parts in this article
Forex in this article
Crypto games are not a clearly defined concept
Players can generate income through cryptocurrencies or NFTs
Also opportunities for investors
According to a study by DappRadar and the Blockchain Game Alliance, blockchain gaming has seen a 2,000 percent growth in 2021. But blockchain gaming – like crypto gaming – is not a clearly defined concept as it encompasses several crypto activities taking place in the gaming sector.
Earn cryptocurrencies through games
One of the ways to tie both worlds together is by being able to earn cryptocurrencies by playing video games. So-called Play 2 Earn games have enabled players to make money with their virtual successes for some time now. In the rarest of cases, however, players are paid in cryptocurrencies – at least not without first making a similar investment in digital tokens themselves.
One of the most famous games in this segment is Axie Infinity. The game has a similar game concept as Pokmon & Co. By acquiring virtual creatures, so-called Axies, that can be raised and bred, players can acquire, raise and breed virtual creatures (Axies) and use them in battles against other players. You can then make money by, for example, selling rare Axies.
Since the number of mating options per Axie is limited and additional items are required in the game to breed, the income of an Axie Infinity player also depends on luck and additional personal investment. There is also the principle of supply and demand. How many other players are willing to put on the table for a virtual creature depends on various factors that can not be priced reliably. The price fluctuations of the in-game currencies AXS and SLP also make it difficult for players to reliably generate income. In principle, however, the system works: If you sell a rare Axie for more money than you have invested yourself, you can exchange the income for other cryptocurrencies or Fiat money and thus generate income.
Make money with NFT games
Non-fungible tokens, NFTs, have also recently found their way into the gaming industry. NFTs ensure owners ownership of specific virtual objects by serving as certificates of authenticity and non-interchangeability of the item. This opens up extensive opportunities in the game segment that many game developers and publishers are already actively exploiting.
Players who have special items in the game receive proof of ownership on the blockchain and can collect, exchange or resell the item in this way. This concept is already being used in games that have reached out to Metaverse, with well-known pioneers including Decentraland and Sandbox, and Axie Infinity also belongs in this category. In this video game, players can purchase virtual properties and design them virtually to their liking. In addition, some avatars can be equipped with special items. Here, too, the initial investment of equity is necessary because the NFTs usually have to buy players before they can be resold.
Major game developers like Electronic Arts (EA) and Ubisoft have also announced that they want to develop NFT games. In late 2021, EA chief Andrew Wilson even said that NFTs were “an important part of our future”. However, game developers also benefit financially from the introduction of NFTs, as a certain percentage of all sales should flow in their pockets. Players who are nevertheless considered to be a generous target audience would not only benefit from the opportunity to trade in the items they have acquired, but could also benefit from the concept through the fact that the design of the ingame environment, the avatar mv. be unique Gaming NFTs to be persuaded.
Criticism of NFTs does not diminish
But by no means do all experts and representatives of the gaming community view the latest developments in the gaming sector positively. Concerns about the environmental aspect are raised again and again. As NFTs are based on cryptocurrencies, the issue of the high power consumption associated with such projects is particularly relevant. Cryptotransactions leave a clear carbon footprint, and the extra energy consumption goes against the desire for climate neutrality.
Another point of criticism is the valuation of NFTs. As these fluctuate greatly depending on supply and demand, but do not themselves have any inherent value, their value in contrast to, for example, gold is often based on subjective assessment and a narrative-based hype. A sharp drop in price can result in disproportionate losses for the NFT owner.
Especially in the video game segment, the criticism also comes from within the company: Many gamers accuse game developers and publishers of letting the creative aspect of the development of a video game come in the back seat, while putting the monetary aspects in the foreground. Especially if players gain advantages in the game through NFTs, or if the concept assumes a casino-like structure, the implementation of NFTs in video games can also deter several players.
Nevertheless, observers are undisputed that crypto, NFTs and blockchain will have an impact on the video game market. Krypto’s entry into the gaming market has potential and generates new sources of revenue for game developers and gamers. But even those who do not play themselves can benefit from the development that is driving the gaming industry towards a decentralized future.
Several metaverse currencies can also be traded on crypto exchanges apart from the associated video games. In addition, investors can also buy shares of listed video game manufacturers to participate in the cryptocurrency trend. In addition to Ubisoft and Take-Two Interactive, Electronic Arts and Activision Blizzard in particular are worth seeing here, although not all game groups have yet announced comprehensive crypto initiatives. Activision was recently acquired by technology giant Microsoft, which underscores the US company’s ambitions in this area and also draws investors’ attention to the shares of the Windows manufacturer.
The Facebook parent company, recently renamed Meta, also has plans in the crypto sector and is planning a comprehensive virtual reality world. With Facebook, WhatsApp and Instagram, where the testing of NFTs was announced, the company has strong sales channels and a large potential customer group in the beginning.
Gaming ETFs are ideal for those who do not want to take the risk of making a single investment or buying a Metaverse currency. The investment can be spread here, which minimizes the risk. In addition, participation in the gaming market is also possible here with little money.
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claim for recourse.
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