Blockchain games made a huge leap in 2021, skyrocketing from $15 million to $2.1 billion in NFT sales. They are the second-largest segment in NFT sales, with only collectibles ahead of them. But how do these games work, and why are they so popular? Let's find out.
With the emergence of blockchain technology, virtual objects gained the ability to become unique. It means that a certain piece of art, a phrase, or virtually anything else can be "minted" into an NFT. Thanks to that, a digital object can be limited in quantity, and, unlike something that can be copied and distributed in unlimited amounts for a determined price, it has a value on its own and can be bought, sold, and exchanged.
People use NFTs to play blockchain and crypto games. They can buy, breed, and sell NFTs and also use them to earn crypto. For example, in Axies Infinity, players buy Axies, axolotl-like creatures they can grow and develop, and then sell the characters for a higher price. They can also put them into battles against other players' Axies and earn SLP coins, which can be used as an in-game currency or cashed out like an ordinary crypto coin.
There is little surprise that NFT games are mostly enjoyed by people between 21 and 38, who comprise 28% of the blockchain game users. The majority of players are not new to the crypto world, with 55% already owning cryptocurrency before they start playing.
Geographically, Asia and the Pacific region are the largest contributors to the industry, with 22 million users. The second one is Europe at 5,9 million, followed by the Middle East and Africa. North America comes last in this list, which can possibly be explained by more strict regulations of crypto in Canada.
For now, blockchain games are favored by those willing to earn money rather than people who enjoy gaming. It can be explained by the hype surrounding crypto and NFT trading and the fact that NFT games cannot compete with regular games in terms of gameplay and graphics.
Crypto games offer different earning models to suit the capabilities and preferences of different players. These are the most common revenue mechanics used:
In-game currency. Most blockchain games give players currency for completing tasks or winning tournaments. In Axies Infinity, players can earn Smooth Love Potion (SLP) by winning battles. They can then use it to breed Axies or cash it out.
Breeding. In some games, players can grow creatures to sell them as NFTs. In the game called CryptoKitties, people can buy cats and breed them to create new characters that take traits of their parents. Better cats mean a higher selling price.
Stacking. This passive income method is much like making a deposit. People give their in-game currency to an exchange pool for a certain period. After that, they get their money back with interest and, possibly, some prizes.