Why Blockchain Gaming Will Succeed: A Look At Past Mistakes and Future Solutions

Blockchain gaming, the sector of the gaming industry which includes elements that use blockchain technologies, including cryptocurrencies and non-fungible tokens, shows no signs of stopping its rising trajectory.

Even within the dire market conditions of 2022, GameFi has continued growing, month by month:

Blockchain games and Metaverse projects raised $1.3 billion in Q3, adding up to $7 billion raised in the first three quarters of 2022. An improvement compared to the $4 billion raised in all of 2021.

In September only, 912k daily Unique Active Wallets interacted with blockchain games’ smart contracts: a good 8% increase from the previous month. Gaming also accounts for 48% of wallets that have interacted with dApps, or decentralized applications, in Q3 2022.

According to Naavik and BITKRAFT Ventures the blockchain gaming market is estimated to grow from $1.5B in 2021 to $50B in 2025.

The primary revenues of blockchain gaming ($1.5B) in 2021 came from revenues from game economies ($1.3B), video game NFT primary sales ($0.1B), and blockchain virtual world NFTs ($0.1B).

This data apparently paints a rosy picture of GameFi in 2022 and the future, but not all is what it seems, and the reasons for dissatisfaction could be many.

The gamers in the world are approximately 3.2 billion, and the overall market worldwide is?estimated at a hefty $196 billion in 2022.

THE PRESENT AND THE PAST

If we compare the number of wallets connected to blockchain games to 3.2 billion overall gamers, it’s easy to see that mainstream adoption is still way behind the curve.

After all, #GameFi still doesn’t have titles like Minecraft, PUBG, CoD Modern Warfare, Fortnite or League of Legends: Gamefi’s most played Axie Infinity, Alien Worlds, or Splinterlands don’t even get close to the numbers of traditional games, even the more niche ones.

Blockchain games grew in popularity because of one element, which, if programmed well, will make GameFi’s fortunes: the play-to-earn model: players could make a good earning from playing and from the secondary sales and renting of NFTs.

Many times, though, this model has proven to be unsustainable, and, if we really want blockchain gaming to succeed, great attention should be paid towards fixing this issue.

Going back to the origins of Blockchain gaming will help understand where things went wrong:

Launched on 28 November 2017, Cryptokitties was the first Blockchain games to be launched on the Ethereum chain. From 1500 NFTs of these Tamagotchi-like cats on release day, by December the number had gone to 52k.

The craze was on. But not for long.

The sales peaked in December 2017, and began a steady decline with the new year. As sales declined, so did the value of the NFTs tied to the game.

What exactly went wrong?

The ability for two Cryptokitties to breed and have an NFT baby quickly saturated the market. The rarity of the cat NFTs was quickly diluted, and there was little incentive for people to hang onto their rarest cats.

Games following the trailblazer, such as Axie Infinity and Binary X, all witnessed a surge in price, followed by a depressing spiraling down of the value of the assets tied to the games.

The problems facing these early blockchain games were innumerable:

• Inflated NFT assets.
• People not familiar with the #blockchain.
• Hackers and money outages.
• High barrier of entry with basic NFTs being expensive.

One of the main issues is that such a model requires more and more players to join the game to avoid the pyramid collapsing under its own weight.

Another issue, possibly the biggest, is that blockchain games out right now are not as fun to play as original AAA company titles on PC or console.

THE PRESENT AND THE FUTURE

There are many things in Blockchain gaming development going into 2023 that should leave us optimistic.

The expansion of games being hosted on different blockchains, such as Solana and Polygon, and protocols such as Immutable X, with its absence of gas fees, are two massive factors that will change the GameFi world in the long run.

One of the biggest complaints regarding Cryptokitties or Axie was the massive Ethereum gas fees related to every transaction. With Ethereum gone to Proof-of-Stake and other protocols promising zero gas fees, the case for mass adoption is definitely stronger.

We also have massive?AAA gaming companies investing heavily into the sector:

Ubisoft has recently invested $12 million for the development of their own blockchain games; Square Enix, of Final Fantasy fame, sold $300 million worth of valuable intellectual property to fund its Blockchain initiatives; Epic Games raised $2 billion to develop its own metaverse, and all these companies are being followed by other big names such as EA, Microsoft and Tencent.

The involvement of such huge names is basically the factor that is going to tip the scale:

Blockchain gaming, just like crypto in general, need to gain mass adoption to perform at their best, and things seem to be setting up in a favorable way.

Investments are pouring in, game developers from traditional gaming companies are moving to blockchain gaming, the gap between off-chain games and their on-chain counterparts should be decreasing steadily in the next couple of years.

Ultimately, the litmus test for Blockchain gaming will be when gamers will chose to play on the blockchain regardless of the incentives of play-to- earn:

Once the choice of playing an on-chain title will be down to the quality of the games, and once the blockchain will have its own blockbuster titles, its own GTAs, LOLs, PUBGs, then play-to-earn will be a welcome addition and nothing more.

Once all these factors converge in the same directions, and all of the blockchain’s perks will be seamlessly integrated within a game, without the player having to jump through hoops learning blockchain technology to play a game, then we’ll be ready for the gaming revolution of the twenty-first century.

And there will be no stopping it once it is here.

About Gamestarter

Gamestarter also has an?in-house game studio?focused on building high-quality blockchain games (Gamestarter Originals) like?Dark Frontiers?&?Pixel Pix.

Gamestarter adds?liquidity,?player-ownership, and?new funding resources?to the largest entertainment industry in the world.

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