Illuvium’s collapsing token represents the problems with GameFi
2 min read
Blockchain games began as a means to effectively test technology’s true potential. However, making sure they reach that potential remains a challenge. While
With blockchain gaming, there is also a high cost of entry — greatly hindering the mainstream adoption of GameFi. There must be additional value added other than a monetary return that takes significant time to build up. The user experience needs to be rectified. This factor not only turns off players but also investors. The ultimate purpose of token issuance is to increase its value with the team, investors and players.
However, with Illuvium, there is a risk for retail investors and players, given that 45% of the tokens could face selling pressure before the game even launches. Token investors have an incentive to sell when the demand for ILV rises, but this is at odds with game players, who are hoping for a decent return on investment from playing the game.
So far, Illuvium is profiting from the buzz generated by tokens and NFTs — and retail players and investors bought the excitement — but it has not yet shown real value. The game’s “token first, make the allocations available, and game later” strategy creates a situation where investors and players have diverging interests. The game was primarily made for investors rather than gamers.
While it has some impressive designs and ideas, the game is still missing a lot of features, and there is significant room for improvement.
Investors represent too many of the game’s users, making its success a product more of marketing than the quality of the game. Illuvium’s current nature is akin to an initial coin offering project, hyping the creation of an AAA blockchain title that hasn’t been delivered. Even if a $100 million title is successfully produced, the question remains: Are there enough blockchain gamers to support it?
Takuya Tsuji is the founder of Eureka Entertainment Ltd, a gaming company set to release an upcoming blockchain game, Coin Musme. He previously founded Techcross Inc, a company he established 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 on DMM Games, a gaming platform in Japan, and has been involved in the development of more than 50 game titles.
The opinions expressed are the author’s alone and do not necessarily reflect the views of Cointelegraph. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.
