Market experts argue that GameFi is not gambling. It refers to the financialisation of video gaming and could transform gaming business models and power the digital economy, they say.
New Delhi: Crypto industry is betting big on the GameFi industry with billions of dollars invested, but in the Asian market, the segment is likely to face a stiff and severe challenge, thanks to strict and rigid regulations in multiple countries.
The existing laws and regulations are quite hostile for GameFi. Countries like South Korea and China have had laws about converting in-game tokens into fiat currency for nearly 15 years.
In South Korea, gaming is a serious industry and has its own regulatory code – strictly prohibiting speculative acts, gambling and free gifts. Its laws prohibit converting game tokens into cash.
Market experts argue that GameFi is not gambling. It refers to the financialisation of video gaming and could transform gaming business models and power the digital economy, they say.
Obasi Francis, Co-Founder and Chief Executive Officer, DeSpace said that GameFi can be defined as the combination of video games (gaming) and decentralised finance (DeFi).
The People’s Bank of China has put a blanket ban on crypto trading, whereas Japan is convinced enough to consider it as gambling. In India, the Supreme Court has questioned the government to clear its stance on the legitimacy of cryptos.
Anndy Lian, Chairman, BigONE Exchange said that GameFi is not Defi. Playing hard to earn in the game and then allow it to turn into coupons so that you can buy some food is not gambling.
“There are games that are tokenised but not listed on any exchanges and only able to redeem very specific things and not cash directly,” he added. “They are only doing it in their own ecosystem.”
Crypto gaming has grown in popularity as it allows players to collect and trade virtual assets that can be exchanged and traded anywhere in the world. It has emerged as a way to earn money from the gaming industry in a safe and secure manner.
However, GameFi is more about the yield, than the game. Games like Axie Infinity, whose native token has delivered multibagger returns, do not have many daily active users, and most of its user base comes from developing countries.
Currently, the blockchain games have more talkers than players. These games lack an active gamer base as users want to reap the yield and not play the game. Also, the in-game economy suffers from crippling inflation.
Unlike conventional games, blockchain games enable users to make money by buying, selling and exchanging non-fungible tokens (NFTs) for various in-game items, said Francis.
On the other hand, Lian agrees that GameFi is not more developed in low per capita countries. “Game content and quality comes first and not the earnings,” he added.
Undoubtedly, GameFi is one of the hottest technologies in the crypto eco-space, and early investors can expect gaming-related collectibles to power the virtual economy.
But the games can’t go mainstream in Asia’s major markets because authorities would crack down using laws. Also, such GameFi are not getting too popular to gain the benefits of word of mouth.
“Ease of transactions, the ability to play anywhere, and the elevated levels of safety and security, GameFi enhances the overall gaming experience for game players while providing new sources of revenue for developers,” said Francis.
However, the concept involves giving players financial incentives to play and progress through games. Though, for the growth of industry, blockchain game developers must work harder to drive that.
“If regulators think that GameFi is gambling, then maybe they should ban NFT too,” said Lian of BigOne. “NFT is a lottery when it comes to mystery boxes. Regulators need to dive deep and not look at the surface.”
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
