How to analyze a GameFi project before spending money

For newbies: There are 5 factors to analyze about GameFi if you want to spend money. If you don’t want to be deceived, don’t be an amateur!

GameFi, also known as Game NFT, is a type of game (phone, or PC) that is partially developed on the blockchain network, with its own token/NFT. The popular model in GameFi is “Play To Earn”.

Although it was just born in 2017, with the game at that time was crypto Kitties (raising cats to make money). The total GameFi market is currently around $36 billion, too small compared to the total market value of $175 billion of gaming today.

The advantage of GameFi is that players participating in the game can both play and earn money, and almost every decision on in-game items is completely unique and in the hands of the player (NFT).

BUT, the general purpose of players when joining GameFi is to MAKE MONEY. The problem becomes somewhat more complicated in this word MONEY. So, what factors to choose a GameFi project worth investing in?

As I said, there’s a single keyword: It’s PEOPLE. The project has a long term or not, success or failure, 80% comes from this factor. Try before you trust.

We will go through the following factors in turn: 1. People and vision of the game. 2. Games and gameplay. 3. The economic balance in the game. 4. The competition. 5. Your preference

Now let’s analyze each one:

1. People

People here include Dev Team, advisors, and project investors.

Out of these three, Dev team is still the most important keyword because they are the “parents” of the project, they will have to be the ones who love and understand their child the most.

So let’s find out what kind of people the Dev team are? Do they have experience in business and the market or not or just joined the market for about 3 months? Fresh graduates and have no job, have nothing but credibility, so they want to exchange credibility for money?

In addition to the elements of expertise in blockchain, games, the dev team must also be a group with real businessmen and marketers.

Look at the game Axie, Vietnamese people know Trung Nguyen (ie Nguyen Thanh Trung). But there is a second person that contributes a lot to Axie’s success, The Jiho (co-founder) who is a fantastic marketer.

The most important thing to help a certain Dev team succeed is a game team like 300 Spartans, “willing to spend the last money on the project”, not people who just want to sell IDO then take the money and run away…

Of course, in this blockchain world, sometimes Dev also doesn’t want to show up and isn’t required to show up, so how to evaluate?

So, look at the team of Advisors and Investors of the project: The advisors who have used BOTH MONEY AND INTELLIGENCE and put their efforts into the project, have already assessed a part of it for you. As for the Advisors standing there to fill up enough spots to get the token seed round, please dodge.

The most important criterion is still “those who have experience in this market”. Those advisors help the Dev team with market lessons through each stage to adjust accordingly, which most GameFi projects are still weak. Because GameFi, as mentioned at the beginning of the article, is still too new.

Backer of the project: Usually venture capital funds have very strict appraisals, so once the fund is in, you just “go with the wind”. But note that you should try to check information from both sides, and distinguish between good and bad backers.

2. Games and gameplay

Creating games is for playing games, of course, so you should consider the gameplay of the game.

About the game: Let’s ask the question, if you were a gamer, would you play this game? Pay attention to the details and finish of the product. If the Dev created the game to attract the amateur, they would have no mind to care about the game, everything is very sloppy, irrational, and stupid.

How should you view the game’s graphics? Do the characters, game story have depth? What genre is the game? Strategy or skill?

Gameplay – How to play the game? This is an important factor to attract and retain players. A game created that the gameplay factor is almost zero, just Click to Earn, then the game is just a disguised Ponzi game, nothing more, nothing less.

Good gameplay provides a good user experience, players enjoy the missions with attractive mechanics, enough to make most players still play the game every day, even if the game’s ROI declines.

Anyway, GameFi is still a part of the entire crypto market, so it goes up and down with the market.

3. The economic balance in the game

When participating in NFT games, most participants spend money to buy NFT to play the game and receive rewards with the game’s Token, which players then sell for money.

The common form is games that issue 2 tokens. A deflationary main coin (issued in limited quantities and burned to reduce supply) and an inflation token (used for rewards and burned during gameplay as for item breeding,…). For example, Game Axie has AXS (deflation) and SLP (reward, inflation) coins.

Indeed, it is difficult to launch the game, but balancing the economy in the game is even more difficult, it forces the investors to have certain knowledge and reference frames before choosing a project to invest in.

Don’t see that the project increases in value but FOMO, and don’t see the project being low that disregard it.

In order to balance the economy in the game, the publisher/developer must have certain knowledge and experience in economics and finance to be able to calculate the most reasonable problem that both curbs inflation and still guarantees benefits for all players.

There are 2 ways to reduce that:

1. The number of newbies is regularly added daily

So where do you get a lot of newbies to add daily while the average ROI of GameFi today is 1-2 months?

That means 1 month must have x2 players, and so regularly we have the formula of progressive x2: 1-2-4-8-16-32-64-128-…

Just like that, the Ponzi scheme grew bigger and bigger and the pressure was heavy until at some point, all the people in the system are just working hard to make a profit but can’t feel satisfied anymore. And as you know, it will collapse after a beautiful night!

2. Players must “spend money” in the game

To be exact, players have to spend their money earned in the game. But to do this, the game must have appealing gameplay and mission mechanics that force players to continuously reinvest in their character/account.

That amount of money they spent, the publisher could burn (since it didn’t cost them anything), and maintain the balance of the game.

Again, this is an extremely difficult problem, if the developer is inexperienced, it is possible that just one adjustment can cause the game to collapse after one night (like the PvU game,…).

4. Competition

GameFi is currently considered a revolution with the traditional game market. For example, the development of blockchain games like Axie took 4 years to reach $8 billion while giant VNG has been working hard for 17 years to be valued at nearly $3 billion. GameFi is therefore a fertile ground for game startups.

Competition for games happens when a game launches and in the next week, a similar game comes out. And so on, the life cycle of a GameFi seems very short.

Up to this point, the Crypto Kitties game is almost empty of players. And many Click to Earn games only last 3 months – 6 months, even shorter.

Players are constantly changing.

So choosing a game is quite difficult, the advice is to look for a game with a real long-term vision to invest in, then you will not have to follow others.

5. And finally, your preference

In the end, it’s still your preference. GameFi is like a beautiful girl, but the girl is only beautiful in the eyes of the beholder. So your preference is to Click and earn money. You can choose, if you have the skill, use the skill. If you are a guy with big hands and poor skills, then choose strategy games, brain games, etc.

Through many times playing games, I have had certain experiences with GameFi, now I share it with you. Hope this article is useful to you.

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