarding Solana. You can find information about Solana’s established and upcoming projects below:

Solana’s ecosystem

Solana is a top-performing cryptocurrency of 2021.?In June 2021, Solana secured?$314M?in a new funding round led by Alexander Horowitz to develop more DeFi projects.

Following Solana’s success, many projects on this network manage to secure funding even before the token’s launch.

Here are some established projects:

• Solrise Finance. Raised?$3.4M?in funding in July 2021.
• Serum. The project completed a?$20M?seed round in July 2020, with ten investors contributing funding. In the past year, the value of the SRM token — used for reducing trading fees and staking — noted a?426%?price increase.

And some upcoming projects:

These three recent projects secured investments before releasing their native tokens.

• DeFi Land, a decentralized finance and gaming project, has secured $4.1M.
• Cyclos, a concentrated liquidity market maker, has secured?$2.1M.
• SolRazr, the go-to fundraising and developer platform for any project in the Solana ecosystem, has secured?$1.5M?in seed funding.

Up and coming games on Solana

Most games being built on Solana are currently in alpha. However, similarly to other projects on Solana, they succeed in securing substantial funding despite early development stages.

Here are three of Solana’s most successful games:

• Star Atlas?is still in Alpha mode; however, its market cap has reached?$209M. It’s the first AAA NFT game built on Solana. Star Atlas marketplace has generated?$50M?in revenue for the year while the game hasn’t been launched yet.
• Ninja Game. Its native Ninja Protocol token has reached? $2.3M?in trading volume even before the game launch.
• Aurory. This exciting project teamed up with the most valuable esports company in the U.S., TSM FTX. Secondary sales of Aurory NFTs on the NFT marketplace on Solana have already generated $64M+.

In conclusion, Solana has all it takes — and more — to conquer blockchain gaming.

Visit our website at?https://rapidinnovation.io?to learn more about us and how we can help you launch your blockchain project.

About Rapid Innovation

Rapid Innovation is a blockchain app development company focused on helping entrepreneurs and startups build great products that decentralize the internet.