Venture Capitalists showing massive interest in Play-to-Earn gaming industry

Despite poor macroeconomic trends, investor appetite in the booming play-to-earn (P2E) blockchain gaming business continues to grow, with record-breaking funding ready to be deployed. Venture capitalists and angel investors are investing billions of dollars into a wide range of blockchain-based P2E initiatives and infrastructure development, according to DappRadar’s Q1 2022 Dapp Industry Report. In comparison to the $4 billion invested in P2E gaming in 2021, investors have already invested over $2.5 billion in the first quarter of 2022. In mid-May 2022, a16z (Andreessen Horowitz), a California-based company, unveiled Gaming FUND ONE, a $600 million fund dedicated to the future of the P2E games sector. Neil McFarland, CEO of First Light Games, commented on the investment momentum in P2E gaming industry:

 

“It’s the biggest opportunity seen in gaming or tech yet! You’ve got the community and retention of a game like Minecraft married to the social network of Facebook combined with the financial power of a stock exchange. We expect that in 5-10 years that the biggest game or game company will be a metaverse web3 focussed company with Blockchain at its core.”

 

About the same time as Andreessen Horowitz , Framework Ventures announced a $400 Million Fund to Support Web 3 Gaming and DeFi. Framework has secured the above mentioned $400 million for its third venture capital fund, bringing its total assets under control to $1.4 billion. The majority of the funds will be invested in blockchain gaming, with Web 3 and decentralized finance (DeFi) as additional focus areas. Commenting on the investment Framework co-founder Michael Anderson said:

“We think Web 3 gaming is the sector that has the most potential for growth within the wider blockchain industry,”

According to market researcher DappRadar, players spent $4.9 billion on NFTs in games last year, representing around 3% of the worldwide gaming industry. Investor interest in NFT-based games has also ballooned, with projects attracting $4 billion of venture capital funding last year, up from $80,000 in 2020, DappRadar said.

“There’s so many users who want to interact with the tech,” said Axie Infinity co-founder Aleksander Larsen, adding that Axie Infinity’s revenues exceeded $1.3 billion last year. “It’s like you found a new continent… like finding America all over again.” In Axie Infinity game, users buy virtual blob-looking creatures with various abilities as NFTs or non-fungible tokens – digital assets whose owner is recorded on the blockchain – for tens of dollars up to hundreds of thousands.

Last July, Thitadilaka in Thailand decided that he wanted to make more money than he could by playing alone, so he and his friends formed a “guild,” as it’s known in gaming slang. They let users who wished to play Axie Infinity for free without investing in an asset to utilize their NFTs, and took cut of their profits in return. This model is a standard across play-to-earn games. Thitadilaka said his guild called GuildFi, grew into a network with 3,000 Axie players who split their proftis earned in games with the asset-owners 50:50. Thitadilaka now runs GuildFi as a full-time job and his company has raised $146 million from investors.

Thailand and the Philippines, for example, have emerged as some of the hottest worldwide gaming hotspots. Teriz Pia, a 25-year-old pre-school teacher from Manila, quit her job last June when her brother launched the Real Deal Guild, a play-to-earn gaming guild. She now makes as much as $20,000 per month from her network of over 300 players across numerous games.

Pia lets her players keep 70% of the profits from Axie Infinity, while she keeps 30%. She shares it 60:40 in another play-to-earn game, Pegaxy, where participants buy and sell NFTs of virtual horses to compete in races for crypto tokens. Yield Guild Games, one of the largest play-to-earn networks, reported that as of the fourth quarter of 2021, it had 10,000 Axie Infinity players who kept 70% of their income and made $11.7 million in total.

We reported about indications from venture capitalists expecting huge returns from the NFT sector at the end of last month. While it’s great to see more venture capitalists and angel investors entering to the P2E gaming industry, it is rather disappointing that the market still has no interesting game titles to offer to compete with AAA or AA standard games that we can find in stores worldwide. We clearly lack solid games with beautiful visuals, high quality animations, rich stories, and adrenaline pumping realistic gameplay, but hey… that’s where Ready4Player comes in with its amazing content currently in development, which is set to revolutionize the P2E gaming industry as we know it. Seeing all of the problems that other games have, Ready4Player focuses on security and high quality as the rock solid foundation of future-proof products creation. Combining it with variety of games and metaverses will take the play-to-earn experience to the next level. The so called P2E 2.0 (Play-and-Earn) is coming and soon the list of guilds cooparating with the project will be announced early so players can start reserving their spots in the next-gen entertainment.