In this episode of BeInCrypto’s Video News Show, host Jessica Walker takes a look at the NFT gaming market, which is growing by leaps and bounds while gaming regulatory bodies and traditional gaming corporations shun the ecosystem. The gaming industry is a multi-billionaire dollar market traditionally dominated by giant corporations like Atari, Sony, Microsoft and Nintendo, among others.
Throughout their history, these major firms have aimed to provide entertaining gaming experiences to attract new players and expand their market share. However, non-fungible tokens (NFTs) are attempting to give gamers a financial incentive for playing games, in addition to providing an engaging gaming ecosystem.
NFT gaming
These games, known as play-to-earn games, are played in a Metaverse that is essentially a fictional universe. The play-to-earn gaming model rewards users for their time and effort within the game. Because of this, the model has a chance to gain a portion of the $175.8 billion global gaming market that is touted to grow to more than $200 billion in 2024.
The protocols in the NFT gaming sub-sector have been gaining a lot of traction in terms of users and volumes. Their associated native tokens have been performed extremely well too. The native token of the Ethereum-based NFT game Axie Infinity has been leading the charge for the sub-sector. The token has posted 83% gains in the last 90 days and over 73,000% yearly gains.
AXS currently trades around $120 and has broken into the top 25 cryptocurrencies by market cap, making it the only NFT gaming-related token to make the cut. The platform itself has witnessed incredible growth in terms of users and volumes since its launch. According to data from Dappradar, there has been trading activity worth $2.6 billion on the platform with over 800,000 traders participating.
Growth
Even though the most utilized blockchain network for the deployment of decentralized applications is Ethereum, in the NFT gaming ecosystem, there are several other blockchain networks like Binance Smart Chain, Polygon, Hive and Harmony that are also gaining large user bases along with growing volumes.
On Oct. 12, Binance announced a $1 billion accelerator fund for the overall development of the BSC ecosystem. Popular games on its smartchain are MOBOX: NFT Farmer, Faraland, ZOO Crypto World, and CryptoBlades.
Good enough?
Despite the growth seen across various platforms and networks in the NFT gaming sub-sector, the long-term proposition of these games could be in question. This is because gamers from the traditional gaming community are used to playing games that are extremely well-designed. These titles also boast impressive gaming ecosystems, as a majority of them are backed by large corporations that have ample resources and development infrastructure.
At this stage, this cannot be said of the games that use NFTs, native tokens and other incentives to reward users as they are still in the nascent stage of their development and are clearly not as sophisticated. This makes it even more important to measure the time and effort the users of these platforms are putting in to earn these rewards on games that might not be as stimulating as the mainstream games.
Corporate opposition
Despite the rapidly expanding NFT gaming ecosystem, the traditional gaming giants have yet to adapt to blockchain technology or NFT integrations into their pre-existing games. In fact, a few of them have explicitly ruled out the possibility.
Valve recently announced the removal of blockchain games from its platform Steam and even asked users to not publish any content related to cryptocurrencies and NFTs. The corporation flirted with crypto back in 2016 when they announced that they would accept Bitcoin payments, but soon put a stop to the service, citing high fees and volatility.
In the aftermath of this ban, the CEO of Epic Games, Tim Sweeney, announced that his company is open to hosting and supporting games that use cryptocurrencies and blockchain-based assets.
Epic — the firm behind the immensely popular Fortnite — did note that developers will not be able to use the platform payment service to accept cryptocurrencies. Instead, they will need to use their own payment systems. This could become a barrier to adoption and inclusion for games without this infrastructure.
The perception held by Valve extends to regulators in the gaming industry as well. On Oct. 14, the Gambling Commission of the UK began an inquiry into one of the most popular NFT fantasy soccer games, Sorare. The gambling watchdog is evaluating whether the platform would need an operating license and if their services constitute gambling.
Recap
Since the entire ecosystem is at such a nascent stage in its development, it seems to be more of a waiting game to gauge the true potential, utility and long-term propositions of integrating crypto, blockchain and NFTs in gaming ecosystems.
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