Blockchain play-to-earn games have failed to deliver as expected, causing investors to incur massive losses. The GameFi market, a cryptocurrency sector that is about four years old, has not been productive for investors. The most notable example is Axie Infinity (AXS), which has declined by more than 92% year-to-date, while bitcoin is down about 55%. The use of cool graphics and buzz does not last long if there are no active users to plug into the game and generate profits. Even simple bitcoin earning games are affected.
According to Oleg Fomenko, co-founder of Sweat Economy, the original mass-market play-to-earn promise of Axie Infinity and StepN seems like nothing but a Ponzi scheme. He believes that the gaming and blockchain sector needs a drastic rethink. Fomenko’s opinion is that niches such as gambling and casino-style games benefit most from the convergence of gaming and blockchain. He added that the development of the next wave of breakthrough projects would take more time and money than most people anticipate, and he is bearish on play-to-earn.
Investors must recognize that the entire blockchain world is new and high-risk. Most of these companies are less than five years old, and it’s easier to lose money than to make money, especially if one gets the timing wrong. Blockchain project failure is inevitable, and it’s going to happen. Axie Infinity might still have a chance, even though investors are bailing out.
Matthew Howells-Barby, CMO at Decentral Games in London, a place where you can play poker in the metaverse, stated that with less focus on purely earning rewards, blockchain-based game studios are concentrating on building genuinely fun and engaging gameplay experiences. He added that a lot of the hype had settled down, but the games that still have active user bases have stayed alive for a reason.
The gaming industry is gradually shifting its focus from play-to-earn to plan-and-earn. According to Jack Griffin, vice president of studios at Smashverse, a blockchain fighting game full of bodybuilder-looking dudes and apes in boxing gloves, play-to-earn has failed since earning was the main objective, and the actual gameplay became secondary, and in some cases, almost nonexistent. Play-and-earn is similar to traditional internet gaming’s reward mechanisms. Players unlock rewards that enrich their gaming experience, which makes them want to get to the next level, just like an old-school action-adventure game on Xbox.
Game developers can reward players with rare NFT “skins” or cosmetic items that deepen the player’s connection to their in-game characters, increasing the stickiness and retention of players. Timothy Biggar, head of marketing at UniX Gaming, a blockchain gaming guild that provides Web3 gaming solutions in Dubai, said that many of their web3 community, including 200,000 on Discord, are excited about play-and-earn games. Unix has switched gears to focus on play-and-earn since the play-to-earn strategy wasn’t working as planned.
The problem with play-to-earn is that most gamers do not care about earning potential; they just want to play the game. Therefore, it’s up to game developers to build and market their games to be as affordable and accessible as possible. Selling a limited number of expensive items and building speculative trading into a game is the wrong approach. This strategy might have turned investors off from Axie Infinity, which was once the rockstar of the GameFi investors’ universe.
In conclusion, while blockchain gaming is a new and exciting gaming trend, it’s high-risk, and investors must tread carefully. The shift from play-to-earn to plan-and-earn is gaining momentum as blockchain game studios focus on building genuinely fun and engaging gameplay experiences.