Illuvium’s token collapse reflects GameFi’s issues.

Illuvium's token collapse reflects GameFi's issues.

The Challenges and Pitfalls of Blockchain Games: Illuvium and the State of the Industry

Blockchain games have gained significant attention in recent years, with the promise of revolutionizing the gaming industry through decentralized technology. However, despite the initial hype and excitement surrounding these games, they have often fallen short of expectations. One such example is Illuvium, a highly anticipated blockchain game that has seen its token price plummet by 97% since 2021.

Underestimating the Task at Hand

One of the primary reasons for the underwhelming performance of blockchain games is the lack of focus on user experience. While immersive gameplay and impressive graphics are essential, they are not enough to sustain a game’s success. Creating high-quality AAA games is a complex and expensive process, often with intense competition. Building games that can rival those released by top publishers is no easy feat.

Developers and publishers in the blockchain gaming industry have also engaged in tired tropes and poor practices. Many games have been rushed or poorly designed, lacking meaningful entertainment value. Some companies have even released games that do not match the gameplay showcased in their trailers, leading to a loss of trust among players.

The Illuvium Experience: A Case in Point

Illuvium, a highly anticipated blockchain game, raised $72 million through the issuance of its ILV token and the sale of non-fungible tokens (NFTs) before its launch. However, the public beta launch has been repeatedly delayed, highlighting one major disadvantage of AAA blockchain games – an excessive focus on earning potential can potentially strip away the enjoyment of the game itself.

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Pixelmon, another AAA blockchain game inspired by Minecraft, Fortnite, and Pokemon, failed to meet player expectations despite earning approximately $70 million from the sale of its NFTs. Some characters in the game were nothing more than standard Unity models, and there were reports of players receiving invisible characters. Such shortcomings make it clear that not all blockchain game projects are worth their massive valuations.

These examples indicate a trend in the GameFi market, where developers prioritize unsustainable economic models over implementing engaging gameplay. In Illuvium’s tokenomics, for instance, a meager 10% is allocated to game rewards, compared to the 45% set aside for the team and investors. This skewed distribution of tokens raises concerns among both players and investors.

The Risk and Cost of Entry

Not only do blockchain games carry the risk of losing money due to token price fluctuations, but they also come with a high cost of entry. This cost hinders the mainstream adoption of GameFi, as it fails to provide sufficient value beyond monetary returns that take significant time to build up. The overall user experience needs to be improved to attract both players and investors.

With Illuvium, the risk for retail investors and players is compounded by the fact that 45% of the tokens could face selling pressure even before the game is launched. Token investors have an incentive to sell when the demand for ILV rises, potentially undermining the hopes of game players seeking a decent return on their investment through gameplay.

A Game Primarily for Investors

It is clear that Illuvium and many other blockchain games prioritize investors over gamers. The game’s allocation strategy, which prioritizes token issuance and availability before game development, creates a situation where the interests of investors and players diverge. This approach portrays Illuvium more as an initial coin offering (ICO) project rather than a fully-realized AAA blockchain title. Despite its impressive designs and ideas, the game still has significant room for improvement and lacks essential features.

Furthermore, Illuvium’s success heavily relies on marketing rather than the quality of the game itself. Investors represent a significant portion of the game’s user base, raising the question of whether there are enough blockchain gamers to support a $100 million title, even if successfully produced.

Looking Towards a Brighter Future

To overcome the challenges and pitfalls of the blockchain gaming industry, a shift in focus is required. Developers must prioritize creating captivating gameplay experiences while ensuring a smooth user journey. Emphasizing sustainable economic models and fair distribution of tokens can help build trust among players and investors alike.

In an industry where innovation and disruption are the norm, blockchain games have the potential to reshape the gaming landscape. However, for this potential to be realized, developers must rise to the challenge and deliver high-quality games that prioritize user experience above all else. Only then can blockchain games truly flourish and gain widespread recognition as AAA titles.

Featured image credit: Twitter

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