Whilst some industries have suffered since 2020, one that has thrived has been the gaming industry. In fact, the gaming industry continued on its upwards trend the following year, too, in 2021. Research from InvestGame shows that private investments more than tripled year on year in the first half of the year.
In 2020 alone, £1.6 billion extra was spent on video games in the UK compared to the year before. It seems as if gaming was the solace that the public turned to during dark times in lockdown.
But some people went one step further, and a new trend began to take hold. InvestGame also found that there was a rise in cryptocurrency-based gaming. Members of the public were able to make money from gaming, which is part of the appeal and led to the gaming format taking off. But why is that? Let’s take a closer look at what crypto gaming is.
While typical games are centralised, meaning all items gained while playing are unique to that game, crypto gaming offers an alternative by using blockchain technology. Players in the game can now use their rewards and items across multiple crypto gaming platforms.
Crypto gaming goes a step further by allowing players to earn money as they play. This is the play to earn model, and it can be achieved in a number of ways.
Axie Infinity is a good example, where users can buy characters called Axies. Users then level them up and sell them on at a higher price. In addition, players can battle with their characters and earn XP, which is paid out in the form of Ethereum based crypto gaming tokens.
This completely changes the face of gaming as we know it, as all of a sudden, gaming can be a source of income. Think of those who cannot leave the house or lack an education. Crypto gaming is opening doors for people, whether we like it or not. But how does it work?
Ownership is one of the key reasons that crypto gaming has taken off. Of course, typical games already have many of the same elements that crypto games have, in that normal currency can be used to buy in-game money and assets.
However, the big difference between crypto gaming and traditional gaming is that players can actually own their in-game items and trade, buy and sell them in a marketplace fashion.
Being able to earn money by playing a game is the big draw here. In the past, some games have been pay-to-play or at least pay to get ahead in the game, whereas cryptocurrency games pay out through their play-to-earn model.
Examples of successful blockchain games
According to Zipmex, the top blockchain games on the market today are:
Axie Infinity is an excellent example of a successful cryptocurrency game and was the first Ethereum-based NFT game to reach $1 billion in sales in 2021. With over one million active users already, it is the most popular NFT game available at the moment.
Similar to Pokémon, the game is based on building a team of animals called Axies and using them to go into battle. The game has two currencies: Axie Infinity Token (AXS) and Smooth Love Potion (SLP). Each Axie acts as an NFT (Non-Fungible Token). They can usually be sold for anywhere between $100 and $1000, but very rare NFTs have sold for hundreds of thousands of dollars.
This format is standard throughout NFT and crypto games, with characters and assets being sold later down the line for large profits. This is part of the large appeal of blockchain games, as users truly can earn money by playing and committing to it for an extended period of time.
Each cryptocurrency game has its own form of currency, Axie being a good example again. They have two, as previously mentioned. Others have one, but all are unique to their game. The main asset is derived from the Non-Fungible Tokens you produce and cultivate within the game and then sell on.
The top 10 currencies currently being used in blockchain games right now, according to Crypto Slate, are:
Although there are the obvious upsides of being able to earn money while you earn, there are a number of disadvantages that gamers should be aware of ahead of investing their hard-earned cash.
Firstly, there is the barrier that prevents some players even getting into the game. Axie Infinity, for example, requires players to own at least three Axies before they can start playing. The cheapest Axie is $100, so players would have to spend a minimum of $300 before being able to start playing. Of course, most games do not cost as much as this, but it is a standard example of games requiring investment before play can commence.
In addition, players are also at risk of losing tokens, currency or non-fungible tokens. For example, if a player attempts to send currency to a wallet that does not support that kind of NFT, they could lose what they have earned.
Furthermore, there is also the risk of scams. Scams and malicious attacks are not uncommon in the cryptocurrency world, and as NFTs are becoming ever more popular, hackers and scammers will target gamers with increasing frequency.
There is also the risk of losing cryptocurrency without coming under attack from malicious sources. The ever-changing landscape of the crypto market means that the value of the currency you own could plummet at any moment.
Furthermore, some games will not allow you to withdraw the entirety of your wallet in one go, meaning you could lose out on the value of your currency while it sits there untouched.
Gambling is also a risk that is a growing feature of crypto gaming and the marketplace. Gambling has long been a risky feature of our everyday lives, but combining it with crypto gaming has made it even more volatile.
Traditional video games have always had ‘swag boxes’ or ‘loot boxes’ that players can buy or win and open them for random rewards, but crypto games are now introducing them too. Players can buy them with cryptocurrency or non-fungible tokens and will be rewarded with the contents.
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