GameFi Bringing More Gaming Companies Into Blockchain Technology, Says Binance Report


SOURCE: OUTLOOKINDIA.COM
JUL 17, 2022

The number of GameFi projects has continued to rise steadily and has reached 1,551 games as of June 2022, crypto exchange Binance has said in its half-yearly research report. That said, the slow growth is evident as the month-over-month growth has tapered to low single-digit rate, clocking at 2.5 per cent in June 2022, the report further said.

The name GameFi combines the terms “game” and “finance”, and it includes both gameplay and financial incentives. Beyond just simple financial rewards, GameFi offers players the chance to own digital assets in the virtual world, along with the option for interoperability by bringing these assets across various virtual worlds.

Binance’s research report said that GameFi has a huge potential that comes from integrating traits of Blockchain technology, gaming, financialisation, and non-fungible tokens (NFTs), which has contributed to significant interest in and growth of GameFi.

According to the report, the broad overall negative market sentiment likely contributed to this decline, as market participants took a breather from Blockchain activities, and the number of new game launches slowed down.

Moreover, the report has cited that Ethereum remains the dominant Blockchain with the highest number of GameFi projects built. The market share has also fallen steadily from over 50 per cent in July 2021 to around 35 per cent in June 2022.

“Private investments are good indicators of institutional interest, and can serve as proxies to gauge the health of the space. For the first half of 2022, GameFi witnessed a healthy deal flow,” says the report.

In addition, total capital investments in GameFi exceeded over $4.1 billion in the first half of 2022, contributed by a behemoth of $2 billion raised by Epic Games.

“This represents a 38 per cent increase when compared to the second half of 2021. Overall, GameFi remains a key focus for institutions; Andreessen Horowitz launched a $600 million gaming-focused fund in May, and Immutable launched a $500 million venture fund focused on Web3 games in June,” the report said.

Gamefi

GameFi is also altering the laws of gaming by bringing a fresh group of players into the Blockchain community.

GameFi is also altering the laws of gaming by bringing a fresh group of players into the Blockchain community. The gaming market size is estimated to be around $175 billion, and GameFi market cap is less than 4 per cent of that at only $6.2 billion.

“The first half of 2022 saw tangible actions taken by traditional gaming companies to enter the Blockchain gaming space,” the report said.

Square Enix, a gaming company sold $300 million worth of valuable intellectual property to fund its Blockchain initiatives in May 2022; Epic Games raised $2 billion to develop its Metaverse efforts in April 2022.

However, companies like Ubisoft, EA (Electronic Arts), a gaming company, and Tencent have also entered the Blockchain gaming space, albeit to different extents.

“This means an increased competition for existing Blockchain game companies; it is a positive sign for the industry in terms of driving innovation,” the Binance report added.