Written by Scott Craig|Posted on September 22, 2022
A new report from crypto exchange Binance shows that the number of GameFi projects continues to grow, with 1,551 GameFi products recorded in June 2022. The data comes from Binance’s regular six-month research publication, and also demonstrates that growth has slowed down recently, to 2.5% month-over-month this summer.
GameFi a portmanteau of “game” and “finance” refers to video games that offer some kind of financial reward or incentive along with traditional gameplay elements. Rather than direct monetary rewards, this typically takes the form of ownership of digital items in the virtual world, and the ability to trade them in a marketplace. Non-fungible tokens, or NFTs, can be used to verify the authenticity and possession of these digital assets. Cryptocurrency and blockchain ledgers provide the foundation for these virtual economies, with the idea of interoperability and exchange across different game platforms being a key goal of the GameFi space.
The Binance report credits GameFi’s integration of entertainment, financialization, and blockchain for driving the sector’s expansion and encouraging a new audience of gamers to adopt blockchain technology.
2022 has seen a healthy flow of private investments into the GameFi sector, but negative market sentiment in the overall cryptocurrency market over the last quarter contributed to a slowing of growth and a decline in the number of blockchain-related game launches. Of the total $4.1 billion of investment capital in the GameFi space, contributions from major game industry players include $2 billion raised by Epic Games and $300 million from Square Enix. Ubisoft, Electronic Arts, and Tencent have also invested in blockchain gaming to varying degrees.
Ethereum is the most popular blockchain used as a basis for GameFi projects, thanks to the network’s versatility in enabling new projects to be built on it. GameFi is also integrating with the emerging metaverse and Web3 infrastructure via virtual reality gaming.
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