Should You Invest In Crypto Gaming?

Published on 08 Jul 2022

Crypto Gaming

Lockdowns during COVID seemed to accelerate the gaming business, which is still growing rapidly. In 2020, the UK spent £1.6bn more on video games than in 2019. During lockdowns, many played Animal Crossing and Call of Duty.

The worldwide video game business expanded in 2021, according to InvestGame. Private investments increased year-over-year in H1 2021, while public offers rose from $4.9bn to $17.1bn. InvestGame found another trend: blockchain-based gaming. Crypto games integrate the two technologies, using an NFT marketplace or enabling players to earn bitcoin prizes.

Cryptocurrency in gaming is becoming popular. Axie Infinity, a popular crypto game, has made $1.2bn. In the first quarter of 2022, 128 blockchain gaming firms received financing. It's a tough industry where investors and participants swiftly switch projects. Gaming investors must comprehend this sector's specifics. What's crypto gaming?

Also Read: Will Programmers Become Extinct As A Result of AI?

What Is Crypto Gaming?

Traditional games are centralized; therefore, things and XP can't be utilized in other games. Blockchain technology transforms crypto gaming. Players may utilize awards and stuff across crypto games.

Cryptogaming lets gamers earn money. Players may use a play-to-earn approach in a number of ways. Consider Axie Infinity. Axies may be bought, leveled up, and sold for more. Players may duel with their Axies to gain Ethereum-based SLP and AXS.

This offers a new aspect to the industry: earning bitcoin while gaming. Three-quarters of players wanted to utilize their cash on other platforms, according to Worldwide Asset Exchange. Just gamers?

Who Is Playing?

Statista records NFT game use over the previous month. Alien Worlds, Axie Infinity, and Splinterlands have over 2 million monthly users.

Despite a dearth of study, it's evident that gamers are the major target audience. 38% of crypto players are millennials; according to Triple A., 55% of millennial crypto owners were gamers.

Asia-Pacific has 22.6 million cryptocurrency holders. Europe had 5.9 million players, while the Middle East and Africa had 5.8 million. North America has just 3.3 million crypto players.

These statistics mirror the gaming market. Statista ranks Asia-Pacific nations first through fifth in gaming revenue.

Sergey Kopov is the CEO and creator of 0xGames, a blockchain game developer. He expects 3.24 billion gamers would be interested in crypto gaming.

Crypto games attract those who want to earn money on the current craze, Kopov said. Temporary. Soon, crypto games will be fascinating enough to compete with conventional games, attracting players."

The Philippines is a crypto gaming hotspot. Some inhabitants discovered a method to generate money despite the Covid-19 epidemic. A YouTube documentary tracked Filipinos making money with Axie Infinity, illustrating that spending time may pay off. Documentary disputed crypto gamer stereotype. A mother, college grad, taxi driver, and an elderly couple were all crypto players.

Crypto-game Success Stories

The game's Asian origins explain why it's popular in the Philippines. Vietnam's Trung Nguyen established the Ethereum-based gaming startup Sky Mavis. Sky Mavis' worth is around $3bn as of December 2021, a surprising sum since the firm had secured $152m in initial investment in October 2021.

Axie Infinity is the second most popular crypto game, after Alien Worlds, which has 1.16m monthly players. Saro McKenna, the game's co-founder, spent 10 years in corporate finance. McKenna has an Oxford MA.

Alien Worlds is more popular than Axie Infinity, although in-game money shows otherwise. Axie Infinity token (AXS) was $16.13 on 27 June 2022, down 14% in 30 days. It's fifth in market capitalization after Decentraland and The Sandbox. Alien Worlds (TLM) is $0.02 cheaper.

Splinterlands has around 604,000 monthly players and is third on Statista's list. Buy, trade, and level up cards in this game. Matthew Rosen, creator and CTO of Splinterlands has been making video games since he was 10 years old.

The card game's token, Splintershards (SPS), costs $0.05. Although the price is greater than TLM, its market cap is smaller, and CoinMarketCap puts it at 408, whereas TLM is at 291.

How Does Crypto Gaming Work

Traditional games include several crypto elements. Players may purchase in-game money with real money, gather stuff, and level up. What draws crypto investors and players?

Crypto gaming has taken off because of ownership. Crypto games offer players ownership of what they gather through blockchain. Players may trade or sell in-game stuff. The marketplace dynamic attracts players, whether a Splinterlands monster card or a purple Axie with green thorns.

Profiting from gambling also attracts participants. Some games have been criticized for requiring players to pay to get the most out of them. Before crypto gaming, spending money meant quicker leveling. Crypto gaming uses a play-to-earn approach to let players benefit from their investments. Some Filipino gamers have even made money playing.

What Are The Risks of Crypto Gaming?

Crypto gaming has pros and disadvantages. Some games have additional entry hurdles. Axie Infinity takes three Axies. The cheapest Axies cost $100. Thus, you must spend $300 before earning. Most conventional games cost less than $100, thus this significant investment may deter players.

Tokens and NFTs may be lost. This may happen if you transfer them to a wallet that doesn't accept NFTs or get scammed. In July, Hedgie's creator claimed being cheated out of $1m in NFTs. Axie Infinity's blockchain, Ronin, was hacked and lost $600m.

Crypto games provide a greater fraud risk than cryptocurrencies since operators aren't required to follow anti-money laundering requirements.

Volatility may also cost players money. Some games restrict how frequently you may withdraw crypto game tokens, exactly as non-gaming cryptocurrencies. Players may not have time to cut their losses if a crypto gaming currency like AXS declines (it's presently worth around half what it was in April 2022).

Combining two prominent technologies exacerbates a critical flaw: gambling. Loot boxes allow gamers to pay to unlock a virtual box of random goodies. Loot boxes are "structurally and psychologically like gambling," says a researcher. Crypto games use loot boxes. Splinterlands sells random card packs. Health experts worry that gambling is already part of young people's daily lives, and crypto gaming will further feed this.

See also: Best Buy acquires U.K. Company Current Health

Crypto Gaming's Future

Crypto gaming is expanding, and investors want in. Mark Cuban helped Sky Mavis collect $7.5m on its first fundraising round. Framework Ventures established a $400m fund for Web 3.0 games, while Andreessen Horowitz created a $600m fund.

Solana and Polygon have invested in early-stage blockchain games using decentralized money (DeFi). With more investors pressuring crypto gaming sites, the sector might develop.

Drake Star Partners' latest report confirms this. 128 crypto gaming firms received $1.2bn in Q1 2022.

In October 2021, Steam, the world's biggest PC game distributor, declared it would not host blockchain-based games since it doesn't accept products with real-world value. Steam is an industry-leading platform that draws 62.6 million daily players, so losing it might hurt crypto games.

Epic Games' approach is different. Epic's CEO, Tim Sweeney, stated that the company is willing to engage with early creators of blockchain-based games. The distributor claims that Crypto games must comply with financial rules and have age ratings. This might reduce crypto gaming risks and widen the market to Epic Games' 31.3 million daily players.


Featured image: Crypto exchange photo created by frimufilms


Subscribe to to learn about new updates and changes made by tech giants that affect health, marketing, business, and other fields. Also, if you like our content, please share on social media platforms like Facebook, WhatsApp, Twitter, and more.