In 2021, blockchain games saw a rapid expansion in user adoption and grew to account for more than 50 percent of all activity based on this technology.
The challenges of the Play-to-Earn games industry.
NFT-only Web3 games, also known as Gen 0 because of their underdeveloped economies, are prone to problems with token liquidity, asset valuation, and low exchange frequency. In these games, low NFT exchange volumes limit the value added to the game economies, negatively impacting the market capitalization of native tokens. In addition, many of these Gen 0 games are tokenized versions of Web2 games, which operate outside of a blockchain and use crypto assets in an attempt to attract Web3 users. In a bearish market phase, most of these games do not make it past the first few months after launch, leaving most of their users with NFTs that have no tangible value outside of the game. The need for engaging games supported by sound economic designs is therefore critical to the future sustainability of the blockchain game industry.
The first step in this direction was the introduction of Web3 games, which employ fungible tokens, which represent objects with higher exchange volumes and NFTs for more valuable game objects. A significant example is the Star Atlas platform, which offers users the opportunity to live in space and explore the future of reality aboard their own customizable spacecraft. By introducing fungible tokens that have a limited lifespan and can be purchased using the native token within the game, such projects can generate much higher exchange volumes and keep supply and demand metrics essentially stable. However, with the announcement by the Web3 cryptocurrency game CropBytes and the imminent launch of its service economy feature, the industry is poised to witness the next evolutionary phase that will introduce players to a truly self-driven economic model.
\The “service economy” concept
By introducing the possibility for Web3 investors to participate in the Web3 gaming industry, CropBytes has paved the way for the Service Economy concept, in which players can earn money using assets belonging to investors or merchants. Labeling this new model as “Get Paid to Play,” CropBytes will allow players to use its native CBX token to pay other users for services such as growing crops or feeding farm animals on their behalf. Alternatively, they will also be able to lend their NFTs to other players in exchange for a commission. As players trade goods and collect in-game items that can be redeemed for CBX tokens, CropBytes is one step closer to unlocking the full potential of blockchain gaming and harnessing the power of cryptocurrencies to create a sustainable and balanced virtual economy. Introducing service economy principles can help the Web3 gaming industry increase transaction volumes and generate the liquidity needed to create gaming economies that can sustain prolonged crypto winters, such as the one we are experiencing today.
CropBytes was one of the first blockchain games to incorporate the service economy approach, and now big names in the industry are following suit. Axie Infinity recently launched its Axie Homeland Alpha, which allows players to cultivate and farm their own Axie land, generating resources and spending them in the game. Service economy concepts are becoming a mainstream approach in the blockchain game ecosystem.
The next step
In addition, the introduction of governance functions will be the next natural evolution in the space. However, this will first require existing players to develop large service and fungible economies, in turn supporting them in maturing to a level where investors, token holders, and other stakeholders will govern broader game ecosystems.