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What was the game industry like before the emergence of NFT?

Before formally discussing "Why GameFi needs NFT", we might as well take a step back and take a look at what position the game industry occupies in today's economic society? And before the large-scale application of NFT, how did the game industry operate? What areas for improvement exist?

In the paper "Economic Analysis of China's Online Game Industry" published by Shi Hexin, School of Economics, Central University of Finance and Economics, there is a passage like this: "The online game industry can now be regarded as one of the national pillars of a country. Development determines whether a country can advance the modernization process and the development of the capitalist economic process. In the stage where the market economy prevails, the development of national interests is inseparable from the lucrative interests generated by the online game industry. Like a link, online games The development of e-sports platforms affects the interests of e-sports platforms, and the development of e-sports platforms affects the national economic development.” Moreover, on the Wanfang Data knowledge service platform, the number of research papers on the game industry alone has reached nearly 5,000 articles, and most of them were published after 2010. Here we will not comment on the viewpoints in Shi Hexin's paper for the time being. Just from the increased attention paid to the game industry in the academic circles in recent years, we can also get a glimpse of the increasing importance of the game industry in today's economic society.

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The market size of the global game industry from 2015 to 2020, sourced from Qianzhan Industry Research Institute

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Distribution of global game players in 2021, source Newzoo

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NFT helps GameFi to deeply change the game industry

With the gradual improvement of the global situation, people have begun to feel the changes that have taken place in the whole world over the past year. The most prominent point is that during this period, more and more online communication has penetrated into our daily life. And in every corner of our work, we unexpectedly discovered that many things that originally required offline contact in the real world can actually be solved well through online methods. Reality and virtuality do not seem to need to be so Clear boundaries. In the encryption market, the concentrated reflection of this change is the rise of Metaverse and GameFi.

More importantly, once this trend starts, it will have an irreversible impact to a certain extent, because in the process, the meaning carried by the game is also quietly changing. Judging from what we have observed so far, games have gradually changed from pure entertainment attributes to entertainment, social and other multiple attributes. As the game scenes brought by GameFi become more three-dimensional and personalized, digital virtual characters are becoming an important part of people's self-expression and individuality. At the same time, starting from this dimension can also help us better understand why NFT avatars It can constantly surpass people's conventional cognition and refresh transaction records. Whether it is GameFi or NFT avatar, the reason why it has been widely favored by the encryption market in the near future is essentially an extension of unique personalized social needs in real society.

Let's focus on GameFi again. In the previous article, we mentioned the conflict between game producers and consumers in the current game industry. So how does GameFi solve this problem? Here we have to introduce the important role of NFT in it. With the blessing of NFT, every game item (whether obtained by purchase or through gold) obtained by game players in the game has a unique, non-counterfeit and irrevocable "identity authentication", which greatly facilitates players The process of confirming the ownership of props and equipment owned by oneself. In other words, with NFT as the underlying technical support of GameFi, players can control all the ownership and disposal rights of their game items, and it is even expected to realize the transfer between different games.

Take Axie Infinity, a typical representative in the GameFi field, as an example. In the game, every Axie elf obtained by the player is unique and completely belongs to the player, whether it is the game developer, publisher or other players, It cannot be obtained illegally without permission. Of course, the most important point is that, unlike the current situation in the game industry where producers take most of the profits, about 95% of Axie Infinity’s operating income is allocated to players, and most games on the other GameFi track also take most of the profits. The profit is distributed to the players, the difference is only a slightly different proportion. Before the rise of NFT and GameFi, such a situation was unimaginable, but with NFT, there will be more imaginative solutions to the trust issues between game players, developers, and publishers, as well as the balance of interests According to the plan, the two parties are no longer a simple relationship between producers and consumers, but tend to establish a more equal and harmonious relationship. In this transformation process, NFT has made great contributions. From this point of view, GameFi and NFT are undoubtedly subversive to the business model of the game industry in reality.

epilogue

epilogue

At present, the pioneers of the Internet industry, including the encryption market, have paid unprecedented attention to the Metaverse. Although everyone cannot yet draw a clear scene of the Metaverse, what is certain is that GameFi, DeFi, Web3.0, etc. Elements will definitely be an important part of the metaverse in the future. So let's imagine how to become a more critical part of the Metaverse? Or in the metaverse world, what will be the core competitiveness? From the topic of GameFi today, a preliminary answer we can give here is: attention.

There is no doubt that, from the past to the present, and then to the future, the information received by everyone is increasing exponentially. In this case, attention will inevitably become a scarce resource. Whoever can attract more attention can become an important traffic portal in the metaverse world. In this battle, the game world built by GameFi based on similar scenarios and gathering a large number of players can give The unprecedented social experience and interpersonal experience brought by people cannot be achieved by any TradeFi or other media, nor can it be replaced. Therefore, the integration of NFT and GameFi in the future will most likely build a positive cycle, forming an upward spiral of "better because it is good".