Kieran Warwick, the co-Founder at gaming platform Illuvium, explained how GameFi will fare against DeFi in a recent podcast. He stated that the addressable market for DeFi is limited by the population. Contrarily, he said,
“DeFi game is our addressable market, is something like three billion people.”
He further added that nearly half the world is engaged in gaming when many people dismiss DeFi for being too “complex.” Additionally, Warwick believed that bringing people into the crypto space has been an opportunity with companies like Axie Infinity. In the context of new investors, he said,
“I think it’s a matter of bringing them in… without even realizing it, they’re going to start adopting crypto.”
Therefore, he predicted that gaming will win with more engagement in the indie games segment in the short run. However, DeFi will take over in a longer period. In this setting, Gabby Dizon of Yield Guild also believes that DeFi and GameFi go hand in hand. He said,
“DeFi is the gamification of finance, GameFi is the financialization of games.”
He further added that combining the two will result in play-to-earn and metaverse, where people own assets across different gaming experiences. By 2025, some predictions put the market cap of the metaverse universe to be around $300bn.
Adoption and community
Some voices like Loot Squad’s Bryce Johnson thought that DeFi will depend on gaming to “provide long-term sustainability.” This essentially means that gaming might be the entry point for many before their first banking experience.
The gaming industry is seeing a lot of traction with an estimated 41.9 million gamers owning crypto. In terms of revenue, the crypto gaming industry is believed to have a market revenue of $321 million as of 2020. Moving forward, a recent report predicted that the global gaming market will be worth around $178 billion by 2021.
On the other hand, the DeFi space is currently close to a $95 billion industry. However, the growth estimates by the DeFi industry is exponential with some predicting it to be $1 trillion by next year.
Meanwhile, institutional investors have a growing appetite for crypto assets, especially in the DeFi segment. Blockchain companies, in general, have attracted the highest levels of funding in 2021 by VCs, as per figures by Blockdata.
Johnson predicted that while the gaming sector will see several new entrants in the near term, there will be no winners or losers. However, that can change in the next 20 years with some blue-chip companies, he added. Dizon however opined that the future of work is going to be in the metaverse.
All in all, industry insiders also seem bullish on Axie in the future. Additionally, the entry of players like Microsoft Xbox, Twitch, G2A, and other NFT marketplaces are increasing the competition. While companies like Axie Infinity, Gods Unchained, and CropBytes have gained strength in the space.