After the initial blockchain gaming storm spurred Facebook’s Meta transformation, the play-to-earn (P2E) market is entering calmer waters. Before the next bull cycle starts and major games are released, it is important to consider the major changes coming our way.
Here are some of the key ways in which P2E shifts the business model for developers, but also turns gamers from passive consumers into stakeholders. Why Is P2E Gaming Important?
As of 2020, the video gaming industry has become the most profitable industry of entertainment. According to NPD Group, it grew to $57 billion in revenue, overshadowing both the music and movie industries combined. And that’s just the U.S. Consumer spending on games globally reached $116 billion in 2021, according to data.ai .
One of the key reasons why gaming surpassed all other forms of entertainment is due to its flexibility and smartphone penetration. Because of Moore’s Law, even entry-level smartphones now provide computing power that was only found in boxy consoles just a decade ago. The mobile gaming market is becoming more dominant, with projections indicating a 12.3% compound annual growth rate (CAGR) between 2021–2026.
In other words, tablets, in-car computers, and smartphones are creating a low-entry mobile gaming infrastructure that is likely to create a market size of over $400 billion by 2026. For comparison, according to Research And Markets , the global film and video market for 2020 reached $235 billion, with projections reaching $410 billion by 2030.
However, these projections were made before the onset of blockchain gaming. For the first time, tokenized games allow for a game’s internal resources to be exported out of the game into NFT marketplaces and cryptocurrency exchanges, giving real world value to items in-game like never before.
The trendsetter was Axie Infinity, employing NFTs as playable creatures that players evolve like Pokémon, alongside dual tokens called Axie Infinity Shards (AXS) and Smooth Love Potions (SLP). When synchronized, these three digital assets created a money-making machine both for players and developers in the span of a year.
Image credit: AxieWorld.com
What was previously reserved for occasional esports competitions and streamers can now be the default experience; the fusion of earning and entertainment. It doesn’t take too long to realize that if gamers have a choice in playing non-tokenized and tokenized games, more likely than not, they would spend their time on a hobby that has an earning potential.
Furthermore, the average gamer spends more hours playing year over year. The pandemic scare is the obvious trigger, but the habits formed are likely to remain cemented. From 2019 to 2021, weekly gaming hours increased by 30%, from 12.7 to 16.5.
Overall, these trends paint a picture that makes it clear why Microsoft bought Activision Blizzard for a record $68 billion, why Facebook rebranded to Meta, and why Ubisoft launched its own Quartz NFT marketplace for in-game items.
However, we are still in the anticipatory stage before blockchain gaming becomes mainstream. It takes time to successfully build such complex projects that combine both blockchain technology and traditional video gaming development. Nonetheless, the upcoming P2E trends are already visible. Beyond Gamified Finance: Hedge Funds and Derivatives
As more blockchain games are released, there will be more digital assets across NFT marketplaces and crypto exchanges. In turn, just as it happened with the stock market, avenues to asset systems are developing specifically to create indices and investment funds by applying DeFi protocols to NFTs and P2E games.
At the lower level, fractional NFT ownership is already outlining this trend. With expensive NFTs broken into smart contract pieces, they would not only be reserved for millionaires but also retailers.
At the higher level, we see DAOs (decentralized autonomous organizations) emerging as effective hedge funds for NFTs. BlackPool DAO is a quantitative, smart-contract-powered hedge that takes in ETH funds in order to acquire NFTs for its investors; holders of BlackPool Token (BPT).
This is quite similar to how BlockBuster DAO intends to collect funds to buy the BlockBuster IP from the current owner, Dish Network, and set up a decentralized movie production and distribution platform. Not only do both rely on their native DAO tokens for voting rights and treasury management, but also on social media and brand recognition to gain traction. P2E Guilds
Video gaming guilds have been around since the first MMORPG was released, but popularized with Blizzard’s World of Warcraft. Up until now, guilds were simply formed as in game communities and to form competitive groups.
Blockchain gaming now allows for an economic component to be added. For example, it costs about […]
source Play-To-Earn Gaming Is About To Take Over the Video Gaming Industry
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