How to Identify Crypto Games Worth Investing In

The crypto gaming scene has exploded in 2024 on the back of simple play-to-earn games like Hamster Kombat and Notcoin. Telegram, home to these minigames, has become the de facto platform for Web3 gaming and has quickly attracted hundreds of millions of daily players.  

Serious gamers aren’t being left out either. Illuvium just released its interoperable, three-part massively multiplayer online game to the world which has been decently received thus far.

But with so many titles being released – and most being, for lack of a better term, crap – how do investors sort the good from the bad?

Related: Telegram Boosts Crypto Integration, Launches Feature for Creators to Earn Toncoin

Aussie analysts Pav Hundal and Ted Coaldrake sat down on Tapping Into Crypto to discuss the latest Web3 gaming trends. 

Why Are Blockchain Games so Up and Down?

The duo kicks the podcast off by discussing the difficulties of the current blockchain gaming scene. Although several GameFi projects have exploded in 2024 – these are mostly restricted to “second monitor” play-to-earn games, rather than the large ambitious titles you might see on console or Steam. 

There are a few reasons for this.

Crypto games have tended to lack “staying power”, quite likely due to the crypto market’s major fluctuations. If the value of play-to-earn games plummets on the back of a broader crypto winter, the incentive for gamers to participate in – let’s face it – mediocre games is simply not there.

This can be seen through the performance of the once-massive Axie Infinity, which peaked in 2021. The game’s native coin, AXS, has fallen from its heights of US $160 (AU $241) to just US $4.50 (AU $6.80)

A lot of these gaming coins are down 90% since their launch in 2021…There is a…lack of infrastructure there…to provide quality games.

Pav Hundal

The hosts also note that crypto games require a lot of time and money to be built, which can quickly burn a hole in the developer’s pockets if they can’t engage a lasting community.

Related: Fidelity Eyes Stablecoins, Tokenised Treasuries in Crypto Push

Crypto Gaming May Have a Huge Target Market in the Future

It’s not all bad news though.

The market’s most popular game (outside of the P2E Telegram titles) is Pixels.xyz, which boasts a healthy 2.4 million users. 

They note that Fortnite, the most popular non-crypto game, sees over 220 million monthly unique users.

While there is a huge disparity in numbers there, it also shows the potential market if a Web3 game were to hit it big.

GameFi titles have a unique allure, in that users can earn money and participate within an in-game ecosystem. 

Take Fortnite, for example, which relies on users spending V-bucks to purchase cosmetics. This same principle could apply to Web3 gaming, except instead of using mummy’s credit card, you earn the V-bucks equivalent by playing and participating in the community.

Individual Gaming Tokens are Boom or Bust: So What’s the Alternative?

The podcast hosts also discuss several ways that investors can tackle the GameFi industry.

There are three main ways to purchase assets – L1 blockchains that facilitate gaming, networks dedicated specifically to gaming, or buying the tokens of individual crypto games.

The latter option is quite risky, as interest in gaming fluctuates drastically both in and outside of the cryptosphere.

However, some of the new gaming-dedicated platforms – such as ImmutableX, Beam and Ronin – may present a more diversified investment while still providing exposure to the GameFi industry. 

Related: Telegram Boosts Crypto Integration, Launches Feature for Creators to Earn Toncoin

The hope is the next cycle, boosted but not led by P2E Telegram phenomena like Hamster Kombat, will bring the infrastructure to GameFi that supports the development of serious, deep games that translate to the everyday gamer.