The rise of blockchain apps and the development of NFT contributed to a successful year of blockchain games along with the Play-to-Earn trend. GameFi thrived, but it appeared to struggle to hold on to momentum.
GameFi has transitioned from a new phenomenon in 2021 to a sector on the back burner at the beginning of 2022.
Lack of Momentum
Axie Infinity debuted as a dark horse in mid-2021, garnering a large number of cryptocurrency investors and players.
Token prices continued to rise, and the Pokemon-inspired game did not take long to find its way into the unicorn list. Axie, far from being the pioneer of the Play-to-Earn concept, set the framework for this trend.
New projects were constantly launched; some had their own shining moments, while others faded into obscurity.
Data from Sky Mavis revealed that the number of active users on the game was 1.48 million on March 28, 2022, a decrease of 45% from the peak of nearly 3 million in November 2021.
Despite the sharp decline, Axie Infinity is still the most popular NFT game, with much more players than any other game. Looking further, this result is not encouraging for the overall GameFi industry, indicating a downward trend as we enter Q2.
Money-making is one of the primary aspects that contributes to the popularity of P2E games among young people, as the opportunity to play games while also earning money is combined.
Aside from that, there hasn’t been much progress in raising the level of NFT-based games.
In comparison to traditional games, NFT games are unappealing and time-consuming. Rapid development, lousy graphics, and uninspiring game content It’s all just a shady investment that goes against game-creation ethics.
While finance is a component of GameFi, it is only the tip of the iceberg. Many games struggle to maintain consistent growth over time because they primarily focus on revenue systems, although gameplay and graphics are the driving forces that attract and keep new players.
That explains why, when major companies expressed a desire to integrate NFT features into popular games, a wave of protests arose from members of the gaming community. Player adoption is often the most difficult challenge, but it is also the most promising aspect of NFT games.
Series of Attacks
Recent non-fungible token attacks have caused severe damage to well-known gaming titles. The Axie Infinity team announced by the end of March that its Ronin bridge had been exploited, causing a $625 million loss. So far, it has been the largest DeFi hack.
Shortly after Axie’s case, another prominent NFT game was hacked. On April 7, Wonder Hero, one of the NFT games that has received a lot of attention since its release, was attacked against its trading portal.
According to sources, the hackers used the exact tactic, breaking into the weak spot in the same way they targeted Axie Infinity previously. The damage is estimated to cost $320,000.
Scams and rug-pulls continue to occur, causing significant loss to investors and tarnishing the GameFi model’s reputation. Games come with many unpredictable risks of malicious outsiders. Not to mention the problems of the scamming NFT game projects themselves.
Where There’s A Will, It Can Grow
In 2021, GameFi’s player base increased by more than 16 times, reaching 1.1 million in February 2022, as reported by Crypto.com.
It’s clear that GameFi has room to expand. New game products are gradually enhancing gameplay, graphics, and the NFT exchange function by learning from the successes and failures of a series of GameFi projects.
Also, instead of Play-to-Earn, a new term was born – Play-and-Earn (P&E). Play-and-Earn is one of the new sectors that has emerged as a result of this natural progression.
While P2E focuses revenue, P&E promotes ownership and high-quality gameplay, which are more essential to supporting long-term engagement.