Since the highs of November, the GameFi sector has seen a significant drop in attendance. So much so that the big names in the industry, such as Axie Infinity (AXS), Decentraland (MANA) and The Sandbox (SAND), have seen their visitor numbers fall by 96%. Let’s take a look at the different reasons for this lack of interest.
The GameFi sector sees its attendance plummet
While the play-to-earn (GameFi) industry has grown dramatically in the last year, the drop is now just as steep with attendance down 96% since November, according to a survey by Arcane Research. This data can be seen in the activity of big names such as The Sandbox (SAND), Decentraland (MANA) and Axie Infinity (AXS).
It is a dynamic that follows the crypto market prices. During times of crisis, small holders do tend to leave the market, or at least refocus their capital on less volatile positions.
At their level, investment funds are now becoming more attentive to fundamentals. This is in contrast to the previous market phase where anything could work, as long as the project was stamped non-fungible tokens (NFT) or metaverse.
Of course, the bear market is only one of the reasons for the drop in GameFi applications, and several other structural causes can be cited. Rather, the price drop would be the trigger for this state of affairs, caused by several parameters.
The reasons that lead to this decrease
The price of entry is one of the main challenges for play to earn to become more democratic. As we see on a regular basis, speculation can sometimes drive the prices of various NFTs in blockchain games to crazy amounts. If we don’t want to debate the justification or not of these prices, the fact is that it represents a huge brake for the general public.
Moreover, the immersion and the experience proposed by blockchain video games will have to evolve. Certainly, solutions exist today to eliminate transaction fees in these games, such as layer 2 Immutable X for example. But the mechanics currently offered in the GameFi sector are far from competing with the big traditional licenses.
This massive and too fast arrival of new players, only there in this state of mind, then creates a bubble on the token of the blockchain game in question. When the inflation of the token becomes too great, the craze subsides and the profits decrease, the players migrate to the new play to earn in vogue.
On the other hand, the traditional gaming community sometimes feels that GameFi distorts the enjoyment of the game and that the two are not necessarily compatible.
The need for experimentation and failure
However, this loss of popularity of play to earn is ironically good news for the industry. Indeed, it allows the ecosystem to be cleaned up of dubious projects and other rug pulls, allowing the serious elements to strengthen and gain in quality.
The GameFi sector is still a young field, which is looking for its economic model. Thus, the technology still needs to evolve and there is no doubt that today’s failures will be used to build tomorrow’s successes. Moreover, let’s not forget that metaverses such as The Sandbox are regularly the subject of promising announcements for the long term.