If there’s one thing that can be said of anything remotely connected to the Internet and a computer screen, it’s that if it’s salacious or a video game, it’s likely to survive the market turmoil.
So for crypto investors, if there is anything left after this week’s news about Coinbase keeping their crypto if it goes bust (they say they are not at risk of going bust), and Bitcoin
GameFi goes something like this: imagine you’re playing 2K Sports PGA Golf and you create a golf course and instead of giving it away, you can charge people for it. They pay in 2KSports token, and 2K gets a cut, and you get a cut. If you’re famous, like Tiger Woods, you make millions with the Tiger Woods designed golf course in-game. That’s the model of playing to win if it were part of the traditional world of console gaming.
In other games, like the award-winning Star Atlas (ATLAS), you can create worlds or avatars and earn a lot of money.
In emerging markets like Indonesia, people make a living playing these games. Some players earn a couple of hundred dollars a day. Other smart guys pay players entry fees to settle into play-to-win gamer worlds like Axie Infinity
“Yes, you can buy players and people are doing exactly that,” says John Sarson, founder of Sarson Funds, a cryptocurrency investment firm with offices in Indiana and Massachusetts. “These platforms are morphing into metaverse solutions. They have the potential to become a microeconomy and a microlife,” he says.
Crabada (CRA) – a new game in Avalanche
“Scholarship programs have been established around the world where you pay a player to earn money from your crabs in the game and you share in the revenue,” says Sarson.
STEPN (GMT) is another move from GameFi. It’s a Web3 app that people download on their phone to record their physical activity and can earn tokens for walking. Yeah, it sounds ridiculous and maybe that’s why it fell 26% on Wednesday alone. (Don’t feel bad GMT hodlers, CRA fell 38% earlier that day.)
But, “there are people making like $900 a day on that game,” says Sarson. “I’m serious? Yes, I am very serious.
The more people who enter these play to win communities, the more value those coins will have. It is no different from traditional equity in that sense. The more people buy Apple phones instead of others, the more value investors place on Apple. There is always the risk that Apple will become the next BlackBerry.
All of these blockchain games are communities and many of them are set up so that players can earn cryptocurrencies there that they can exchange for fiat money, sometimes known as real money.
Some games are more about making money for the players, like Crabada, and others are more about community involvement, like STEPN, where you can make money, but it’s more about the game and less about the winnings.
In emerging markets where gamers can earn $100 a day from these apps, that’s a desk job. Imagine that in India and parts of Southeast Asia and inland China. There have been several articles about gamers in the Philippines who managed to find work during the Covid lockdowns playing Axie Infinity.
The blockchain market is still in its early years. NFT games alone generated $2.32 billion in revenue in the third quarter of 2022, according to the Blockchain Game Alliance. The gaming industry as a whole will hit $203 billion this year.
Blockchain-based games are becoming a bigger part of the gamers universe, so if that grows and crypto is the only way to get into that market, then it could be a place for investors to invest. once the dust settles a bit on this disastrous Luna-Apocalyptic market. .
Konstantin Dinev, CEO of GameFi’s new startup Time Shuffle in Switzerland, is being baptized by fire. They will launch this year in Avalanche. Dinev says that TimeShuffle will use a play-and-win model, its derivative of the play-and-win model that everyone already knows.
“Our main team is all the players,” Dinev tells me. “We come from the traditional game development industry with over 30 years of experience. We have over 20 game titles under our belt and titles from over 40 million registered users. We wanted to create a game that was fun and not so focused on the winning element,” he says. “This is not a game to win first, it’s a game to have fun first.”
In it, there are some guys who look like Salvador Dali and some guys who look like Albert Einstein, and both sides live in a time when humanity has discovered alien technology that gives us the ability to travel through time. Controlling the timeline and the course of history is the difference between anarchy and peace. That’s the fight in TimeShuffle. Looks great.
Users will be able to play, progress and unlock better characters without the need for cryptocurrency wallets linked to the game. But on the money side, players can participate in the game’s Web3 economy by interacting with their NFTs.
“We have historical or mythological figures that have been transformed from variations in continuous time,” says Dinev. “Each of these characters and his different professions will offer different battle tactics. The goal is for each user to build the best skill deck for each character and try out different strategies when going into battle.”
They raised about $2.1 million in seed funding, with Shima Capital in Silicon Valley being the biggest investor, followed by the Blizzard Fund.
The cooler the game, the more investors these things will attract, says Sarson. This applies to retail investors who buy tokens on exchanges, venture capital firms, and investment funds like Sarson Funds.
“Everyone loved the Star Atlas gamer trailer, so people bought the coin,” says Sarson. ATLAS is in a deep bear market. “Honestly, what did we learn from their increase in value? All that mattered from what we discovered was how good it looked. Within the GameFi space, Axie is the true blue chip. That’s because you’re seeing thousands of people making a living playing that game. So with Axie, it’s not about entertainment and graphics, it’s about building a team of players to earn the maximum amount of money.”
Their Small Coin Strategy fund has a 25% deposit for gaming and metaverse companies. Some of the properties not yet mentioned here include Illuvium (ILV), still in beta, and Blocktopia (BLOK).
Maggie Rokkum-Testi, a senior advisor at Sortium Blockchain Studios in Switzerland, said she got into GameFi after playing Axie. Sortium’s CryptoGene game looks great. You cut and dice DNA and create battle monsters.
“I played Axie in its early stages, just to understand how it worked,” he says. “I fully understand how it can become addictive. NFT technology is rapidly changing the gaming industry by giving participants true ownership of their assets while also giving content creators a fair share of the ecosystem.”
Some investors see the blockchain gaming world merging with the world of the metaverse and becoming its own economy. You live in the game (although don’t worry, you can also escape to the real world, although you may not earn as much money in it).
“There is a real opportunity for metaverse economies to empower their player bases around the world in a way we haven’t seen in gaming before,” he says. “It’s one of the things we’re focusing on for CryptoGene: making viable digital economies that are for players by players.”
GameFi is expanding and maturing. Games are moving into a broader range of genres, such as RPGs and first-person shooters that have mass-market appeal and are designed from the ground up to deliver PlayStation-style player experiences.
Crabada has overtaken Axie Infinity in NFT trading volume. Since its launch just six months ago, it has seen $225 million in NFT sales, according to CryptoSlam.
On Avalanche, developers are launching games on their own subnets, which are application-specific blockchains that allow projects to support high-volume applications without raising fees on a single network or being impacted by other on-chain traffic.
Subnets provide the best Web3 gaming experience where games can keep their initial gaming costs low and allow them to win without the burden of high transaction fees, which have become a tax on player activity.
This includes games like Shrapnel, Ascenders, Domi Online Gunzilla, Castle Crush, and Ragnarok in production on subnets, just to name a few, notes Ava Labs president John Wu.
“Don’t take this as financial advice, but the two projects I see transforming the GameFi experience right now besides Avalanche are DeFi Kingdoms (JEWEL) and Crabada,” says Wu. “They have passionate fan bases.”
The DeFi Kingdoms subnetwork is executing more daily transactions than some layer one blockchains, averaging around 200,000 transactions per day in its first five weeks of being in business. Crabada’s subnetwork, Swimmer Network, is coming soon, which could give investors a reason to consider CRA.
Over the past year, GameFi has grown by roughly 2,000%, according to DappRadar. In the first quarter of this year, before the Ukraine war and inflation caused market sell-offs, blockchain games raised some $2.5 billion in venture funding.
Will that go kaput?
It could, in this market.
But if player startups manage to raise capital at the same rate as they did last quarter, the companies’ numbers will exceed last year’s. That will depend on a serious change of sentiment. Investors may like the blockchain gaming universe, but when their investments drop 40% in a week, it’s not hard to imagine every player hitting the pause button.
Disclaimer: The author invests in Bitcoin.