The metaverse is not proving as effective as some investors might have thought. A new report indicates that games built around NFTs, cryptocurrency and blockchain are struggling to retain players.
The report comes courtesy of Coin Desk (via VGC), which notes that several NFT-based games are losing players and their tokens are losing value. “Tokens for the three major metaverse protocols, MANA from Decentraland, AXS from Axie Infinity and SAND from The Sandbox are all down year-to-date and are significantly underperforming bitcoin,” reads the report.
As you can see from the chart below, Axie Infinity, Decentraland, and The Sandbox NFTs all lost value in 2022 compared to 2021. April was particularly tough with all three nose dives, although in the case of Axie Infinity, this could be due to the recent security breach which saw many of its NFT holders lose significant amounts of cryptocurrency.
It’s not just NFT value that’s lost, but players as well. to 1,180 players) and Decentraland losing 15% (to 978). Axie Infinity remains the top performer of the three with 107,240 concurrent players, but that still represents a 30% drop in player numbers at the start of March.
Addressing market watchers, Coin Desk posits that the amount invested in the metaverse by various companies does not appear to be generating any value, either in NFT or player count. There could be many reasons for this, but as Web 3 DeFi analyst Vader wrote, chief among them is a lack of “organic engagement that keeps players in the game.” Another problem is that the nature of NFTs often creates a pay-to-win environment that most major video game publishers try to avoid.
News of a failing metaverse comes less than a month after a report revealed that NFT transaction volume has fallen 80% since its peak last November, causing NFTs to lose nearly half their value. Public backlash against NFTs is thought to be the cause of the NFT sales slump, but weekly reports of hacks and scams probably aren’t helping either.
Next: Returnal’s Jane Perry on Best Performer at This Year’s BAFTAs
The new Eeveelution has already been practically confirmed by the anime
About the Author