John Gilbert

Pat Rabbitte

<div id="highlights-block_3a8b4a369a21a1d4d560483d66474090" class="highlights">
 <ul>
 <li>The video game industry is currently priced at $178 billion, with the GameFi sector making up $21 billion</li>
 <li>GameFi isn’t just another opportunity for VC funds — it is changing how and who gets to invest in new projects</li>
 </ul>
 
</div>



What happens when you open the <a href="https://cms.blockworks.co/the-investors-guide-to-gaming-nfts/">GameFi</a> ownership economy to a gaming industry that can amass audiences larger than the Super Bowl? You get a new class of creative entrepreneurs and Silicon Valley VC funds eager to invest — or almost eager.&nbsp;



The video game industry is currently priced at <a href="https://www.wepc.com/news/video-game-statistics/" target="_blank" rel="noreferrer noopener">$178 billion</a>, with the GameFi sector making up $21 billion. If Web3 is about to disrupt the industry as Web2 did in the 2000s, then venture capital fund managers have a lot of reason to pay close attention to the gaming sector.



The big question for these managers is, will the gaming community — the people behind the industry&#8217;s revenue — want to mix play with work? My last article explained the difference between the GameFi monetization models and why the <a href="https://cms.blockworks.co/play-and-earn-is-fixing-gamefi/" target="_blank" rel="noreferrer noopener">play-and-earn system</a> could make GameFi more attractive to the rest of the video game industry.



The jury is still out. But regardless of the gaming zeitgeist direction, GameFi is not only attracting funding and talent from Silicon Valley. It is changing the funding model altogether.



<h3 class="wp-block-heading">The venture capital managers leading investment in GameFi</h3>



Last year, Andreessen Horowitz invested $4.6 million in a leading gaming guild. Not an enormous amount in relative terms, but with a $2.2 billion crypto fund in place, the Menlo Park-based venture capital firm is actively allocating. At the time, Arianna Simpson (who heads up the fund) <a href="https://a16z.com/2021/08/19/investing-in-yield-guild-games/" target="_blank" rel="noreferrer noopener">outlined</a> &#8220;a largely untapped economic opportunity in emerging markets to provide jobs by building a virtual economy in the digital world.&#8221; She pointed out that this sector is making us all rethink and redefine employment.



Arianna is alluding that she sees the gaming zeitgeist moving in a direction that adopts a work and play mixture. It&#8217;s a move that will undoubtedly leave the adage, &#8220;get off the couch and get a job,&#8221; outdated. It will challenge the definition of human productivity — something that is already in question as automation threatens to disrupt the majority of occupations.



FTX <a href="https://cms.blockworks.co/ftx-to-launch-gaming-unit-to-support-mainstream-crypto-adoption/" target="_blank" rel="noreferrer noopener">announced</a> a new gaming division as a crypto-as-a-service-styled platform targeted at game developers in February. Its division lead, Amy Wu, recognizes the industry&#8217;s opportunity before its initial reluctance is overcome, stating: &#8220;Yes, there are gamers who don&#8217;t believe in NFTs in games, but there were also naysayers about free-to-play and mobile gaming. It will take examples of exceptionally designed, innovative games to show gamers the future.&#8221;&nbsp;



Wu alluded to the two billion-plus gamers who have bought digital assets (in the form of in-game items) for years, with the vital distinction being that they can now take proper ownership of them.



Wu and Simpson were speaking about the enormity of the opportunity that GameFi presents. Play-to-earn is just the preamble. The move to play-and-earn — focusing on gameplay alongside the blockchain-based ownership dynamic — will draw in the two billion-plus gamers that Wu referenced. While DeFi has greater depth from a total asset value perspective, the incredible size of the gaming audience is an indicator of the comparatively outsized opportunity that exists for investors in the space.



<h3 class="wp-block-heading">The new decentralized investing model for IGOs</h3>



GameFi isn’t just another opportunity for VC funds. It is changing how and who gets to invest in new projects — or what is called IGOs (Initial Game Offerings). The DAO-operated gaming guild <a href="https://www.unixgaming.org/?__cf_chl_tk=LGNzqzefFg1rRmjfO5wb8CVbIai44ziBMlwI_Bq_WBg-1652227358-0-gaNycGzNCmU" target="_blank" rel="noreferrer noopener">UniX Gaming</a> introduced a new investing model called <a href="https://finalround.unixgaming.org/" target="_blank" rel="noreferrer noopener">Final Round</a> which provides community members with the opportunity to invest in and even play games before they are made available publicly.&nbsp;



The community members of this guild are similar to the VCs and angel investors in the sense that they get access to equity shares before a company goes public. But instead of equity, guild members get access to <a href="https://cms.blockworks.co/the-investors-guide-to-gaming-nfts/" target="_blank" rel="noreferrer noopener">game NFTs</a> and gaming tokens. Unlike the traditional model, though, the fund is managed decentrally through a DAO (decentralized autonomous organization) and powered by its own UniX token. This makes investing more accessible and transparent through the innovation of off-chain smart contracts. And in a step to make more projects available for crowdfunding, UniX moved from the Ethereum blockchain to Polygon. This decision allows games built across multiple blockchains eligible for Final Round.



<h3 class="wp-block-heading">How play-and-earn is a revolution in consumer participation</h3>



As GameFi iterates and evolves from play-to-earn to play-and-earn, it&#8217;s also finding a way to improve user acquisition. Axie Infinity inspired some brilliant game developers to move to Web3. Creative, independent developers were getting squeezed by handing over significant capital to tech giants such as Facebook and Google to acquire a user base.



The economic incentives behind GameFi drive community and consumer participation. For this reason, the team behind Axie Infinity was able to scale up its community incredibly quickly, without having to hand over a dime to the tech giants. In 2021, Axie grew at a rate of 30% per week. It became one of the <a href="https://www.businessinsider.in/investment/news/axie-infinity-saw-3-5-billion-nft-transactions-in-2021/articleshow/90153079.cms" target="_blank" rel="noreferrer noopener">highest-grossing games</a> globally without a presence in any app stores.



<h3 class="wp-block-heading">Guilds creating brand evangelists</h3>



In tandem with the incredible growth of Axie gamers, <a href="https://cms.blockworks.co/online-communities-to-digital-nations-how-gaming-guilds-combine-startups-vcs-and-social-impact/" target="_blank" rel="noreferrer noopener">gaming guilds</a> have emerged and grown communities at a similar rate. Guilds such as <a href="https://www.unixgaming.org/" target="_blank" rel="noreferrer noopener">UniX Gaming</a> have been instrumental in creating brand evangelists more effectively than any other industry. Furthermore, they&#8217;re lowering the participation threshold by removing a considerable upfront cost for would-be participants.



<h3 class="wp-block-heading">Unrealized potential in esports</h3>



Esports is another vertical in the sector offering exponential potential. It&#8217;s <a href="https://www.statista.com/statistics/490522/global-esports-market-revenue/" target="_blank" rel="noreferrer noopener">forecasted</a> to grow to a $1.62 billion market value by 2024. It&#8217;s estimated that League of Legends tournaments have recorded viewership that exceeds that of the Super Bowl and NBA finals.



The competitive nature and monetization of gameplay in esports make it a precursor to play-and-earn guilds. As these games and communities develop, their players and builders will find ways to merge with esports.&nbsp;



Instead of taking a more conventional approach to influencer marketing, GameFi projects embrace live-stream gamers as influencers. UniX Gaming has amassed 23 million viewers via their stream partners. With economic incentives in place, the gaming guild has set its sights on a target of 150 million viewers. Harnessing this level of community engagement is incredibly powerful in bringing new games to market.



As it stands right now, total GameFi market capitalization amounts to $21 billion. Gaming, in general, is projected to reach a value of $268 billion by 2025. We are witnessing a shift from publisher-first economies to player-first economies, which is likely to be a killer application of blockchain-based gaming. Armed with that knowledge and an understanding of why GameFi is poised to disrupt traditional gaming, it&#8217;s easy to appreciate that GameFi represents the next Silicon Valley for investors.



<hr class="wp-block-separator has-css-opacity"/>



This content is sponsored by <a href="https://www.unixgaming.org" target="_blank" rel="noreferrer noopener">UniX Gaming</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

GameFi

Is GameFi the Next ‘Silicon Valley’ for Investors?

<div id="highlights-block_627bd33e60997" class="highlights">
 <ul>
 <li>GameFi is considered a sector of Web3 because ownership is decentralized between builders, investors and players</li>
 <li>Gaming NFTs are simply a record of game asset ownership on a public blockchain</li>
 </ul>
 
</div>



<h3 class="wp-block-heading">GameFi explained&nbsp;</h3>



GameFi, as the name suggests, is the intersection of gaming and finance. It&#8217;s considered a sector of Web3 because ownership is decentralized between builders, investors and players. These two industries found each other on the blockchain through an exciting ecosystem of in-game tokenomics and gaming NFTs (non-fungible tokens).&nbsp;



In this context, gaming NFTs are simply a record of game asset ownership on a public blockchain such as Ethereum, Cardano or Solana.&nbsp;&nbsp;



The decentralization of GameFi allows game assets (or NFTs) to be transferred out of and between games. This transferability gives the assets value outside of the gaming ecosystem. And because the ownership status of an NFT is tracked on the blockchain, they can be bought and sold as collectibles on third-party exchanges.



This evolution in gaming isn&#8217;t about game mechanics. Rather, it&#8217;s about moving game monetization closer to the ultimate vision of Web3. Many big GameFi builders hope these games will become blockchain marketplaces where the free market gives value to in-game assets within a player-owned ecosystem.



Learn more: <a href="https://cms.blockworks.co/can-gamefi-still-unlock-the-metaverse/">Can GameFi Still Unlock the Metaverse?</a>



<h3 class="wp-block-heading">So what are the real world benefits of gaming NFTs?</h3>



It&#8217;s not just about digital collectibles. Gaming NFTs bridge digital worlds by introducing a new era of game asset collecting. It is the technology that will facilitate a unified metaverse, and Web3 gaming will bring several benefits that traditional gaming lacks.



Ownership: In traditional gaming, in-game purchases are non-transferable investments locked within a single gaming world. Gaming NFTs bestow ownership of in-game assets to players. That ownership is more meaningful as it&#8217;s not restricted within the game publisher&#8217;s walled garden.



Provable scarcity: The scarcity of gaming NFTs can be proven via the immutable records of the blockchain. This is important when you consider that rarity and authenticity are valuable traits in the minds of collectors. Furthermore, gaming NFTs cannot be tampered with or duplicated due to the immutable record generated on the blockchain upon digital asset issuance.



Interoperability: The traditional online gaming model relies on centralized servers. Such games operate on disparate systems. When it comes to gaming NFTs, they can be designed to be transferable, interconnected and interoperable with other games built on the identical underlying blockchain. The player then has the freedom to use them in other games (if other games support those assets) or to sell them to other players.



<h3 class="wp-block-heading">Obstacles to GameFi</h3>



One wrinkle that needs to be ironed out is scaling. Currently, most gaming NFTs are issued on the Ethereum blockchain. Ethereum gas fees are making transaction costs impractical. This bottleneck has meant that chains that achieve much higher throughput, such as Polygon and Solana, are becoming increasingly popular for blockchain-based gaming. This is likely to remain the case until the eth2 upgrade.



There&#8217;s resistance to blockchain-based gaming from many gaming communities. Previously, attempts to use micro-transactions to monetize games have seen backlashes. Due to bad experiences in the past, many gamers assume that a move to gaming NFTs is purely profit-driven and a mechanism that the most prominent game publishers will utilize to nickel and dime them.



Another fear is that a &#8216;pay-to-win&#8217; model will be pursued, resulting in more significant repercussions. If a player manages to buy their way through the game, they gain unfair advantages over other players.



The most prominent game publishers are interested in gaming NFTs but need to innovate ways to integrate monetization without sacrificing play. Top ten gaming company Ubisoft recently <a href="https://gamerant.com/ubisofts-project-q-nft-controversy-issue-explained/" target="_blank" rel="noreferrer noopener">experienced a community backlash</a> when it tried to introduce NFTs through one of its games. As a result of the community response, the company rolled back on its intention to use NFTs.&nbsp;



<h3 class="wp-block-heading">The future of gaming NFTs</h3>



While Axie Infinity has been a breakthrough for the play-to-earn model of blockchain gaming, further innovation is needed to bring the advantages of blockchain-based gaming to the mass market. An<a href="https://cms.blockworks.co/play-and-earn-is-fixing-gamefi/" target="_blank" rel="noreferrer noopener"> evolution toward a play-and-earn model</a> is already underway. This approach focuses on gameplay as much as it does on tokenomics.



This doesn&#8217;t mean that play-to-earn is going to go away anytime soon. It will remain an appealing segment of Web3 gaming to participants that are already crypto native. These games will continue to attract participation through their tokenomics more than anything else.



This contentious yet exciting merge of DeFi and gaming has vast untapped potential. As gamers, developers and investors find solutions that satisfy all parties, they will expose the remaining users of a <a href="https://www.investopedia.com/articles/investing/053115/how-video-game-industry-changing.asp#:~:text=In%202020%2C%20the%20gaming%20industry,than%20%24260%20billion%20in%20" target="_blank" rel="noreferrer noopener">$155 billion gaming industry</a> revenue. to DeFi.



<h3 class="wp-block-heading">How to invest in Web3 gaming</h3>



Investors can take several approaches to invest in this space.



Play-and-earn: The play-to-earn and play-and-earn blockchain gaming models are one approach. Axie Infinity developer Sky Mavis was the first major innovator in this space. With this model, gamers can invest their time and effort in return for game NFTs and tokens that have value outside the Axie ecosystem.



This is particularly relevant in developing countries with significant potential earnings relative to the local economy and per capita income. The Philippines accounts for 40% of Axie Infinity players. In October 2021, the total number of in-game Axie tokens that had been minted accounted for 1.7% of the GDP of the South East Asian country.



Whether play-to-earn or the more recent advent of play-and-earn, playing games based on these models represents one of the most straightforward entries into investing in NFT gaming.



Rent-to-earn: As development in this space has progressed, many of the most popular NFT games now require a substantial investment to commence playing and earning. At its height, the <a href="https://dappradar.com/blog/axie-infinity-trading-volume-up-despite-crypto-price-dump" target="_blank" rel="noreferrer noopener">average price</a> for an Axie Infinity NFT is around $355 — and a minimum of three are needed before a new player can play the game.



Gaming guilds such as <a href="https://www.unixgaming.org/" target="_blank" rel="noreferrer noopener">UniX Gaming</a> have emerged to help players invest in gaming NFTs through offering newcomers the option to rent under a scholarship program. Profits are then shared between the guild and the player. This is yet another approach that removes entry barriers for a player to participate and earn.



In-game currency:&nbsp; A blockchain-based game will have an in-game token to function as the game&#8217;s currency. It&#8217;s possible to invest directly in these tokens. However, the degree to which the token supply is limited is one factor that needs consideration when deciding whether to take this approach. Games with a capped token supply are more likely to appreciate, given the game&#8217;s sustainability and demand.



Governance tokens: Blockchain-based games are also likely to have governance tokens. A governance token allows the holder to vote on smart contract code changes and treasury management items. Taking Axie Infinity as an example uses Axie Infinity Shards (AXS) as its governance tokens.



Stakeholders have a strong incentive to obtain governance tokens: they hold influence over game tokenonmics. Some of these tokens provide voting rights over the strategic direction of the protocol. Additionally, these tokens will often include rights to cash flow akin to dividends with equities.



Gaming guilds: Many consider investing in individual games risky due to the presumption that most fail. Gaming guilds offer investors a risk-averse strategy.&nbsp;



Take UniX gaming guild as an example. UniX carries out due diligence on games it believes will be successful and buys NFT assets in those games. Therefore, holders of the UniX token benefit from professional curation of NFTs much like an ETF or index fund. Additionally, the holder shares in the revenue from NFT scholar rentals and asset price appreciation. All of these assets are managed decentrally through a DAO. And the diversification spreads risk across all investments.



Initial game offering (IGO): Investing in an IGO through launchpads such as <a href="https://finalround.unixgaming.org/">UniX Gaming’s Final Round</a> offers the opportunity to get NFTs or tokens in upcoming games at a discount price. If the game achieves popularity with listings on major exchanges, investors can expect a significant return on investment.



<h3 class="wp-block-heading">Further Reading</h3>



The sponsor of this Investing Guide — UniX Gaming — has partnered with DAO Maker and SL2 on Final Round, its multi-chain launchpad, which is due to launch imminently. Further details can be found <a href="https://medium.com/@UniXgaming/unix-gaming-dao-maker-sl2-team-up-for-final-round-launchpad-40ed978fd023" target="_blank" rel="noreferrer noopener">here</a>.



<h3 class="wp-block-heading">Relevant Podcasts</h3>



<a href="https://cms.blockworks.co/podcast-the-future-of-play-to-earn-gaming-felix-sim-gabby-dizon/" target="_blank" rel="noreferrer noopener">The Future of Play-To-Earn Gaming | Felix Sim and Gaby Dizon — Empire podcast by Blockworks</a>



<a href="https://cms.blockworks.co/podcast-why-gaming-nfts-will-be-bigger-than-twitch-justin-kan/" target="_blank" rel="noreferrer noopener">Why Gaming NFTs Will Be Bigger Than Twitch | Justin Kan — Empire Podcast by Blockworks</a>



<a href="https://youtu.be/tIVsk6aOafM" target="_blank" rel="noreferrer noopener">FTX&#8217;s Gaming Strategy | Amy Wu &#8211; Empire Podcast by Blockworks</a>



<a href="https://youtu.be/990N8M7UhIo" target="_blank" rel="noreferrer noopener">How Web3 Will Change The Gaming Industry | Carra Wu &#8211; The Unstoppable Podcast</a>



<hr class="wp-block-separator has-css-opacity"/>



This content was sponsored by <a href="https://www.unixgaming.org" target="_blank" rel="noreferrer noopener">UniX Gaming</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

The Investor’s Guide to Gaming NFTs

<div id="highlights-block_627169317b9f3" class="highlights">
 <ul>
 <li>The play-and-earn model, popularized by Axie Infinity, has revolutionized gaming guilds by monetizing the gaming community</li>
 <li>Although it is still in its infancy, the play-and-earn model is also poised to take off in esports</li>
 </ul>
 
</div>



Education platforms, community development, crypto crowdfunding and more. The gaming guild phenomenon has evolved far beyond online communities of gamers. These guilds are rapidly becoming digital nations.&nbsp;



<h3 class="wp-block-heading">Gaming guilds: what they are and how they work</h3>



Traditionally, a gaming guild is a collection of gamers who like to play together, compete against other guilds and share gaming tips. The play-and-earn model, popularized by Axie Infinity, has revolutionized gaming guilds by monetizing the gaming community. Instead of joining a guild purely for entertainment, players sign up to master their craft and build revenue streams.&nbsp;



Like any disruptive industry, the entry point to the play-and-earn gaming model is getting increasingly expensive. In the case of Axie Infinity, a newcomer must purchase and hold a minimum of three Axie characters before they can play the game. The <a href="https://dappradar.com/blog/axie-infinity-trading-volume-up-despite-crypto-price-dump" target="_blank" rel="noreferrer noopener">average price</a> of an NFT on Axie Infinity was $355 late last year.&nbsp;



Guilds such as <a href="https://www.unixgaming.org/" target="_blank" rel="noreferrer noopener">UniX Gaming</a> recognize that most players live in developing countries where the average <a href="https://www.unixgaming.org/litepaper.pdf" target="_blank" rel="noreferrer noopener">monthly salary is $150 to $250</a>. Many argue that for the industry to continue its expansion, it needs to lower the cost barrier.



UniX helps by offering scholarships for newcomers. They operate under a DAO (decentralized autonomous organization) structure, so scholarship funding comes from within the community of DAO token holders. They collectively invest in the gaming NFTs needed to participate and lend to the scholars. Once scholars earn rewards with these NFTs, they split earnings between the player and the guild. In this way, the guild makes a return on its original investment in digital game assets.



<h3 class="wp-block-heading">How gaming guilds are more than a cost solution</h3>



The DAO model of gaming guilds first emerged primarily as a solution to the play-and-earn entry barrier. However, the rapid growth of these DAOs is creating new opportunities and innovations in the gaming metaverse industry.&nbsp;



UniX Gaming, one of the largest gaming guilds in the play-and-earn space, is a great example. Through its scholarship program, it provides a 50/50 profit share. Over several months, the gaming guild has amassed 1,000 scholars just for Axie Infinity and 5,000 across more than 50 games.



UniX has expanded the scholarship program to include its learn-and-earn education platform. This investment both attracts more scholars and increases player performance. Consequently, it&#8217;s reporting a higher than average matchmaking rating (MMR) per scholar (in-game skill level) by comparison with other guilds, resulting in higher earnings.



<h3 class="wp-block-heading">Social impact</h3>



Gaming guilds are quickly discovering that they have great potential for social impact. UniX found that most of its users joined without previous crypto experience. So it sought to include topics like the metaverse, security, NFTs, crypto, and even English, math, science, cooking, and biology in its education platform.&nbsp;



Players share rewards from UniX gaming activities with UniX governance token holders. Their goal is to grow the DAO through an expansive gaming ecosystem. Not only will players share rewards for playing and learning, but investors and builders will be able to fund and launch new games through UniX&#8217;s <a href="https://finalround.unixgaming.org/" target="_blank" rel="noreferrer noopener">decentralized launchpad</a> called Final Round. This model combines traditional venture capital fundraising with open source development — all for and through the community members.&nbsp;&nbsp;



Axie Infinity was the spark that lit the fuse in blockchain-based gaming. It was developed in Vietnam and took off across the Philippines. With that as a backdrop, we shouldn&#8217;t underestimate the social impact blockchain-based gaming and gaming guilds could have throughout the world.



<h3 class="wp-block-heading">Blockchain gaming and esports</h3>



Although it is still in its infancy, the play-and-earn model is also poised to take off in esports. Since these new game economies are moving from a participation model to a competitive one, it will likely attract more esports media attention. Many speculate that exposure to the 2025 projected $2.89 billion esports market capitalization will increase interest from institutional and retail investors.&nbsp;



<h3 class="wp-block-heading">Crowdsourcing, funding, skills and community</h3>



Because DAOs envelope gaming guilds, they provide a mechanism to crowdfund and crowdsource new projects. VCs are involved in this space, but the bulk of the investment comes from the community of investors, gamers and managers — all participants within the guild or DAO. Investors benefit from guild research in finding the best projects. As UniX founder and CEO Mirko Basil told Blockworks recently, &#8220;gaming is not only playing; It&#8217;s owning, building, sharing, chatting, and more.&#8221;



The community can also allocate DAO-controlled capital to fund skills such as developer resources. Santiago Santos, an investor who focuses on the NTF/gaming space, goes so far as to predict that gaming guilds will create more employment than any other sector.



UniX emphasizes community in its <a href="https://medium.com/@UniXgaming/the-unix-vision-a108999aec88" target="_blank" rel="noreferrer noopener">vision</a> for a growing UniXverse. It intends to introduce a chat function to enable casual conversations between users and the exchange of private information. Additionally, it is developing new user groups for NFT fans, artists and developers.



There is no doubt that gaming guilds are in their early innings. But through monetizing the gaming community, these guilds now have many features similar to a modern-day nation. From governance structures and funding mechanisms to scholarship programs and community management, it is an exciting time for players and developers.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Online Communities to Digital Nations: How Gaming Guilds Combine Startups, VCs and Social Impact

<div id="highlights-block_61ddc7f9edcd5" class="highlights">
 <ul>
 <li>Play-and-earn gives players the entertainment they want while also providing earnings and ownership</li>
 <li>“Play-to-earn is basically a job. It’s not fun. You do something, and you get rewards. Then people cash out their earnings, over and over.&#8221;</li>
 </ul>
 
</div>



The initial iteration of blockchain gaming in the form of a play-to-earn model has garnered a lot of attention. However, a new paradigm is emerging in the space; The play-and-earn approach refactors priorities and seeks an expanded audience with a more lasting effect.



Axie Infinity was the first blockchain-based game to put down a marker, with the Ethereum-oriented NFT game reaching $1 billion in sales last August, according to <a href="https://cryptoslam.io/" target="_blank" rel="noreferrer noopener">data</a> from Cryptoslam! — rising to $4 billion by February.



<h3 class="wp-block-heading">From play-to-earn to play-AND-earn</h3>



Following the initial success of Axie, there has been a scramble to get similar games onto the market. However, while the play-to-earn gaming model is innovative, it loses sight of the core motivators behind gaming — playability and fun. Pivoting to a play-and-earn model seeks to address that, and it is this approach that is necessary to bring blockchain-based gaming to the mass market.



The play-to-earn and Axie hype was evident all through 2021 and continues into 2022. However, the hype and interest will hold only as long as the profits do. If the playability of a play-to-earn game is not of a high enough standard to attract and engage gamers organically without such financial incentive, it’s not likely to come anywhere close to matching the popularity of games produced by AAA games publishers.



In contrast, play-and-earn gives players what they want while also providing earnings and ownership. It’s an evolution of gaming rather than a complexification of investing. As Mirko Basil, founder and CEO of <a href="https://www.unixgaming.org/" target="_blank" rel="noreferrer noopener">UniX Gaming</a>, put it, “It’s never been play-to-earn, it’s always been play-and-earn. We’re adding crypto as an earning vehicle to gaming.”



<h3 class="wp-block-heading">The importance of community</h3>



UniX Gaming is very much seizing the initiative in terms of pursuing a play-and-earn approach. Basil said:



“Play-to-earn is basically a job. It’s not fun. You do something, and you get rewards. Then people cash out their earnings, over and over. They don’t contribute to the community, they’re just doing their tasks and getting paid. Play-and-earn is fun and rewarding. People spend hours, days and months playing and getting better, competing and collaborating and building a really incredible community.”



The emphasis doesn’t stop at a consideration of game playability: “Gaming is not only playing; It’s owning, building, sharing, chatting and more”, he explains. “In gaming and in crypto, the most important focus is community. The greatest feats of both industries are creating attractive and impactful communities.”



With a nod to the importance of community, UniX has established itself from the outset as a gaming guild — a gathering of gamers that play together, which has evolved to include business and social projects. This aspect of the evolution from play-to-earn to play-and-earn also has implications for other community participants such as streamers, game developers and investors.



With play-and-earn, guilds become organizations capable of great innovation and social change. Leading by example, UniX has organized itself as a decentralized autonomous organization (DAO), becoming itself just one group within a large symbiotic ecosystem it creates in gaming communities. 



Gamers are empowered to use their voices and resources together with regard to what they want the landscape of play-and-earn to be. In recent weeks, UniX has been adding AAA titles to its ecosystem via its Initial Gaming Offering (IGO) Launchpad, and players have been forming investment guilds, development guilds, competitive guilds and more.



With early adopters in the blockchain gaming space such as UniX leading the way, it’s clear that this evolution in gaming is ongoing with the likelihood of mass gaming adoption in the not too distant future.



DAOs were said to be the evolution of the governance and organizational structure, and gaming guilds are the evolution of DAOs. 



<hr class="wp-block-separator"/>



This content is sponsored by <a href="https://www.unixgaming.org/" target="_blank" rel="noreferrer noopener">UniX Gaming</a>. To learn more about <a href="https://www.unixgaming.org/">UniX</a>, explore the <a href="https://www.unixgaming.org/" target="_blank" rel="noreferrer noopener">website</a>.

Unix

Newsletter

Blockworks Research