Best Way to Explain What is Blockchain Gaming: Pipedream or Prophesy?
Blockchain Gaming, Notwithstanding this, the Pixelmon collection generated $5.8 million in trade volume in the first week. Is this an indication that investors trust in the promise of blockchain gaming, or is it merely a game of highly speculative musical chairs?
The blockchain-enabled gaming sphere is one of the most diverse crypto industries, with many believing in its long-term potential. It is widely viewed as a potential road toward the widespread adoption of cryptocurrencies and blockchain infrastructure.
However, while early blockchain games saw meteoric success, few have managed to maintain interest in the face of increasing competition and a deteriorating crypto economy.
Now, as the sector continues to spin its wheels and developers seek to grow during the bad market, it’s uncertain whether blockchain gaming has a bright future or is already stale.
The Failure of Earn-to-Play.
P2E was a prominent trend in 2021, with literally hundreds of (mainly low-achievement) games combining P2E game design and tokenomics to incentivise user acquisition and encourage frequent involvement.
The value proposition is straightforward: by consistently playing (and/or winning), users earn rewards in the form of bitcoin tokens. These tokens might subsequently be utilized in-game or sold on external markets to generate real-world revenue.
Axie Infinity began gaining traction in 2021, when it soon ascended to become by far the greatest blockchain game of all time, with the AXS token reaching a peak market capitalization of about $10 billion.
Axie Infinity rose to prominence thanks to the promise of financially encouraged gameplay. It reached a peak of 2.7 million active users by November 2021, launching the play-to-earn business.
Following in the footsteps of Axie Infinity, the P2E business swiftly became a hub of invention, with hundreds of P2E games released last year. Though the great majority of these failed to acquire traction, a few, such as Alien Worlds, Splinterlands, and Farmers World, went on to reach tremendous success.
However, because to the lucrative nature of P2E games, the business encouraged what can best be described as mercenary-like behavior, with a huge portion of players shifting between games based on economics rather than enjoyment.
Many of these companies’ play-to-earn tokens reached exorbitant valuations before plummeting by more than 95% from their all-time highs. Because of a general lack of actual token utility and poor gameplay, only a few P2E games have withstood the test of time.
Recent Blockchain Gaming Innovations
Notwithstanding the obvious appeal of play-to-earn games and the benefits that blockchain technology can bring to gaming, few blockchain games have developed a significant player base.
In truth, when it comes to the number of daily active players, even the most ambitious and successful blockchain games pale in comparison to traditional games. Alien Worlds is now the most popular blockchain game, with over 207,000 daily active wallets (used as a proxy for users).
Though this is impressive for a blockchain game, Alien Worlds would not even be in the top 100 games by daily active players if it were offered on Steam, one of the most popular gaming platforms. To put this in context, consider the top five most popular games on Steam.
More than 200,000 people are online at the same time on average.
Major participants in the Move-to-Earn space have recently proved that mainstream adoption of blockchain apps is feasible. This includes STEPN, which had over 3 million users at its peak. Newer systems, such as PRIMAL, are beginning to capitalize on the mainstream appeal of fitness influencers and celebrities to encourage adoption of its gamified fitness monitoring software.
The platform seeks to onboard 300 million athletes by developing collaborations with celebrities and athletes who have over 24 million combined fans, as well as providing support for popular fitness tracking devices such as Oura, Fitbit, and Apple Watch. To become the most popular Dapp ever, it would only need to achieve 1% of this target.
However, whether blockchain infrastructure can handle such a demand remains to be seen. Even the most scalable layer-1 blockchains, such as Solana and Avalanche, have been observed to buckle under times of peak stress or configuration problems.
Several blockchain games hope to gain traction by making themselves more accessible. This includes My Neighbor Alice, which intends to produce its own game launcher, as well as Gala Games, which just Superior, an NFT shooter game, has been unveiled and will be released on Steam. This might make it much easier to find, install, and interact with blockchain-enabled games.
The Future of the Metaverse
With existing and prospective metaverses projected to host games of growing complexity and appeal, the Metaverse is largely expected to fuel the next generation of gaming.
Yet perhaps the metaverse is going through some growing pains. Despite having about 300,000 monthly active users in December 2021, Decentraland now has just 46 unique active wallets communicating with the DApp each day (a proxy for daily active consumers).
As an example, consider the most well-known metaverse, Decentraland. Its native in-game currency, MANA, has a fully diluted market valuation of more over $750 million. There are around 290,000 MANA token holders, with only 0.016% actively playing the game on a daily basis, compared to 0.31% of token holders. Each month, they are active.
When focused on more extensive metaverses like The Sandbox, which presently has 400 distinct wallets active each day or 12,000 active each month corresponding to 0.2% and 6% of all holders, respectively the image appears slightly better.
However, these figures are still considerably below those of non-blockchain enabled metaverses like Fortnite and Roblox, which have an estimated 30 million daily active users each.
Meanwhile, Epic Games, the game firm behind Fortnite, is valued at $32 billion as of April 2022, when it last raised $2 billion. This equates to about $1,000 per daily active player (ignoring its other IPs). When the same logic is used to Decentraland, the figure is staggering: $1.63 million per daily active user.
younger generation with a market capitalization of only $5 million, metaverses like XANA have more acceptable valuations. It might grow in a more sustainable manner by promising increased accessibility and using a variety of popular Japanese IPs to attract a broader player base, but the ambitious platform is still in its early stages.
What Games Require to Succeed
The great majority of blockchain games today are predicated on play-to-earn principles, and few can draw players just based on their gameplay.
Unfortunately, this has resulted in a conspicuous lack of variation in the blockchain gaming arena, with most games adhering to the same straightforward usage model: buy NFT, stake NFT, use NFT to participate in gameplay, claim prizes, and use/trade rewards albeit with different gameplay mechanics placed on top.
As a result, only the first movers or the most ambitious and distinct blockchain games have succeeded in carving out their own niche. Future titles will need to overcome three critical difficulties that plague most selections now in order to have the best chance of success. These are some examples:
Interacting with Web3 applications might be difficult.
UX issues: Interacting with Web3 applications can be difficult, especially when there is a required minimum investment, like with most NFT-enabled games. Future releases will most likely address these issues by keeping blockchain technology hidden behind the scenes, using human-readable names as wallet addresses, and implementing a free-to-play option.
Tokenomics that is unsustainable: Play-to-earn games almost always suffer from extremely inflationary tokenomics, which result from team and investor vesting to gameplay rewards and development spending – this can crush the token price and drive away players. Future blockchain games will reduce token emissions significantly by limiting which players can and do get prizes.
Infrastructure that works: Massively popular blockchain games, as seen time and again, have the potential to crash or congest the underlying network. Newer titles will be added.
To handle millions of concurrent players, large capacity blockchains or alternate scaling methods would most likely be required.
Fun: Despite being officially categorized as video games, most blockchain-powered games lack gameplay, and without their play-to-earn principles, most would have few to no users. However, the initial wave of gameplay-first titles, such as Star Atlas and Illuvium, is already under development.
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