Although the crypto gaming industry remains below its 2021 peaks, it still pulled in substantial venture funding last year. But looking to the future, the subsector may look outside of tokenomics to grow and sustain itself for the long haul.
“Tokens are a fantastic way to share ownership of economies. I’m very supportive of tokens and think they’re a brilliant invention and have done a lot,” Robbie Ferguson, co-founder and president at Immutable, said to TechCrunch. “But we will definitely see increased retail skepticism and diligence where they want to see traction on these games.”
For Immutable, which raised $200 million at a $2.5 billion valuation last year, the most important element is “to build a fantastic experience for players — the economy has to be sustainable and user experience has to be fantastic,” Ferguson said. “From there, everything will flow.”
“The future isn’t shouting to gamers why they should love NFTs; it’s showing them with a product they want to play.” Immutable’s Robbie Ferguson
Since the beginning of 2022, the top 10 blockchain gaming projects by market capitalization fell as much as 95% due to the inability to maintain sustainable in-game economies and player bases, according to Delphi’s The Year Ahead for Gaming report.
For example, the token price for Axie Infinity, one of the biggest web3 games to gain traction, hit all-time highs of $160 in November 2021 but has since declined 92% to less than $12, according to CoinMarketCap data.
“We believe that most projects shouldn’t have live tokens in the market until the bulk of their core game loops are established, which can immunize them against speculation and inflated expectations,” the Delphi report stated.
There will be a much higher standard for how effectively and efficiently a foundation uses its tokens and the direct return on tokens spent, Ferguson said. “I think a lot of tokens are spent poorly at the moment.”