Will GameFi Onboard the Next Billion Users Into Web3? | Alex Cooper
In this week’s Spotlight, Alex Cooper, who is Leading Community at Footprint Analytics and overall a huge gamer, talked with Web3 Academy about GameFi. He trIED to explain and simplify the concept of GameFi, something that sounds simple but is actually much more profound than that!
You can watch the episode, or listen on your favorite platform: Spotify | Apple Podcast | YouTube
What is GameFi?
Alex describes GameFi for what it is, a combination of Gaming and De-Fi. What this implies is basically that you implement Web3 tools like NFTs, into traditional games. This changes the entire system and architecture of games, which will be explained in the next section.
Right now, there are a lot of new games being developed on top of different blockchains but most of them do not get any traction. Although there are already about 1 million gamers already active in the GameFi sector, Alex says that it is still super early for anything to get enormous popularity. Axie and StepN are a couple of games that have managed to gain some excitement. However, Alex is confident that the biggest games are yet to be live.
According to Alex, every new game requires a tight community and a strong team. These two are the basic requirements for a fundamentally good game. The biggest problem in GameFi is that most games are launching their own tokens which can be traded on the open market. Usually, when a token performs badly, the community loses its trust in the project. Alex explains that this is the main reason why games are failing right now. If the native token doesn’t generate enough revenue for the users, the community will give up on that particular game.
It is notable that even with a strong team and community, your game can still fail. Axie has been highly successful at the beginning but it has encountered a lot of problems during the last few months due to attacks and lack of further adoption of the game. However, the main reason why Axie is still alive is due to the strong team and tight community.
Why GameFi?
The biggest “promise” of GameFi is that it aims to give the power back to the community. And this can be achieved through a few things:
First of all, through a token that acts as governance. Axie Infinity has its own token AXS which allows the community to vote on certain things within the game. This isn’t at all possible in the traditional gaming world where everything is so centralized and the big corporations are calling all the shots.
Building upon that, decentralization can be achieved further through allowing users to own their stuff in the game. Alex describes how skins (features/designs of certain weapons or outfits to make your character look cooler) in games like WOW or CSGO are worthless. Although some skins cost hundreds of dollars and can be sold, the money is usually not allowed to exit the gaming platform meaning that once you put some money inside a game, it is forever gone.
However, to solve this problem, GameFi aims to convert these “centralised skins” to NFTs. This then allows users to actually own and trade their skins on the open market and receive actual money that they can use in real life. Note that NFTs are usually sold in ETH, SOL or even the native token of a game but all these tokens can be swapped to actual FIAT money.
Lastly, a game built on a blockchain allows you to make money. Or lose it all. Games like Axie or StepN have allowed their users to make hundreds of dollars a day through interacting with that particular game. As a gamer, you do not have to limit yourself to only playing the game, you can use it to generate an extra income during your spare time.
Potential of GameFi
The gaming industry is huge. With a reported 3.2 billion gamers worldwide, there is huge potential for growth in the GameFi sector. Alex states that there are only 1 million users active right now in the GameFi world. What happens once the other 3.1 billion join?
The idea of GameFi is very promising. Giving the power back to the users of a game just makes sense. The existing corporations have controlled the gaming industry to their desire for a long time now and it is nice to see some changes.
However, there is also a limit to GameFi. That of paying to enter a game. Looking at games like Axie or Stepn, you need around 1000$ to start playing which is just not possible for the average gamer. Although existing games also cost around 80$ to get, the difference is huge. Saying that, we have to account for how much money is wasted in today’s games on skins and features that are basically worthless.
In conclusion
GameFi is a promising idea but one that is very early. It is hard to project its success and that’s why we need people like Alex to portray a very bullish future for this space.
We are extremely excited to follow Alex’s progress and would love to have him on the podcast once again in the future to re-discuss the developments within the GameFi industry.
Footprint Analytics is an all-in-one analysis platform to visualize blockchain data and discover insights. It cleans and integrates on-chain data so users of any experience level can quickly start researching tokens, projects and protocols. With over a thousand dashboard templates plus a drag-and-drop interface, anyone can build their own customized charts in minutes. Uncover blockchain data and invest smarter with Footprint.
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