How Crypto gaming (GameFi) is emerging as the new way to make money?
Crypto games are video games that run on a cryptocurrency network and include a completely or partially distributed ledger architecture, giving players verifiable ownership of the virtual products in the games.
As cryptocurrency remains a global phenomenon, industries all over the world are looking for new ways to incorporate this truly revolutionary technology into their core products and services. Online gaming, in particular, has become a hotbed of exciting innovation in this field.
Developers are inventing new ways to use cryptocurrency to buy and sell in-game items, cosmetics, unlock characters, and much more. The virtual and real worlds – our metaverse – have never looked so good.
Video games have come a long way in the last few decades. Indeed, the global gaming market, which was valued at USD 173.70 billion in 2020, is expected to reach USD 314.40 billion by 2026, with a 9.64 percent CAGR between 2021 and 2026. Sony, Tencent, Nintendo, and Microsoft are among the largest video game companies, with combined gaming revenue of more than ten billion dollars.
Sony is at the top of the list, with a massive revenue of approximately $25 billion. Electronic Arts (EA Games), Sega Games, Konami Holding Corporations, and Gameloft are among the world's most prominent gaming studios.
While several economies shut down as a direct result of the Covid-19 pandemic in 2020, the video gaming industry was one of the few that experienced an unexpected boom. With several countries imposing nationwide curfews, people naturally turned to their homes for entertainment during the successive rounds of restrictions.
Activision Blizzard, Epic Games, and Electronic Arts, among others, claimed a massive increase in revenue from sales as well as an active user base in 2020. The increase in in-game purchases mirrored the increase in active users.
The growth of cryptocurrency gaming
With advancements in PC and mobile gaming, the gaming industry's interest in cryptos has increased noticeably. Crypto games, without a doubt, are now disrupting the traditional games market by allowing players to earn while playing, thereby rewarding their time and effort.
In a report published published by the Worldwide Asset Exchange, more than 75% of online gamers desired to exchange their virtual assets for a currency that could be used across multiple platforms. The ability to collect and trade virtual assets that can be exchanged and traded anywhere in the world has contributed to the popularity of crypto gaming. It has also proven to be a safe and simple way for the gaming industry to generate revenue.
How does cryptocurrency gaming work?
It is a well-known fact that cryptos can be easily bought and sold using digital wallets and crypto exchanges. So, how does cryptocurrency work in the realm of online gaming? This is how it is done.
Traditional online gaming monetization methods include affiliate marketing, in-app purchases, and in-app advertising. Furthermore, in-game coins, such as those found in Monopoly or mobile games like CandyCrush, are very familiar to today's gamers. But it's terrible that these coins have had no value outside of the scope of the game for so long.
Crypto gaming stands out in this regard since it allows players to add value to their purchases. In crypto games, store tokens, such as in-game merchandise, are frequently held on a distributed ledger atop a crypto network. The blockchain is the distributed ledger that allows game products to be traded for cryptocurrency, which can then be exchanged for real money.
In-app purchases allow users to purchase stuff straight from the game, such as money, additional lives, custom characters, clothes, and accessories. When it comes to crypto gaming, in-app purchases are made when users purchase products with bitcoin or purchase cryptocurrency itself. Traditional games, on the other hand, often purchase components from a central developer-owned store, which benefits the developers rather than the gamers.
Furthermore, in traditional games, players have no control over the game's life cycle. When the server is shut off, the operator will remove any unused virtual properties, and the player will no longer have access to them. The game operator, not the player, is the only proprietor of any merchandise in the game.
Although digital ownership is present in modern games, it does not have the same value or stakes as crypto games. While you are allowed to hold in-game assets, you are not permitted to sell them to other players. When compared to this, crypto games have a whole distinct concept, from virtual asset ownership to decentralised operation, and the fact that players' assets are worldwide distributed and not restricted just for gaming purposes.
Make money by playing crypto games
In essence, crypto games are video games that run on a cryptocurrency network and include a fully or partially distributed ledger architecture that gives players verifiable ownership of the virtual goods in the games. As a result, players will be able to trade virtual goods for bitcoin, which can then be exchanged for real money.
Throughout this time, the only people who profited from the virtual coins that were sold to players or users were the game developers or game studios, because these assets had solely a monetary worth. This meant that, despite people paying real money for them, practically everything you could buy in a game (e.g., skins, armour, upgrades, etc.) had a finite worth.
However, with the emergence of crypto games, the status quo is changing. While traditional games have always been primarily about amusement, crypto games combine entertainment with the possibility of earning actual money while playing. When a player purchases an asset, they are indirectly increasing the game economy's worth. Axie Infinity, CropBytes, and Gods Unchained are a few of the most famous crypto games that allow players to earn money by completing in-game objectives with virtual goods.
CropBytes, a homegrown crypto game, is a good example. Players can expand their asset portfolios in this farm simulation game by deploying NFTs and cryptos in their own farms. This crypto game, which has more than 80,000 CropBytes users, allows users to use the power of crypto to generate money while playing.
NFT Gaming
The NFT gaming business has grown in popularity as crypto games have. NFT games, which evolved from Play to Earn games to collectible games based on the Pay to Earn principle, were released in the first quarter of 2021, giving crypto gaming a boost. The gaming industry has always been driven by trends, and the latest trend in NFTs is no exception. While it is no secret that the NFT market has grown to become a multibillion-dollar industry, games are without a doubt one of the most well-suited applications for NFTs. Much of the NFT industry is currently centred on gaming, which has a lot of potential for offering gamers unique in-game item collection opportunities.
Despite the fact that the phrases crypto gaming and NFT gaming are sometimes used interchangeably, there is a significant distinction between the two. In NFT gaming, native tokens are used to generate or accumulate NFTs, whereas crypto gaming focuses on using crypto coins to transact with other players. Any assets in the game, such as utility, armour, land, or any other asset, can become NFT and be easily owned, transferred, and sold on the blockchain using NFT gaming. The NFT gaming platform also allows players to buy and trade one-of-a-kind NFTs on NFT markets.
Axie Infinity is a popular online video game based on NFTs that is presently the most expensive NFTs collection, with sales of more than $42 million in June 2021.
In addition, GameFi, a new sort of blockchain gaming that mixes decentralised financial (DeFi) capabilities with gaming, is gaining popularity. One such game is MOBOX, a BSC-based game that combines NFT collectibles with yield farming and other DeFi services. Around GameFi (Game Finance), we should see a slew of supporting solutions that give crypto games new dimensions.
Players can, for example, use their game assets as collateral for loans or just borrow an item for in-game activity to earn more assets. There are numerous inventive ways to make money.
FTs are gaining popularity in the crypto sector, despite the fact that most games are now constructed around NFTs. Fungible tokens, unlike non-fungible tokens, can be duplicated and traded for the same value.
In the crypto gaming sector, there is a lot of liquidity
Given how reliant crypto games are on the gaming market, it's also critical to consider the market's liquidity levels. Liquidity, in its most basic form, refers to the maximum number of assets that may be bought and sold in the game market at any given time. Liquidity is a good measure of any marketplace since the more liquidity there is, the healthier the market is.
The crypto gaming market can include both NFT and FT assets to boost liquidity. While FT assets may be scaled to have high liquidity marketplaces and thus be utilised in the game for utility/consumables assets, NFT assets can be used more for their rarity, which normally has high value but low volume transactions.
Looking ahead
I've always loved games, and I've been making counter-strike maps since I was a kid. I've always been a gamer who aspires to work in the industry. With the crypto gaming industry reaching new heights, I am thrilled by the prospects it brings and eager to collaborate with new gaming projects and entrepreneurs.
With more money being spent in the market, there's no doubt that crypto gaming will grow into its own business. Several studios have jumped on the crypto gaming bandwagon in an attempt to profit from the current trend.
That said, the rise of the online gaming sector is something that crypto gaming should attempt to capitalise on, as it offers obvious advantages for both gamers and creators. Crypto gaming improves the overall gaming experience for gamers while providing new revenue streams for developers. From the potential to earn to the ease of transactions, the ability to play anywhere, and the increased levels of safety and security, crypto gaming improves the overall gaming experience for gamers while providing new income streams for developers. Let's get started.
Disclaimer: The suggestions/recommendations around cryptocurrencies in this story are by the respective commentator. DrForex does not bear any responsibility for their advice. Please consult your financial advisor before dealing/investing in cryptocurrencies.
