GameFi Industry in the First Half of 2022
GameFi is currently one of the major drivers of cryptocurrency and blockchain adoption. The development of GameFi has been so rapid that it is said to have disrupted the traditional gaming industry. This article will give you some valuable insights about the GameFi industry overview in Q1&Q2 2022, the challenges of GameFi and its future!
Overview of the GameFi industry in the first half 2022
Overall, the crypto market in 2022 experienced a notable decrease; however, not all sectors faced the same challenge. In terms of the GameFi industry, the funding market has been very active, in which there has been an unprecedented rate of growth in the capital flow. Particularly in Q1 2022, the total funding amount recorded of GameFi escalated by 194.19% YOY.
Regarding the total market capitalization, all GameFi tokens decreased by 15% in Q1 because of the market trends that were related to the BTC market capitalization fluctuations. Despite this, the total number of GameFi users remained literally unchanged as in Q4 2021 at around 1.2M.
According to Footprint Analytics, the total number of GameFi projects as of May was recorded at 1,498, which increased by 99% in comparison to the same period last year. The volume of investment made in GameFi in the first half of 2022 stood at $3.7B, representing 16.4% of the total investment in the entire blockchain sector.
Issues and barriers of the GameFi industry
In spite of its accelerated growth, the blockchain gaming ecosystem suffers from various challenges. First and foremost, most of the games are expensive for users to play. For example, Axie Infinity, a top GameFi project, requires users to pay 3 Axies or approximately $90 for the cheapest Axies to start the game, which makes it unaffordable for gamers to play rather than their counterparts.
Furthermore, the GameFi industry concentrates too much on “earning” that they sometimes forget the entertainment value. You may have noticed that several blockchain gaming platforms are simply clicking games that have little or even no entertainment value, which results from the difficulty of creating Call of Duty-Esque games on blockchains, lack of creative writing and technical flaws in developing the gameplay.
A look into the future of GameFi
While it may seem like GameFi is in a bubble, data in Q1 indicates that the sector has been proportionately strong in comparison to the greater crypto industry. The market cap of gaming projects was stable, token liquidity increased, and venture capitals have still been demonstrating passionate interest in new projects.
In addition, according to Newzoo, the world’s most trusted source for games and esports analytics and market research, the gaming industry was on track to generate over $175B in 2021 and is expected to surpass $200B in 2023. Experts also predict a $300 million market value by 2027 for the industry. With the combination of NFTs, it would generate a sustainable gaming economy and motivate player engagement.
Based on the predicted figures, there’s enough evidence that GameFi will continue to grow in 2022 because it involves the connection between the gaming and finance industry, which provides players with a huge opportunity to earn digital assets through simple and common activities like yield farming or breeding while still being able to enjoy the captivating gaming experience.
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Disclaimer: The information herein is for educational purposes only and should not be considered financial, investment, or trading advice. Please conduct your own research and due diligence before making investment decisions. You understand that you are using the Information provided at your own risk.