GameFi in previous years experienced a sudden surge in investments and users but has eventually suffered a decline along with the overall markets. Amid pessimism and cynicism, GameFi has proven resilient despite current market conditions.
What is GameFi?
GameFi in simple terms is the combination of the Gaming industry and the DeFi Industry, hence the term “GameFi”. It revolutionizes both the Videogame and Cryptocurrency industry by making games that allow players to earn while playing their favorite game. Using Blockchain technology, developers integrate blockchain elements into virtual games by giving users an opportunity for financial freedom and the exciting prospect of owning digital assets.
This was palpable in the rise of the household Blockchain game, Axie Infinity. The game was a massive hit, especially for Southeast Asian gamers. In just January of this year, Axie garnered 2.78 million users. Players reportedly have earned more than what they earn in their day job and this has even prompted some to quit their real jobs to pursue Axie full-time.
How GameFi declines
Optimism was at its peak at the time, and no one would ever think that the hype would end. However, certain designs of in-game tokenomics eventually took a drastic chokehold on its users.
After the inevitable decline of the markets in the recent year, GameFi as an industry has received a decline in its reputation. Top GameFi token prices crashed by the 90% range from their ATH(All-time-High). Investors and users alike experienced a pervasive sense of pessimism towards Play-to-Earn, leading to the current bad reputation the Play-to-earn genre is experiencing now.
Although macro factors such as the War on Ukraine or the looming global recession certainly took a toll on all markets, it’s only fair that the Blockchain gaming industry should also take a share of the blame.
How GameFi has performed
Despite recent tragic effects in the crypto market, taking a step back on GameFi has revealed that the GameFi industry has been resilient in staying strong during the bear market. According to data from Dappradar, 60% of industry wallets belong to GameFi users which means more than half of crypto users are still into GameFi.
In other words, despite the decline, the industry has faced builders within the GameFi space as continued to improve and develop features within their games. Moreover, the shift from “Play-to-Earn” to “Play-and-Earn” has been most likely the biggest factor in the retention of many users.
The “Play-and-Earn” movement is the shifting away from monetary-driven game features to bringing back to why people even played games in the first place – because they’re fun. All problems regarding maintaining in-game economies with investments would be solved if they had a steady stream of loyal users. And as evident from the traditional game industry, it’s as simple as going back to the roots of gaming and drafting your game into a fun polished product.
It’s apparent that the games industry still has many things in store for it. The shift towards Play-and-Earn has led to the development of more exciting and sustainable GameFi economies. So far, the GameFi industry has proven that Blockchain gaming is here to stay.
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