Entertainment Monetization: How GameFi changes the gaming paradigm

In 2021, the GameFi sector became one of the main drivers of growth in the cryptocurrency market. 1.4 million wallets were connected to decentralized applications from this sphere, the volume of bidding NFT intra -game exceeded $ 4.5 billion, and the venture investors invested more than $ 4 billion in the segment.

GameFi changes the paradigm of the industry: the Play-to-Earn business model (P2E) allows you to receive financial benefits not only to developers, but also to gamers with the creators of the content. Some users consider this as an possibility of additional earnings, others see a full-time alternative.

  • Gamers have long been earned due to intra -game activity. However, P2E projects are excluded from the chain of monetization of intermediaries in the form of streaming services, third-party trading platforms and e-sports organizations.
  • Blockchain games can bring income, but the amount of earnings depends on the market conditions, user investments, developers and a number of other factors.
  • The entry threshold to GameFi is quite high, so the guild is gaining popularity that sponsor participants in exchange for the percentage of earnings.
  • P2e companies are in search of a sustainable economic model. This is a young direction, and existing projects have problems in the context of tokenomics.

Hamification of income

Gamers have long learned to monetize intra -game activities, and very successfully. One of the obvious methods is striming. Twitch data leakage in October 2021 showed that popular streamers earn hundreds of thousands of dollars a month.

Here’s A More Comprehensive List of Leaked Twitch Payouts (I Will Keep Updating Thisad as More Things Come Out). Pic.Twitter.COM/15JITVP6L4

– KnowsMething

Among other options are the sale of skins (intra -game items) on third -party sites, trading accounts and their boosting. You should also not write off the accounts of e -sports – the size of this market exceeded $ 1 billion.

However, some of these practices, for example, are the sale of accounts, publishers of video games consider illegal, and the chance of getting on the scenes or becoming a popular streamer among ordinary players is low.

The P2E model uses blockchain to grant gamers the right to undivided ownership of digital items. Users do not need “crutches” to monetize their activities. All that needs to be done is to play and generate the value, which can then be realized at your discretion.

Examples of projects like Axie Infinity showed that when playing you can even make money at home. However, the size of this income varies greatly depending on the tokenomics of a particular game, the actions of the users themselves and the state of the market.

“An Axie Infinity Player from the Philippines Boun Two Houses with His Earnings from the Popular Crypto-Powered Play-to-Earnings Game.""

Congrats John! So amazing to see the impact Axie is having on people 🙌🔥 https: // t.CO/L7ZSWEQLYU

– Axie Infinity🦇🔊 (@Axieinfinity) July 29, 2021

Is it possible to earn in p2e games?

Short answer – yes. But the exact income is difficult to calculate is quite difficult.

Earnings strongly depends on the general market picture, efficiency and good luck of the player, as well as the time that he is ready to devote the process. Income is also affected by the awards and restrictions established by the developers.

For example, in Axie Infinity, the player’s actions are limited by “energy” -a resource that is consumed for each PVP -or PVE -bit and is completely restored at the beginning of the new day. The amount of energy depends on the size of the collection of creatures.

Similar restrictions in one form or another exist in most P2E-IGR. For example, in Splinterlands such a barrier is the volume of daily pool pools DEC.

Gamers earn cryptocurrency Smooth Love Potion (SLP) and Axie Infinity Shads (AXS) control tokens. They can get:

  • ~ 2250 SLP per month for performing daily quests;
  • up to 39,000 SLP per month for battles on PVP-Arena (on high ratings, subject to 100% of victories).

At the current CLP course (~ $ 0.01), a successful gamer can earn up to $ 412 excluding profit from AXS Staking vs. mining: stake and NFT sales.

However, the described situation is an example of an "perfect storm". To receive the specified income, the user needs to win absolutely all the battles for a month, which for obvious reasons is almost impossible.

It is significant that in May 2021 the player could earn over $ 650 in a month only on the performance of daily quests. In January 2022, this activity will bring a little more than $ 22, since the price of SLP decreased by 96%.

There are awards awards for getting into the table of the arena leaders. The size of the prize fund is set by developers – in the latter, season 19, they allocated 3000 AXS, in season 18 – 5000 AXS.

In season 19, a player who took first place in the ranking received 135 AXS (~ $ 7060 at the current rate). However, the developers themselves determine the duration of the season, and taking prizes is extremely difficult.

Another source of income in Axie Infinity is Axie trading (Axie) – combat beings that make up the player’s team – land plots and cosmetic objects. All of them are presented in NFT format.

Players can breed Aksi, consuming SLP and AXS. So that such activities could not be “put on stream”, the developers introduce a restriction – the creature can convey their “genes” only seven times, and each new iteration is more expensive than the previous. Obtained as a result of Aksy can be left or put on marketplace.

Earnings in P2E projects also directly depends on the investment of gamers. Rare combat creatures in Axie Infinity or ships and high -level equipment in Star Atlas increase the owner’s income, but cost a lot of money. This increases the entry threshold for neophytes.

One of the possible options for beginner players is to join the guild – an organization that sponsor the activities of participants in exchange for part of their earnings.

There is safety in numbers

Guild is an organized group of people united around similar economic interests and to achieve common goals. In traditional games, guilds are usually created by gamers with various characters archetypes to perform certain tasks like conquering dungeons .

In the blockchain game guild can conditionally be divided into two categories: actually game and Gamefi.

Game guilds are similar to traditional analogues. Their main task is to achieve specific intra -game goals such as punching of rare equipment, expanding territories and execution of quests.

GameFi gilds are focused on maximizing profit from the P2E project. They can be compared with e -sports organizations that hire the pool of experienced players and provide them with everything necessary to participate in events in exchange for a percentage of prize.

The entry threshold in some P2E projects is quite high. For Axie Infinity, you need to assemble a team of three Aksi. The price of these creatures greatly depends on the characteristics and rarity. At the time of writing, the minimum cost of one Aksi is $ 29.

Thus, a gamer who wants to join the project must have at least $ 87 of the initial capital. It may seem that this is a little, but we are talking about buying Aksi with low characteristics that may not fit into metham. With such creatures, it is difficult for the user to win in battles and, therefore, earn SLP.

The cost of Axi also depends on the market conditions – during the bull cycle, it will be more expensive to assemble a team.

GameFi gilds, as a rule, have a large capital-according to the results of 2021, Aum Yield Guild Games (YGG) exceeded $ 824 million. This allows them to provide NFT participants and other resources necessary for the game. In exchange, they take a percentage of earned tokens.

YGG participants from among Axie Infinity gamers expel the 30% of their income guilds. In other organizations, the percentage may be different. For example, BlackPool charges 40% collection.

Crypto Gaming United (CGU) co -founder Sergei Sergienko told Forklog that the percentage may vary depending on market conditions. According to him, if a standard offer involves 50% of the deduction, then in the falling market the guild gives the players all income.

“Now [in Axie Infinity] we give all the income to the player, since the price of SLP is below the skirting board and we strongly support our players at least so that they do not run away,” he said.

To create a guild, it is not necessary to establish Tao . However, the decentralized structure allows us to maintain the coordination of the community as the organization is scaled. Therefore, some large teams like Merit Circle and YGG choose such architecture.

How Will the Yg Dao Work? Find Out More in Our Latest Article! https: // t.Co/HTKBPXVGAF

– Yield Guild Games (@yieldGuild) July 9, 2021

The polar opinion lies in the fact that the structure of the Tao, on the contrary, can become a barrier to scaling. According to Konstantin Sinov, Liberty Gaming Guild Marketing Director, from the point of view of long -term growth, the guild should enlist the support of investors:

“For this, alas, the influence of the community of players is not enough – large incomes involve the release of their own token and the activities for its maintenance. The guild becomes like ETF for those who want to invest in GameFi. And this does not do without consequences – when it comes to financial management, you have to limit the influence of the concept of Tao ".

Shatkaya tokenomics

P2E projects are not just games in which you can earn money. Successful representatives of the segment are based on complex economic models that determine how resources will be distributed.

Studio standing behind the blockchain games are aimed at making a profit. In addition, a clean flow of funds is necessary for the projects themselves for the development. The developers are in a constant search for the balance between the exciting game experience and the incentive system that makes users invest time and money in the product.

According to the analyst of cryptoproducts in Andreessen Horowitz, Karra Wu, the behavioral economy suggests that there are four driving forces that form the basic architecture of human motivation:

  • the desire to purchase (tokens, NFT);
  • the desire for social relations (friends, guilds, Tao);
  • the desire to invent (creating content);
  • The desire to protect (territories, ideology, battles).

She emphasized that the ability to be realized in these areas is important not only for gameplay, but also for the economy of the game.

Building Many Ways to Win Along Thir 4 Dimensional Achievement Space is not Just for Gameplay, But Also Existential to the Macroeconomy. Players Who Value The Drive to Bond, Invent, Or Defend Most Highly Supply Liquidity and Subsidize Play Value The Drive To Accquire.

– Carra.ETH (@wucarra) October 7, 2021

“Players who most value social ties, inventions and protection most, provide liquidity and subsidize users oriented to acquisition,”.

In addition to holding users, it is important for developers to build such an economic model that will not fall apart when the project is scaling.

According to Konstantin Sinev, even in projects with a closed economy, the relevant specialists constantly monitor inflation of intra -game currencies, conduct additional emission or, on the contrary, reduce it. He emphasized that games like Axie Infinity need to do the same.

“The economy of any game is endless calibration. You can’t release something and just engage in technical support for users. […] The risk of collapse of the economy exists, but only if the [developers] cannot be in time to adopt the experience of “senior” companies, of course, adapting it to the realities of Gamefi, ”said Sinev.

Jonathan Lai from Andreessen Horowitz noted that developers can influence the economy through “tokenized resources”. According to him, the equipment craft and other intra -game objects allows the studio to perform the functions of a monetary regulator.

16/ By Changing the Formula for Inputs that go into Finished Goods, A Game Designer Can Balance The Layer of Abstration. It’s Similar to A Central Bank Changing Interest Rates to Control Inflation VS Directly Setting Price 🏦

– Jonathanylai.ETH (@Tocelot) September 19, 2021

“Changing the formula for the resources that go to the production of finished goods, the game designer can balance the economy. This is like how to control inflation the central bank changes interest rates, and not directly sets prices, ”barking wrote.

Resource tokenization also allows you to solve another problem that can negatively affect the economy of the project – a lack of intra -game drains for cryptocurrencies.

A small number of options for using tokens inside the game prompts gamers to sell assets in the foreign market, which inevitably leads to a decrease in their price. Therefore, developers are trying to expand the list of "economic absorbers".

• Launch New Gameplay Content
• Add Needed Economic Sinks
• Supercharge OUR Community
• Educate Millions of New Web 3 Users

All the same investments

Gamefi-tokens are extremely volatile-their value is highly dependent on the general market situation and the network effect, which, with the erroneous actions of the project team, can also work in a negative way. Because of this, the potential payback of investments may suddenly decrease, and in order to repel even the initial investments, a considerable time will take.

This is a relatively young sector in which there are still no truly large AAA projects. Since we are talking about games, first of all they should be fascinating. Existing P2E products are niche.

Even in the metavselny segment, the harbinger of which some consider GameFi, a mass user prefers projects without the use of a distributed registry and concept P2E concept.

“As the Next Generation Increasingly Spends More Time Online, Many Investors (and Speculators) are Hope Real Estate Tycoons in the Metaverse."Https: // t.CO/A5NYPT9XQH $ rblx https: // t.CO/LAXDRKL7Q2 PIC.Twitter.COM/RBMQR8VRNI

– Martijn Kleinbussink (@biasedrational) January 24, 2022

In the best way, the high entry threshold affects the situation in the best way. In addition, users who are not interested in the playing component P2E turn to Defi services, since the latter are able to offer even a large profitability.

According to Sergienko, the appearance of more complex and interesting games will affect the appetite of venture investors who are already investing in projects from this sphere.

“Now a pretty great interest of venture funds in these stories is both in the games Joseph Lubin called themselves and to guilds. I think the industry will still see the influx of funds, especially when projects become more interesting than simple games, ”said Sergienko.

The developers are in search of a stable economic model, and in the future the situation may change for the better. But at the moment, P2E has enough problems, and projects from this sphere should be considered as investments. Blockchain games can bring income, but the concomitant risks cannot be lost.

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