The launch of Grit, the “first-ever” blockchain game from the partnership between Epic Games and Gala Games, is seen as a “watershed” event for the mass onboarding of gamers from Web2 to Web3, according to an update from Huobi.
However, blockchain games have “not reached mass adoption largely due to their speculative nature, high upfront investment costs, poor production quality and security concerns.”
Huobi further noted that a free-to-play-to-earn model “can best address these challenges and take blockchain games mainstream.” This, according to an update by Huobi Research Institute titled “Will Epic Games Store’s First Blockchain Game Drive Mass Adoption?”.
As the inaugural blockchain game launched on the Epic Games Store, a major game platform with over 56 million users, Grit has “the potential to kickstart the adoption of blockchain games on major gaming platforms.”
To date, the latter has been “slow to introduce blockchain games and NFTs due to concerns over fraud, security, and money laundering.” The success of Grit’s free-to-play-to-earn model and NFT strategy “is therefore pivotal to persuading other major platforms such as Steam to include GameFi games on their platforms.”
Although GameFi and play-to-earn games have enjoyed “explosive” growth in the past year, they have “failed to sustain their rapid growth trajectory.” Total daily GameFi players “peaked in December last year and remained stable until June, when the number plummeted around 30% in the wake of the game tokens market crash in May.”
The player base “remains relatively small compared with that of traditional games. The Epic Games store, for example, has nearly 62 million monthly active players – nearly 1.7 times the number of active players for all blockchain games.”
The report highlights that “the main factors holding back blockchain games from going mainstream are the inherent flaws in the highly speculative pay-to-play-to-earn game model, and technology risks surrounding blockchain.”
These issues have “led to gamers associating blockchain games with Ponzi schemes and scams, and to major gaming platforms holding back from blockchain-enabled games to avoid putting their reputation on the line.”
Secondary factors “include the hefty upfront investments in NFTs which pose a high barrier to entry for the young gaming population, as well as the increasing focus on economic incentives at the expense of game quality.”
To make blockchain-based gaming more inclusive and sustainable, the report proposes “a free-to-play-to-earn game model.”
An option to play at no cost “will let players avoid speculative Ponzi-like games where early players or investors profit by selling NFTs to new players who enter later in the game.”
NFT in-game assets “should be optional and provide social utilities such as cosmetic customization, rather than performance utilities that encourage pay-to-win and unfair gameplay.”
Huobi Research Institute researcher Hanson Chan, the author of the report, said:
“With only 35 million monthly unique active wallets, it is obvious that blockchain games are still a niche video game genre that mainly consists of crypto-native players. Mass adoption of blockchain games will happen when blockchain games dissociate themselves from pay-to-earn, Ponzi-like game models and prove themselves to be a safe technology that can be implemented into games.”
“Major game studios and publishers will play an important role in building a safe environment for blockchain gaming and setting the standard for blockchain games. With most large game publishers taking a wait-and-see approach in launching blockchain games, pioneers such as Epic Games and Ubisoft will lead the way in Triple-A blockchain games.”
To access the complete report, check here.
As covered, Huobi Blockchain Application Research Institute (referred to as ‘Huobi Research Institute’) was “established in April 2016.”
It is committed “to researching and exploring new developments in the global blockchain industry.”
Its goal is “to accelerate the research and development of blockchain technology, promote its applications, and improve the global blockchain industry ecosystem.”
Huobi Research Institute “covers industry trends, emerging technologies, innovative applications, new business models, and more.”
Huobi Research Institute partners “with governments, enterprises, universities and other institutions to build a research platform that covers the entire blockchain industry.”
Its professionals “provide a solid theoretical basis and analyze new trends to promote the development of the industry.”