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A whole new gaming phenomenon swept across Southeast Asia during the summer of 2021. In the Philippines, where the market was ripe for the play-to-earn NFT game Axie Infinity, its stratospheric ascent that year was especially visible.
There are a lot of tech-savvy people living in the Philippines, and the country’s online gaming business is expected to reach US$1.52 billion by 2025.
One of the most visible examples of the GameFi trend, the success of Axie Infinity in the country demonstrates how well the combination of real-world earning possibilities and a casual gaming setting can pay off.
More than 2 billion (about US$36.9 million) has been sent back to the Philippines by Axie Infinity players from outside.
However, a year later, after user confidence was damaged by Axie Infinity’s US$600 million breach, larger issues about the promise of play-to-earn games were raised in light of the game’s entrenched power structures and long-term economic sustainability (P2E).
The popularity of Axie Infinity has plummeted, with the number of active users falling at less than 750,000 from a high of more than 2.7 million in January of this year.
Economic Imbalance
The marketing of the game experience is the backbone of the P2E business model. People who have worked in the gaming business for a while know that thriving communities both online and off may lead to significant financial gains.
As long as players appreciate their worth, there will always be a market for commercialized souvenirs, avatars, and in-game experiences.
This raises the question, “How many individuals are here just to sell in the hopes of earning a profit, and how many are here to acquire in-game assets and play?”
The market is dominated by other vendors who adhere to the greater-fool notion when the former dynamic predominates. Critics have even said that Axie Infinity has taken advantage of the notion of financial empowerment in neglected nations to sell more copies of the game.
After considering inflationary NFT pricing, cryptocurrency price swings, and transaction fees, entering the game with the expectation of a return becomes exceedingly difficult.
Considering the typical daily minimum salary in the Philippines is around US$10, the average cost of a single Axie was around US$37 as of March 2022, meaning that a user might spend upwards of US$110 establishing a beginning squad of Axies.
Moreover, studies have revealed that many academics, who are new players who rent in-game assets from people or gaming guilds as part of a profit-sharing scheme, earn less than the Philippine daily minimum wage.
Looking Beyond the Obvious Advantages
The lesson learnt from Axie Infinity is that money is important, but it can’t be the only motivation. Considering this as one of the first milestones on the long road ahead for GameFi, it becomes abundantly evident that the gaming industry as a whole has to return to its historical origins.
Axie Infinity is aware of this and is progressively implementing measures to encourage a change in mind-set towards play-and-earn, which will help equalize the power dynamic between buyers and sellers in the ecosystem.
This year saw the announcement of Axie Infinity: Origin (Battles v3), which included the addition of new game elements including the ability to employ runes and charms to enhance the abilities of one’s Axies.
To make one of these, players would need to invest both SLP and Moon Shard, the game’s second off-chain currency.
These things are purged and replaced at the end of each season, making it necessary for players to hold onto and spend the in-game cash in order to maintain a competitive edge for their teams. The question of whether or not this will actually influence user behavior is open to discussion.
Interestingly, a similar pattern was observed in the Web2 environment for fantasy sports. High-earners in daily fantasy sports, for example, have the resources to “game” the system by planning out their movements on spreadsheets and entering numerous times in each contest or tournament.
Since almost 80% of participants are destined to incur financial losses, the playing field is anything but a fair playground.
While daily fantasy sports and sports betting have similarities, many who participate in season-long fantasy leagues do so more out of a deepening passion for a particular sport and a desire to strengthen bonds with their social circle than for financial gain.
The key to changing the dynamic away from P2E is finding and exploiting the sweet spot that allows players to tap into their passion for the game and the community surrounding it.
Given the similarities, there has been a quick expansion of activities at the interface of sport and crypto, with teams and leagues from the sporting world becoming involved in an effort to increase fan participation
Deloitte predicts that NFTs in sports would produce over US$2 billion in transactions this year, which is more than quadruple the sum projected for 2021.
Fantasy sports, however, may offer a clue as to how Web 3.0 might truly allow a fairer gaming experience while avoiding the difficulties that P2E has seen over the last year by moving beyond the collectibles model and into utility and gamification.
Switching Things Up
By fusing the gaming, cryptocurrency, and sports industries, a step towards a new direction is required which will offer a deeper dive into the core values of the game industry as a whole. To win over these players, players should not be misled by the latest game or gaming system.
This demonstrates the importance of designing game systems that foster emotional connections between players, their communities, and their environments, leading to longer sessions of play and stronger brand loyalty.
Sports fans have a strong emotional investment in the outcomes of their favorite teams’ seasons because of the sports entertainment and memorabilia industries that have flourished around fantasy sports.
Here, sports fans’ emotional investment in their favorite teams gives them a new way to immerse themselves in the action, as they take on the role of general managers, coaches, and players in the game.
The value of sports leagues and teams has skyrocketed as a result of fantasy sports, which have transformed sports fandom from a singular obsession with one team to an all-encompassing fervor in which followers take an active interest in every contest.
To address the shortcomings of P2E, a new subset of NFT games is testing out a business model that may be called P2O (play-to-own).
With features like free-to-play modes and fungible tokens, these games aim to address the user retention problems plaguing Axie Infinity and other pay-to-win titles.
This guarantees that new players are joining for the correct reasons, whether that be the games itself or as an extension of the sports fan experience, and allows them to take advantage of Web3’s accessibility and equal opportunity.
The P2O system, when applied to the fantasy sports industry, offers a level playing field in which all participants have an equal chance to purchase an athlete token and become true owners of the teams they construct. New forms of ownership emerge less from monetary rewards than from the game mastery itself.
The Asia-Pacific area is home to approximately 1.5 billion gamers, or more than half of the world’s total gaming population, thus it goes without saying that this is a substantial user base.
While P2E introduced the concept of player ownership of in-game assets, the gaming industry can take it a step further by giving players control over the entirety of their gaming experience.
Beyond its monetary worth as something to be exchanged and sold, in-game assets allow players to be a part of a community that embraces the fan culture of a sport, which is something P2O emphasizes.
Sports are the gateway to Web3 for potential P2O players all over the world, whether it’s basketball, football, cricket, or anything else with a ball.
With Unity Follows a Thriving P2E Industry
The blockchain gaming ecosystem has gone a long way since the days of CryptoKitties, and P2E was an important initial step in this progression.
Despite the temptation to rely on potential profits, Axie Infinity’s difficulty in making the switch to a free-to-play model demonstrates the importance of nailing the economics from the start.
After all, the Web3 movement is propelled by the involvement of many people, and there’s no better way to advocate for it than via genuine possession.
Taking command of the gaming experience as a group is unquestionably more powerful than continuing to be dependent on the profit and gameplay dynamics established by a select few.
Are There Any Better Alternatives?
Yes, there are. If you’re looking for the two best currencies with explosive growth potential in 2022, these are your best bets:
Tamadoge
Aiming to be the most popular Memecoin, Tamadoge is a new cryptocurrency. The goal of the project is to merge the world of the Metaverse with that of play-for-pay video games.
Metaverse features, genuine token usage, a NFT store, and Play-to-Earn functions are all brought together in Tamadoge. The Play-to-Earn system in Tamaverse is how players may earn TAMA tokens by just engaging with the game.
Each time a person plays a game or engages in a combat, they can earn Dogepoints and rise in the monthly worldwide rankings. Only the top scorers at the conclusion of each month will be awarded the TAMA token prizes.
The total value of the prize pool is proportional to the monthly trading volume of TAMA tokens. The TAMA tokens utilized by the development team are distributed to the prize pool at a rate of 65%. A pooled sum like this is awarded to the best players.
Battle Infinity
You can play Battle Infinity with people all around the world, versus anybody you know or complete strangers. Battle Infinity hopes to capitalize on the current craze for crypto games.
Even though it’s still in its infancy, Battle Infinity has quickly become the dominant blockchain gaming initiative. The website intends to design and host a number of games where users may compete for cryptocurrency prizes.
The Metaverse is another target of Battle Infinity’s, as this area is forecast to expand at a rapid rate in the near future. Investors will be able to take part in live-action video games once Battle Infinity unveils its Metaverse environment.
The crew behind Battle Infinity is similarly formidable and dedicated to the project’s goals. Battle Infinity’s CEO and co-founder, Jagjeet Jena, hails from India, which is home to a sizeable population that enjoys participating in fantasy legacy sports.
Suresh Joshi, the game’s other co-founder, has extensive experience in the video gaming industry.
As a game, Battle Infinity is also interested in expanding its user base. The group has announced a $3000 prize; open to the highest scores who entered before the deadline.
The Battle Infinity whitepaper outlines the project’s plans in depth, with a focus on its decentralized finance (DeFi) component.
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