Why does GameFi need NFT?

No matter what you think of the GameFi boom in recent months, some may think it is a product of a new era with great transformative significance, or some may think that it is still a silly game, but what I have to admit is that GameFi has become encrypted. A concept that is booming in the market. In this article, we will further explore the deeper connection between GameFi and NFT.

What was the game industry like before the emergence of NFT?

Before we formally discuss “Why GameFi needs NFT”, we might as well take a step back and take a look at what position the game industry occupies in today’s economy and society. And before the large-scale application of NFT, how did the game industry operate? What needs to be improved?

In a paper published by Shi Hexin, School of Economics, Central University of Finance and Economics, there is a paragraph like this: “The online game industry can now be regarded as one of the national pillars of a country. The development of online games determines whether a country can promote the modernization process. , The development of the capitalist economic process. In the prevailing stage of the market economy, the development of national interests has been inseparable from the rich benefits generated by the online game industry. Like a link, the development of online games affects the development of the interests of e-sports platforms , The development of the interests of e-sports platforms affects the development of the national economy.” Moreover, on the Wanfang data knowledge service platform, the number of research papers on the game industry alone reached nearly 5,000, and most of them were published after 2010. . Here we will not comment on the viewpoints in Shi Hexin’s paper for the time being. Just from the increasing attention paid to the game industry in the academic world in recent years, we can also get a glimpse of the increasing importance of the game industry in today’s economy and society.

So in the field of actual production and consumption, how does the game industry perform? According to data compiled and released by the Foresight Industry Research Institute, between 2015 and 2020, the global game market compound growth rate (CAGR, that is, the continuous growth rate in a few years) reached 13.4%, and the global game market will reach 164.6 billion in 2020 The U.S. dollar is expected to reach 196 billion U.S. dollars in 2022, reaching the 200 billion U.S. dollar mark.

In addition, according to the “2021 Global Game Market Report” recently released by Newzoo, the current global game player group is close to 3 billion people, and due to well-known reasons since 2020, the number of game players is still growing. situation. In addition to the continuous increase in the number of game players, the changes that have been quietly taking place in the game industry in recent years are that the way game players spend their leisure time has become more and more complex, which objectively raises questions for the game industry producers. To meet higher requirements, but on the other hand, it undoubtedly provides GameFi with an excellent opportunity for overtaking in corners.

As long as you have a little understanding of the game industry, you can know that the current game market participants present an obvious dualistic structure-upstream producers and end consumers, both of which are insurmountable on the issue of benefit distribution The gap. Specifically, upstream producers mainly include game developers and other IP owners, game publishers, game distribution channels, etc. Some market participants play multiple roles in the industry value chain and participate in some cases at the same time. In the game development, distribution and distribution links, they dominate the development of the game industry and at the same time occupy most of the profits created by this industry. The end consumers, that is, as many as 3 billion game players, are one of them. On the one hand, it provides a steady stream of capital investment for the game industry. On the other hand, it is difficult to a large extent to have real ownership of the production materials such as accounts, equipment and props obtained by spending time and money in the game. This status quo It’s hard to call it fair. This is the first and most important problem to be solved by GameFi and NFT.

NFT helps GameFi, deeply transform the game industry

With the gradual improvement of the global situation, people have begun to truly feel the changes that have taken place in the entire world over the past year or so. The most prominent point is that as online communication has penetrated into our daily lives more and more during this period. And every corner of our work, we accidentally discovered that many things in the real world that originally required offline contact can actually be solved very well through online methods. Reality and virtuality do not seem to be and need not be so. Clear boundaries. In the crypto market, the concentrated reflection of this change is the rise of Meta Universe and GameFi.

More importantly, once this trend starts, it will have an irreversible impact to a certain extent, because in this process, the meaning of the game is also quietly changing. From what we have observed so far, games have gradually changed from pure recreational attributes to multiple attributes such as entertainment and social interaction. As the game scenes brought by GameFi become more three-dimensional and personalized, digital virtual characters are becoming an important part of people expressing themselves and highlighting their individuality. At the same time, starting from this dimension can also help us better understand why NFT avatars Able to continuously surpass people’s conventional cognition and refresh transaction records . Whether it is GameFi or NFT avatar, the reason why it has been generally favored by the crypto market in the near future is essentially an extension of the unique and personalized social needs in the real society.

Let us focus on GameFi again. In the previous article, we mentioned the current conflicts between game producers and consumers in the game industry. So how does GameFi solve this problem? Here we have to introduce the important role that NFT plays in it. With the help of NFT, every game item (whether obtained through purchase or gold) obtained by game players in the game has a unique, non-counterfeit, and irrevocable “identity authentication”, which greatly facilitates players The process of confirming the rights to the props and equipment that you own. In other words, with NFT as the underlying technical support of GameFi, players can control all the ownership and disposal rights of their game props, and it is even expected to realize the transfer between different games.

Before the rise of NFT and GameFi, such a situation was simply unimaginable, but after NFT, the issue of trust between game players, developers, and publishers and the balance of interests appeared more imaginative solutions. , The two sides are no longer a simple relationship between producers and consumers, but tend to establish a more equal and harmonious relationship. In this transformation process, NFT has made great contributions. From this point of view, GameFi and NFT are undoubtedly subversive to the real business model of the game industry.

Concluding remarks

At present, pioneers in the Internet industry, including the encryption market, have paid unprecedented attention to the meta-universe. Although everyone cannot describe a clear meta-universe scene, it is certain that GameFi, DeFi, Web3.0, etc. Elements must be an important part of the future meta-universe. So let’s imagine how to become a more critical part of the meta-universe? In other words, in the world of Metaverse, what will be the core competitiveness? From the topic of GameFi today, a preliminary answer we can give here is: attention.

Undoubtedly, from the past to the present, and then to the future, the information received by everyone is increasing exponentially. In this case, attention will inevitably become a scarce resource. Who can attract more attention, who can become an important traffic portal for the meta-universe world. In this battle, the game world built by GameFi based on similar scenarios and gathered a large number of players can give The unprecedented social and interpersonal experience brought by humans cannot be achieved by any kind of TradeFi or other media, and it is also irreplaceable. Therefore, in the future, the integration of NFT and GameFi will have a high probability of building a positive cycle, forming an upward spiral of “because good, so better”.

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