Cryptocurrencies and their various condiments are of no doubt the new cool. The global finance news space is always saturated with crypto news updates. NFTs, one of the most recent tractions gaining sectors have been leveraged by a lot of traditional companies. For instance, Nike acquired RTFKT Studio. Gaming companies have also leveraged this opportunity as they have leveraged the existing opportunities on blockchain to modify their games and make them more mainstream.
Although the crypto space is getting bigger and is waxing stronger, several Play-to-earn projects have been struggling to survive and stay afloat. For instance, PolyChain monsters, a reputable play-to-earn game is currently trading its native token at $1.44 from its all-time high of $58.1. similar to this, Nakamoto games’ native token is currently trading at $0.08748 from its all-time high of $6.
The two listed above are just a few illustrations among the pool of struggling play-to-earn projects. This article seeks to examine the factors responsible for the decline in the gamefi industry.
Little Focus On The Product
One of the major problems plaguing the play-to-earn space is that most of the existing projects raise funds for marketing campaigns. The developers pay little attention to the product itself as they put less effort while developing the actual products. They pay less attention to the target audience and their reception of the game. Their main focus is mainly on marketing the project.
The success of a product is highly dependent on how well the developers are creating an in-demand product rich with new features that will keep users glued to the app. Most of the existing play-to-earn projects are void of this. This in turn makes users less interested in the game.
Expensive In-game Items
Another reason why Play-to-Earn projects are failing is the high cost of entry, especially with NFTs. To have a swell time and earn on blockchain games, in-game items have to be purchased by the gamers. Some of these items are relatively expensive and it becomes unaffordable for an average gamer. Some of these items cost as high as $1,000. This is very high compared to an average gaming device out there. An average gamer will not be willing to pay so high on a single game since they can get a game console and have access to more games for less.
Although, there are play-to-earn projects that are not as expensive as that. But the majority of them have expensive entry fees. This is a big turn-off for interested gamers who lose interest after a few attempts.
Absence of Strong Tokenomics
Tokenomics is a part of any project that cannot be undermined as it determines the success of any project.
A lot of play-to-earn projects have more than one native token. This is in addition to the native NFTs that serve as an entry pass to play these games. Multi-token projects are prone to problems in terms of allocation and distribution and makes the tokens inflationary. When the tokens become inflationary, they start to lose their value. For instance, Axie infinity experienced a downtime because of its tokenomics and, in February 2022., the team decided to burn their tokens to bring balance to their tokenomics.
Still, on tokenomics, most of the tokens issued by these apps have no actual use case. Gamers just earn them and have them in their wallet. This again made gamers lose interest in play-to-earn games. Since these tokens fail to provide multiple utilities for their tokens, players will lose interest. This leads to a fall in the value of the token and ultimately leads to the failure of the project.
Difficult to Play
One of the reasons Traditional gaming industries have thrived over years is the fact that their developers built games that are easy to operate. Most of the existing play-to-earn games have their areas of complexities that can only be navigated by Web3 natives.
On the other hand, traditional games require simple and familiar technologies that can be navigated with basic or quasi-computer knowledge. To make in-game purchases items like credit cards are used. But for crypto games, the process is different. Players are required to buy an NFT before playing and to get this NFT, players have to buy it from the open market or marketplace of the game. This can prove to be a difficult task for web3 non-natives.
These are some of the reasons the play-to-earn world is declining and may eventually fail. Upcoming play-to-earn projects are already putting this into consideration as they develop their apps. Special and more interactive features have been added. For instance, IguVerse combines the features of Move-to-earn. Socialize-to-earn and play-to-earn in its game. This provides gamers with different options they can switch to when bored. GEMS in its gameplay has provided users the opportunity to earn passively by lending out their in-game NFTs. Will this save the declining industry? Let’s wait and see.