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New Report Sheds Light on GameFi: Top Takeaways
- A report from CoinGecko into GameFi has found that the top 20 titles control over half the market.
- Additionally, metaverse hype has faded substantially since its peak in 2020-21, although development still continues in several projects.
- Traditional gaming heavyweights like shooters and strategies are underrepresented in GameFi due to poor titles and funding limitations.
- Play-to-earn games have been hit rather hard by the crypto winter, with the player base down 57% since the heights of 2021.
The new era of online gaming seems destined to meet with the blockchain industry – and according to a report from CoinGecko, this is poised to happen sooner rather than later. The current wave of games revolving around microtransactions and cosmetic items is a match made in heaven with cryptocurrency. Blockchain tech can give gamers full ownership of their in-game items, unlock new in-game economies and earning opportunities, and fully decentralise the gaming experience. Spanning back to 2017, several game companies have entered the blockchain gaming (GameFi) fray, but very few have stood the test of time.
Farming Games Lead the Way
Although blockchain tech can theoretically push forward the next generation of gaming, developers are currently focused on simpler, economically-powered games. Leading the way in 2023 is the farming/mining game genre – a popular style of game that involves gathering resources, building infrastructure and occasionally combatting enemies.
According to CoinGecko, there are approximately 650k active wallet addresses participating in GameFi – and 250k of those (about 40%) are playing farming games. The top performers in this category include Alien Worlds, Farmers World and Splinterlands.
Other interesting notes from the report include:
- DeFi gaming is incredibly top-heavy, with the above graphic showing over half of the community is concentrated within the 20 most popular games. This suggests there is a large gulf in quality between the best games, and those at the fringes.
- The popularity of metaverse gaming and products has fallen off a cliff since its boom in 2020-21. Although the power of the metaverse isn’t close to being fully harnessed, its lack of user base will likely delay its evolution somewhat.
- Shooters and strategy games are two of the most popular genres in the regular gaming world. Poor development and lack of funding have led to them being unpopular among GameFi. For GameFi to take off among the general populace, this gap will need to narrow.
- Most people using decentralised finance on big chains like Solana, Ethereum and Binance Smart Chain do not participate in gaming (less than 5% of active wallet addresses are linked to a gaming app).
What Does This Mean For GameFi?
The crypto winter has been quite harsh on GameFi. Much of the sector’s appeal came from lucrative rewards, but as the value of native tokens has dropped off, so too have the potential profits. There is still merit to the concept of play-to-earn (P2E), as it is a perfectly timed counterrevolution given the prevalence of microtransactions across top-tier gaming.
GTA VI might just be the push the industry needs to take the next step.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
