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The internet has undergone massive changes since its inception. Millennials like me had a front row seat as websites evolved from simple text to today’s data-driven powerhouses. One of the largest and most resilient industries to boom from this development has been gaming and esports.
There are tons of addictive and brilliant games out there with several new multiplayer and community based online games launching every year. However, this has come with a downside: players spend countless hours and dollars unlocking exclusive features, microtransactions, DLCs, and more—all without a chance to earn anything in return.
But that could be about to change with the advent of a new generation of the Internet – Web3. According to Business Research Insights, the global GameFi market is projected to grow to $38 billion by 2028.
In my experience developing an upcoming gaming platform, Open League, that will enable in-game asset ownership, I have seen how Web3 models have the potential to modernize the industry. Having watched the evolution of the internet, I foresee that GameFi and play-to-earn (P2E) games could impact the gaming industry because they combine the two things younger generations want most: freedom and the opportunity to define their own lifestyle.
While GameFi and P2E are still in their infancy, I believe they could play a unique role in modernizing the gaming market. Here’s my take on four ways GameFi and P2E are influencing the development of the gaming industry:
A new focus on players
Players are one of the main contributors to a game’s success, so why not reward them? P2E models aim to solve this problem.
Axie Infinity is one of the most popular Web3/P2E games currently available in the market. At its peak, in-game characters were sold for up to 300 ETH ($600,000 at the time). Not only did this provide players with a whole new source of income, but it also changed the way people around the world played.
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P2E revenue models
Players want to feel like they’re an important part of the game; many contribute hours daily. If players are to be fairly rewarded for the time they spend online, the traditional method of gambling to win may no longer be sufficient. Instead, gamers are drawn to what GameFi projects offer – a unique play-to-earn model that offers economic incentives to users and allows gamers to own a piece of what they’ve worked so hard to create.
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The GameFi approach aims to add value to the lives of gamers that goes beyond the games themselves. Usually there are rewards in the form of in-game cryptocurrency or NFTs.
In web2 gaming, success is usually derived from two main factors: game developers and gamers. However, the GameFi economy has a more diverse variety of stakeholders. The P2E system thrives on creators, builders, collectors and investors. Although the investors do not participate in the actual games themselves, they form the financial backbone of every successful P2E game.
Ownership of In-Game Assets
Traditional gaming frameworks allow players to earn items, but these items typically have no intrinsic value and players have no ownership of what they earn. Web2 games allow players to earn points, weapons, and other rewards, but these earnings lack monetary value. It’s a great way for players to have fun, spend time with friends, and enjoy the thrill of victory while improving their gaming skills.
Not only does GameFi offer all the fun of Web2 gaming, but it goes above and beyond, allowing users to own what they deserve. This changed the gaming framework to player-as-owner instead of player-as-consumer. This is made possible by blockchain technology and what it introduces – NFTs and cryptocurrency. NFTs allow for full ownership, allowing players to buy, sell, or trade all different types of in-game assets, characters, and more.
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DeFi Incentives
Many GameFi ventures offer additional incentives such as yield farming, liquidity mining, and staking. All three are great ways for players to earn returns and generate passive income. As GameFi and DeFi mature individually, I believe the overlapping space between them could grow.
In my view, we are on the cusp of another evolution of the Internet. As more entrepreneurs join the Web3 movement over time, these models and incentives are likely to become more concrete.
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Modernization of the gambling industry
For years, gamers have been looking for ways to monetize the time they spend online. Some choose to organize gaming tournaments, which usually only reward a small percentage of participants. Others rely on live streaming and sponsorship. Now, GameFi could offer every gamer the opportunity to capitalize on their gaming skills – you no longer have to rely on the number of followers you have to make your gaming dreams come true.
Gamers strive to see themselves as an important voice in the gaming industry. Will P2E games have a sustainable future? Will it grow to the market size the experts predict? Only time can tell. Until then, I will play and earn.
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