Memecoins and AI are pushing Gamefi out of the spotlight.
The intersection of gaming with finance and crypto – also known as GameFi – was a bit of a mixed bag in 2024.
Voices from across the industry spoke with Cointelegraph to give their verdict on the current state of the GameFi industry – and their conclusions are far from unanimous.
In the year In December 2023, Cointelegraph asked industry experts to predict what 2024 will bring for the sector, and now that we've passed the halfway mark, we're revisiting the topic once again.
GeeZee, head of gaming at Layer-2 Ethereum package Mantle, has viewed the past six months positively.
“2024 was a transformative year. […] The expansion of the GameFi ecosystem is beyond our expectations,” GeeZee told Cointelegraph. “Accelerated growth in blockchain adoption and mainstream adoption of GameFi outperforms initial forecasts.”
GeeZee points to Mantle ecosystem partners like Katizen and Metasene as evidence of success, both of which reached 15 million users within 60 days of launch.
Institutional investors tempered their positivity with two caveats, saying they have cooled on the industry and touching on the ever-present regulatory uncertainty.
Russell Bennett, chief executive of Metacad, a gaming and web3 environment, was lukewarm on the assessment, believing the picture in 2024 to be mixed.
“Initially, many believed that the boom in the first few months of the year was the real kick-off, but what happened is that this phase of more market consolidation is testing different altcoin narratives,” Bennett told Cointelegraph. “AI and memecoins take the spotlight, pushing GameFi down.”
This led to what Bennett described as a “phase of depression” for the industry.
“While the gaming projects themselves are improving, price performance has certainly fallen short of expectations,” Bennett added.
The good and the bad for Gambhi
Rebecca Liao, co-founder and CEO of Saga — which supports the Layer-1 protocol Web3 — finds GameFi a less comfortable place than some of her contemporaries.
“The Web 3 game is now at a tipping point. Several major titles that started building in 2021 are coming out now and are not seeing the reception they had hoped for. The model for launching tokens or NFTs is clear. [non-fungible tokens] A game is not enough to ensure the success of the game. However, neither is a good game,” Liao told Cointelegraph.
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Liao is still optimistic about the future.
“To gain traction in Web3, you need to be able to seamlessly incorporate blockchain elements into your gameplay,” Liao said. “The upcoming games have discovered this and will bring this space to a long-term sustainable development direction.”
When contacted by Cointelegraph in December, Oleg Fomenko, co-founder of the activist platform Lab Economy, was highly skeptical of the sector. The intervening six months did little to change his opinion.
“My prediction was that the GameFi segment would not have an easy ride, and this prediction turned out to be true – only the top four ‘games' of the most used DApps by Dapradar are in the global top 20,” said Fomenko. Cointelegraph.
“This tells us that one of the most important market activities – gaming – is still not driving the growth and adoption of Web3.[…] We still haven't found the magic balance between game/fun and web3/mechanics revenue.
It's amazing for GameFi
In the year By the end of 2023, the industry was looking forward to the launch of more sophisticated games and gameplay.
In the year By July 2024, the games were growing in popularity and were surprisingly under-attended. Gerard Colomer Castello, Head of Product at Layer-1 Laos Network, highlighted the phenomenon while talking to Cointelegraph.
“Unexpectedly, simple games like Hamster Kombat and the ‘Banana' game on Steam made big headlines. Hamster Kombat has attracted millions of followers on its YouTube channel as a ‘clicker' game, leaving blockchain and wallets in the background and inspiring other games to use similar strategies to grow their communities, Castello said.
The success of simple tap-and-click games, however, has not spread to the wider industry. In the current market, it's surprising that Bennett is moving to launch more complex titles.
“I'm surprised that large, heavily funded projects can start aggressively by getting listings on major exchanges like Coinbase and Binance, when they're facing significant downsides of 50–60%,” he said.
He continued, “I'm surprised that the teams still push through the startup knowing that the market isn't ready. GameFi is now dormant and needs active players and retail participation.
Bennett concluded that he expects a quieter summer “starting with real activation from September or October.”
What remains?
While there are some surprises in GameFi 2024, some things remain largely the same. The industry is still looking for a title that appeals to the imagination of the mainstream gaming market.
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According to Liao: “It's clear that the gaming audience is not in Web 3. We need to expand the user base to include players who are not yet into crypto. It's a challenge before GameFi projects build this cycle.
That said, while the broader market is in the doldrums, the sector also has a fair amount of built-in optimism beneath the surface. Speaking to Cointelegraph, Ronen Kirsch, founder of Web3 gaming platform Game7, expressed that sentiment:
The broad market growth has had a positive impact on on-chain games. It injects optimism into the space, prompting teams to reevaluate their go-to-market strategies and overall business models. Many projects that have been under construction for months are revamping their Tokinomics to adapt to the new market reality.
