GameFi opportunities and challenges in 2024

GameFi can be set for a historic year with multiple Triple-A (AAA) titles slated for release. Could 2024 be the year blockchain shakes up the traditional gaming market?

GameFi titles haven't always had a good reputation with the general gaming public. Critics of the genre point to lackluster graphics, uninspired game mechanics, and a general lack of fun. What's even more interesting is that the token elements of GameFi titles are often difficult to sustain in the long run.

But if industry experts are to be believed, GameFi could be set for a comeback. Mark Long, CEO of Shrapnel — the AAA first-person shooter that encompasses the creator ecosystem — is among the voices predicting positive things for the industry. Long was quick to admit that blockchain titles currently have a mixed reputation, but argued that the next wave of titles will confuse critics.

“One of the biggest things I expect to see next year is a shift in the narrative around Web3 games,” Long told Cointelegraph. They are not playing, they are playing for work,” he said.

While the current crop of GameFi titles is critical, Long predicts that several “groundbreaking” titles in the pipeline will change public perception.

“Two games I'm really excited to play are Dead Drop and Off The Grid,” Long said. “Dead Drop is creatively driven by Doctor Who and is fronted by a male influence who plays by his own rules. […] Off The Grid features a car designed by my favorite movie director, Neill Blomkamp, ​​and it looks like fire. Bloomkamp's worlds, to me, are a uniquely grounded kind of science fiction, while at the same time, surprising in very unique ways.

Shrapnel's CEO named it another title he's been looking forward to, citing a development model that includes player ownership.

“GameFi gives Web2 gamers an exciting new opportunity to do what they've always wanted to do: be a part of game creation,” said Long.

Simply Ponzi schemes

Not everyone in decentralized finance (DeFi) is so enthusiastic about GameFi's prospects in the coming year. Oleg Fomenko, co-founder of the movement platform Lab Economy, is very skeptical about the sector.

Fomenko does not believe that a separate GameFi sector can challenge traditional games, stating that the general concept is flawed.

Fomenko told Cointelegraph, “The belief that a game that simply includes elements of Web3 will immediately belong to a separate category of GameFi is quickly fading. “While Axie Infinity and StepN initially led us to believe that they created a completely new gaming world where players can earn and earn money, this is temporary and disappointing. It became an event. These are Ponzi schemes that take advantage of early adopters and they know when to jump ship early.

Fomenko said GameFi tokens would only hold value “if a game inherently generates value,” but “it doesn't.” Therefore, GameFi is inherently flawed.

Even so, the sweat economy founder found some positivity in the broader Web3 sector. “Games with Web3 elements are thriving, and I'm excited to see more innovation in this space, especially the use of non-vulnerable tokens (NFTs) in games,” continued Fomenko.

The GameFi Redemption Arc

For GameFi to make a significant impact in 2024, it will need to overcome negative perceptions around the industry. That's the verdict of Les Boursay, founder and chief strategy officer of Wave Financial – an investment advisor that manages more than $1.5 billion in assets.

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“As we look to 2024, GameFi's journey is at a critical juncture,” says Borsay. “The current state of affairs has often been criticized for prioritizing blockchain and DeFi gimmicks over real gameplay quality. This approach has led to widespread resentment among the gaming community, who feel that the essence of the game has been overshadowed by blatant monetization strategies and non-participatory mechanics.”

Borsay sees an opportunity for the industry if it can capitalize on other emerging technology trends such as artificial intelligence (AI) and digital twin technologies. As Boursay sees it, these provide “an opportunity for GameFi to redeem itself.”

“For GameFi to make a real impact and win over gamers in 2024, it needs to fundamentally reevaluate its approach,” Borsay said. “It should be more than slapping on advanced technologies. It should seamlessly integrate these elements into the games that players want to spend their time with. If GameFi can strike this balance, it has the potential to not only mature, but dramatically change our perception of what gaming can be with integrated finance.

Complex business

Developing AAA game titles is not an easy task. Edge-to-edge games typically take two to five years to develop and bring to market. The wait for some titles is even longer. For example, Grand Theft Auto VI is scheduled for 2025 – a full 12 years after its predecessor hit the market.

The extended development process shows just how difficult game development can be, even without the added complexity of integrating blockchain technology.

Teddy Pender, Technical Product Manager at Zero Knowledge (ZK) – a native blockchain role protocol, said the implementation of zero knowledge technology makes the process easier.

“In the past, web3 game applications have been criticized for having a simple user interface and poor gaming experience. 2024 will be a turning point, however, when we see GameFi applications starting to appear and feel like real competitors to the existing web2 game industry,” Pender told Cointelegraph. “Using ZK-native blockchains , developers can build games that use zero-knowledge frameworks, reducing the complexity of GameFi applications.”

While ZK-proofs and other technological solutions help propel the industry forward with new energy, some figures believe the industry has some distance to go before it can hope to catch up with traditional games.

A little longer

Rob Gregg and Josh Jones, co-founders of Cornecopius – a multiplayer online video game built on Unreal Engine 5 – agree that 2024 will be a pivotal year for the industry.

“The potential of 2024 is huge: private ownership of in-game assets powered by blockchain technology is not only new, but we are looking at the landscape that will eventually evolve into the new normal,” Jones told Cointelegraph. It promises to open up, making it time for developers and players alike.”

However, the couple feels the industry is not ready to mature in the coming year.

“The industry is at a crossroads,” Greg told Cointelegraph. “Looking ahead, 2024 looks like a critical year […] With studios cautiously approaching crypto-related initiatives and testing the waters before they are fully committed. By 2025–2026 we will see mass adoption in the gaming sector.

With 2024 being GameFi's inaugural year, advocates like Long hope that the next generation of gaming titles will start to tip the needle for the industry as a whole.

“As the year draws to a close, traditional and centralized models seem to be fading. “I think the players are ready for something really new,” Long said.

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