What is NFT in Gaming? The Blockchain Crypto Game Market
The concept of gaming (or video games) has changed drastically over the decades from a simple Pong game to complicated software solutions on consoles, PC and mobile that offer a virtually unlimited range of genres and interaction mechanisms that turn games from mere interactive forms of entertainment into complicated universes that both engross and captivate.
“The global gaming market was valued at $162. 32 billion in 2020 and is expected to reach a value of $295. 63 billion by 2026, registering a CAGR of 10.5% over the forecast period of 2021 – 2026.” - Reportlinker.com announces the release of the report "Gaming Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)".
The pandemic has had its impact on the gaming market as well, as millions of people experiencing lockdowns around the world started playing more games. A survey from March 2020 revealed that video gamers in the United States spent 45% more time playing video games during the quarantine.
While the PC and console markets have been lagging behind mobile, which has dominated over 50% of all internet traffic globally for the first time in the first quarter of 2021, a new type of gaming has been creeping onto the market with staggering success.
CryptoKitties game dropped on the Ethereum network in 2017 and literally clogged the network to a standstill. As gamers rushed to have a taste of the new type of blockchain gaming, the money flowed in their wake. The most expensive collectible cat ever sold in the game was valued at $117,000, which says a lot about the prospects of decentralized gaming.
Ever since then, blockchain-based games have been coming off the production line with varying degrees of complexity and success. The first quarter of 2021 saw the advent of an upgrade in crypto gaming in the form of NFT games, which have made the shift from Play to Earn games to collectible games based on the Pay to Earn principle, as rare NFTs often fetch astronomical prices on the market.
Recent statistics from statista.com reveal that the value of the game market worldwide has increased significantly over the past decade and is forecast to grow over the $200 billion mark in 2023. The overall capitalization of the NFT market reached over $22 billion in 2021, up from $338 million in late 2020. Much of the given sector is being focused on the gaming industry, which has immense potential for providing gamers with unique opportunities for collecting in-game items. Such possibilities are best highlighted in the esports market, which was valued at over $495 million in 2020 and is expected to reach over $646 million in 2021, in large part thanks to the injection of new technologies that make the engagement process more exciting for gamers and fans.
The funding received by blockchain game developers is staggering. An example is Battle Pets, a Binance Smart Chain based blockchain game about adorable pets, where each pet is an NFT that can be collected, nurtured, and used for pet battles where players face each other. Another example is Forte – a decentralized major ecosystem – recently raised $185 million at a $1 billion valuation for its behind-the-scenes blockchain game platform with Griffin Gaming Partners leading the investment in the latest unicorn to rise in the blockchain gaming market. Another example is Bit-Country, which raised over $4 million in a day for its digital, community-governed metaverse.
It is noteworthy that over 80% of all traffic on the Ethereum network is attributed to decentralized betting and gaming transactions over the last two years running. Such figures are a clear indication of the interest that both players and developers are dedicating to decentralized infrastructures for a great number of reasons. But while Ethereum is making headway, the Binance Smart Chain is also catching up by offering many exciting crypto game projects, like Battle Pets.
In addition a new genre of blockchain gaming is starting to emerge, which combines the elements of decentralized finance (DeFi) and gaming. A good example of such a game is a very popular BSC-based game MOBOX, which combines NFT collectibles with yield farming and other DeFi services. MOBOX allows players to play their NFT game, while utilizing their NFTs for yield farming, which allows them to earn returns on their time and effort spent on the game.
Crypto Gaming vs NFT Gaming
Crypto gaming and NFT gaming are two different segments, as the first is more focused on spending cryptocurrencies to earn and transact with other players, while NFT gaming is focused on using native currencies for generating and collecting unique NFTs that can be used in-game for special actions or held and sold later on.
As for gamers seeking novelties, gaming NFTs can also be sold on the upcoming NFT Marketplace that is set for launch on 24 June. More details about the upcoming event can be found here.
Why Does Gaming Need Blockchain?
Video gaming is a pretty locked-up industry in which gamers are isolated to their dorm rooms, couches, consoles, and mobile devices, but primarily to the in-game environment with limited options. This makes the interaction process limited to the game itself and the instruments it provides, which are usually collectible in-game items that can affect the abilities or visuals of an in-game character. In a true sense, modern gaming is very isolated as the players can only interact with their characters and items inside the in-game environment, with no connection to the real world.
In addition, most games online and offline can be modified or hacked, giving some gamers an unfair advantage over others.
Decentralized gaming offers gamers what they need – an economy based on principles of transparency, immutability and fairness, eliminating the possibility of fraud and allowing the gamers to start earning in-game, rather than spending.
Apart from the boons of principles, blockchain allows developers to explore entirely new horizons in a virtually unlimited and expansive infrastructure that gives untapped possibilities for integrating an endless variety of modules and technologies ranging from VR, AR, uncontestable pseudorandom number generators, and much more. All combined, such technologies extend the meaning of gaming beyond handheld interfaces.
The Problems of Blockchain Games
Though highly promising, blockchain games have their limitations. Not the least of them is the problem of transfer fees, which can often bite large chunks out of gamer earnings. Another problem is associated with data loss and the need to reward those who maintain game universe networks. The user interface and experience is also a major hurdle for blockchain-based game adoption. Lastly, blockchains are still scaling poorly and money laundering using NFTs is being eyed by authorities as a new form of crime.
It’s All In The Popularity
Regardless of the problems, NFT games are currently in the lead with such titles as Axie Infinity – a decentralized strategy game where users collect, breed, and trade fantasy creatures called Axies in Pokemon-style. The game sold nine plots of land for $1.5 million in its virtual space and is attracting up to 5,000 new users weekly, with weekly volumes nearing $1.8 million in turnover.
Sorare has proven to be just as popular, as it allows players to play fantasy football using digital cards of five-player teams and earn rewards based on their performances in real life. Other highly popular titles include F1 Delta Time – a Formula One game where users get to participate in racing tournaments using digital collectibles like cars, trinkets, race tracks, drivers, and tires. Or Evolution Land, where players interact using avatars called Apostles that can be purchased at NFT auctions.
The Future of Blockchain Games
The statistics speak louder than any prognosis, as the market determines the winners and is always quick to latch onto any opportunity that promises rewards and profits. Gamers want diversity, new experiences, and are eager to start making money in their favorite games. What else is there to say about the prospects of blockchain games, when blockchain itself is still nascent and is only just starting to develop its potential.
The coming years are sure to see an explosion of new titles flooding the market as blockchain networks scale and allow users to access games that are more user-friendly, better suited for mobile, and wield better graphics and engrossing storylines.
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