GameFi Investors Lose Profits to Poor Quality Blockchain Games

About 90% of GameFi investors report a decline in profitability over the past six months. And 58% of them believe the main reason is “poor in-game economy design.”

GameFi Investors Lose Profits to Poor Quality Blockchain Games

A recent State of GameFi 2022 survey by ChainPlay analysts found that returns of crypto investors in the gaming sector have declined. More than half of them say poor blockchain gaming is to blame.

Over 2,400 GameFi investors took part in the ChainPlay survey. According to the poll, 89% of them report a decline in investment returns over the past six months. Remarkably, 62% of investors claim to have lost more than 50% of their profits over that period. Recall that returns on crypto-assets also upset 46% of Americans who have invested in them this year.

However, despite the market decline, over half of GameFi investors blame blockchain game developers for the losses. Thus, 58% believe that “poor in-game economy design” of the projects they invest in is to blame. Only 21% reported losses due to a drop in the price of in-game tokens, while 15% cited the decline in BTC as the main factor.

Interestingly, the gameplay remains the top priority for 81% of investors when choosing a project to invest in. Four out of five investors surveyed believe that only high-quality GameFi projects will be successful in the future and that earning should be a secondary incentive. For example, 42% complain about having to perform repetitive actions in games to make money, which makes the process “boring” and “routine.” Another 28% of investors point to “crappy graphics” in most P2E projects.

Gamers also agree with this opinion, with only one in ten interested in making money in games. Analysts from Delphi Digital recently proposed introducing NFTs in games so that the refusal to buy them in any way did not affect the free game experience. For example, in the form of microtransactions.

The ChainPlay survey also revealed a decline in player activity this year. In 2022, GameFi investors spend an average of about 2.2 hours per day playing P2E games, a 43% decrease from last year (an average of 4.4 hours per day).

The State of GameFi 2022 survey also showed a high interest in cryptocurrencies related to the gaming sector. For instance, 75% of respondents say they started investing in crypto because of GameFi. And the sector has been growing over the past 12 months, during which 68% of GameFi investors joined the market. Analysts at Absolute Reports forecast the GameFi industry to reach $2.8 billion by 2028.

The survey also found that money invested in GameFi typically accounts for about a quarter of investors’ capital. And only 15% of investors invest over 75% of their total savings in blockchain-based games.

The most popular ecosystems among GameFi investors are:

  • 86% prefer to invest in BNB Chain-based games;
  • 37% invest in Solana-based games;
  • 33% invest in Ethereum P2E segment;
  • 32% prefer blockchain-based games on Polygon;
  • 18% invest in Avalanche-based games.

ChainPlay analysts cited the growth of fraudulent projects in the sector as an important factor holding back investment flows into GameFi. 73% of investors refuse to invest in P2E games because they are afraid of Ponzi schemes, financial pyramids, and Rug Pull. 

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