Play to earn games has exponentially grown over the years. It has been clutched by online gamers to collect cryptocurrencies and nonfungible tokens (NFTs). Blockchain technology-based games have enabled users to generate income by trading cryptocurrencies or selling Non Fungible tokens, which can be exchanged for fiat cash.
The data reports of the GameFi industry, a play-to-earn gaming platform that provides access to the financial environment for users by the use of blockchain technology; have promised the GameFi industry to generate around $2.8 billion by 2028, as the annual growth has been pondered over by 20.4%.
However, the future may be not same for the play-to-earn games, given the rate of its promising growth during the past few years. There are a few reasons why the industry won’t be similar to the past few years.
As we all are well aware the spectacular case of the crypto scam-king Sam- Bankman fried, who evaporated $8 billion of his investor’s funds for political campaigns and other personal gains.
Play-To-Earn Gaming Is Built With Fragile And Unrealistic
The explosion of the world-second biggest crypto exchange, FTX has stumbled the entire crypto market; resulting in every cryptocurrency bleeding their value.
This is due to its toxic framework in the structure of the technology. The play-to-earn gaming platform is not built with rigid foundations, instead, it is fragile and unrealistic.
Since the projectors can issue the tokens of the game even before the establishment of the game, the highly influential abilities of the owners draw the customers to purchase the token.
Thus, when project owners benefit from selling the tokens, he skims the development of the game nonchalantly, which results in poor quality of the game promised and the players will not be pleased with the development of the content and find themselves in a grudging environment.
The current environment enables the project owners to be unreliable and flexible. The owners have been screwing with their investors by gaining the investor’s trust and imploring perverse incentives.
At present, the entire crypto market is crumbling down due to the collapse of the FTX giant, which genuinely had a heavy impact on all cryptocurrencies.
The token and crypto market is currently in a downward trend almost every cryptocurrency has lost 50% of its value from its prime.
Many play-to-earn industries are currently surviving based on the promises made by the owner, and once their investors may realize that they have lost their funds they may retrieve from the industry. Experts suggest that the industry will bleed the gamers if the market keeps crumbling.
Another reason for the market to collapse is the global energy crisis, as the sanctions on Russia’s energy supplies have surged the prices of energy which eventually led the mining facilities to run out of funds.
Many cryptocurrency mining companies have filed for either bankruptcy or sale. Therefore, it is highly unlikely for the cryptocurrency market to recover back to its feet in a short time. Thus, GameFi may erase in 2023, but the industry can always come back with certain improvements.
GameFi needs to adapt to the developments of Web3 applications to survive in the industry. Many experts suggested that the play-to-earn industry can recover in the future if the developers prioritize the financial aspects of the industry over the fun when developing the game.
Despite the huge slap to the industry, the numbers in the community have witnessed steady growth with industries WAX and Binance Smart Chain has reached 2.94 and 2.49 million users respectively.
As web3 applications have been a hot topic for venture capitalists as they are fierce on acquiring gaming platforms within the GameFi space. The industry can emerge as the top in decentralized finance if the rigid foundation is replaced by fragile ones.