GameFi. GameFi is called one of the crypto trends of 2022. Blockchain games have revived the gaming industry and have made it possible to turn a hobby into a stable income. The play-to-earn concept has found millions of fans around the world. Many blockchain developers have noticed GameFi because this area is now in trend and therefore the startup founders find investors easily. GameFi is considered by some the future of the gaming industry. Oleg Petryashyov, Founder of Technocrat company, delineated the popularity phenomenon in an interview. The current problems and prospects that the development of GameFi opened up for users were also covered.
- What is the GameFi phenomenon in the first place? What common ground can there be between the gaming industry and cryptocurrencies?
- The gaming industry as a separate serious sector of the economy has existed for a long time. Self-contained in-game economies were almost fully formed in the 2000s, and this is a very important milestone in the development of video games. Already then, for example, in Lineage or World of Warcraft, and much earlier in browser games, there were their own internal markets. It was possible to resell items, upgrade characters and sell them, create your own guilds and take a commission from all players for managing this guild, create unique gear, and so on. All this would continue to flourish without cryptocurrencies. But, in my opinion, cryptocurrencies for the gaming industry have a very decisive, key impact.
The thing is that the chain of selling and buying game items or characters for real money is quite complicated. You need to negotiate with someone, enter the marketplace, then sell through this marketplace, transfer money somewhere, send money to your card, and so on. It is quite difficult for a wide audience to enter this market, unless, of course, you are a Digital Native teenager who grew up in this environment and is well versed in it. And imagine that money falls out of the monster you killed, and, as soon as you pick it up, it is instantly credited directly to your bank card. This function is just ideally implemented through the mechanism of decentralized finance. The platform and infrastructure for a certain system token—in this case, the game's in-game token—to be turned into other currencies and coins with no borders already exists.
- The ability to make money on games is not new. Esports has been flourishing for years, and good players can make a lot of money from their hobby. In addition, no one excludes earnings on streams and other ways to generate additional income. What is so unique about this “play and earn” concept?
The thing is that the gaming world is where the sports persons thrive—the rare, exceptional players who make up less than 0.1% of everyone involved. This is the key principle of income in sports: millions of people are engaged in it, and only 10 of them become professionals who earn something. The uniqueness of GameFi games lies precisely in that they will be available to a much larger audience. Any person is supposed to be able to play and receive some income without becoming a professional.
The main income in eSports comes from advertising: there are sponsors who form tournaments where the best players receive money and, in turn, attract an audience to the tournament and the game. Another option for professional gamers is streaming and monetization through donations and ad revenue. The play-to-earn concept implies completely different in-game mechanics, creating your own in-game economy—and this is a completely different earning opportunity for users.
- GameFi is called one of the crypto trends of 2022. What is the secret to the wild popularity of blockchain games?
Games are one of the best ways to gain industry recognition and new users quickly. So far, nothing better than GameFi has come up for introducing ordinary people to cryptocurrency technology. That is why major players in the cryptocurrency market are extremely interested in the development of the GameFi industry. For example, last week Binance, the largest cryptocurrency exchange, invested another $500 million in a fund dedicated to Web3, including the development of the GameFi industry.
- The hype on play-to-earn games is said to be linked to the coronavirus pandemic. What do you think about this?
From my point of view, covid and GameFi are only indirectly related. The pandemic has accelerated digitalization, the possibility of remote work has appeared, and delivery services and online presentations have been thriving. Now there is everything so that a user can comfortably spend a significant amount of time online, while being anywhere in the world. In parallel with this, interest in all types of digital entertainment has been growing. This is evidenced not only by the financial statements of online cinemas but also by the crazy demand for video cards not only from miners. People bought computers and began to work and relax at home more often, and, as a result, spend more time playing various games. This is a general trend that has also affected the GameFi industry, but I would not draw a clear relationship between the pandemic and GameFi.
- There is an opinion that the GameFi sphere can solve the global problem of poverty and unemployment in the countries of South and Southeast Asia, because play-to-earn games are mainly aimed at young people who find it difficult to find jobs. Now they can provide for themselves just by playing. Is it really possible to earn so much on this, or are talks about real earnings a little exaggerated?
To my mind, GameFi in the next few years can significantly affect the social structure of society. According to the Russian Statistics Agency, in 2021, 11% of Russians were below the poverty line. Recently, the World Bank warned of an increase in the level of poverty around the world. Imagine if so many people had an economically sustainable product that would allow them to earn in their region, spending much less effort than working in the field. Such a product will become a powerful driver for the development of this market.
Take the incredible popularity of the game Axie Infinity in the Philippines. It is this country that accounts for over 35% of traffic and the largest share of active users per day, and some of them have earned income through the game, equivalent to a salary at a usual job. And these are actual cases that are easy to believe in: last year, Axie Infinity allowed you to increase capital for an invested coin by 100–150 times.