As blockchain technology continues to evolve, the gaming industry has been quick to embrace it. Cryptocurrency and NFTs have paved the way for a new form of in-game economies where assets have real-world value.
Gamers who’d spend hours levelling up their characters and grinding for rare items now have more incentive to do so than ever before. Blockchain games reward them for their time through a model commonly known as play-to-earn (P2E) gaming.
This has become especially popular in parts of Southeast Asia, where some have been able to generate a full-time income through gaming alone.
However, as time passes, flaws are starting to emerge. It’s becoming apparent that P2E models aren’t always sustainable. They often rely on new users investing in the ecosystem, and once interest fades, they’re no longer able to pay out returns.
“The play-to-earn model that shaped the first iteration of blockchain gaming creates an unsustainable ecosystem,” explains Justin Hulog, Chief Studio Officer of Immutable, a platform pioneering NFT technology.
“Creating products where the only reason to play is purely to earn is flawed and misses the point of gaming. Often, these financial gamifications are predatory and untenable in the long run.”
Introducing ‘play and earn’ gaming
It’s only a slight change in phrasing, but the implications are significant. Immutable champions a gaming model where it’s possible to earn monetary rewards, but the core focus remains on gameplay and entertainment.
We believe that games should be fun. Rather than turning people’s favourite hobby into ‘work’, we focus on fun and compelling gameplay while still empowering players with ownership and utility.
– Justin Hulog, Chief Studio Officer at Immutable
The play and earn model is showcased in Immutable’s flagship offering, Gods Unchained. Created in 2018, it’s an online trading card game where players compete in duels against one another.
Gods Unchained uses the $GODS crypto coin as its in-game currency, which users can earn by playing the game. The coin can then be exchanged for fiat money, or used to unlock in-game utilities.
“Our focus on $GODS has always been around unlocking additional utility for our community. With $GODS, players can craft new NFTs that can be used in-game or traded on the marketplace. We have recently released a new Shine Fusing feature that allows players to burn their NFTs to create a rarer NFT as well,” says Hulog.
By ensuring $GODS has desirable utilities, Immutable is able to drive demand and prevent mass sell-offs. This is where play-to-earn games often tend to falter.
“We are working towards unlocking even more use-cases for $GODS, such as staking, voting and governance,” he adds.
While Gods Unchained players are able to earn through the game, it isn’t presented as a primary focus or selling point.
US$200 million funding to fuel expansion plans
As of January 2022, Gods Unchained had around 80,000 active players, with $GODS sitting at a market cap of over US$10 million.
Following its success, Immutable is now preparing for the launch of its second blockchain game — Guild of Guardians — which already boasts a community of 400,000 people.
Paired with this, the platform secured US$200 million in Series C financing earlier in March, led by Temasek and other investors including Animoca Brands and Tencent.
Now valued at US$2.5 billion, Immutable has aggressive plans for expansion geared to take shape in the coming months.
First, we have plans to more than double the size of our company to 400 people. This means hiring more than 200 new employees worldwide over the next year across many functions.
From a cash perspective, we are fortunate enough to have more than four years’ runway projected, even with aggressive hiring. This means that we can expand our workforce even when other traditional tech and crypto companies have paused hiring.
– Justin Hulog, Chief Studio Officer at Immutable
Immutable will also use the funds to invest in its NFT marketplace Immutable X, and to scale its games studio.
“To be a leader in blockchain gaming, we must not only build owned-and-operated games, such as Gods Unchained and Guild of Guardian, but also become the go-to platform for developers looking to build blockchain games,” he continues.
Given the success of NFT gaming in countries such as Indonesia and the Philippines, Immutable is also looking at the Southeast Asian market as one of its key target markets.
“This region is incredibly important in terms of how we think about growth at Immutable. Beyond ensuring the reach of its current products, the company is looking to create tailored offerings for this market as well,” he explains.
“We understand the richness of diversity in these regions, with massive communities which have different motivations, needs and languages. As such, we are prioritising localisation as one of our key strategies for expansion. It’s more than translating our product and marketing into local languages. It’s about tailoring both our product and our content to meet the needs and interests of each local market and their diverse communities.”
To fulfil this goal, Immutable has started expanding its hiring processes in Southeast Asia.
The future of NFTs and blockchain gaming
Although the recent market crash has waned interest in NFTs, Immutable remains fully convinced of their place in our digital future.
NFTs are going to tokenise the world and gaming will be their first massive break-out vertical. Video game assets have always been highly desirable digital collectables in and of themselves.
In 2020, players spend US$74 billion on in-game items just to collect them and not make anything in return because they desire those items. With NFTs, they can own these items instead of licensing them from gaming companies.
– Justin Hulog, Chief Studio Officer at Immutable
This technology will ensure that the time and money players spend on games is no longer a sunk cost. That being said, the earning potential won’t drive user adoption on its own.
“Games with great gameplay, like Gods Unchained and Guild of Guardian, that players want to play even without incentives, are going to be the main factor in driving mass adoption for blockchain gaming,” he adds.
Featured Image Credit: IGN Southeast Asia / Immutable