GameFi isn’t a new concept, in fact, CryptoKitties was the first project to bring this concept to light in 2017. It’s best known for creating the play to earn model that is used by all blockchain-based games. This model proved to be a big success, earning the game over 1.5 million users and $40,000,000 in transactions. It was significant that the model occurred in the early days of the cryptocurrency market.
The sector has changed over time to meet increasing customer demands. Today there are approximately 1,498 GameFi projects. The number of these projects has increased by over 99% each year. GameFi investments exceeded $780 million by 2021, surpassing $3.7 billion in 2022. With these increasing numbers, revenue models for games have evolved as well. These projects are shifting away from the traditional play-to earn model to other models that can guarantee their long-term viability.
Let’s take a look at the different models and how they are benefitting users.
You can play to earn
Players can earn real-world money by playing play-to-earn games. To power and monetize in-game economies, the model uses crypto and NFTs. The NFTs are in-game goods (e.g. outfits and avatars), but cryptocurrencies can be used to motivate players. Players can also benefit from NFTs by having full ownership over in-game assets. Every game action is recognized with an in-game currency.
P2E also offers many benefits, such as the possibility to make money and own assets while creating value for your community. Axie Infinity, the perfect game to explain this concept, is the best. Axie is a Pokémon-style monster-battling game in which players capture cartoon creatures known as Axies. Every Axie has a unique NFT and each player can adventure, fight, or breed their Axies throughout the game. Players receive smooth love potion (SLP), crypto tokens as a reward.
P2E gaming solutions can overcome many problems associated with traditional gaming, however they do have limitations. The first is the model’s emphasis on earning rather than gaming experience. It has resulted in inflationary tokenomics that caused the games to go under. Gamers have given up on P2E gaming due to the high entrance fees.
Play-And-Earn
As opposed to play-to earn, play-and–earn represents a more natural progression. The evolution of P2E allows gamers to obtain what they want, while earning money and owning property. It focuses on games that are enjoyable and satisfying. The goal of this model is to encourage people to play, compete, collaborate, and build a community.
It also addresses P2E issues like user retention and rewards sustainability as well as gameplay experience. UniX gaming employs the play-and-earn method that allows players to build, own, share, and even chat. This allows them to utilize their resources and voices to help create healthy gaming environments. UniX is primarily focused on AAA gaming with an incentive system.
The model is much more playable than P2E in terms of its ability to be used. However, it does still have a few shortcomings. However, it does not allow the owner of in-game resources. It may lead to lower user retention and a less attractive value proposition for players. Play-and-earn focuses on playability and may miss out on delivering extra utilities, which is blockchain’s sole purpose. A more sophisticated version, play-to own, is available and can solve all your Web3 gaming problems.
Play-to-Own
Play-to-own, also known as play-and’own is an in-depth form of the game. This model allows players to make money from their gaming and convert the in-game currency into NFTs. The model provides evidence of their ownership rights over in-game items. A digital item, such as a coin or token of their ownership, can have a tangible value if it is sold on a trade site or marketplace. This model offers the greatest advantage over all others because it increases retention and creates new income streams.
Life Beyond is a blockchain-powered MMO that mixes play-and-earn with play-to-own. It is currently at its Alpha stage. Players create items, weapons, equipment and gather resources to defeat enemies. As a reward, users earn LBToken (marketplace currency) for participating in game activities. The in- game NFTs may be utilized across the game’s maker, Darewise, and its portfolio of future games. Although the game seems intriguing, it is only time that we will see if it delivers on its promises.
GameFi keeps evolving
GameFi is one sector that is always evolving. Blockchain gaming’s infancy may be one reason. This industry is changing faster than ever before, with play-to earn games such as Axie Infinity evolving into play-and earn games such as UniX Gaming. It has covered the majority of this topic, and also how games have been quick in implementing new game revenue models. With games like Life Beyond embracing enhanced gaming models, GameFi’s future seems sustainable.