Blockchain games: 3 reasons why NFT games can't sustain for a long time.

We have seen huge and positive growth in the crypto space for Play-To-Earn, NFT and blockchain gaming over the past 8 months and from June 2021 up to this date, March 2022, we keep on seeing new Play-To-Earn NFT games emerge, develops as well as failed projects. Ever since the hype of blockchain gaming, there were thousands of NFT gaming projects that were offered to players or investors but unfortunately most of those projects fails because of these reasons - rugpull or scam and the economy was bad.

The term "rugpull" was originally recognized in the BNB Chain (formerly Binance Smartchain) where the developers of a project under the chain pull out the Liquidity of the token dragging the price make it to zero or no value. But this article will be about the sustainability of the NFT projects on where those once successful projects failed that was a bad move for its economy and sustainability.

Sustainability in the game is important.

It's been over 8 months since the new trend in crypto was realized by people and saw the potential of NFTs and Play-To-Earn gaming and with that, we also saw thousands of different NFT projects, especially in the gaming section, emerged and promised people (players and investors) a very rewarding and enjoyable game.

Those early projects were seen to be a really successful one when they were giving out players so much rewards and with that news, people were excited to try the game, invest on it and hoping for the same huge income like what early players were telling. Unfortunately, the developers of those projects didn't realized early the bad impact of its economy, many players were just cashing out huge amount of money from the game, depleted the reward pool of the game making the economy of them down and lost its sustainability.

The 3 main reasons why the game can't sustain.

Most NFT games failed for many reasons no matter how they develop their game. And here are 3 of the most known reasons that people have witnessed in the NFT gaming space.

1. The use cases of the token.

The law of supply and demand should be the most important thing a developers of the project must know if they seek long term and sustainable economy for the their game. No matter how good the game is, if there is no demand for the token to be used, that token will eventually lose value in its prices.

During 8 months of hype in Play-To-Earn gaming, it was really noticeable that most of the project's token were only used to buy the NFTs in the game then players of spend on it will just wait for its return of investments, and when players got his ROI, they will just keep on crashing they price of the token that they got from the game. No or not enough use cases can make the project's token's value over time because players will just eventually keep on selling the tokens players get without any or enough burning mechanisms to save the chart.

Most projects were too focused in the game itself, developing and making it beautiful in the eyes of players without realizing deep enough the economy and problems they could face if they don't offer a sustainable game. These kind of projects were really meant to shutdown in the first place and only early players have the chance to get money in the game.

2. Mishandling the growth of user-base.

A great developers of the project must know and realized that they have the potential to be a successful project and they should be ready when that time comes. If their user base is growing, they should be more transparent with users.

The growth in players could also mean a growth in price of the project's token but also a meaning that more people or players that will eventually dump their earned tokens from playing.

If you know Axie Infinity and Cryptoblades, the two were once the top 1 NFT games in Ethereum chain and BNB Chain respectively, they were a very good example for this topic. Mishandling the possible outcome for having an increasing players could make the price of token go down heavily in just a few weeks.

Cryptoblades, the once number 1 game in BNBChain, didn't expect that the price of their token will jump to 100x because of the adoption of many players, and when the hype fades off, it dropped more 90% making players who invested during the peak lossing so much money and didn't get their return of investment yet.

3. Unlimited tokens minted and sold by developers. (Bonus)

It's not really bad for a project to have unlimited supply in their token's tokenomics. In fact, the top 2 in the crypto rank, Ethereum has an infinite supply but it has reached a good market capitalization.

But in the case of NFT gaming, tokens with unlimited supply really is a red flag for the future and sustainability of the game especially the developers were anonymous and showing less transparency. If you ever come across this kind of tokenomics, it's better to research and learn about it deeply to avoid future losses.

Final say.

As of today, there are still many potential NFT projects out there in the crypto space and all we need is to research about them. Manage the risk when getting into that game and accepting that there is a gamble there could make you move wiser along the way in this journey in investing.

Image from Pixabay.