A recent report published by Chainplay, State of GameFi 2022, found that investors in GameFi are increasingly more focused on fun over profits. This is likely a mindset shift borne of necessity with the bear market. Nevertheless, with GameFi turning to fun as a priority, perhaps we can bury this awful word for good.
For over a year, I have been loudly against the portmanteau, GameFi. The horrid combination of game and finance was likely intended to be gamified finance, which in a vacuum, would be an interesting enough concept. In reality, it has become the worst brand of the Play-to-Earn genre, with the most rudimentary “games” pedaling profits off the back of hype, which generates more profits and hype. This is, of course, until the hype or the profits slow, and then it collapses in on itself like a dying star.
GameFi has become a blanket term for any game in which you can earn, but its roots are gamified finance and the basic clickers-for-crypto we’ve come to detest. Now, in part thanks to the beariest of bear markets, GameFi has been in steady decline and I hope it marks — if not the end of GameFi — the end of games with profit as the only selling point.
Chainplay Report Shows GameFi Is Changing Quickly
Chainplay surveyed 2,428 GameFi investors (that is, people who have spent money on GameFi games, I believe) to get a fresh vantage point of the sector; it has yielded some interesting results. I recommend reading their wonderfully present report, but here are some key takeaways:
- 89% of crypto investors worldwide saw their GameFi profits decrease in the last 6 months with 62% of them losing more than 50% of their profits
- 58% of investors worldwide stated that “Poor In-game Economy Design” is the number one reason for declining GameFi profits
- 68% of GameFi investors joined the market less than a year [ago]
- 51% of respondents stated that profits are their number one reason when joining GameFi
- 81% of GameFi investors prioritize the fun factor over earnings when it comes to future GameFi projects
There are a lot of interesting (albeit slightly contradictory) statistics to come out of this survey. The overarching trend appears to be that profits are down, people are warier of scams and rug pulls in the space, and that going forward, people are gravitating toward fun over simply profits.
Well, if the interest is in blockchain games with some earning capacity, let’s do away with the term GameFi altogether. True ownership of in-game items as NFTs and tokenization of game currencies are part and parcel of blockchain gaming and in many instances, that facilitates the opportunity for earning. While earning needn’t be reduced to a byproduct in games going forward, having it as the primary (and often sole) focus was, and is, unsustainable.
GameFi, when taken as simply gamified finance, if it insists on continuing to exist, ought to play second fiddle to a more useful mechanism. That is, it could be used to reward people for engaging in ecosystems or a more innovative way to harness the power or numbers. For example, Eve Online integrated research for The Human Protein Atlas in which players could complete simple tasks for a reward that would help map the human proteome.
What we must bury (and it looks as if it’s working on burying itself) is “games” that only aim to generate crypto for its “players” in a way that is almost entirely reliant on whether or not the project is in vogue. They are, for all intents and purposes, pyramid schemes, and their inclusion under the banner of blockchain or Web3 gaming is to undermine the burgeoning sector.
Perhaps GameFi can evolve into something new and innovative, but if it cannot, we must leave it behind. In the best and rarest instances, GameFi projects acted as interesting use cases for on-chain game economies, but that is now best left to games with fully-fledged economies like Alien Worlds. Whatever the case, it is not in our new industry’s best interest to conflate GameFi with Web3 gaming, and the simplistic clickers must not fly under the same banner as games that utilize blockchain technology.