Why are blockchain x games gaining momentum?
What are the expectations and aims of game players and developers who see opportunities there?
In addition to major markets such as consumer, PC, and mobile games, there are several other markets in the game world, such as VR games, that are currently small in scale but have great potential for the future. Blockchain games (BCG, also known as GameFi or Web 3.0 games) is one such market. First, let me explain about BCG again.
BCGs are games that utilize blockchain-based technologies such as crypto assets and NFTs. For example, the ability to exchange in-game assets for real assets (money) via crypto assets and NFTs is one of the main features of BCGs enabled by blockchain.
In reality, there are many things that are possible with blockchain technology, and various innovations are still being devised, but at this point, it is sufficient to understand that BCG is “the possibility of earning (real money) through games.
BCG is already well-known in the industry utilizing the blockchain-based technology known as Web 3.0, but it is not so well-known to the general public, so let us briefly explain how it came into being and its current status.
The first BCG title was “CryptoKitties,” released in 2017, in which players bred, raised, and traded digital cat NFTs.
Crypto assets were also used as a means of payment when trading these cat NFTs, but later, a title that further incorporated crypto assets into the game appeared. That was "Axie Infinity."
This work created a mechanism called "Play to Earn" that allows you to earn tokens by playing the game while holding the character's NFT.
"CryptoKitties" had the opportunity to increase crypto assets by trading NFTs, but "Axie Infinity" created a chance to earn crypto assets just by playing the game.
In addition, "STEPN" was released in 2021 as a title that applies the "Play to Earn" mechanism. This BCG allows you to earn tokens by walking while holding digital sneaker NFTs, and at one time it became a trend with more than 600,000 active users worldwide.
As you can see from the above, it is more like a health app than a so-called "game," but by combining it with crypto assets and NFTs, it became popular as a completely new service.
We have given a very brief introduction to BCG's history, but the main attractions of BCG today are "NFT trading," "obtaining tokens through gameplay," and "being able to exchange in-game assets for real assets." (Note that the above does not cover all of BCG, as there are many other new experiences and mechanisms that did not exist in conventional games, such as the experience of "owning and trading digital data through NFTs" and "the value of in-game assets changing in tandem with real-world values.")
BCG is attracting a lot of attention, especially from investors who are interested in Web 3.0, including crypto assets. The reason for this is of course the possibility of increasing assets. In other words, BCG is both a game and an investment.
However, compared to the traditional game industry, the number of users is still small. At present, it can be said that only a small number of people are paying attention to it.
BCG is also expected by the Web 3.0 industry (companies and people involved in blockchain-related services). The term Web 3.0 was once a hot topic in Japan, but even now, blockchain technology, including crypto assets, is not widely accepted in society, so the game = BCG may be the catalyst for spreading the appeal of Web 3.0.
Crypto assets, which can be said to be a representative invention based on blockchain, are also said to be inventions that make "exchange of value" possible on the Internet, and are strongly linked to the financial sector. For this reason, for the time being, the Web 3.0 industry is centered on financial services such as asset exchange, preservation, and investment.
However, it is difficult to widely convey the worldview of Web 3.0 to society through the financial sector alone. Given this, there is currently hope that games, as a form of entertainment, will be able to play a role in communicating Web 3.0 to many people.
So, what kind of companies are developing BCG? Initially, the main players were companies in the Web 3.0 industry, as mentioned above, and the developers of "Axie Infinity" and "STEPN" had no track record in the traditional game industry, but they have earned huge profits through the success of BCG titles.
In recent years, in addition to companies that can be said to be from the Web 3.0 industry, companies that have been active in the traditional game industry have also begun to enter BCG. This may seem obvious if you think of BCG as a type of game, but it is not unrelated that the mobile game industry, which has been a bustling emerging market for the past few years and in which many companies have achieved success, has recently become a red ocean (a market where it is difficult to make money).
In the early days of the social game and smartphone app markets, emerging companies that entered early were successful and expanded the size of their companies in one fell swoop. If BCG is going to grow explosively like the social game market, entering it should be a natural choice for game companies.
Moreover, the current scale of BCG development is much smaller than that of consumer games. It is unknown whether BCG will grow into a large market, but even if it does not work out, the losses will not be that large. In other words, BCG is seen as a market with the potential to obtain high returns with relatively low risk.
In this way, the current situation of BCG is that the market is suddenly booming as each party's intentions overlap.
NFTs are "unforgeable certificates of ownership" and "digital data with unforgeable certificates," and are issued and traded on the blockchain, just like crypto assets. To put it simply, it is a system that gives digital data such as game characters and weapons a certificate that "this is one of a kind" and makes it possible to trade them.
This makes it possible to trade digital assets in the game with other players in blockchain games. Crypto assets are used for trading, and crypto assets can also be exchanged for Japanese yen.
The 2018 release of “Accy Infinity” (developed by SkyMavis) created a system where tokens can be earned through gameplay.
STEPN” (developed by FSL), released in 2021, created and popularized ‘Move to Earn,’ a system where tokens can be earned simply by holding NFTs and walking around.
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