The global video game market, projected to reach an astounding INR 15 trillion by 2021, is undergoing a transformative evolution. As online gaming captures an ever-growing global audience, the intersection of gaming and cryptocurrency, known as crypto gaming, is emerging as a game-changer. In this new era of gaming, crypto is seamlessly woven into the gaming economy, ushering in innovative opportunities and unique dynamics that redefine how players engage and earn rewards.
Defining Crypto Gaming
While the concept of virtual game currencies is not novel, the rise of blockchain technology has introduced novel dimensions to in-game economies. Crypto games, leveraging the capabilities of blockchain, intertwine real-world economic elements into the gaming sphere.
In the realm of crypto gaming, players can accumulate Non-Fungible Tokens (NFTs) as rewards. These NFTs, also referred to as crypto, become players’ digital property upon winning the game. Importantly, these digital tokens can often be traded for stablecoins on decentralized or centralized currency exchanges. From there, players have the flexibility to either exchange these assets or convert them into fiat currency directly.
Unveiling the Mechanics of Crypto Gaming
Diverse business models underpin the world of crypto gaming. One noteworthy approach is “Play to Earn” (P2E) games. Adrian Krion, CEO of Spielworks, a blockchain-based gaming site, elucidates that P2E games empower players with various avenues to earn or purchase gaming tokens.
In some games, crypto revenue is generated through the sale of in-game items such as skins, weapons, or virtual land. These items hold real-world value and contribute to the immersive gaming experience.
Developers also incentivize players by rewarding them with NFTs or crypto for accomplishing in-game quests. These quests can range from simple tasks like defeating enemies to collecting resources. This gamified engagement model encourages players to invest more time and effort into the game, enhancing their gaming experience.
Additionally, certain gaming platforms offer opportunities for crypto enthusiasts to engage in casino games and diverse betting options. Notable platforms include BitStarz, 7bitcasino, and mBitcasino, which have become popular cryptocurrency gambling hubs.
Prominent Gaming Tokens
The gaming token market boasts a valuation exceeding INR 1 trillion. Notably, gaming tokens can hold intrinsic value both within the gaming environment and the broader real-world context. Here are three prominent tokens by market capitalization:
- ApeCoin (APE): With a market cap of INR 175 billion, ApeCoin is the backbone of the Bored Ape Yacht Club. This NFT-based coin operates on the Ethereum blockchain and extends its utility to diverse third-party games, exemplified by the P2E Mobile game Benji Bananas.
- Decentraland (MANA): MANA is the primary token powering Decentraland, a virtual world existing on the Ethereum blockchain. This token facilitates property transactions, social interactions, and gaming experiences within Decentraland, boasting a market cap exceeding INR 143 billion.
- Sandbox (SAND): The Ethereum-based metaverse, The Sandbox, relies on SAND tokens for various in-game transactions, including land purchases. With a market cap of approximately INR 127 billion, SAND underscores the metaverse’s growing influence.
Earning Opportunities
In crypto games, players can accumulate rewards in the form of digital tokens or currency through quest completion and performance. These in-game assets hold the potential for real-world value. Harry Turner, co-founder of The Sovereign Investor, highlights that in-game items like armor, weapon skins, and equipment can possess significant real-world worth. By trading NFTs and virtual assets, players can generate substantial profits.
Platforms like DMarket facilitate the exchange and sale of NFTs and virtual in-game items, with some items fetching millions. A reminiscent anecdote from 2001 reveals the immense worth of virtual assets. RuneScape’s party hats distributed as virtual items during a holiday event 20 years ago now possess values equivalent to billions of in-game gold pieces.
Despite the enticing prospects of crypto gaming, potential risks loom. Tokens tied to crypto games are susceptible to supply and demand fluctuations, often reliant on game popularity. The value of in-game currencies can plummet if player engagement declines, rendering tokens obsolete.
Furthermore, the nascent nature of crypto and inadequate regulations expose players to security risks, including fraud and hacking. While blockchain technology secures transactions, vulnerabilities in game engines and marketplaces persist. Cryptocurrency wallets storing gaming tokens are also vulnerable to breaches.
Last year, hackers pilfered INR 49 billion worth of Ethereum from Axie Infinity players. This cautionary tale underscores the importance of thorough research and vigilance.
In conclusion, crypto gaming marks a captivating amalgamation of gaming and blockchain technology. As the market evolves, players must navigate potential pitfalls while capitalizing on the remarkable opportunities presented by this revolutionary realm. While challenges exist, the future of crypto gaming holds immense promise, offering players unprecedented engagement and rewards, both within the game and beyond.