The Problem with The Early GameFi Attempts
We see a GameFi explosion now in the crypto world. Evidence is everywhere: CoinMarketCap.com has recently opened a new tab named “Play To Earn” on its list, next to Cryptocurrencies, DeFi and NFT. We see Axie Infinity at the top of the list. It went from around 0.50 to over 80 USD in 2021. Its market cap is over 4 Billion USD at the time of writing. And yet its gaming experience could not survive in the gaming industry without play to earn. People pay hundreds and even thousands of Dollars to Axies not because it is fun to play but because it is good investment. Remove the NFT part, and its market will collapse. Another striking example is Star Atlas. They just completed IEO and IDO phases with demand dwarfing the supply so badly that it was applied as a lottery where winners cheered. “Star Atlas, CoinMarketCap data indicates that it started trading the same day at about $0.083 — nearly 60x from the IEO price — and registered an all-time high of $0.2719 two days later, for a price increase of over 196x.” The fully diluted market cap of Star Atlas is over 3 Billion USD at the time of writing, although the game development has not started yet, and the release YEAR is unknown because the roadmap has no dates. 3 Billion Dollars for just a roadmap without dates and a presentation-level whitepaper is possible in this free market economy because GameFi is big, investment timing is historic, and the team (including the partners) behind the project is strong. There are projects on this list, reaching many-million-dollar market cap with just a road map, rough explanation about the game and no information about the team. Pick any project from the play-to-earn list and you will see the evidence that the next big thing is GameFi.
Dr. Serkan Toto, CEO and Founder of Tokyo-based Kantan Games Inc., an independent game industry consultancy, tells Inverse, “A lot of these games seem to be forced exercises in basically trying to use blockchain and digital ownership and monetization. There's no real fun inside many of these games. Making them fun is the hard part. Making them secure for children, making them safe for everybody to use — that's easier to solve than making these games fun and engaging” Check out the games in the play-to-earn list to verify that Dr. Toto is right.
Psychology tells us that play-to-earn is doomed to fail because it harms the fun part. So even if the game is fun, those who play to earn, will no longer have fun. How do you sustain paying those gamers? They will stop playing if you stop paying.