Predictions and Challenges for the Blockchain Gaming Market
Revenue from the global blockchain gaming market exceeded $4.6 billion in 2022 and is set to reach around $65.7 billion by the end of 2027. Leading countries in the market include the U.S., China, Japan, South Korea, Canada, Germany, France, and the UK. Awareness of the improved security and transparency blockchain technology provides is stimulating the market, coupled with further integration of non-fungible tokens (NFTs).
High levels of investment and organic growth activity have also stimulated the growth in blockchain gaming revenue. Investment is due to the demand for the unique gaming experience that blockchain technology provides. A good example of this type of investment is the $40 million raised by Horizon Blockchain Games to scale operations and enhance its portfolio. However, there are also challenges that the industry faces as it develops and aims to further increase its revenue figures.
There are several drivers that are currently promoting the growth of blockchain gaming:
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Increased cross-border transactions promoted by the centralized nature of blockchain technology.
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Productive partnerships between gaming developers and companies and blockchain platforms that enable strategic planning.
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The ability for gamers to own in-game digital assets that can be utilized across various blockchain gaming projects.
Market predictions say that these factors will continue to be key. Other areas that are predicted to have a positive impact on the industry include:
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Increased popularity of the play-to-earn model that allows players to monetize their gaming success.
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Introduction of augmented reality (AR) and virtual reality (VR) that have a positive influence on the blockchain gaming market.
When considering the future of blockchain gaming, it’s vital to consider challenges that currently exist and are likely to continue to impact it.
Scalability is a major challenge for industry. Work is currently being done to overcome this by developing more efficient layer-2 solutions and algorithms. This work will result in faster transaction speeds and lower costs.
While resolving this challenge will drive the blockchain gaming market forward, the industry still faces significant regulatory challenges. In this area, blockchain gaming and blockchain gambling have similar hurdles to overcome. For example, in the US, blockchain and cryptocurrency laws are disjointed, and there is no federal regulatory framework in place. States have different rules in place regarding the use of blockchain technology and cryptocurrencies.
From a gaming point of view, there is no law against playing games of skill using blockchain technology and cryptocurrencies, but there is also no specific regulation. Blockchain gambling is further restricted as US-based casino providers cannot allow players to use cryptocurrencies. However, according to WikiHow, offshore sites provide licensed blockchain gambling to players, and it’s not illegal to play.
These fragmented regulations make progress in the blockchain gaming market difficult. However, if the regulatory landscape changes positively, this obstacle may be overcome.
Finally, the blockchain gaming market must overcome the challenge of a lack of awareness. Many users are still unaware of the benefits of blockchain technology in gaming and do not fully understand the associated terminology. As the use of blockchain technology expands, it should be possible to overcome this hurdle.