NFTs and Gaming:
What happened to the NFT gaming hype?
For the past four months, the Web3 space witnessed the downfall of the bullish glory days of 2020. But Venture Capitalists (VCs) are still eager for a future turnaround within the industry and it seems gaming is the first mover to hint at better days within the sector.
TL;DR
- Venture Capitalists (VCs) are still eager for a future turnaround within the industry and it seems gaming is the first mover.
- As of August 2022, venture capital funding for gaming rose by 66%, surmounting a total of USD 842 million.
- NFTs and cryptocurrencies often introduce speculation to the gaming experience and their use within GameFi doesn’t guarantee to make the games more fun, adventurous, or engaging.
Most videogames and publishers were rampant with new interesting NFT projects at the start of the year. Let’s look at the numbers going into cryptocurrencies, NFTs, and the GameFi Sector.
As of August 2022, venture capital funding for gaming rose by 66%, surmounting a total of USD 842 million. But to the rest of the sectors within this industry, we’re currently in a bear market where general funding for blockchain-related gaming is in decline; at least that’s been the case for Q3 of this year, spreading into Q4. Regardless, optimists are already taking the hint and presuming that the sudden interest in GameFi/NFTs is the promise of the quarter.
In fact, while cryptocurrency prices decreased by an 8.5% MoM (Month over Month), Gaming related NFT tokens such as Ape Coin (APE), Flow (FLOW), and Chillz (CHZ) have all shown an upsurge in their valuation.
The issue here is trying to find out what the resistance really is. GameFi already met several setbacks when dealing with in-game NFTs. Games like Minecraft were initially concerned before the introduction of NFTs would eventually go against their gaming guidelines; regardless their team has managed to meet the NFT sector halfway. They did so by avoiding play-to-earn / play-to-win business models that deter the gaming experience by incentivizing players to play for the wrong reasons and instead offered free obtainable NFTs in-game.
And that’s exactly the issue. Play-to-earn–online games that let players earn rewards with real-world value–went viral the past couple of years and it brought in a lot of noise. What most companies learned as a consequence of buying into the hype of it all was that it’s initially quite an effective business model to catch a lot of users, but eventually, the incentives to continue playing sooner than later become to obtain tokens/money rather than the gaming experience itself. Shocking as it may seem, it’s still kind of effective.
Thndr games and ZeeBeeDee games are both still hopeful of turning newcomers into Bitcoin adopters. Their tactic is to provide token incentives on the same games that people already play, specifically on mobile. Their strategy hinges on the premise that “…2.6 billion people worldwide play games, mobile gaming being the most popular. That makes up for about 60% of the gaming industry.”
But this is only until recently. In the past, the bond between crypto, NFTs, and gaming hasn’t been smooth. In fact, it’s received a bad rap with big projects like Axie Infinity getting hacked and losing loads of money in the process. Deep down the play-to-earn (P2E) business model is a bit tricky.
NFTs and cryptocurrencies introduce speculation to the gaming experience and their use within the games isn’t exactly making the game more fun, adventurous, or engaging. Instead, it overhauls the narrative of the game and it possibly changes its end goal into earning money or winning tokens. This is one of the main reasons why the bigger players of the gaming industry are now averse to getting pitched by blockchain-related companies. But there’s a bright side to this mismatch.
The fact that established gaming companies haven’t found the right fit to integrate blockchain technology — NFTs, cryptocurrencies, complete security breach prevention, among others– in their ranks, doesn’t imply there isn’t a market for it. It’s interesting to note that some of the few success stories combining Gaming and NFTs are native NFT outputs; consider BAYC (Bored Ape Yaught Club) spanned from their illustrated NFTs all the way to Otherside.
Lastly, without the major gaming publishers in the middle, there’s more room for independent gaming studios to bring out their best material while evolving their products in dialogue with their communities.
At THEOS, we envision a new way of thinking, minting, and trading NFTs, and have developed what we believe will become the next-generation community-governed NFT platform.
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