Why GameFi Needs NFTs?

The birth of the gaming industry before NFTs
Before discussing the main issue of "why GameFi needs NFTs," let's briefly review and consider the position of the gaming industry in today's economy and society, as well as how the gaming industry operated when NFTs were applied on a large scale. What needed improvement?

A brief history of the electronic gaming industry with revenues of 165 trillion
In an economic analysis article from China, it was stated that "The online gaming industry can now be seen as one of the pillars of the nation."

The development of this industry is also a part of promoting the industrialization and modernization process and the growth of the 4.0 economy.

Watch the video below for more information about GameFi:

It is not an exaggeration to know that in 2021, the actual revenue of the Chinese game market was 296,513 billion yuan, an increase of 17,826 billion yuan compared to the previous year and an increase of 6.4% compared to the same period last year (current exchange rate: 1 yuan = 3,475 VND) Source: Game4v

Moreover, on the Wanfang data knowledge service platform, the number of research articles on the gaming industry has reached nearly 5 thousand, so we can see the increasing attention of the gaming industry in the academic community, which demonstrates the importance of the gaming industry in today's economy and society.

According to data from 2015 to 2020, the compound annual growth rate (CAGR) of the global game market reached 13.4%, with the global game market expected to reach $164.6 billion in 2020 and projected to reach $196 billion in 2022, hitting a record $200 billion.

In addition, according to the "Global Games Market Report 2021" released by Newzoo recently, the current number of gamers is nearly 3 billion, and due to the development of social networks and the Internet, this number continues to grow exponentially.

The Chinese gaming industry is growing slowly due to policy-IT
Along with the continuous increase in the number of players, the psychology of these gamers is also starting to change in a more complex direction. This objectively suggests to game developers that they increasingly need to improve and refine their offerings.

Currently, the global gaming industry has a one-way structure. That is, when players start a game, they usually start for free, but after playing for a while, if they want to become stronger or more beautiful, players need to spend a corresponding amount to own skins and increase VIP status, and receive more incentives from the publishers.

Game publishers are also very adept at understanding player psychology in this regard, so they often release beautiful skins with attractive effects and VIP programs with great incentives to "bleed" players and increase profits for these companies.

If players want to earn money from games, they can only go farming or sell accounts (nicks) to other players for corresponding amounts, but this is not suitable for everyone.

After a period of operation, if a game does not have a stable number of players or encounters unforeseen incidents, the game may not be released to the market anymore. In that case, almost 99% of the items, skins, or VIPs of players will cease to exist or have no value, even if players have invested any amount of money, the publisher is not responsible for compensating them.

This situation is really difficult to call fair, but with the advent of GameFi and NFTs, this reality has been resolved.

NFTs help GameFi transform the gaming industry deeply
If you don't know what GameFi is, you can read the article: Here

The birth of GameFi has brought a wind not only to the global gaming market in general but also created a significant impact on the cryptocurrency community in particular.

The emergence of GameFi has broken the previous structure of one-sided profit from developers and gaming companies. Playing GameFi games allows players to earn money on those games by rewarding and selling their items and also to entertain after a stressful study or work period (core factor when playing games).

GameFi? The difference between traditional game projects and GameFi? - BeInCrypto Vietnam
And the key for GameFi to solve this problem is thanks to NFTs.

NFTs play an extremely important role in games, with the help of NFTs, all items that players obtain in the game (whether through purchases or through gold) have a unique "identity authentication," not counterfeit. any second addition, this creates favorable conditions for players to confirm ownership rights for tools and equipment in this game.

In other words, with NFT support, players can easily control the exclusivity of items as well as freely use items in games and can even transfer between different items.

Taking Axie Infinity as a typical representative of the GameFi field:

In the game, each Axie spirit that players get is unique and completely belongs to the player, whether it's the game developer or the publisher can't create another offspring like this anymore, and it can't be taken illegally without permission.

Of course, the most important point in these game projects is profit, and about 95% of Axie Infinity's income is allocated to GameFi players, of course, this ratio will differ slightly.

Axie Infinity - a game developed by Vietnamese people has become the first NFT game to cross the $1 billion revenue mark | Advertising Vietnam
Before the appearance of NFTs and GameFi, the issue of trust between game players, developers, and manufacturers still raised a big question about the balance of interests between the two sides. But when NFTs and GameFi appeared, the two sides were no longer a simple relationship between producers and consumers, but tended to establish a more equal and harmonious relationship. In this transformation process, NFTs have made significant contributions to overthrowing the old-fashioned business model of the gaming industry.

According to Axie Infinity's official news data, in early September 2021, its daily active users reached 993,000, just a few more users to reach millions.

According to tokeninsight's statistics, the market value (9/2021) of the Axie Infinity-AXS management token has reached $4,308 billion, ranking 41st in the cryptocurrency market, with a trading volume of over $634 million in 24 hours. Only from the above data, it's hard to believe this is the daily transaction volume of a game. But while the game has only existed for less than a year, this only reflects the true development of GameFefds.

Summary
At the moment, it is undeniable that the Gamefi market is no longer as HOT as before, but this is one of the potential super industries that can develop particularly well in the future.

In addition, we cannot fail to mention the extremely important role of NFTs, not only helping the Gamefi industry to operate smoothly but also currently and has penetrated into many other areas such as Move to earn or most recently the sale of NFTs by the famous rapper BINZ, it is expected that NFTs will be widely used in many social activities as well as specific fields requiring fairness and exclusivity.