P2E triggers an upsurge. From the perspectives of token economics, Metaverse, and venture capital, where is the chain game industry heading?
For most of us, generating income while playing games sounds like a utopia. However, due to the play-to-earn movement, this situation is not far from reality.
Since May 2021, blockchain-based games have achieved great success. The number of accounts or wallets connected to blockchain games reached 754,000. Compared with the second quarter, the only active wallet (UAW) related to games increased by 25% and increased by 509% year-on-year, which is impressive. Although the number of UAWs is an indicator on the chain and will not necessarily translate into user 1, there is sufficient evidence to support the growth of demand.
It seems that people are finally beginning to realize the potential behind the combination of games and blockchain technology. Especially with interesting concepts like metaverse gaining popularity in mainstream media. But what exactly is play-to-earn? What is the main driving force behind this latest trend in gaming? And where will the blockchain game industry go?
Blockchain is one of the most disruptive technologies created in the past few decades. It enables individuals to safely conduct transactions between peers without having to repeat transactions with third parties, and at the same time can prove the ownership of related assets. If the use cases are applied properly, this technology has the potential to change any industry. The game is no exception.
Blockchain-based games are sowing the seeds of a new micro-economy. In this case, gamers around the world can create monetary value in their favorite games. Blockchain will transform games that follow the Web 2 method into a decentralized Web 3 type. Here, players have changed from consumers to real owners. They not only determine the future of their game story, but they can also fully control their items in the game, beyond the single game itself. In this process, a new micro-economy is created. How to achieve this goal?
Simply put, by releasing the NFT. NFT is a tokenized representation of a digital asset, which essentially transfers its ownership to the wallet that holds it. Ownership is recorded in an immutable, accessible, distributed and decentralized ledger called a blockchain.
Source of Split Land Trading Card: Split Land
This is the main difference from traditional games. Blockchain game NFT includes virtual land in the game, in-game items and collectibles related to the game. For example, blockchain games like Decentraland or The Sandbox have virtual lands that can be built on top of them, NFTs for battles and other types of activities, and virtual pets or anything else that does not necessarily play any role in the game mechanics. thing.
Provide players with real ownership
The in-game items used to improve the gaming experience generated US$40 billion, accounting for 25% of the global revenue of the traditional gaming industry. Popular games such as “Fortnite”, “DOTA”, “Call of Duty” and Roblox have found a real market for these decorative items. For example, 80% of “Fortnite” players use decorations to some extent, and Roblox’s 42 million daily active players spend an average of US$5.6 per month.
From this perspective, the NFT market value at the end of September is estimated to be 14.2 billion US dollars. In the record-breaking NFT transaction volume in the third quarter of 2021, in-game items accounted for approximately 20%.
In addition, in traditional games, players buy their items without actually owning them. In reality, players only have licenses for digital copies of items, which are regularly stored centrally on the server. If the server fails or disappears, the digital item will be lost forever, and the proof of ownership will also disappear. In contrast to this method, the items in the game represented by the NFT will survive on the blockchain as long as the network is up and running. Similarly, NFT gives players complete control over the in-game items they purchase. This is especially important when monetizing these assets.
Following the same idea, another factor that should be considered is the transferability of assets. Players can not only resell their assets on the market, but also on the secondary market that is not necessarily linked to the native platform. This means that players who are willing to sell in-game assets will have different options. If a game is in the ether Square run on, this person can sell the items on OpenSea, Rarible, as well as the game’s primary market.
All in all, NFT gives the element of ownership of digital assets, so it is transferable. Turn digital purchases into investments while eliminating legacy structures that are still involved in traditional games.
Complete tokenomics framework
Now that the boundary between blockchain and traditional games has been drawn, it is time to focus on one of the most concerned aspects of blockchain games, namely Play-to-Earn. Blockchain-based games include a complete token economics framework that allows players to monetize their game time, which is considered to be earning while playing (P2E).
There are two main ways to make money in blockchain games. One is by earning in-game currency. Like most decentralized applications, some blockchain games host the game’s native cryptocurrency. These game-based cryptocurrencies can play a variety of roles, from granting governance rights, to purchasing and enhancing NFTs in games, and even acting as facilitators of other blockchain functions (such as staking). By spending time playing games, gamers can obtain game-based cryptocurrency, which can then be exchanged for any fiat currency through a centralized exchange, thereby bringing the proceeds into the real world.
Secondly, players can get some profits from the NFT itself by trading NFT on a planned trading platform called the market. Players can obtain an item, enhance it, and then resell it on the market at a higher price.
The impact of the P2E revolution is so great that the latest impetus used by the entire blockchain industry is driven by games. According to DappRadar’s Q3 industry report, the number of UAW connected to game DApps accounts for 49% of the industry’s total.
Therefore, blockchain games have become more and more popular in the past few months. But what detonated the P2E revolution?
From a socioeconomic perspective, playing money-making games is having a positive impact on our society. These types of games essentially provide a democratized source of income for individuals who spend their time playing blockchain games. There is no better example of P2E movement than Axie Infinity.
Axie Infinity’s PvE battle
Axie Infinity is a game developed by Vietnamese studio Sky Mavis, which has become a pioneer in the P2E revolution. Axie found herself in a perfect storm, and the combination of various factors made this game flourish in the emerging economy of the Philippines.
We all know the economic and social impact of the COVID-19 pandemic on our lives, which is even more serious in developing economies. The market opportunity, the first important factor, is already in place.
But the Sky Mavis team took a move to help Axie reach a very high level-creating Ronin. Ronin is an Ethereum sidechain that solves the two main challenges raised by the Ethereum network: high transaction fees and low latency. After moving to Ronin in April 2021, Axie began its journey to the moon.
Axie Infinity has become the NFT series with the largest transaction volume ever. In the Axie market, more than $2.7 billion Axie NFT has been traded. The next NFT series is CryptoPunks, which is an Ethereum collection that has generated $2 billion since its establishment in 2017.
In addition, Axie generates more revenue than the entire blockchain. According to Token Terminal, this P2E DApp generated more than $800 million in revenue in the third quarter. This is more than the entire blockchain such as Bitcoin and Solana, and even surpasses the popular Ethereum NFT market OpenSea.
Axie allows players to earn up to 75 SLP tokens 3 per day by completing daily tasks including mini games and PvP battles. Considering that the average price of SLP is US$0.1, a person who only focuses on playing Axie Infinity will earn about US$2700 a year. This figure will be within the forecast range of the Philippines, Vietnam, Indonesia and other Southeast Asian countries’ GDP per capita in 2021.
Although the current income provided by P2E games is far less than the average salary of League of Legends professional players ([about 300,000 US dollars per year](https://leaguefeed.net/pro-league-players-salary/#:~:text=On average% 2C the LoL salary, making three times this amount.)), but the social impact of these games cannot be ignored. Especially in emerging economies, the financial impact will be magnified. The democratization of game time and income without considering any demographic barriers is a very positive sign for the industry. Since the currencies of such countries have low accessibility, cryptocurrencies can stabilize the inflation factor. But in addition to Axie, there are several other games that can also achieve this.
New games and tokens
Starting from Splinterlands, this is a P2E game hosted on the Hive blockchain. Splinterlands is a trading card game in which players must make strategic adjustments to their NFT cards in PvP (player-to-player) battles to defeat other players. By successfully completing the proposed tasks, players can obtain Dark Energy Crystals (DEC), which is the main currency in the game. In addition, in August, the game launched SplinterShards (SPS), the governance token in the game, which helped the game establish its position in the industry rankings.
In September, Splinterlands attracted more than 245,000 independent active wallets every day, an increase of 3267% compared to the end of June. The surge in usage has resulted in more than 58 million transactions. According to the project, the market value of the game, including all cards and collectibles, has exceeded 200 million U.S. dollars. To learn more about the game, please read this guide.
This year, Alien Worlds in WAX and Upland in EOS also increased their respective player bases in amazing ways. Alien Worlds, a P2E game of space mining and battle, attracts more than 500,000 active wallets every month on average. Another P2E game, Upland, is one of the games with the most players in most of 2021. Players have virtual assets that can replicate real cities such as San Francisco, Brooklyn and Manhattan.
Last week, “Alien World” and “Split Lands” attracted a total of more than 1 million independent active wallets. But it does not stop there. CryptoBlades, Mobox and countless blockchain games have transformed the Binance Smart Chain (BSC) from a network that really relies on DeFi to a blockchain rich in game DApps.
Although the P2E movement is completely changing the game paradigm, it feels like this is just the beginning of something bigger. It aims to blur the boundary between the real world and the new virtual reality, the metaverse.
The meta universe is a truly fascinating concept. Originally conceived by Neal Stephenson in the science fiction novel “Avalanche” and promoted by Ernest Cline’s “Ready Player One”, the meta universe is a personal can A virtual space for creating, trading, playing and socializing. To be fair, it has the potential to change the way we form communities.
Ready Player One Source: Filmstars
Meta universe has become relevant enough that Facebook has reshaped its own brand Meta to make room for centralized virtual spaces as part of its products. But this concept is not new to mainstream media, let alone gaming platforms. In 2019, DJ and producer Marshmello held a live concert in the “Fortress Night” meta universe, which gathered more than 10.7 million live audiences, and even had a positive domino effect on his album, making it Sales increased by 300%.
The allure of the decentralized virtual world is that these types of events have already happened. Decentraland, an important virtual world running on Ethereum, hosted a four-day music festival, with Deadmau5 as the main title.
Deadmau5 Decentraland Source: Twitter
Since the past ten years, for large-scale sandbox games like Minecraft, communities can be built on an endless digital space. World of Warcraft has generated more than $10 billion in revenue in the past 10 years. And the virtual world based on blockchain is not lagging behind.
In the third quarter, the blockchain virtual world accumulated more than 56 million US dollars in transaction volume, of which The Sandbox was in a leading position. The Sandbox has become one of the reference meta-universe games. Similar to Minecraft, players can build experiences for the community, and these experiences can be monetized through the sandbox’s native currency, SAND. So far, this popular game has achieved important partnerships, including well-known brands such as Atari, The Walking Dead, Smurfs, and most recently Snoop Dogg. Snoop Dogg recently contributed $17 million due to the sale of the land in The Sandbox.
Other popular blockchain-based digital world games include Ember Sword (its 12,000 sold packages have generated more than $400 million in revenue), Treeverse (market capitalization of $71.8 million), Blankos Block Party, Somnium Space, CryptoVoxels , My Neighbor Alice, etc. The decentralized meta-universe is becoming a collection of virtual reality ecosystems based on P2E games.
In addition, fashion brands such as Burberry, Gucci and Dolce & Gabbana have turned their attention to the meta universe. The fusion between important brands, celebrities and the decentralized meta-universe will likely become an important monetization funnel at both ends.
All in all, the decentralized virtual world will become a place where people use apes and cats as their avatars, wear more expensive clothes than they wear in reality, and play with friends they have never met in real life. Although most of these games are still in the development stage, they have attracted the attention of large companies including several venture capitalists.
Venture capital companies flocked
Free games are one of the largest industries on the planet. According to Statista, the video game industry generated nearly US$159 billion in revenue in 2020, and this number is expected to exceed 200 billion by 2023. From the perspective of the impressive numbers of traditional industries and the rapid adoption and socio-economic impact of P2E games, important investors have already started their own actions.
In the past few months, news about recognized venture capital investment in blockchain-based games has been around us. In September, Sorare, a P2E fantasy football game-based startup, received US$680 million in Series B financing from SoftBank’s Vision Fund 2.
A few days later, Dapper Labs, the startup behind the popular NFT collection platform NBA Top Shot and the breeding game CryptoKitties, received more than $600 million in investment rounds from Andreessen Horowitz (a16z), GV, Version One Ventures, and most recently Coatue.
With the huge market opportunity, the latest development of the P2E movement has not been ignored. Three weeks ago, a16z invested $150 million in Sky Mavis, the team behind Axie Infinity.
And this list can go on. Animoca Brands, a venture capital organization focusing on digital entertainment, blockchain and gamification, invested an undisclosed amount in the P2E game Star Atlas that will be running on Solana. In addition to the much-hyped Star Atlas, Animoca Brands’ portfolio includes The Sandbox, Revv Racing and Arc8, as well as several other traditional game platforms.
Recognized venture capital is clearly participating in the blockchain game industry. This will definitely lead to the enhancement of current dapps, such as Axie or Sorare, but also pave the way for the next generation of P2E games.
AAA games ready to go
It is undeniable that P2E games are in the spotlight. As mentioned earlier, it has been the main driving force behind the use of the entire blockchain industry. With the rapid growth of the player base, new projects are seeking to expand existing products to new levels.
As mentioned earlier, Animoca Brands announced its investment in Star Atlas. The Star Atlas currently under development will be a AAA-level P2E open world space exploration strategy MMORP based on the Unreal Engine developed by Epic Games. Thanks to its token economics and various game NFTs, Star Atlas aims to build a real galactic economy, including combat, politics, and mining.
Despite the lack of AAA status, other Solana upcoming games worth knowing about include Aurory, another profitable RPG that may become one of Solana’s blue chip games.
Star Atlas trailer
Another P2E game widely anticipated by the community is Illuvium. Illuvium is an open world RPG that will run on the Immutable X blockchain. Illuvium will allow players to capture and breed creatures called Illuvials. Similar to Pokemon in this sense, then the game follows a combat mechanism that may be similar to League of Legends. Illuvium’s graphics, background music, and token economics have caused an uproar in the industry and have been labeled as a AAA game.
Illuvium battle game demo source Illuvium
It should be noted that Immutable X is an Ethereum layer 2 solution that relies on Zero Knowledge (ZK) Rollups as a consensus mechanism. This blockchain architecture allows players to enjoy a gas-free and faster gaming experience. Other related games that will be hosted in Immutable X include Guild of Guardians, a blockchain mobile RPG game with more than 150,000 fans, My Crypto Heroes, and of course Gods Unchained, a trading card game that makes Immutable X’s name focus on.
Finally, it is worth mentioning the startup Gala Games led by Zynga co-founder Eric Schiermeyer. Gala Games aims to build a decentralized ecosystem based on P2E games. Gala’s goal is to enable players to have network nodes, and these nodes will eventually run the entire blockchain. So far, this startup has only launched Town Star, a P2E agricultural game that rewards players with the original effective token of the network GALA and the token TOWN of the game itself.
In addition, Gala will also launch the fantasy RPG game Mirandus, the arena game Spider Tanks, the space epic game Echoes of Empire and the tower defense game Fortified. All these games are in the development stage.
P2E games empower people by enabling players to invest in the ownership and monetization of the time and capital of the game. Changing the social economy of the entire region is not something that can be seen every day. When you understand the role played by blockchain games, the impact will be deeper.
First of all, these decentralized game platforms are related to concepts such as meta universe. The virtual world will change the way we socialize and even change the current monetization paradigm. There is no difference between an individual and a big brand, all in one space. Platforms such as Decentraland, The Sandbox and Somnium Space will also be places where users build NFTs to show their peers. Create a Norland-style Inception type paradigm.
In addition, as we all know, games will gather crowds. In 2016, the Pokemon Go craze gathered thousands of people in one place because of the desperate need to capture the monsters they dream of. E-sports competitions have attracted a large audience level. In 2019, [League of Legends Championship is watched by 100 million people worldwide](https://www.statista.com/chart/16875/super-bowl-viewership-vs-world-cup-final/#:~:text= The 2020 Super Bowl pales, million viewers around the world.), and broadcast in 19 different languages through 30 platforms including ESPN. From this perspective, Super Bowl LV is watched by 130 million people worldwide. With a planet of 2.4 billion gamers and innovative disruptive technologies, P2E games will become a key factor in the large-scale application of blockchain and have a positive impact on our society.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/p2e-triggers-an-upsurge-from-the-perspectives-of-token-economics-metaverse-and-venture-capital-where-is-the-chain-game-industry-heading/
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