Tokenomics and Gamer Engagement
Despite ongoing skepticism from segments of the gaming community regarding “tokenomics,” industry leaders believe that gaming studios will persist in employing airdrops and various incentives to draw in players. Kieran Warwick, the founder of Illuvium, remarked in a Cointelegraph interview that such strategies are an effective means of capturing market share. However, he cautioned that any game lacking engaging gameplay is likely to falter. “If your marketing relies solely on incentives without a quality product, player retention will be severely compromised,” Warwick stated.
The Need for Fun in Gaming
Shi Khai Wei, founder of LongHash Ventures, echoed Warwick’s sentiments, emphasizing the necessity of enjoyable gameplay. He noted that while crypto provides excellent user acquisition through incentives such as airdrops and play-to-earn models, retaining players hinges on the game’s entertainment value. Axie Infinity serves as a notable example of a successful blockchain game, but it faced significant challenges, including a $650 million bridge hack, which impacted user retention following the previous bear market. Wei highlighted that games that develop sustainable economic models, appropriate emission schedules, and cultivate the right player engagement will be the ones that endure.
Token Incentives and the Gaming Community
Warwick recognized that while token incentives might attract opportunistic airdrop hunters rather than genuine gamers, such tactics are essential for expanding the player community. He added that these incentives also help garner attention from true gaming enthusiasts. Recently, Illuvium announced the release of 200,000 ILV tokens, valued at around $25 million, as part of a six-month Play-to-Airdrop initiative. These tokens will be available in various Illuvium titles, set to launch on IMX, an Ethereum-based NFT layer 2, by the end of May.
Airdrops and Social Identity
Gabby Dizon, co-founder of Yield Guild Games, pointed out that while airdrops can significantly accelerate GameFi adoption, not all participants are primarily motivated by financial gains. “Some individuals may seek to acquire assets that confer social status, similar to purchasing luxury cars, watches, or high-end clothing,” she explained.
The Evolution of GameFi
Both Dizon and Warwick conveyed that GameFi is still lagging approximately 14 to 15 years behind traditional gaming. Nevertheless, they anticipate rapid advancements in this area. Warwick remarked on the accelerated pace of innovation within blockchain compared to the conventional gaming industry, noting that many individuals in blockchain gaming have backgrounds in mainstream game development. “We aren’t starting from scratch; however, building intellectual property (IP) that resonates with players takes considerable time, as it involves creating engaging stories, universes, and character interactions,” he elaborated.
The Journey to Dominance in GameFi
Warwick highlighted that developing IP can take six to seven years, indicating that leading gaming studios are currently about halfway through this journey. Until a groundbreaking GameFi project emerges, akin to the impact of Clash of Clans or Candy Crush in the early 2010s for traditional gaming, Dizon expressed hope that Yield Guild Games will help foster such a transformative title by uniting blockchain games and gamers within a decentralized network of gaming guilds.
Future Trends in Gaming
Looking ahead, the landscape of gaming is increasingly focused on User-Generated Content (UGC). The trend of players creating their own characters and levels is expected to continue, but for the digital economy to flourish, it’s essential to have technologies that empower creators to maintain ownership of their work. Wei expressed optimism that 2024 will see the release of a AAA-standard game within the GameFi sector.
