The limited release of game version numbers in the past two years has caused a lot of impact on the domestic game industry. Many small and medium-sized game companies have been forced to choose to transform. The choices before practitioners are: continue to apply for and wait for the version number, or find another way. Enter the game and go to sea.
GameFi has become a choice for some practitioners to go overseas.
What is GameFi?
GameFi, the full name of Game Finance, is gamified finance.
According to foreign media reports, the number of GameFi projects continues to increase, with 1,551 games worldwide as of June 2022.
The most widely used Ethereum blockchain today also started with games. It is said that Vitalik Buterin, the founder of Ethereum, once liked Blizzard’s “World of Warcraft” very much. Coincidentally, the editor was also a Warcraft player, but Vitalik Buterin’s favorite character at that time, “The Sorcerer”, was officially deleted. The important skill “Life” Siphon”.
To this end, Vitalik also went to Blizzard’s official forum to protest, but never got an official answer. Therefore, he realized the shortcomings of the “centralization” of traditional online games, that is, because the owner of the game is Blizzard, so they can modify the game content at will without asking the players’ opinions.
So Vitalik resolutely gave up World of Warcraft and started his way to found Ethereum.
“World of Warcraft”
Ethereum founder Vitalik Buterin
In fact, as early as 2017, there was a similar concept of GameFi, which was called 1.0. But at that time, there was no token economic model, there were only simple and simple game screens, and the gameplay was weak, but NFT assets began to appear.
2.0 appeared in 2019-2020, and GameFi was first proposed by MixMarvel CSO Mary Ma in 2019. At this time, there were more token economic models, the game screen and gameplay began to be deeply designed, and NFT assets occupied an important element.
In February 2021, GameFi began to explode, which is the so-called 3.0 stage. The token economic model integrates DeFi (decentralized finance) to maximize capital efficiency for users. At this time, the playability of the game became stronger, and the screen began to be close to mainstream games. At the same time, Play-to-Earn and game guilds appeared.
In 2021, GameFi will evolve rapidly. From the initial application of the configuration of DeFi projects, to the main DeFi project’s profit and mild integration of gameplay, it finally evolved into a heavy-quality boutique game design.
At this point, GameFi already has the quality and completion of AAA games.
Is playing and earning without legal protection a Ponzi scheme?
“Earning while playing” is the biggest difference between GameFi and so-called traditional games.
Tokens in traditional games can only be used in the same game and cannot be exchanged for cash; in the GameFi game world, game tokens earned by players can be circulated in the market like ordinary cryptocurrencies and can be exchanged for cash or other currency. To make money from playing games, players can continue to participate and attract more players to join. The business model is very important.
After the Metaverse concept came out last year, GameFi games quickly exploded, and P2E (Play to Earn) games such as Axie Infinity, Decentraland, and StepN became the leaders. However, this mode of earning while playing has also been controversial for various reasons.
Decentraland is a decentralized virtual reality platform powered by the Ethereum blockchain, where users can socialize, play, trade, and more. Decentraland is also a virtual city with a lot of virtual land. Users can create any building on the virtual land and create a virtual space of their own, such as shops, schools, office buildings, art galleries, etc.
For Decentraland, it is no longer news that a piece of virtual land sells for millions or tens of millions of dollars. What attracts more attention is the entry of celebrities and famous brands from all walks of life: Sotheby’s auction house opens a virtual gallery to exhibit its new Bond Street in London The digital collection of the gallery; Millennium Hotels and Resorts launched the M Social Metaverse virtual hotel; European fashion brand Mango issued 5 NFTs, and opened a virtual fashion museum in Decentraland.
Sotheby’s opens virtual gallery in Decentraland
Although it has certain commercial value attributes, ordinary people still need to be cautious when investing in virtual land.
Some people believe that the so-called “real estate” in the Metaverse can only be regarded as a virtual digital product. Since there is no real asset and does not conform to the concept of digital assets, it is currently difficult to be protected by relevant laws.
STEPN is one of the hottest GameFi projects in 2022. It focuses on the concept of “Move to Earn”. The beta version will be officially launched in December 2021. On January 20, 2022, STEPN has completed a seed of $5 million. The round was co-led by Sequoia Capital India and Folius Ventures.
With capital support and users’ enthusiasm, STEPN has become one of the most popular currency projects in the first half of the year.
The fundamental difference from traditional games is that this game uses a dual-token economic model to derive a new game mode called “Play to Earn”. There are two types of tokens SLP and AXS in Axie Infinity. In simple terms, users exercise or operate in the game to obtain various token rewards. At the same time, the user’s own behavior will also consume various tokens, forming a two-way generation and consumption. The economic cycle, so that the game can run all the time, and users can also get rich economic returns from it.
But this kind of token economy that attracts users purely by economic model has also been questioned as a kind of “Ponzi scheme”.
In a classic Ponzi scheme, the perpetrators usually promise victims high returns in the name of investment, but in fact there is no value-added project. The investment funds of the latecomers are purely used to pay the interests of the deceived before.
GameFi can’t get a foothold in China
my country is one of the largest game markets in the world, and the ban on GameFi is also the most severe.
In fact, Tencent Q coin as early as 2000 was the earliest virtual currency in my country. At that time, Q coins could be exchanged for cash. In 2007, Q coins were banned from being pegged to RMB, and any game elements that could be converted into RMB are strictly prohibited. At that time, many online chess and card games were also closed because the tokens could be exchanged for RMB.
Nai Xue, who was on the hot search a few days ago, issued “Nai Xue Coins” and virtual stocks, which can be linked to real stock prices and can be leveraged. Many lawyers commented that they were “suspected of breaking the law”, and industry insiders commented that “ignoring the red line of supervision and fighting wildly.” Edge ball”, the user commented “I watch the punishment”, it has only been online for two weeks, so it was convenient to hurriedly call to stop last Thursday.
I don’t know if Nai Xue has thought about why other domestic brands don’t issue coins and virtual stocks. Is it something that others can’t think of?
The People’s Bank of China completely banned cryptocurrency transactions in 2017, which completely eliminated the possibility of GameFi in China.
In my country, gaming is a licensing activity, and developers who want to distribute games domestically must obtain approval from regulators such as the Ministry of Industry and Information Technology. However, GameFi cannot gain a foothold in China due to its involvement in virtual currency businesses, such as encrypted wallets, exchanges and token trading. In addition, China is also cracking down on the hype of digital collectibles.
Overseas GameFi is becoming more and more popular, and domestic game companies are going overseas
On June 17, Immutable, an Australian chain game developer, announced the launch of a $500 million venture capital fund to accelerate the advancement of GameFi games. According to public information, Immutable completed a $200 million Series C financing earlier this year, with Tencent as the investor.
Industry insiders pointed out that several major game companies in China are planning or considering going overseas to do GameFi.
“Going overseas has always been the trend of games. The issuance of domestic game version numbers is definitely shrinking gradually.” An overseas game person said.
In addition to the domestic game industry going overseas, overseas traditional game companies such as Ubisoft and EA, as well as well-known institutions such as a16z and Samsung Ventures, have also entered the GameFi field, and a large amount of capital has poured in, further contributing to a new round of GameFi development boom.
This may be a positive sign for the industry in terms of driving innovation.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/domestic-game-companies-that-cant-make-gamefi-go-overseas-one-after-another/
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