The number of GameFi projects has continued to increase steadily and has reached 1551 games as of June 2022, the crypto exchange Binance has said in its semi-annual research report. That said, the slow growth is clear as month-over-month growth has stepped down to a low single-digit rate, with a clock of 2.5 percent in June 2022, the report further states.
The name GameFi combines the terms “gaming” and “finance”, and it includes both gaming and financial incentives. Beyond just simple financial rewards, GameFi offers players the ability to own digital assets in the virtual world, along with the ability for interoperability by bringing these assets across different virtual worlds.
Binance’s research report said that GameFi has enormous potential coming from the integration of features of Blockchain technology, gaming, financialization and non-fungible tokens (NFT), which has contributed to significant interest in and growth of GameFi.
According to the report, the broad general negative market sentiment probably contributed to this decline, as market participants took a breather from Blockchain activities, and the number of new game launches decreased.
In addition, the report has cited that Ethereum is still 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 investment is a good indicator of institutional interest, and can serve as a proxy to measure the health of space. For the first half of 2022, GameFi witnessed a healthy flow of agreements,” the report said.
In addition, GameFi’s total capital investment exceeded $ 4.1 billion in the first half of 2022, contributed by a $ 2 billion fundraiser raised by Epic Games.
“This represents an increase of 38 percent 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 gaming in June, the report said.
GameFi is also changing the laws of gaming by bringing a fresh group of gamers into the Blockchain community. The size of the gaming market is estimated at around 175 billion dollars, and GameFi’s market value is less than 4 percent of that at only 6.2 billion dollars.
“The first half of 2022 saw concrete 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 intellectual property to fund its Blockchain initiatives in May 2022; Epic Games raised $ 2 billion to develop the Metaverse effort in April 2022.
However, companies such as Ubisoft, EA (Electronic Arts), a gaming company, and Tencent have also entered the Blockchain gaming area, albeit to varying degrees.
“This means increased competition for existing Blockchain gaming companies; it is a positive sign for the industry when it comes to driving innovation, “the Binance report added.
