SolanaPrime Industry Use Case #1: GameFi
Video games have emerged as one of the most profitable media forms in our society. The online gaming market alone has grown into a $200 billion industry. Some AAA games are getting a better promotion than even a typical Hollywood blockbuster movie. Game engines are at their most powerful and there are more game developers working today than ever before.
While generic, dumbed-down, corporate studio-produced AAA games are dominating the market in sheer capital invested and profit gained, it is AA games and indie developers that most often manage to deliver quality immersive experiences to discerning gamers who value actual gameplay. Immersion is, and will continue to be, a key performance indicator in gaming, and with the metaverse just around the corner, forward-looking game studios will undoubtedly embrace the possibilities of building worlds in the metaverse and taking advantage of its AR/VR immersion factor.
The one major obstacle most indie game developers are currently facing is figuring out how to successfully fund their next title. One obvious option is, and you guessed it, Kickstarter. While crowdfunding video game projects on Kickstarter tends to be mostly successful, it’s worth noting that the funding targets expectations have been realistically modest. Sure, it’s worked surprisingly well for already established indie studios like Obsidian Entertainment, whose crowdfunding campaign for the Pillars of Eternity role-playing video game exceeded its initial $1,1 million goal by raising a record $4.7 million on Kickstarter back in 2013. It has also worked extremely well for video game legend Chris Roberts (creator of the classic Wing Commander gaming franchise) whose massively immersive, VR-enabled, sprawling space adventure Star Citizen managed to raise over $2 million from the project’s initial $500,000 Kickstarter goal and later over $428(!) million on the game’s own crowdfunding platform by selling “game packages”. That’s a nearly 1000x increase.
Clearly, the potential for game developers and investors is enormous. Especially when you consider all the equally talented and doubly ambitious, but sadly not as famous, developers who might not be able to create such unprecedented funding frenzy on Kickstarter but will most likely be able to successfully tap into the liquidity of the crypto markets. If only there was something that could facilitate such a transition. Well, actually…
A new kind of launchpad
A Solana-powered, token- and NFT-based, fully decentralized IDO launchpad platform aimed at crowdfunding serious game projects is the perfect vehicle to empower the upcoming wave of Web3/Metaverse game titles on a global scale. Why Solana? We offer a deep dive in our previous blog post.
“SolanaPrime turns simple crowdfunding of video game projects into an opportunity to invest in video game projects. This is huge. The SolanaPrime IDO dApp will unleash the untapped potential of a global-scale, metaverse-based economy, monetized via community ownership. Game developers will finally be able to achieve financial success from their passion projects and gamers will be able to actually own part of the game and profit from its success.” —@CryptoRalph, Llamas Ventures
As the number of gaming platforms on the market grows, so does the demand for content. A constantly rising number of players need new games to play on their shiny, newly purchased consoles. Venture capital funds are increasingly looking for fresh ways to ride the wave of the massively expanding gaming industry. The renaming of Facebook to Meta in November 2021 triggered a surge in funding for web3 projects of nearly $1 billion that same month, totalling $2.2 billion for the year. Footprint Analytics estimates that Forte, a leading provider of blockchain solutions for game publishers, a blockchain game called Mythical Games and Daml, a smart contract programming language, received the most funding. By this point it seems quite obvious that GameFi is going to be the next big thing in 2022.
Disrupting the gaming industry
In contrast to traditional online multiplayer games following the model of purchasing upgrades to gain a competitive edge within the same game, GameFi introduces the innovative Play-to-Earn (P2E) model that liberates the in-game value accrued by the player. P2E allows gamers to earn digital currencies and/or NFTs by spending time in the game world and performing certain actions. The recent interest spike in blockchain-based games isn’t all that surprising, considering that the value created by playing a game is owned by the player (not by the game or the developer) and is actually transferable (i.e. the value isn’t trapped within one game world).
GameFi P2E functionality in games allows players to easily transfer their gaming score, character progress and/or in-game NFT item to another Web3-based game or straight into the real world by transferring the digital tokens to a crypto exchange. There they can effortlessly swap it for cold, hard cash, and then can, on the same day, pay for groceries with it. No wonder P2E games are gaining so much popularity in developing economies, such as Africa and India, where potential returns from P2E games sometimes far outstrip the local minimum wage. For the first time, gamers who aren’t eSports champions or streamers are actually able to earn a meaningful income by simply playing a game and claiming ownership of in-game NFT items. Last year for example, a 22-year-old gamer from the Philippines (where P2E has gained enormous popularity) purchased two houses with the money he won playing Axie Infinity on his smartphone. Opportunities like this are set to disrupt and revolutionize the online gaming industry, creating new and exciting revenue streams for players and investors alike.
The undeniable massive global success of top P2E titles like Axie Infinity demonstrates the boundary-breaking attraction of this new gaming economy also known as GameFi. During the second half of 2021, GameFi overtook DeFi as the hottest sector in the crypto market. With the increasing popularity of digital assets, even large gaming studios are chomping at the bit. Yosuke Matsuda, president of Japanese video game company Square Enix (Tomb Raider, Deus Ex, Final Fantasy), recently published a New Year’s letter indicating that decentralized games using crypto tokens and in-game NFT items will be a “major strategic theme” for the company from 2022 onward. Since crypto tokens and NFTs are poised to become the de facto currency not just within the metaverse, but also throughout the up-and-coming Web3, it’s no wonder that game companies and venture capital firms are starting to pay close attention to the nascent blockchain-based gaming industry. According to DappRadar’s industry report, VCs have invested a record $4 billion in blockchain games and underlying infrastructure in 2021. That’s a whopping 5,000% increase compared to 2020’s $80 million in invested capital.
Solana, the game-changer
Yet despite its enormous potential, P2E titles and GameFi-equipped games in general continue to face issues that threaten to slow down, if not derail, the sector’s progress. The majority of current blockchain-based titles look somewhat unappealing. Improved gaming engines, graphics and, most importantly, better gameplay are necessary if blockchain-based P2E projects are to set the wider gaming world ablaze. Imagine if/when more AA game developers and indie studios decide to follow in Square Enix’s footsteps and contribute their tried-and-tested gameplay know-how to blockchain online gaming. This acceleration would be exponential.
Of course, handling player interactions and transactions on such a large scale will be very different from trendy titles like Axie Infinity. High speed and stability are crucial to gameplay. Awesome graphics and a global increase in the number of users will inevitably put strain on the blockchain infrastructure. In order to thrive, blockchain gaming requires something better than Ethereum. A scalable blockchain platform that can handle the stress. Currently, Solana is the only one that comes to mind.
“The SolanaPrime dApp is designed to be easily accessible to game developers. It will provide them with an opportunity to establish a direct relationship with fans and forward-looking investors, instantly eliminating current obstacles such as funding difficulties and creative pressures. It will allow gamers to move their in-game capital more freely between gaming worlds and the real world. SolanaPrime will facilitate the confluence between real gameplay and true value creation, finally unleashing the substantial power of GameFi.”
—Ramiro Gamen, CBDO SolanaPrime
This is only the beginning. If you truly wish to be at the forefront of the Solanaverse, follow us: