Game Finance or GameFi is an area of blockchain technology that has continued to gather interest despite the year-long cryptocurrency bear market. GameFi holds a lot of potential for traditional gamers, crypto investors, venture capitalists, etc.
What is Game Finance?
The World Economic Forum(WEF) defines Game Finance(GameFi) as the intersection of gaming and finance in an environment driven by the use of blockchain, non-fungible tokens (NFTs), and smart contracts. GameFi can also be referred to as Web3 Gaming or Blockchain Gaming.
Features of GameFi
Blockchain Technology: the underlying technology behind GameFi is known as Blockchain Technology. If you do not know what blockchain is you can read this articlearticle. The whole GameFi network is powered by blockchain technology although web3 gaming projects can develop on any blockchain of their choice. These blockchains include Ethereum, BNB Smart Chain, Polygon, Shibarium, Soul, EpiChain, etc.
- Non-fungible tokens(NFTs): I believe by now you must have heard about NFTs with many celebrities including Neymar, Justin Bieber, Logan Paul, Donald Trump, and Eminem buying or creating their NFTs. Non-fungible tokens or NFTs are an important feature of GameFi as it provides a solution to the problem of owning in-game assets in traditional gaming. We will talk more about this as we continue.
- Metaverse: A metaverse is a digitally developed 3D world where game players and users can interact with each other and other computer-created characters/avatars. It is simply a virtual world built on the internet or web3 based on this context. Web3 gaming projects have embraced the idea of creating metaverses by developing an open world where players can explore and also interact with each other.
Traditional gaming market vs blockchain gaming
According to Statistica, the traditional gaming industry currently has a market revenue of US$221.40bn. The traditional gaming industry’s annual growth rate(CAGR) from 2022-2027 is projected to grow by 6.52% reaching a projected market revenue of US$285.00bn by 2027.
On the other hand, the global blockchain gaming industry currently generates around $4.6 billion in market revenue. In comparison to the traditional gaming industry, we can see web3 gaming industry has massive growth potential in the coming years.
According to a new report by MarketsandMarkets, the global blockchain gaming market is projected to grow at an annual growth rate(CAGR) of 70.3% from 2022 to 2027, reaching a projected market revenue of $65.7 billion by 2027. Impressive isn’t it?
Advantages of GameFi
- Owning of in-game assets: Through the use of NFTs, in-game assets can be owned by game players. This is impossible in traditional gaming environments, but through the use of blockchain technology, players can own in-game assets in form of NFTs, and ownership of these assets can be verified on the blockchain at any time. These assets can be stored in crypto wallets and traded on NFTs marketplaces.
- Huge growth potential: In our earlier comparison between the traditional gaming industry and the web3 gaming industry, we could see the huge growth potential web3 gaming holds for would-be investors in the nearest future with the blockchain gaming industry projected to grow from $4.6bn to $65.7 billion in revenue by 2027.
In this article, we covered the introductory part of Web3 Gaming including its features, advantages, and market comparison with the traditional gaming industry. In our next article, we will talk extensively about an innovative blockchain gaming project that is already playable with exponential growth potential for would-be investors.