Crypto-Gaming Is Exploding Into the Playful Future

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This jump also shows just how popular the intersection of gaming and crypto has become, with crypto-games attracting a growing fanbase largely because they mix one of the world’s favorite pastimes with the opportunity to earn some kind of income. However, industry players speaking to Cryptonews.com affirm that crypto-games offer more than just the opportunity to earn, with the ability to earn a part of the game world and the ability to connect with other people being other major draws.

In the future, most analysts agree that the use of non-fungible tokens (NFTs) and play-to-earn models will continue to be dominant. On the other hand, they warn that crypto-gaming will face a series of regulatory and accessibility hurdles before it can reach its true potential.

It needs to be said that, if they weren’t fun to play, few if any of the biggest crypto-games (e.g. Axie Infinity, the Sandbox Decentraland, My Neighbor Alice, Alien Worlds, Illuvium) would have so quickly attracted a substantial user base.

“If these activities were not fun primarily, the benefits of player-owned economies and true ownership wouldn't be sufficient to appeal and retain users at a massive scale, as we're now witnessing,” said Sebastien Borget, the co-founder and Chief Operating Officer at the Sandbox.

According to him, these are good games at first, that have found the right audience at the right time, and through the perseverance and dedication of the team building these products “there is a market fit.”

Of course, there is something unique about crypto-games, in that they provide players with the opportunity to earn some money as a side-effect of their playing. That said, industry participants say that the relationship here is a little more complicated and nuanced than simply being one about ‘earning money.’

“From a micro point of view […] these games are designed to be a reflexive loop -- it significantly amplifies the effects of narrative shift and expectations of players and participants. For instance, because of AXS’s increasing price and perfect narrative of allowing low-income players to adventure and battle to earn real income; it drove more demand to Axies breeding which leads to taking more AXS and SLP [Smooth Love Potion tokens that can be earned as rewards by Axie Infinity players] out of supply while increasing demand for AXS (which is needed for new players to enter),” said Joe Zhou Founder of the Dawn Protocol.

Indeed, many commentators argue that something deeper is going on than simply giving people the opportunity to make money while gaming. In many cases, they suggest that the success of crypto-gaming resides with how they offer gamers the chance to participate in and help develop a community.

“Being able to earn while playing a game is a big deal but the result of that is that people interact, trade, gift, tip and communicate much more with each other. Basically what is happening is connection on many levels, which is a core human need,” said David Elvion, a member of the Zurich-based Dacoco, which oversees the development of Alien Worlds.

While other commentators agree that the appeal of crypto-gaming operates at various levels, some suggest that there are macroeconomic reasons for the recent rise in decentralized applications (dapps) such as Axie Infinity and others.

“From a macro point of view, many crypto games' success, especially Axie, in this cycle had greatly benefited from the cyclical narrative shift when the market cools off and an increasing number of participants were seeking returns outside the DeFi/yield farming. Naturally, they look to allocate their cash into riskier assets,” noted Joe Zhou.

Despite this, crypto-games offer a significant refinement on more traditional gaming models, one which accounts for their unique appeal. In particular, Sebastien Borget notes that blockchain technology has enabled user-generated content (UGC) -- which already existed in games such as World of Warcraft -- to enter the realm of true ownership.

“Blockchain technologies created new opportunities for users, and in 2017/18 -- when NFT gaming was in its earliest form -- pioneers studios such as Axie Infinity or The Sandbox saw the potential for creating a new type of games or platform where the economy is truly owned by its players, meaning that all the content, the economy and even the governance of the game or virtual world could be in the hands of the players, creators, and users who contribute to these games,” he told Cryptonews.com.

According to him, this has led to a new generation of games such as My Neighbor Alice and Alien Worlds, which also improved on the core idea and expanded into DeFi, staking, and new gameplays.

Going forward, most participants and observers affirm that NFTs will remain the key element of crypto-gaming for some time to come.

“Play-to-earn will establish itself as a permanent new genre in the gaming industry and I believe other new genres only possible through NFT technology are yet to emerge,” said David Hanson.

David Elvion also argues that NFTs will continue being the essence of crypto-gaming, if only because pretty much any game item, area, or character can be programmed as a non-fungible token.

“NFTs are the ‘things’ being used in games, like tangible items in the real world, that can be used to identify and utilize proof-of-ownership for various functions in the game. I don't see this trend going away but rather expanding to bridge virtual and real items much more in the near future,” he said.

But while NFTs have certainly been a key ingredient in the success of crypto-based games, some commenters suggest it’s too early to say what will be the dominant features or trends related to crypto-gaming in the more distant future.

“We are in a still-young industry and it's hard to predict what works now will ultimately still work over a long term,” stressed Sebastien Borget. “While NFT-based games offer incredible new opportunities for players, game developers, and brands, every new paradigm shift sees friction and challenges as it scales up.”

Speaking of challenges, most industry figures are humble enough to admit that crypto-based games will need to surmount various obstacles before gaining widespread adoption.

“The only blindspot I would say a lot of participants aren't seeing is the potential anti-money-laundering risk once you can allow users to trade these NFT items against crypto -- especially stablecoins -- otherwise I don't foresee any regulations on the play to earn itself,” said Joe Zhou.

However, while developers agree that the industry needs to be mindful of regulatory obstacles, most suggest that the biggest challenges are actually internal.

“Accessibility is the main blocker for mainstream adoption, as well development tools and access to easy-to-use clients; similar to what Ultra's infrastructure build will allow game developers to make,” said David Hanson.

Conversely, David Elvion suggests that the opportunity to earn via gaming may invite certain abuses among players, and that the industry will need to work hard to preempt such abuses.

“The biggest challenge I see in the crypto-sector is proof-of-personhood, making sure that a play-to-earn game is not played by players using automations to gain unfair advantages,” he explained.

Such hurdles aside, it seems that that crypto-gaming might not face severe difficulties in its near future. And given that the ability to earn, trade, and profit from in-game objects really does seem like a natural, logical evolution in gaming, it really does seem like one sector of the crypto industry that’s here to stay.
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