Can Blockchain Gaming Catalyze the Next Bull Run
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By now it’s evident that blockchain technology has had a significant impact on traditional industries.
The debate surrounding digital assets is still ongoing, but the utility and benefits of blockchain are increasingly recognized across multiple industries.
In 2022, the blockchain technology market was valued at $11.1 billion and is projected to grow to $469.5 billion by 2030 with a CAGR (compound annual growth rate) of 59.9%.
In this burgeoning market, blockchain gaming has carved out a significant niche.
The benefits of digital ownership, real reward-based competitive engagement and transparency are attracting more gamers and traditional studios.
The blockchain gaming sector recently reached a milestone of one million daily unique active wallets, representing 33% of the blockchain industry’s monthly activity.
Significant financial investments, which amounted to $739 million in Q1 2023, underline the sector’s potential and investor confidence.
As blockchain gaming continues to drive the adoption of cryptocurrencies and NFTs, it’s reshaping the gaming industry’s economy.
The fusion of real assets and economies created by gamers and traders in this space could very well catalyze the next bull run.
So, let’s look at the evolution of blockchain gaming and its current impact and analyze whether it holds significant potential to drive the crypto market.
Exploring the current state of blockchain gaming
The crypto gaming trend has continued to grow throughout Q4 2023.
Previously, we only saw emerging startups and new projects coming into this sector but now veteran game developers and major companies are heavily investing in creating high-quality blockchain-based games.
This movement is expected to significantly alter the perception of Web 3.0 gaming, revitalizing the entire industry.
Most importantly, these companies create a variety of genres, such as RPGs, battle royale, trade-based gaming and RTSs.
This diversity is allowing blockchain gaming to expand across different segments and attract different types of gamers.
The trend of RWA (real world asset) tokenization in gaming is rapidly gaining traction.
The tokenization of real-world assets is expected to unlock a new ‘golden age’ in both blockchain and traditional finance.
This process is facilitated by major financial institutions and startups, as they begin to tokenize tangible assets like commodities, art, real estate and financial instruments.
RWAs have become the fastest-growing category in DeFi, with their total value nearly doubling to $2.5 billion by September 2023, and projections indicating that number to exceed $16 trillion by 2030.
This growth is driven by a shift towards traditional yield-generating instruments like the U.S. Treasury and private credit, which have grown more attractive due to rising interest rates and a bearish crypto market.
Non-stablecoin RWAs particularly those offering yields such as tokenized private credit, real estate and treasuries have seen a significant increase in market share, growing from 31% to 53% between January and September 2023.
The majority of on-chain demand for RWAs is driven by a relatively small number of native crypto users.
This indicates that while the RWA sector is growing, it is predominantly being adopted by users who are already familiar with and active in the crypto space rather than attracting new adopters or traditional investors.
How has decentralization impacted the gaming industry
Blockchain gaming might seem like a very small part of the overall traditional gaming industry, but the impact of decentralization is quite evident especially in how games today are being monetized.
Recent trends show Web 3.0 games evolving to resemble their Web 2.0 counterparts, with improved graphics and gameplay and simplified onboarding processes.
Mainstream games are slowly introducing decentralized features to their games to ensure a minimal learning curve.
We’ve already seen Ubisoft introduce NFT features in their AAA games, including Assassin’s Creed, and Rockstar Games rumored to include a crypto-based reward system in the latest GTA (Grand Theft Auto).
This shift aims to broaden the appeal of Web 3.0 games to those outside the blockchain bubble a crucial step towards mainstream adoption.
Fully on-chain games represent a bold stride in decentralization, putting every game aspect on the blockchain, leading to permissionless interoperability, community ownership and new gaming experiences.
The technical challenges of blockchain ike speed and scalability issues still limit games that rely on simpler turn-based formats.
There’s also a notable trend of B2B, decentralized, out-of-the-box, white-label trading games. These games are bringing general crypto traders into the gaming space.
These platforms offer scalable, automated solutions that transform audience engagement into a dynamic revenue stream, further demonstrating the potential for decentralized gaming models to drive industry growth and sustainability.
However, the traditional gaming industry also faces challenges in distribution, market adoption and balancing the interests of traditional gaming powerhouses with the innovative ethos of blockchain gaming.
As the industry progresses, these factors will determine the trajectory and success of decentralization in the gaming world.
The key to success in this space appears to be a balanced approach that leverages blockchain’s unique features while maintaining the core aspects that make games appealing to a broader audience.
The future of blockchain gaming and market dynamics
As we reflect on the transformative journey of blockchain gaming, it becomes evident that this sector possesses the potential to significantly influence future market dynamics.
The fusion of advanced blockchain technology with the gaming industry has redefined player engagement through ownership, security and transparency, paving the way for decentralized, player-centric gaming economies.
The surge in investments, the rise of decentralized out-of-the-box solutions and the increasing involvement of traditional gaming giants collectively show the sector’s growth trajectory.
The integration of RWA tokenization within gaming offers a glimpse into the future where digital and traditional asset markets converge, potentially driving the next bull run.
Given these factors, it is plausible to assert that blockchain gaming could be a central force in driving future bull markets. However, user adoption will be a key in determining the industry’s future.
It’s important that developers and projects effectively address the traditional gaming community’s concerns and criticism of this sector and make the onboarding process more seamless for those unfamiliar with crypto and DeFi.
If these challenges are addressed effectively, blockchain gaming could become the cornerstone of the next digital revolution in both the gaming and financial markets.
Oleg Bevz is the chief marketing officer and advisor for Playnance. He has had a robust career in the IT and Web 3.0 gaming space for close to a decade. Oleg has grown with these entities, from his initial role with an IT services company to his senior management roles with notable blockchain service and media companies.
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Author: Oleg Bevz
