New Opportunities in the Gaming Industry

New possibilities in the gaming industry will arise when there is a stronger awareness of NFT technology and game finance (GameFi). Since players can no longer obtain in-game items solely through official channels, they will be encouraged to develop a fair and active secondary market. This is the manifestation of the concept that a player's profits will be returned to the player themselves, otherwise known as "play to earn" (P2E).

The application of blockchain technology and decentralization will allow us to mitigate two key issues found in mainstream games: “non-disclosed gacha rates” and “the inability of gaming assets to maintain their value.”

  • Non-disclosed gacha rates: This is the most direct application of blockchain technology, especially when converting gaming assets into NFT. Disclosing the quantity of all assets and their respective pull rates will prevent developers from manipulating the game.\
  • The inability of gaming assets to maintain their value: With the concept of Game Metaverse and the tradeable nature of NFT items, future players won't need to worry about losing all their investments. Even if they were to quit the game, players can recover most of their assets through a secondary market. Such an environment will naturally increase peoples' willingness to play. In turn, developers can also charge reasonable fees for management and maintenance through the robust economy of a secondary market.

Game decentralization is a wonderful concept, however existing cases in the market remain scarce. This primarily may be due to mainstream misconceptions of blockchain games, such as exaggerating P2E concept and convincing investors that they will strike gold by playing the game. As a result, some may think that the blockchain gaming industry is all hype and isn’t a practical use of blockchain technology.

To be blunt, making a fortune through gaming is a pipe dream!

If the developers manipulate game tokens, spam NFT, create hype, make empty promises to investors, or develop immature GameFi models (such as forcing newcomers to provide economic mobility to benefit veteran players), then blockchain games will eventually become a massive pyramid scheme, with inflation as the first sign of catastrophe.

Simply put, game economy models that force newcomers to buy items in the market before they can play or play with ease function by exploiting the cash flow from these players. This model will only generate money internally between players and will collapse in the absence of new players.

It is easy to imagine that when there are enough games to choose from, no one will want to become a late-comer to a game. This is because being an early player can net more benefits.

The implication is that if a game's economic model fully relies on the quantity of players, then it will fall apart if it fails to meet quota.

Additionally, non-fungible tokens (NFTs) are currently enshrouded by illogical speculations, with many people investing in massive amounts of capital without an understanding of the true function of NFTs. However, this irrational phenomenon will eventually return to rational state.

In fact, crypto currency has just recently completed the aforementioned cycle. In the last wave of hype, useless crypto currencies that relied on hot money began to appear. The market was disinterested in the actual use of crypto currency, while the investors merely wanted to profit from the surging trend. However, their dreams have since been broken.

The good news is that at present, the crypto currency market is gradually returning to rationality. Investors are paying more attention to the intrinsic value of crypto currency, that is, the development of its fields of practical application rather than fixating on pure hype. However, the NFT market has not undergone a similar cycle.

A plethora of NFT with no artistic value, massive numbers of NFT with digital generated avatars, and so on—in a market where developers can reap large profits with virtually no effort and risk, NFT initiatives are being churned out with the sole purpose of netting gains while giving little to no regard to utility. It is easy to see that there is an excess of projects lacking in plans for further development. When just about anyone can make similar NFTs, then NFTs can only rely on hype to propel purchases. Meanwhile, buyers only concern themselves with any rising trends in value, completely ignoring the intrinsic and artistic value of NFTs. This situation is unsustainable.

We are convinced that the market will eventually return to a more rational state. After all, NFTs experience both highs and lows. After hot money cools off, the only NFTs that can survive are those that hold true value. These are referred to as "utility NFT." Some examples include the usable assets in a game Metaverse, assets used for general business purposes, and more.

We boldly predict that utility NFTs will be the key player in the next phase of the market and that the Game Metaverse will be the cradle of the first batch of utility NFTs.

© All Rights Reserved            updated 2022-11-12 13:15:25

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