March 26, 2023

GameFi, a fusion of gaming and decentralized finance (DeFi), has attracted a group of investors who tend to select projects based on use cases rather than earning potential.

The GameFi ecosystem attracts GenZ investors and gaming enthusiasts. As such, it became the entry point for many first-time investors. ChainPlay Survey participate 2,428 GameFi investors revealed that 75% of respondents joined the cryptocurrency space simply because of GameFi.

Three-quarters of respondents have joined cryptocurrency thanks to GameFi.Source: Chainplay

While roughly half of investors initially joined the GameFi space for profit, 89% of GameFi investors succumbed to Crypto Winter 2022 — 62% of them lost more than 50% of their profits.

GameFi’s profits are dwindling.Source: Chainplay

However, investors cited poor in-game economic design as the main reason for their losses. Based on this sentiment, the survey shows that in 2022, global investors will spend an average of 2.5 hours per day participating in GameFi, down 43% from last year to 4.4 hours.

Fears of rug pulling and Ponzi schemes and sub-par graphics are some of the biggest drivers holding back investment in new GameFi projects. As a result, 44% of investors believe that the participation of traditional game companies may be the key to GameFi’s growth.

Additionally, when it comes to future GameFi projects, 81% of GameFi investors are moving away from traditional mindsets and prioritizing the fun factor over profitability when looking for a positive gaming experience.

related: GameFi and crypto “natural fit” for game publishers: KBW 2022

A report by DappRadar confirms that blockchain gaming and Metaverse are the ecosystems least affected by the Terra (LUNA) debacle.

Additionally, continued institutional investment has been seen in both blockchain gaming and Metaverse, underscoring that many of the top companies see the potential for strong future economic growth in both sectors.