• GameFi has been on the decline in recent times, with many gamers reporting significant losses especially in this bear market
• Gaming guilds help to select promising and sustainable web3 game projects for its members to enjoy
• Guilds also serve as a conduit for communication between gamers and project developers, which may help improve the overall quality of the game

For many in the crypto space, the terms “Web3 gaming”, “GameFi”, or “Blockchain Games” have taken on a rather negative connotation in recent times. Especially within the bear market, web3 games have seemingly become little more than casual passion projects that attract only “degens” or the unwitting. Indeed, while total investments in web3 or blockchain games to date crossed the US$9 billion mark in 2022, play-to-earn models have come under fire for being unsustainable and even predatory in nature.

As a recent survey by Coda Labs indicates, gamers (or those who claim to play video games at least twice in a month), ranked their sentiments towards crypto as a whole at 4.5/10, and 4.3/10 towards Non-Fungible Tokens (NFTs). A survey by Chainplay in August also suggested that up to 89% of crypto investors worldwide observed their GameFi profits decrease over the past 6 months, with up to 62% of the surveyed investors indicating that they had lost over 50% of their profits.

Indeed, even GameFi giant Axie Infinity has seen its average weekly log-ins to decrease from 2.7 million weekly users in November, to just 368,000 in July. While mostly in part due to the price decline of Smooth Love Potion (SLP), the game’s in-game reward token, it is undeniable that an increasing number of those in the crypto community are holding web3 games at an arm’s length, amidst rampant scepticisms on their viability that have only become more fervent in the current bear market.

Players on Axie Infinity are required to own three Axies, which take the form of NFTs

Yet Beryl Li, the Co-Founder of Yield Guild Games (YGG), is optimistic for the future of web3 games, and for good reason too, as we find out.

“Play-to-earn games have been readily adopted in regions such as the Philippines, as we saw in 2021, which demonstrates the potential for web3 to create new and diverse income earning opportunities,” she tells us. “The future of work in the open Metaverse will be full of opportunities for everyone, including those who live in places that have traditionally had less access to opportunities for learning and moving up in the world.”

With a community of over 80,000 members, YGG is a gaming guild that coordinates players around the world to earn crypto-based rewards in play-to-earn games. As a fintech entrepreneur herself, Beryl is a firm believer in the future of web3 games, particularly in their potential to serve as alternative sources of income especially for those from less-developed parts of the world.

Yet the crash of Axie Infinity still undoubtedly left many gamers in the Philippines in the rut. Players who bought their own in-game assets such as NFTs or characters were hit the hardest, with many reporting that they owed hundred or even thousands of dollars to friends and family members who helped them pay their initial investment to buy the NFTs needed to play the game.

Conversely, players known as “scholars,” were able to avoid the upfront capital requirements by borrowing the needed NFTs from a guild such as YGG under a reward-sharing agreement. Even so, when SLP (Axie’s in-game reward token) began to decline in value, some scholars have since opted to stop playing the game. Currently, the value of Smooth Love Potion (SLP), or the platform’s primary in-game currency, holds a value of around US$0.003, down from US$0.34 last July.

Beryl however, remains confident that Web3 games still have the potential for many around the world to earn an income on the open Metaverse.

Beryl Li, Co-Founder of Yield Guild Games (YGG)

“What happened last year [to Axie] was crypto speculation that got ahead of where the actual game economy was, which can be very dangerous” Beryl explains. “Speculators bid the price up to levels that were unsustainable within the game economy itself. It gave players the false impression that they would make a certain amount of money from playing the game, when in reality it actually works on supply and demand. As a result, the price became driven by speculation rather than the organic game economy.”

While Beryl may be right in accrediting the majority of Axie’s fall to over-hyping and dangerous speculation, many have also criticised the space for projects that offer lacklustre gameplay and unattractive storylines that simply reduce these games to unpleasant grinds for more tokens.

Beryl is quick to respond to this however, arguing that Web3 games is still in an early phase where individual project may still be learning to manage their economies while offering compelling gameplay.

“Not everyone is trying to build the next Fornite,” she says.

“We are still fairly early in this first-wave of Web3 games, and projects are still experimenting how to design their economies. However, we can expect to see more mature and battle-tested game economies in the next 3-5 years.”

Just as Beryl says, Web3 games are still a relatively new and unexplored space in the industry. While there may be many Web3 games out there that fall within the umbrella of “unsatisfactory” by conventional Web2 gaming standards, there may be even more better projects that are still under development and have not yet seen the light of day.

With powerhouses such as Square Enix, the creator of the cult-favourite Final Fantasy series, and Dan Houser, the producer and writer of Red Dead Redemption and Grand Theft Auto, entering into the blockchain gaming market, many are hoping that more Triple A titles would be what the industry needs to shift the attention from gamers towards enjoyable gameplay as opposed to just seeing the dollar signs.

Gaming guilds like YGG have also been doing what they can to sieve through the rubble and identify promising and sustainable games for its playerbase in the meantime.

“We scrutinise each game to weigh a range of factors such as tokenomics, team deliverables, and of course, the fun factor,” she says. “With more games, we expect to see an even higher chance of quality output.”

Indeed, gaming guilds play an important role in not only lowering the barriers of entry for new initiates, they also help to scout for promising game projects on the horizon.

“The guild represents a network of passionate players who look to us for recommendations on new and upcoming game releases,” Beryl says.

In addition, Gaming guilds like YGG have also been exploring alternate ways for its members to explore opportunities within Web3 besides gaming. For instance, “Web3 Metaversity”, YGG’s recent partnership with Nas Academy, has allowed guild members to learn new skills and uncover new income-earning opportunities in the Web3 space.

Yet the persistent bear market has still sent wintery chills down the backs of most within the space. With stubborn inflation and tightening liquidity, even Bitcoin and Ethereum have traded below their previous cycle all-time highs, sending many spiralling into unrealised loss. The “Lehman Brothers-like" collapse of Terra, Three Arrows Capital, and Celsius only served to exacerbate things in an already-over leveraged industry. GameFi and Web3 projects are no different, with blockchain gaming dropping 7% in Q2 this year, as DApp data aggregator DappRadar reported.

In response, Beryl provides us with some insights that may help web3 games push through the unforgiving blizzard.

“Those who recognise the opportunity in Web3 are harnessing the bear market as a time to invest in upskilling and educating themselves,” Beryl says. “This ensures that they will be well-positioned to capitalise on the growing skills demand of the decentralised digital economy.”

Indeed, the bear market is a time for building and upskilling across the board. Whether it be going back to the fundamentals of game design, or developing sustainable tokenomics, game developers and project founders alike need to leverage on this period to reap the best rewards when winter turns to spring.

“Games that have a strong community and robust play-to-earn mechanics designed for sustainability will have higher chances of attracting players and driving adoption,” Beryl advises. Gaming guilds also play an integral role in this building process, she says.

“Gaming guilds like YGG can help to kick-start the network effects of a game’s economy, so its more than just the value of user acquisition,” she tells us. “We bring in players, and we also work directly with the team behind the game to help think through its virtual economy.”

Indeed, Gaming guilds not only help to onboard newer players by showing them the ropes in a new platform, but also help to consolidate the thoughts and opinions of its members so that they may be communicated to the developers. Building a good game requires just that – substantial contribution from a community that cares for the future of the game, and a game development team that cares enough to listen.

This is an Op-ed article. The opinions expressed in this article are the author’s own. Readers should take the utmost precaution before making decisions in the crypto market. Coinlive is not responsible or liable for any content, accuracy or quality within the article or for any damage or loss to be caused by and in connection to it.