GameFi in Africa: Top Trends and Market Potential
The concept of growing your net worth through playing fun games has many crypto and non-crypto communities alike buzzing with excitement.
GameFi is the new gold
GameFi has overtaken DeFi as the hottest sector in the crypto market. Here is why;
Although a relatively young concept, GameFi has one of the lowest entry barriers of any blockchain offering, making it an exciting way for non-technical mobile gamers to begin exploring exciting new financial markets. To get started, all you need is a mobile phone, an internet connection, and a compatible cryptocurrency wallet.
Decentralized gaming, aptly nicknamed GameFi, is arguably the fastest growing industry in 2022. Game developers, investors and players alike are noticing the benefits that blockchain technology brings to the gaming industry, and consumers have never been more incentivized to game as they are today.
What is GameFi?
Put simply, GameFi is the culmination of Decentralized Finance (DeFi), Non-fungible Tokens (NFTs) and crypto tokenomics, packaged into an interactive, enjoyable financial product. A term commonly associated with GameFi is ‘Play-to-Earn’ (P2E), which is exactly what it sounds like: a business model in which players are rewarded with cryptocurrency for progressing through the game and contributing to the entire ecosystem.
P2E enhanced with crypto
This P2E model combines two activities that historically drive consumers towards platforms or activities: Having fun and making money.
This model is not new to the world of gamers. In fact, many popular mobile games such as World of Warcraft, incorporate in-game economy where players purchase gaming items and explore virtual worlds while also having the option of selling them on a marketplace.
There is however a huge advantage that cryptocurrency offers in terms of the autonomy of game items, open decentralized marketplaces, and the ability of players to influence what happens in the gaming environment.
NFT, Metaverse, and GameFi
GameFi revolutionary idea is enhanced by allowing users to outrightly own in-game assets as NFTs. In-game characters, outfits, land, and weapons are all examples of NFTs that can be taken out of the gaming environment and traded with other players, sold on cryptocurrency marketplaces, or stored in a digital wallet for speculative investing. This is the same principle that underpins the Web3 metaverse economies, and many metaverses are also considered to fall under the GameFi umbrella.
Existing NFT games have already demonstrated how valuable this GameFi concept is. The leading P2E game Axie Infinity has settled over $3.2 billion in transactions through their NFT marketplace. According to Decrypt, the total number of active users in GameFi recorded a 509% year-over-year increase in Q3 2021.
Africa is the ideal launchpad for GameFi
Emerging economies are in a position to benefit the most from the inevitable tidal wave of GameFi projects entering mainstream markets. Africa in particular shows promise in this sector. It has one of the youngest populations, with rising levels of digital literacy and rapid adoption in the use of mobile phones.
Additionally, Ghana, Togo, Tanzania, South Africa, Kenya, and Nigeria all rank among the top 20 countries on Chainalysis’ Global Crypto Adoption Index. This new intersection of gaming and cryptocurrency has the potential to inject financial empowerment into the continent’s mainstream economy, particularly in the suburbs.
Top GameFi trends
While each game is unique, there are some common trends within GameFi that many projects follow. There are four primary ways for gamers to earn money while playing their favourite games:
· In-game currency rewards
· Staking rewards
· Yield farming and
· NFT asset ownership (including items, characters, buildings and land)
The gaming industry in Africa is undergoing a paradigm shift. Numerous mobile games are being developed on P2E models, one of which is Minaland — a promising African GameFi project that aims to incorporate all four of these opportunities into their game. The developers are allowing players to explore worlds connected directly to NFTs created by talented artists from around the world, as well as earn $MIN tokens for exchanging NFTs on the marketplace.
Additionally, numerous DeFi platforms are launching to assist traditional gaming platforms in tokenising their in-game economy. One of such is Cassava, bridging the gap between TradFi and DeFi by making it simple for user-oriented platforms to tokenize engagement. While Cassava is not a gaming platform itself, Cassava will offer game developers simplified access to GameFi: Cassava’s $CSV token and NFTs can be easily implemented into existing titles to create P2E rewards, potentially bringing blockchain to tens of millions of African gamers to their favourite games.
Will GameFi become an even bigger deal than it already is?
Yes, indeed! By 2026, the gaming industry is expected to be worth an astounding $314 billion, nearly doubling its current value of $173.7 billion in 2020. P2E gaming titles already own a sizable portion of this, with the total P2E market cap hovering around $20 billion as of February 2022. This phenomenal growth will be fueled by gamers in all markets, although Africans appear to be playing an increasingly important role in GameFi adoption.
Game market analysts Newzoo and “Africa’s №1 game publisher” Carry1st, released a report in 2021 highlighting the growth of individual gamers in Africa. In 2015, their data showed 77 million gamers across the continent, and by 2021, this number had grown to over 186 million. This key indicator shows that Africa’s gaming industry is on an upward trajectory, and is only likely to remain on-trend as the industry continues to mature.
Simultaneously, growth in NFT and cryptocurrency, in general, has accelerated. According to a 2021 survey, 9.4% of South Africans intend to purchase NFTs in the near future, with NFT adoption expected to reach 17.8% in the near term. In Nigeria, widespread adoption of NFTs is almost certain — a 2021 study discovered that 21.7 percent of Nigerians who did not already own NFTs intended to do so.
GameFi is here to stay
GameFi and Play-to-Earn (P2E) markets are maturing rapidly, showing real value to their ever-growing communities of users. It’s clear these markets are here to stay, and will likely play an important role in accelerating blockchain adoption in Africa and around the world.
With the growth of both the gaming and NFT markets, and with projects like Cassava assisting in the migration of existing games and applications to the Web3, it’s only natural that GameFi will become even more critical than it is today.
Launch with Adaverse
Having close ties to some of the biggest names in GameFi and traditional gaming, Adaverse is a Cardano ecosystem accelerator committed to helping the next generation of African game developers make their mark on global markets. We assist startups to establish and grow sustainable businesses on the continent, through funding and a mentorship program.
Our accelerator program is open to applications all year round from African-based startups with a crypto-native edge and a proven concept. Apply here
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