3 out of 4 Investors Are Joining Crypto Because of GameFi

According to Chainplay’s 2022 GameFi report, 3 out of 4 investors worldwide are joining crypto and the blockchain movement because of GameFi, and 68% got involved less than a year ago.

Footprint Analytics and Chainplay both released new reports to investigate how investors and players are reacting to the downturn of the crypto markets. Chainplay’s report has a deep focus on investors and VCs attitudes towards the market, while Footprint’s analysis is more focused on gamers.

GameFi is taking a hit due to many rug pulls

Chainplay found out that 58% of investors worldwide stated that “Poor In-game Economy Design” is the number one reason for declining GameFi profits, and 73% of the respondents shy away from GameFi investments because they are afraid of rug pulls, Ponzi schemes, and pyramid schemes projects.

Following the trend set by investors, gamers are also shying away from play and earn games. According to Footprint, GameFi project count grew less than 2% in the month of July, and many existing games are failing to retain their users.

In particular, players are starting to avoid BNB, the main blockchain where low-quality games are released. ETH is failing to expand its market too, mostly due to transaction fees, and the main sidechains, Polygon and Immutable, are also taking a hit in terms of total funding and number of projects released.

89% of crypto investors worldwide saw their GameFi profits decrease in the last six months. 62% of respondents lost more than 50% of their profits from GameFi.

GenZ strongly believes in GameFi

GenZ crypto investors allocate on average 52% of their net worth to GameFi, higher than any other surveyed generation. 

Although older generations are starting to doubt the validity of gaming on the blockchain, GenZ youth are still believing in the dream. That’s why 81% of GameFi investors prioritize the fun factor over earnings when it comes to future GameFi projects.

Young investors may not be as well-versed as older ones when it comes to understanding tokenomics, but they do have a crystal clear idea on one thing: a game must, first and foremost, be fun. 

Thanks to GenZ’s faith in the upcoming projects, July was a good month for funding! More and more investment funds are injected into Web3-type GameFi, among which Web3-type funding accounts for 98%.

Community is the leading factor that investors consider while investing

According to Chainlink, 69% of investors believe the vibrance of a project’s community is an important factor to consider when investing, while 66% of them prioritize backers and partners.

It looks like the most crucial considerations before investing in a project are: community, team, backers & partners. This means everything revolves around the people behind the project, rather than the project itself.

Gameplay still ranks in the top10, with 51% of investors mentioning it as an important factor, and Tokenomics sits right after it with 49% of them believing it accounts for most of the project’s success. 

In an era where most GameFi projects are still in the makings, it makes sense that the most valued asset any team can have right now is their own experience, and the size of their player base.

A bright future

88% of respondents stated that they believe in the future of GameFi. Chainplay asked these respondents what would make GameFi receive better press in the coming months.

71% of investors say that “Interesting Gameplay” will keep them hooked to the industry, 55% of them believe that GameFi needs to build games with a better reputation, and 66% of investors think a better in-game economy can lead to long term success.

With many AAA games on the horizon, such as Illuvium, 28% of participants believe the industry as a whole will benefit. The following chart represents the most anticipated games to be released in 2022: 

Finally, Chainplay released a leaderboard for the favorite launchpad in 2022. GameFi ranks first, however, the Binance Launchpad is catching up. If BNB manages to gain a better reputation, it could make for a great competitor to the established leadership.

Giorgio B avatar
Giorgio is a Digital Marketer, Tech Enthusiast. Mostly work with SaaS companies. Involved in crypto-gaming and blockchain. He also loves dogs!