The Rise of Play-to-Earn Gaming Guilds; Why Are VCs Jumping on this NFT Trend?

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by globalintelhub
Wednesday, Apr 27, 2022 - 19:19

Gaming guilds are becoming more popular in today’s online video gaming industry. Unlike in the past, it is now possible for players to connect with counterparts from different parts of the globe who have a similar interest (gaming or forging new connections). By definition, a gaming guild is ‘a collection or group of gamers that organize to play video games together and share data.’ 

Apart from the traditional gaming industry, these social structures are also emerging in the  play-to-earn (p2e) ecosystem. A nascent crypto niche which relies on Non-fungible tokens (NFTs) and the metaverse as the fundamental building blocks. Currently, the total crypto gaming market cap is well over $27 billion (roughly 1.18% of the total crypto market cap). 

Though still in the development stages, p2e games have created much more than an investment opportunity for VCs. This upcoming gaming space allows players to engage in immersive experiences while making extra income through ecosystem incentives. More importantly, p2e games are setting the stage for crypto-oriented gaming guilds. 

Play-to-Earn (P2E) Games 

To understand the rise of gaming guilds in crypto, let’s first take a deep dive into the history of play-to-earn games. Dating back to the Crypto Kitties era (2017), play-to-earn games have been around for quite some time. However, their popularity only exploded recently as more people gained an interest in NFTs and the metaverse. 

According to the Dapp Radar 2021 industry report, play-to-earn games accounted for close to half of the total industry activity, with notable mentions such as Axie Infinity hitting $4 billion in total sales. This figure is almost twice the amount generated from the sale of CryptoPunks, one of leading NFT collections as of press time. 

There has also been an increase in on-chain activity as p2e games opt for alternatives to the Ethereum blockchain. For instance, Splinterlands (built on the Hive blockchain) has recorded over 500K users over the past 30 days, with total volumes ranging above $146K.  Meanwhile, Axie Infinity enjoys close to 2.5 million daily active users. 

Arker Labs CEO and Co-Founder Juanjo Chust believes that the play-to-earn model is the beginning of a new era in the gaming industry,  

“Play-to-Earn games increase the value of the gaming industry through in-game economies that were previously non-existent. Though a nascent niche, the ongoing developments in play-to-earn games will likely usher in the next era of online gaming. A combination of actionable experiences and valuable ecosystem rewards.” 

Crypto Gaming Guilds 

So, where do gaming guilds come in? Well, it goes without saying that VCs have been keeping close tabs on the developments in p2e games. Over $2.5 billion was invested into this burgeoning sector during the first quarter of 2022. That said, investors are not only allocating funds into p2e innovations but gaming guilds as well. 

A recent news report by Coindesk revealed that leading crypto VCs have been investing significantly in p2e gaming guilds. Some of the prominent guild games that have raised money within the past year include Yield Guild Games and GuildFi; the former concluded a $4.6 million funding round in August 2021 while the latter raised $6 million in its seed round. 

Besides the potential of the p2e ecosystem,crypto gaming guilds are rising the ranks due to their underlying value proposition. Initially, p2e gamers had to acquire a particular digital collectible such as Axie monsters to participate in the game. This means investing over $400 dollars (3 Axies at 0.052 ETH each) as per the prevailing prices. 

Thanks to the debut of p2e gaming guilds, NFT gamers no longer have to incur the full cost of purchasing in-game items. It is now possible to lend or lease Axie Infinity monsters through gaming guilds such as Balthazar, a lending platform that allows lenders to gift their Axie and receive an NFT (opensea API), representing the contract of ownership. 

Even better, NFT owners who lend their digital collectibles via Balthazar are entitled to a portion of the proceeds generated by the ‘leasing’ gamers. This gaming guild has over 1,500 scholars (NFT borrowers), with an additional 50,000 on the waitlist. As the metaverse gains popularity, Balthazar’s p2e gaming guild will play a fundamental role in the adoption of NFTs and the metaverse. 

Commenting on this evolution, UniX Gaming CEO and Founder Mirko Basil recently noted that NFT lending guilds will be fundamental in the growth of GameFi,

“NFT lending is the next step in GameFi, for the same reason lending as a service has been successfully integrated into virtually every industry. It's the same for Play-to-Earn gamers who may not be able to afford the full price of an NFT or who only need it for a short time.” 

Looking Ahead 

While the crypto ecosystem has only existed for a decade, it has proven to be one of the fastest evolving industries of our time. Today, there are over 13,000 cryptocurrencies, some of which power the upcoming p2e economy. Will this be the next era of the gaming industry? According to Battle Drones Founder Ahmad Duais, p2e innovations will integrate with traditional gaming softwares such as Unity to bring more immersive experiences, 

"Unity is a very versatile engine and the future of p2e games requires this to tackle the mobile gaming space. The ability to function with cross-platforms allows developers to integrate seamlessly across the different platforms and this is tremendously important for guilds and the overall adoption of p2e games."

Besides on-chain gaming, p2e ecosystems will introduce more virtual experiences. It is likely that in the coming decade people will be able to hold virtual events and meetings within p2e environments governed through decentralized organizations (DAOs). 

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