According to Market Research Report, the global gaming market in 2022 reached $207 billion and will continue to grow to an estimated $343 billion in 2028. This indicates that the gaming market has yet to be exploited and has great potential for investors and developers. Along with the growth of blockchain technology, many GameFi projects will emerge but regardless of traditional or GameFi, both have limitations. However, a fully on-chain game (FOCG) complemented with DAO may be able to compensate for the limitations. This research aims to explore the possibility that FOCG and DAO may create.

Current State of Traditional Game and GameFi

For traditional games, whether it is gameplay or economic model, they are designed and controlled by game developers, a centralized entity. Current GameFi projects are no different with control in the hands of centralized entities, with differences only in economic the model. GameFi projects often have game currency and partial assets being on-chain, however, that does not imply any decentralization. The current state of blockchain games is at the best at a state of Web2.5 not Web3.

Limitation of Traditional Games and GameFi

Examining the current state of traditional games and GameFi, it’s obvious that there are limitations. Traditional games lack advantages of decentralization such as decision-making power of community and true ownership. Additionally, in the supply chain of traditional games, profits are distributed unequally to the different parties involved but almost none goes back to the players themselves who dedicated countless time spent on the game.

The limitation of GameFi lies in the player’s goal of generating profit, which limits the experience of the game itself. Although GameFi is an application of DeFi and NFT in gaming, their essence is still liquidity mining and staking, while other aspects such as game quality, have not received sufficient attention and development. In addition, because profitability of GameFi projects are highly dependent on the price of their tokens market fluctuations, the market risk of GameFi games is relatively high. Since players earn tokens in game, fluctuations in token prices may lead to changes in players' income, which consequently affects the sustainability of the game itself and user engagement.

Characteristic of FOCG

For the mentioned limitations, FOCG may be an effective solution. FOCG generally refers to games that deploy core gameplay and assets on-chain. It has the characteristics of decentralization, fair and transparent mechanism, openness, interoperability and community driven.

Synergy of FOCG and DAO

The attributes of DAO are highly compatible with the characteristics of FOCG. The combination will inevitably promote the development of FOCG, form a more mature decentralized gaming ecosystem, and promote the advancement of games Web2.5 state to Web3.0. In this ideal ecosystem, game play and economic models can be implemented through smart contracts, which are managed and maintained by DAOs. DAO will provide governance and decision support for the whole chain of games, ensuring the fairness and transparency of the game. Additionally, DAO can provide funding and foster community to ensure continuous growth and developments.

The combination of FOCG and DAO is mutually beneficial for both the game and its community. Through game participation, players obtain in-game tokens or other assets that are used for governance and DAO’s decision making. In other words, players obtain voting power through game participation, which ultimately draws players into DAOs as contributors.  

Advantages

Decentralized Governance: Through DAOs, the community can decide on the development direction of the game, distribution of rewards and any other aspects, which ensures that the game is community-driven and transparent.

Trustless Transactions: In FOCG, all transactions are recorded on the blockchain, which makes them trustless and transparent. Players can be confident that the assets they earn in the game are truly theirs and can be traded or sold on a decentralized exchange (DEX) without any intermediaries. 

Immutable Game Rules: The rules of a FOCG are immutable without DAO’s approval because rules are a part of game play which is implemented through smart contracts on a blockchain. This ensures that the game is fair and transparent, where players can rely on the rules to remain the same, unless dictated by the community.

Community Driven Economy: Players can earn tokens or other in-game assets by participating in games, which can be traded or sold on the DEX. This creates a decentralized economy that is not controlled by game developers or any centralized authority.

Conclusion

FOCG’s transparency allows players to trust the game’s rules and asset’s true ownership. In the future where FOCG are fully integrated with DAOs, players will have more say in the governance and economy of the game. FOCG will become a more fair, transparent and decentralized gaming model that gives players more rights and rewards.

References

https://www.imarcgroup.com/gaming-market