Blockchain games started as a way to effectively test the true potential of the technology. However, ensuring they reach that potential remains a challenge. While Illuvium is one of the most anticipated crypto game releases in history, the price of its ILV token has fallen significantly since 2021 – to the tune of 97%.
The developers of the project have not released anything significant for a long time. Immersive gameplay and impressive graphics are not enough to stop the game token from falling. The same can be said for most GameFi tokens.
Blockchain games have been particularly bad so far because they haven’t focused enough on ensuring a quality user experience. Finally, the task of creating these games is underestimated. When GameFi emerged, it had a lot of potential, but it was largely underwhelming. It is not an easy task to make quality AAA games (those released by top publishers). It is a complex, expensive process with intense competition.
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Today’s developers and publishers also share a lot of tired tropes and bad practices. Many games are rushed or poorly designed. Some show no meaningful entertainment value, and the potential income is the only reason people play them. This is usually due to lack of budget or rushing unfinished games. In addition, some companies release games that do not match the gameplay in the trailer, causing players to lose confidence in the industry.
With all of this in mind, it’s fair to say that many of these games may not put their players first. Audiences wait months for new games to arrive — only to find them to be low quality, poorly designed and lacking in entertainment.
— Gringo Hodl // (@GringoHodl) August 15, 2023
Illuvium raised funds by issuing its ILV token and selling land nonfungible tokens (NFTs) for $72 million before the game’s launch. Despite this, the public beta launch has been delayed. This highlights a major drawback of AAA games: Focusing on profit can take the fun out of the game. The same issues that occurred with Illuvium occurred with other AAA blockchain game projects.
Pixelmon stands out when it comes to AAA blockchain game projects that miss the mark. The play-to-earn game inspired by Minecraft, Fortnite and Pokemon sold a collection of 10,000 NFTs by 2022, earning an estimated $70 million from hype alone – but the game’s launch failed all expectations from players. Some characters are standard Unity models, and one user has an invisible character. This is not the kind of project that costs $70 million.
Developers may prioritize unsustainable economic models over implementing features to create a more exciting experience for players. This is a trend in the GameFi market, which ignores the fun gameplay.
In Illuvium’s tokenomics, 45% is allocated for the team and investors. Only 10% is assigned to game rewards, a small number compared to the share of investors. All investors’ allocations will be available and can be sold before the game’s launch, meaning the Illuvium team and investors will have the benefit of an early exit.
With these types of games, there is a great risk of losing money. Users have to spend long periods of time in the game before they receive any significant cashback. It should also be noted that token prices fluctuate rapidly.
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In gaming on the blockchain, there is also a high cost of entry – which greatly hinders the mainstream adoption of GameFi. There should be more value added besides a cash return that takes a lot of time to build. The user experience needs to be optimized. This factor not only turns off the players but also the investors. The ultimate purpose of issuing the token is to increase its value to the team, investors and players.
However, with Illuvium, there is a risk for retail investors and players, as 45% of tokens may face selling pressure before the game launches. Token investors have an incentive to sell when demand for ILV increases, but this is in contrast to game players, who hope for a decent return on investment from playing the game.
So far, Illuvium has profited from the buzz generated by tokens and NFTs – and retail players and investors have bought into the excitement – but it has yet to show real value. The “mark the game first, make the allocations available, and game later” strategy creates a situation where investors and players have diverging interests. The game is primarily made for investors rather than players.
While it has some impressive designs and ideas, the game still lacks a lot of features, and has significant room for improvement.
Investors represent a very large number of users of the game, making its success a product more of marketing than the quality of the game. The current nature of Illuvium is similar to an initial coin offering project, which promotes the creation of a AAA blockchain title that has not yet been issued. Even if a $100 million title is successfully created, the question remains: Are there enough blockchain players to support it?
Takuya Tsuji is the founder of Eureka Entertainment Ltd, a gaming company set to release the upcoming blockchain game, Coin Musme. He previously founded Techcross Inc, a company he founded in 2009 as a student at the University of Tokyo and grew to $70 million in annual sales. He also worked as a top developer at DMM Games, a gaming platform in Japan, and was involved in the development of more than 50 game titles.
The opinions expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph. This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice.