No one said making blockchain games would be easy. But when Crypto Kitties went viral in December, briefly crippling the Ethereum blockchain in the process, it was believed to have cracked it. The $12 million in seed funding that the project secured, three months later, was seen as validation of this. But as the subsequent decline of Crypto Kitties shows, blockchain games have still got a long way to go.
Also read: Paid in Bitcoin? Learn How to Survive Off a Crypto-Income
Crypto Kitties Is Catatonic
Rule 35 of the internet, it has been proposed, is “If it exists there is blockchain of it”. It was inevitable that blockchain games would arrive, and when they did, it seemed natural that the killer dapp should be dedicated to cats, the internet’s favorite animal. Crypto Kitties was the viral game that put the fun into blockchain, and gifted journalists with cataclysmic headlines about the Ethereum network being filled with felines.
Like the ERC20 tokens that are tradable on the Ethereum blockchain, Crypto Kitties are not immune to market forces; it’s now down a staggering 98.5% from its all-time high. That figure is based on the number of daily active users rather than price, for Crypto Kitties have no fixed value. They can change hands for eye-watering amounts of ether – or can fail to attract a single buyer, depending on market mania.
NFTs Are Still In Their Infancy
Right now, the market seems to have had its fill of Crypto Kitties, and while its stock may rise again, it’s hard to see the $12 million valuation in a game with under 200 active users. Diar first brought the decline of non-fungible token (NFT) games to light before Nic Carter followed up on the topic. In addition to the $12 million Crypto Kitties raised in March, Diar mentions the $6m paid for NFT marketplace Rare Bits. It notes:
At one point, Crypto Countries traded more than $25Mn in 24 hours. Now, the game has had two transactions in the last week. While Crypto Kitties still remains the most popular NFT game (see table), its popularity has greatly diminished. In December, the traded volume per day was roughly $2.3Mn, which has now fallen to about $21k daily. The median price of sold kitties peaked at $41 and now is constantly at about $5. Rare Bits lists roughly 700,000 Crypto Kitties for sale while only 4,200 have been sold in the last week.
In the last 24 hours, Nonfungible.com reports a total of 21.5 ETH spent on Crypto Kitties, with an average price of $26.
Blockchain Games Are More an Idea Than a Reality
It’s not just Crypto Kitties that’s in trouble; other blockchain games have also seen diminishing interest. Decentraland is a virtual world formed out of squares of land mapped on a grid. It also operates on the Ethereum network, with each 10x10m parcel of land represented as an ERC721 NFT. In the last 24 hours, it’s recorded 11 sales of land, at an average price of $1,986, while the other three games listed on Nonfungible.com, Cryptopunks, Etherbots, and Ethermon, have each seen less than $200 of trading in the past 24 hours.
Decentraland is one of the more original blockchain games to date (although its uses aren’t limited to gaming, it should be stressed). No less than Barry Silbert has vociferously backed the project. But as even the most bullish reviews concede, the current limitations to blockchains mean Decentraland’s immersive VR world is a long way from reality. In the project’s Discord, many of the channels ran by Decentraland’s community-led zones (areas of virtual land set aside for shared pursuits) resemble ghost towns.
Some districts, such as the proposed university zone, have lain out detailed and ambitious plans, but many more have fallen silent, with scarcely a peep from the developers since land was first auctioned back in December. Compared to conventional video games, blockchain games look like Pong. There is clearly value in digital collectibles that are provably unique, but that value has yet to equate into a profitable game with real longevity.
As Diar reports, “If NFTs want to have a sustainable value and a much wider user base, they would have to become a significant part of the gameplay. With the current problems of blockchain scalability, action heavy game that involves NFTs would prove to be expensive for the users and also inconvenient because of the relatively long confirmation times for transactions.”
As the game that made people believe blockchain games could become a thing, Crypto Kitties is the barometer for its nascent industry. If Crypto Kitties dies, no blockchain game is safe.
Do you think blockchain games will prove to be more than just a passing fad? Let us know in the comments section below.
Images courtesy of Shutterstock, Crypto Kitties, Aetheria Bloxy.info, and Diar.
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