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The term “Metaverse” was used so frequently during 2022 that everyone should have heard it, even if they don’t know what it means. The hype around the metaverse arguably peaked following the end of 2021 as Mark Zuckerberg announced plans on rebranding “Facebook” to “Meta” and allocating $10 billion dollars for investments in the metaverse.
The Metaverse Explained in Simple Terms
The metaverse is a virtual world that exists online, where people can interact with each other and with digital content in real-time. It is similar to a video game, but instead of being limited to a specific game or environment, the metaverse is a vast and constantly evolving space that can be accessed through the internet.
In the metaverse, people can connect with each other from anywhere in the world, and engage in activities such as socializing, shopping, playing games, and even participating in virtual events and gatherings. Ideally, the metaverse has the potential to become a new virtual ecosystem for human interaction, allowing people to connect and communicate in ways that were previously not possible.
Disrupting the Status Quo
Although still a nascent innovation, everyone seems focused on building the metaverse and establishing a presence in it – and for good reason. In June, this year, McKinsey & Company published a report in which they predicted that the metaverse economy could reach $5 trillion by 2030 – stating it was too big for companies to ignore. Brain Insights, on the other hand, predicted that the global metaverse market is expected to reach USD 993.86 billion by 2030, at a Compound Annual Growth Rate (CAGR) of 43.20% from 2022 to 2030.
Image source: The Brainy Insights
Unlike traditional video games which are built on Web2 platforms, most metaverse-based games are powered by emerging technologies such as blockchain, augmented reality, and virtual reality. But more importantly, this new gaming ecosystem leverages decentralized marketplaces, enabling gamers to own and trade in-game items. The creation of decentralized games in the metaverse has introduced new gaming realities such as the “play-to-earn” and “move-to-earn” models.
Play-to-Earn (P2E) is a blockchain-based gaming model that incentivizes players to participate in a specific game. The main idea of this model is to propel a gaming culture where players can enjoy immersive experiences while generating a passive income in the form of native reward tokens. However, in most cases, one is required to purchase an NFT to be able to play a particular P2E game.
For instance, in the popular game Axie Infinity, a player has to buy at least 3 Axie NFTs. With these digital creatures, gamers can engage in various gameplays such as battling other Axies, breeding and creating virtual kingdoms. In return, the players are rewarded with a native token dubbed ‘Smooth Love Potion (SLP)’ which can be liquidated for other digital assets or fiat currencies.
Similar to P2E, move-to-earn is a business model that runs on blockchain and rewards gamers for meeting targets and unlocking new levels. This time, exercises are incorporated into role-playing games because the aim is for players to move their bodies. So, real-world fitness influences their adventures in virtual worlds. Players can unlock new levels or superpowers for their avatars by remaining active.
Additionally, the users can enter into 1-on-1 contests against family, friends, or random people from around the world to complete predetermined tasks. Then, the winner collects the prize, usually an NFT or crypto they can trade for fiat on NFT marketplaces. M2E platforms like Stepn and Genopets combine GPS, with NFTs, blockchain, and GameFi technology to track movements and issue rewards.
A Perfect Fit for the Gaming Industry
As previously mentioned, the whole concept of the metaverse is geared towards making interactions more immersive and fun – just like in video games. No wonder the close relation to the traditional gaming industry. This year alone, decentralized metaverse games garnered lots of attention from users, accounting for almost half of the on-chain activity.
There was also an increased interest by traditional game publishers; Atari recently launched its Web3 gaming arm ‘Atari.X’ on The Sandbox metaverse. Meanwhile, Microsoft is still in the hot pursuit of acquiring U.S. game publisher Activision Blizzard, making the company a prime candidate to bet big on in the Web3 gaming space for the years to come.
What’s more fascinating is that besides game publishers, other established brands are also joining the metaverse gamification hype. Most notably, Coca-Cola already launched an NFT collection on the Decentraland metaverse while fashion brand Adidas acquired a virtual piece of land on The Sandbox and also partnered with Punk Comics to debut their own NFT collection.
Metaverse visuals: Generated by Bitcoin Global Macro
The Top 5 Games in the Metaverse
Here are short notes on some incredible blockchain-based games that provide an overview of what gaming looks like in the metaverse today:
Splinterlands is a digital collectible card game built on the Hive blockchain. Players can collect cards, build decks, and battle other players in the game. The gameplay is based on a fantasy-style world with multiple levels and rewards, and a unique turn-based battle system. In addition, the game also features an NFT marketplace where players can purchase, sell, and trade cards with other players. Splinterlands is currently one of the leading blockchain DApps, with over 279,000 unique users within the past month, according to DAppRadar.
2. Benji Bananas
Benji Bananas is an action-adventure game developed by Animoca Brands, currently available on the Ethereum and Polygon blockchain networks. The game follows the titular character Benji, a brave and adventurous monkey, as he navigates through a tropical jungle filled with obstacles, enemies, and hidden secrets. Players must help Benji swing, jump, and roll his way through the jungle, collecting as many bananas as possible along the way. Earlier this year, Animoca brands transformed Benji Bananas into a play-to-earn game following the release of Bored Ape Yacht Club’s Ape token. The game has since grown to become one of the most played metaverse games, with over 500,000 unique active wallets (UAWs) in the past month.
3. The Sandbox
The Sandbox is a decentralized metaverse ecosystem where players create and share virtual worlds built from simple yet powerful voxel-based building blocks. Players can explore, create, and monetize their creations, using in-game tools to craft unique and imaginative 3D landscapes, as well as design custom character avatars, create interactive stories, and earn in-game rewards for their contribution. The Sandbox also features an NFT marketplace where players can trade a wide range of in-game items, including land parcels and digital art. It is also noteworthy that the virtual land on The Sandbox is limited to 166,464 parcels, with the current floor price hovering around 1 ETH (slightly above $1,200 as per the prevailing market prices).
Decentraland was launched two years ago. It’s a metaverse platform – just like Sandbox. In this virtual world, a player can leverage the native MANA token to create personas, and buy a place or more advanced gaming gear. There are over 90,000 land pieces on Decentraland and every lot can be rented out including the structures on it. Players can also generate additional income by trading their in-game items, planning concerts, and even setting up events where virtual artwork will be sold. As of writing, Decentraland’s native token MANA enjoys a market of over $500 million, although the value has been on a steady decline following the bear market turmoil.
5. Axie Infinity
Axie Infinity is a blockchain-based game on the Ethereum network featuring collectible creatures called Axies. Players can breed, battle, and sell Axies to build their team and earn rewards in the form of Smooth Love Potion tokens (SLP), which can be liquidated for fiat or other crypto assets. The game also includes a marketplace where players can buy and sell their digital items, allowing them to create custom landscapes and battle arenas. This metaverse-based game became popular during the covid 19 lockdown period, with players from developing countries such as The Philippines earning a living from the in-game rewards.
Setting the Stage for the Next Era of Virtual Gaming
It is difficult to predict with certainty how the metaverse will change the gaming industry over the next five years, as it depends on a variety of factors such as the development and adoption of new technologies, market trends, and the creative direction of game developers. However, it is likely that the metaverse will continue to evolve and become increasingly integrated with the gaming industry and other industries, potentially leading to new forms of gaming experiences and business models.
For example, the metaverse could potentially enable new types of multiplayer gaming experiences that are more immersive and interactive, as well as the development of virtual economies and in-game marketplaces. It could also potentially allow for the creation of virtual events and experiences that can be accessed by a global audience. Overall, the metaverse has the potential to significantly transform the gaming industry and the way we interact with and experience games. However, it is important to keep in mind that the development of the metaverse is a complex and ongoing process, and it will likely take some time before we see its full potential realized.