On July 17, BC, the organizer of the well-known Web3 festival in Southeast Asia, announced the winners of this year's blockchain competition, and in the GameFi track, the winner of the Technology Innovation award Heynext attracted wide attention. Heynext is a global interactive entertainment developer with game development as the core. Although it has not been involved in the blockchain game field for a long time, it has grown at an amazing speed due to its strong technical strength. The Heynext R&D team has incubated a more complete system to solve the problems of information leakage in the security system, and this project has largely filled such market gaps. Through Heynext's award, it's not hard to see the current situation of GameFi and some of the problems it faces.
When the world enters the era of stock game, the development of various industries is weak, and the threshold for individuals to obtain wealth is rising, GameFi has become a new round of wealth password considering both technology and flow. People are used to directly equate blockchain games (chain games) with GameFi, but strictly speaking, this is not the case. GameFi emphasizes more on the business operation of P2E games, while chain games value the application of blockchain technology in games. But for now, there is no essential difference between the two in form, so we will not make too fine a distinction.
Play to Earn (P2E), powered by blockchain technology, is a typical project of GameFi, and the model of play to earn seems to open up a convenient way for ordinary people to strike gold. Players obtain NFT rewards that can be converted into crypto tokens by doing tasks or fighting in the game, such as game currency such as gems, points and coins, as well as game assets including virtual land, characters and character skins, etc. Various DeFi projects will provide secondary markets to increase trading opportunities and liquidity.
P2E can indeed be seen as a great combination of virtual and real, but the development of blockchain games has been somewhat unsatisfactory. The scene of widespread crashes and runs in the industry suggests that the concept of "play and earn" has not yet matured.
A game itself does not create economic value on its own, and even its operation, maintenance, and development do not depend on the injection of money from players. Therefore, almost all chain games attract players to krypton by setting a threshold, and these players trade the game equipment and derivatives to obtain the difference in price. Game companies, as the original issuers of digital assets, can take a percentage of each player's transaction according to a specific blockchain protocol.
So everyone wants to make money from P2E games, who is responsible for paying? Obviously, it is the new players who enter after, and the disguised investment of new players is the source of profit for game companies and old players. However, when the number of players entering the market becomes less and less, the profits will decrease, and the players will terminate their investment and sell their assets one after another, which will eventually cause the price of the token to collapse, causing the market to panic and then collapse, which is the main reason for the downturn in the GameFi market.
Based on Heynext's innovation award, we can see its in-depth research on the current situation of GameFi and its determination to solve problems, which also helps us to more comprehensively analyze the existing problems in the industry and the next steps.
Content and Gameplay
At present, the data and assets created by players in the game only belong to themselves to some extent, and its value is single, which is deeply bound with game products. To keep P2E running, decentralization of both client and content is required. Developers should understand that game content is always a core part of GameFi. Having a strong core is crucial, and it is also necessary to provide players with various needs. Only by gaining the consensus and support of players can the long-term vitality of the game be continued.
Accessibility
The accessibility of games can be divided into two meanings. First of all, GameFi's use of cryptocurrencies or related concepts is a high learning cost for Web2 game players, and most Web3 game gameplay is simple and boring, leaving many players standing outside GameFi's threshold without interest in entering.
In addition, GameFi usually sets NFTS as a threshold for games, with players buying a certain amount of NFTS to start playing. This seems fine on the surface, but as NFTS continue to appreciate, the threshold for new players to enter the game will be higher and higher, and it will be more difficult to acquire new users. Therefore, decline and death are the common outcome of GameFi today, so exploring a more reasonable and effective model has become the road to survival that developers must face.
Security
Like many blockchain projects, there are security concerns in the GameFi domain. Game protocols in the form of smart contracts are publicly deployed on the chain, and vulnerabilities in design and implementation are easy to be maliciously exploited by attackers, seriously damaging the fairness of the game. At the same time, the NFT market is still poorly regulated, with risks of fraud and scams, and investors are not protected when trading NFTS. There are already game companies that are doing something about this, and we believe that technology and regulation will evolve to support GameFi's growth.
As GameFi evolves, the problems it faces become more detailed and tricky. Although the blockchain game industry has just experienced a brief winter, in fact, practitioners have never stopped trying, and GameFi has not stopped moving forward. We look forward to more developers like Heynext participating in the construction of chain games in the future, so as to promote the prosperity of the whole industry.