Why GameFi is coming back.

GameFi, once a buzzword in the cryptocurrency market, is now reviving with a vengeance. This revival is driven by new developments, market adaptation and a growing global audience.

These technologies are not a rising trend, but a revolutionary movement in the gaming industry.

Bakken's play-to-earn model

Illuvium founder Kieran Warwick tells BeInCrypto about Southeast Asia's pivotal role in GameFi's renaissance. According to him, Southeast Asia, with its young, tech-savvy population and high crypto adoption, is a key player in this sector.

The region's selection of mobile and accessible gaming platforms integrated with blockchain technology highlights the potential of local content and mobile-first strategies to engage players in emerging markets. Likewise, societal and cultural trends will greatly influence GameFi's growth.

Games like Axie Infinity have successfully integrated local folklore and cultural elements into game narratives, greatly increasing player engagement. Still, the Axie Infinity tokenomics model contains a critical flaw. He prioritized quick profit over sustained player engagement.

Participants can earn AXS tokens by breeding Axies and selling them on the marketplace. This triggered a breeding boom as players aimed to produce as many axes as possible to maximize their token income. Because of this, Warwick highlights the importance of balancing in-game resource scarcity with accessibility.

“Our approach tokenomics and game mechanics aims to balance long-term player engagement with financial sustainability. Balancing in-game asset scarcity with accessibility is critical. Too much scarcity can hinder new player engagement, but too much availability can reduce value,” said Warwick.

This balance is critical to prevent new players from becoming too scarce or too much to devalue assets.

Read more: Top 7 Metaverse Games to Play in 2024

Another sustainable step is the concept of real product by offering tangible rewards in games. However, this also introduces risks such as high inflation of in-game assets and reliance on external economic factors. A balanced approach is essential for long-term viability.

For example, dual-token systems can provide depth to economic and governance issues, although these systems require careful management to prevent economic imbalances.

“They allow for a more complex economy and give players a say in management, increasing engagement,” Warwick told BeinCrypto.

The shift from Play-to-Earn to Play-and-Earn or Play-to-Own models reflects a holistic approach, focusing on fun play along with earning potential. The success of these models depends on a delicate balance between fun gameplay and economic incentives.

The revival of GameFi

Major gaming companies getting into GameFi is a big trend. Potential partnerships between traditional gaming companies and blockchain developers could change the industry.

For example, integrating GameFi components into popular games such as GTA VI could significantly change player expectations and encourage traditional gaming industries to explore blockchain technologies.

Virtual real estate is another growing sector in GameFi. This new economy affects asset valuations and players' investment strategies, highlighting the need for robust economic models and clear regulatory frameworks.

Similarly, the release of high-end VR headsets like Apple's Vision Pro is set to make a significant impact on GameFi, providing more immersive experiences.

“Adapting GameFi to these technologies will be critical to future growth. GameFi developers need to balance innovation with user experience, especially for blockchain newcomers,” Warwick affirmed.

Still, cyber security comes first. Warwick emphasized the need for multi-layered security measures, regular audits and clear, modern contracting practices to protect players' assets. “Building a safe and trustworthy environment is essential to the growth of the industry,” he asserted.

GameFi developers need to balance innovation with user experience, especially for blockchain newcomers. This includes an intuitive interface, educational resources, and seamless integration of blockchain components. Community feedback is critical to GameFi's success, with projects driven by community-driven feature development and beta testing feedback.

Integrating GameFi with Metaverse promises more immersive and interactive gaming experiences. This integration leads to new social interactions and digital economies in the virtual world.