- Some of the most tuned-in investors, the so-called “smart money” are betting that it will soon be the “GameFi Spring,” with Galaxy Interactive, Republic Crypto and Alameda Research launching a consortium that will invest in blockchain-focused gaming studios and developers.
- According to DappRadar, there are already over 1,450 active blockchain-based game apps, with varying degrees of success and following.
From the “Crypto Winter” to the “DeFi Summer,” to everything in cryptocurrencies, there is a season.
And now, some of the most tuned-in investors, the so-called “smart money” are betting that it will soon be the “GameFi Spring,” with Galaxy Interactive, Republic Crypto and Alameda Research launching a consortium that will invest in blockchain-focused gaming studios and developers.
Dubbed NG+, the consortium will seek to fund experienced, traditional, video game developers and studios, helping them with token economics and liquidity as they build out blockchain-based games.
In return, NG+ will receive minority stakes in the tokens of such games.
Last year, the blockchain gaming industry rose to prominence on the back of games such as Axie Infinity, that lets users earn tokens and which provided a viable play-to-earn model for millions of people in emerging markets whose incomes had suffered because of the pandemic.
NG+ is hardly the only juggernaut muscling in on blockchain gaming.
Last year, Solana Ventures, a spinoff of the Solana blockchain, cryptocurrency exchange FTX and venture capital firm Lightspeed Venture Partners, created a US$100 million gaming fund.
Meme stock GameStop (+3.52%) said it was in talks with partners to create funds to support gaming startups and nonfungible token developers.
For investors, pushing into GameFi makes sense especially since it’s less likely to raise the hackles of regulators, which are scrutinizing other applications like DeFi more closely.
DeFi allows a variety of financial services to be accessed in virtual anonymity, raising difficult AML and KYC issues which have been a serious concern for regulators.
GameFi on the other hand looks far more innocuous and is less likely to be a priority issue for regulators having to deal with other pressing areas of cryptocurrencies, especially insofar as they can be used to evade sanctions.
According to DappRadar, there are already over 1,450 active blockchain-based game apps, with varying degrees of success and following.
And while many large traditional gaming companies have stayed on the sidelines, some are throwing their hat in the ring already, including Square Enix, creator of the famed Final Fantasy series, while giants EA Sports and Epic Games have both expressed an interest in the technology.
Legacy gaming companies with rich intellectual property stores they can dive into have proved to be more cautious, as their existing business models are already lucrative.
In-game purchases make up a significant amount of revenue for many video game developers, but games do not typically allow the credits purchased on one game to be swapped to those of another publisher or title.
For instance, Robux, which are the in-game currency for Roblox (+7.06%), can’t be spent on platforms such as Fortnite, and if a gamer loses interest in a game, that pre-purchased in-game currency is lost forever.
Blockchain gaming differs in that developers are actively working to ensure the digital properties players purchase remain theirs forever, via NFTs or non-fungible tokens, while some blockchains are dedicated to interoperability that would allow digital assets from one game to be spent and used on other blockchain games.
Blockchain technology could also be used to secure player accounts, banning hackers through their blockchain addresses and discouraging the anti-competitive behavior that has been a bugbear of millions of gamers globally.
The timing may be perfect as well, as video gaming ha become a growing pastime for billions of people globally who prior to pandemic lockdowns, would otherwise never have taken to gaming.
Video-game spending got a boost during the pandemic, as many consumers stayed home instead of going out for entertainment and those numbers have remained high even after lockdowns have been lifted.
In the U.S. alone, spending on video game subscription services excluding mobile, rose 14% last year, as restrictions were being lifted, according to researcher NPD and the prospect of play-to-earn could drive that number even higher.
