How Today's Gaming Industry Intertwines With Blockchain, Crypto, NFTs, Tokenization

Ever since cryptocurrency permeated fields of the economy, quite a few games have begun integrating non-fungible tokens (NFTs) and blockchain.

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Blockchain, Crypto, and NFT Gaming

Blockchain gaming focuses on decentralization, while crypto and NFT games are inclined to collect rewards from playing the game.

Blockchain-based marketplaces look to enable players to buy and sell in-game items in a secure and transparent process using blockchain technology.

Also, blockchain technology is likely to be used for voting systems for in-game events and to create decentralized gaming communities wherein players can connect, share resources, and collaborate on projects.

The biggest risk is whether a game loses its shine in the market; the in-game token would become worthless.

Also, as the sector is new and with no proper regulations, hackers are always on the lookout for scams.

Gaming/Crypto Intertwine

Based on how much a player achieves in a game, the play-to-earn (or P2E) games reward players by paying them in cryptocurrency or digital tokens which can be exchanged for stablecoins on either centralized or decentralized cryptocurrency exchanges.

The digital assets can be sold/traded on online marketplaces or directly converted to traditional currency.

However, the industry is seeing a recent shift to a more sustainable and inclusive play-and-earn (PAE) approach, which combines the financial rewards of P2E gaming with engaging gameplay experiences.

Read More: Epic Games, Zynga, EA, Activision, Google Veterans Drive Onchain Gaming With Proof Of Play's $33M Funding

DappRadar and BGA Games released a gaming report wherein the blockchain gaming industry accounted for 41% of all the engagements in the crypto industry while DeFi accounted for 30% of all crypto engagement, social blockchain platforms represented 15% and NFTs stood for marginal 4%.

In July, the blockchain gaming industry garnered $297 million in investment funding. About 63% was directed to build infrastructure to support more game development. Most blockchain gaming happens on the Ethereum platform however Binance Smart Chain now hosts most games (38% of total games as of March 2023).

Popular Games/Gaming Tokens

The top three gaming tokens built and operating on the Ethereum blockchain are ApeCoin (APE), Decentraland (MANA), and Sandbox (SAND).

Axie Infinity, Illivium, Splinterlands, and many others form a part of the crypto games.

Axie Infinity is one of the most famous P2E games created by Sky Mavic. It boasts a strong monthly active user base wherein users can collect pets called Axies (NFTs) to use in battles against other players in a virtual world.

Sandbox is another P2E game that revolves around user-generated content created through building in the metaverse space. Game players can create virtual worlds, complete with characters, buildings, art, events, and resources using SAND tokens. Everything users create becomes NFTs and then they can share or monetize their in-game assets to earn crypto rewards through the platform’s marketplace.

Read Now: Best Bitcoin Casinos - Top 15 Online Crypto Casino Sites 2023 (+$40k Sign Up Bonuses)

Industry Forecasts

Based on the report, Cryptocurrency Exchange Platform Market - Global Outlook & Forecast 2023-2028 by ResearchandMarkets, the global cryptocurrency exchange platform market is likely to witness a CAGR of 16.08% from 2022 to 2028.

A significant portion of growth is likely to be driven by the rising demand for cryptocurrency exchange platforms within the crypto gaming sector and the increasing adoption of blockchain technology.

According to Blockchain Gaming Market, the demand analysis of Blockchain Gaming Market size and share revenue was valued at around $7.1 billion in 2022 and is forecasted to expand to $772.7 billion by 2032. This marks a CAGR of around 60.4%.

Benzinga's Future of Digital Assets conference is scheduled for Nov. 14. Attend and learn more about how digital assets have forayed into all segments of the consumer market. The gathering is seen as pivotal for the digital assets community. The event will spotlight the latest trends, innovations, and challenges in the digital asset realm

Image: Pixabay

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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