Blockchain and Gaming: The Evolution and Future of Video Games
Here is why we believe the answer is Yield Guild Games (YGG).
Infinity Ventures Crypto (IVC) closed an investment deal with Yield Guild Games (YGG) at the end of July 2021 after three weeks from our initial meeting with YGG founder Gabby Dizon. Dizon, who has worked in video games for 18 years, is one of the pioneers of adopting blockchain into the gaming industry.
YGG is a Decentralized Autonomous Organization (DAO) for investing in non-fungible tokens (NFTs) used in virtual worlds and blockchain-based games including Axie. Gabby and the YGG team envision creating the biggest virtual world economy, optimizing its community-owned assets for maximum utility and sharing its profits with its token holders.
The introduction of the “play-to-earn” concept has created a far more positive social impact by helping millions of people to make a living who lost their jobs during the pandemic. The business model presented by YGG has set a new revolutionary milestone in the gaming industry.
Video Gaming Past and Present
Video game industry is bigger than the movie industry plus the whole ecosystem of US sports combined. In 2020, revenue surged 20 percent to over $180 billion in 2020.
However, it didn’t start out this way. Video games have come a long way to get to where it is now. Consumer-facing arcades were first introduced to the public in the ’70s. As computer technology improved, newer generation games revolved around gaming consoles arrived in the ’80s then to PC in the ’90s. The 2000s saw the rise of mobile gaming to present. As the hardware revolution continues, the core of business models have barely changed. There are, however, different variations of business models, such as hardware sales, “pay-to-play,” subscriptions, “pay-to-win,” and freemium, to name a few. Video games evolved around monetizing users paying upfront or through the backend or spread out over the duration of the games (SaaS). Alternately, games could opt to have advertiser foot the bill, though gamers still indirectly pay for the games to extract maximum value. Some way or another, gamers have always ended up paying for the game.
The Future
The “play-to-earn” business model is the latest development in the games industry. It’s revolutionized the old gaming economy model and introduced open economy by utilizing blockchain technology, DeFi, and community. It does this by providing financial rewards to all players who contribute to the virtual world of the game. In other words, the developers reward players for putting time and effort into their game. By battling with other players, gamers are rewarded with in-game tokens which can then be used to buy characters. Both the in-game tokens and purchased characters can be exchanged on open platforms for cash. This new “play-to-earn” model is shaking up existing business models by empowering developers to create a whole new way to do business. It’s also reshaping the online communities around these games. “Play-to-earn” is changing the social, economical and technological aspects of blockchain gaming.
Technological, Social and, Economical Impact
After COVID-19 wreaked havoc on global supply chain, developed economies in the West with advanced medical infrastructure are slowly starting to regain their economic footholds that were lost. These advanced economies rely on primarily on service-oriented growth. On the other side, developing nations rely heavily on textile and other types of manufacturing outsourced from the developed nations for economic growth. During the pandemic, countless factories and supply chains were shut down and delayed. Millions of factory workers were furloughed, damaging the fragile economic structure of these nations. With no other solution to reopen but to wait for the arrival of the vaccine, these economies faced a gloomy future.
However, we believe that blockchain games utilizing “play-to-earn” models are changing the course. People from these emerging markets can actually making a living wage through the “play-to-earn” gaming models. In the Philippines, for example, during the pandemic, GDP contracted 9.6% in 2020 and the lockdown led to an explosion of millions trapped at home adopting a trending blockchain-based “play-to-earn” game called Axie infinity. On average, Axie players were able to earn USD $1500 a month, which is 6.5 times the minimum wage in the Philippines. Axie Infinity itself is expected to generate over USD $1 billion in revenue this year, with a market cap of over USD $4.5 billion
However, playing Axie isn’t without its hurdles. To play, gamers have to acquire three “Axies,” in-game creatures, to start which each are priced at around USD $200, which for some users is a gigantic roadblock to get into the game. Additionally, getting started has its own complications, which includes a lengthy sign-up process that might scare away potential customers who are less technologically savvy.
Yield Guild Games(YGG) aims to solve the problem. YGG is onboarding a global community of “play-to-earn” gamers who play competitively to collect in-game rewards (i.e. Axie tokens), coordinate R&D for other gamers to pass proposals for the DAO and vote on initiatives, as well as leasing NFTs (i.e. Axie avatars) for the gamers who can’t afford to purchase these avatars outright. These solutions address and solve the “on-ramping” issues many of these blockchain games have and allow access to these games to millions of potential players.
YGG works like a franchising entity that teaches, leases, sells you all the necessary tools and know-how to run your own franchise. YGG is not just a sole intermediary player in the gaming industry, but it also sets an example of how blockchain, NFT, and DeFi can actually help alleviate poverty in the world.
Disclaimer: None of the above information or the content in this medium blog constitutes of a recommendation to buy/sell any cryptocurrency or any security. This is not a financial advice. You should always do your own research.
About Infinity Ventures Crypto (IVC)
At IVC, we aim to empower and invest in the next generation crypto gaming applications and DeFi, leveraging our global connections to support founders to bring DeFi and crypto games to mass.
