Blockchain Games Are Receiving Investment

Blockchain gaming has been gaining popularity in recent years, thanks to its ability to provide players with true ownership and control over their in-game assets. With the rise of blockchain technology and the increasing demand for decentralized gaming experiences, investors are starting to take notice of the potential of blockchain gaming.

In fact, according to a report from DappRadar, the first quarter of 2021 saw a record-breaking $2 billion in transaction volume for decentralized applications (dApps), including blockchain games. This represents a significant increase from the previous quarter and highlights the growing interest in blockchain gaming among both players and investors.

So, what exactly is driving this surge in investment into blockchain games? Let’s take a closer look at some of the factors at play.

True Ownership and Scarcity

One of the key benefits of blockchain gaming is that it allows players to truly own their in-game assets. Traditionally, in-game items and currencies are owned and controlled by the game developers, and players have little control over them. With blockchain gaming, however, players can own and trade their assets on a decentralized marketplace, giving them more control over their gaming experience.

This sense of ownership also creates scarcity, which can drive up the value of in-game assets. For example, in the blockchain game Axie Infinity, players can breed and trade digital creatures called “Axies.” The most rare and valuable Axies can sell for thousands of dollars on the open market, thanks to their limited supply and high demand.

BLOCKLORDS is another game that puts the focus of the gaming experience on ownership. Each Hero has its own unique traits and skills, which develop through he players in-game decisions, giving every player a unique experience they can own. The game is yet to be released, but you can still watch some BLOCKLORDS gameplay on YouTube

Investors are taking notice of the potential for blockchain games to create valuable, scarce assets that can be bought and sold like real-world commodities. This has led to a wave of investment into blockchain gaming startups and platforms, with companies like Immutable, Animoca Brands, and Gala Games raising millions of dollars in funding.

NFTs and Tokenization

Another factor driving investment into blockchain gaming is the rise of non-fungible tokens (NFTs) and tokenization. NFTs are unique digital assets that are stored on a blockchain and can represent anything from artwork to music to in-game items.

In the world of blockchain gaming, NFTs are used to represent rare and valuable in-game assets. For example, in the game The Sandbox, players can buy and sell virtual land using NFTs. This creates a sense of ownership and scarcity, as players can trade these NFTs on a decentralized marketplace.

Tokenization, on the other hand, involves creating a digital token that represents ownership in a particular asset or platform. This can be used to fundraise for a blockchain game or platform, as investors can buy and trade these tokens as a form of investment.

For example, the blockchain game Splinterlands recently launched a token sale to raise funds for its platform. Investors could buy and trade these tokens, which represent a share in the game’s revenue and governance.

The potential for NFTs and tokenization to create valuable assets and investment opportunities has led to a surge in interest from investors. This has driven up the funding and valuation of blockchain gaming startups and platforms, as investors look to capitalize on the potential of these technologies.

Mainstream Adoption

Finally, another factor driving investment into blockchain gaming is the potential for mainstream adoption. While blockchain gaming is still a relatively niche market, there are signs that it is gaining traction among mainstream audiences.

For example, the game Axie Infinity recently surpassed 1 million daily active users, making it one of the most popular blockchain games on the market. This level of adoption has attracted attention from investors and mainstream media outlets, helping to legitimize the potential of blockchain gaming as a viable market.

Additionally, major gaming companies like Ubisoft and Atari are starting to dip their toes into the world of blockchain gaming, signaling a potential shift towards mainstream adoption. As more companies and players become familiar with blockchain gaming, the potential for investment and growth in the industry will only continue to increase.

Challenges and Risks

Scalability

While the potential for investment in blockchain gaming is high, it is not without its challenges and risks. One of the biggest challenges facing blockchain gaming is scalability. Currently, most blockchain networks are not able to handle the high transaction volume required for large-scale gaming experiences. This can lead to slow and expensive transactions, as well as potential security risks.

Awareness

Another challenge is the lack of mainstream awareness and adoption. While there are signs that blockchain gaming is gaining traction among mainstream audiences, it is still a relatively niche market. This means that investors may be taking a risk by investing in a market that has yet to prove itself on a larger scale.

Regulation

Finally, there is also the risk of regulatory crackdowns and legal challenges. As blockchain gaming continues to grow, it may attract the attention of regulatory bodies and lawmakers. This could lead to restrictions or outright bans on certain types of blockchain gaming, which could negatively impact investor returns.

Conclusion

Despite these challenges, the potential for investment in blockchain gaming is high. With its ability to create truly owned and scarce assets, as well as the rise of NFTs and tokenization, blockchain gaming has the potential to revolutionize the gaming industry.

Investors are taking notice of this potential, as evidenced by the record-breaking transaction volume and funding rounds in the first quarter of 2021. However, it is important to remember that investing in blockchain gaming is not without its risks and challenges.

As the industry continues to evolve and mature, it will be important for investors to stay informed and up-to-date on the latest developments and trends in blockchain gaming. With the right approach and a bit of luck, investing in blockchain gaming could prove to be a lucrative opportunity for those willing to take the risk.