Blockchain-based (P2E) games based on Play-to-Ears attracted investor interest in late 2021, with Axie Infinity leading the pack with more than 2 million active users. In P2E games, players are given encrypted or non-fungible tokens (NFTs), as they progress through the game. These digital assets can be sold using markets and cryptocurrency exchanges, generating income in a decentralized manner.
However, there is a huge contrast between P2E technology and traditional PC and console gaming experiences. In this sense, crypto games are two decades behind due to the limitations imposed by blockchain technology.
Yes, most crypto games lack a decent user experience
Although the promise of AAA-level crypto games eventually exists, so far most launches have gravitated toward digital trading card battles and DeFi disguised as role-playing games and collectibles.
Not surprisingly, critics of crypto games focus on a lack of fun, or a similar user experience versus the traditional market, noted analyst Udi Wertheimer.
“Yes, what are you going to do tonight, let’s play the new cipher game together!”
Nobody says that
Because coding games are not fun
Also not available
– udiverse (@udiWertheimer) August 2, 2022
According to Anton Link, CEO of Unitbox Rental and Lease Protocol at NFT:
“Unlike most Web2 titles, fun is not what players who play to earn money aim for. Their main goal is to make a profit and to be the first to gain valuable new experience that they can use effectively as a guild member or as a member of an esports team to monetize their time.”
In terms of adoption, the traditional game industry is outperforming film and television entertainment by a large margin. A recent report from Newzoo indicated that the video game market will reach $200 billion in 2022, an increase of 5.4% year-on-year. In addition, the report states that the gaming sector attracts 3 billion players, which is much higher than the 320 million crypto users worldwide.
Even if Wertheimer’s observations are correct, this means that the demand for crypto games will remain sluggish, as having only 0.5% of this segment equates to 16 million users. Moreover, there is nothing to stop anyone from looking for some form of revenue in P2E and separately enjoying traditional games on consoles, PC and mobile apps.
On expanding the potential P2E user base, Anton Link, CEO of Unitbox Protocol said:
I believe that NFT blockchain gaming and the GameFi sector will be the main drivers of the industry in the next few years — and will also become a vehicle for the mass transition of new users into the crypto industry through new NFT-based DeFi products.
There is a huge difference between collectible NFTs, in-game avatars, armor, weapons, land ships, and spaceships. The bias against P2E gaming is likely to come from the 67% drop in NFT trading volume from May 2022 to July 2022, according to data from DappRadar. Furthermore, Axie Infinity suffered a massive Ronin Bridge hack worth $600 million on March 29.
DeFi-focused games can generate income for many
There is a lot of valid criticism of the crypto gaming industry, and forcing users to buy items or tokens is near the top of this list of complaints. However, one should note that the multiple DeFi applications are as compelling as the games, such as DeFi Kingdoms, Farmers World, and Sunflower Land. In these cases, expecting free compensation without any initial investment would be odd.
Despite the challenges in preparing users and creating sustainable in-game economies with adequate incentives, Link explained that “it will only be a matter of time before institutions start lending against NFTs.”
“Once the institutional lending infrastructure is in place, we expect the demand for NFTs to rise as well, as institutional funds can flow into the country due to the additional benefit that comes from securing NFTs.”
Perhaps, in the near future, players will not have to purchase digital monsters and spaceships before venturing into P2E. Although there are valid criticisms of the crypto gaming industry, a 10-fold increase in the number of active players to 16 million is not far off. More importantly, this growth and the new models that support it do not require the same user experience that traditional games provide that do not require interaction with blockchains.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You should do your research when making a decision.