Gaming has been no stranger to Southeast Asian (ASEAN) society; with a whopping 250 million online gamers across Indonesia, Malaysia, Thailand, Vietnam, Singapore, and the Philippines, Southeast Asia generated around $4.3 billion in gaming revenue in 2019, which is 13.9% more than the year before. Before the influx of GameFi - Esports, strategy, and shooter games were the most played genres amongst ASEAN gamers. In that context, with the recent introduction of 5G and ASEAN's mobile-first nature, it was no surprise that the introduction of blockchain-developed games - AKA GameFi, was widely and quickly adopted in the region of native gamers.
Axie Infinity brings new opportunities in challenging times
The rapid and mass adoption of GameFi wasn't just due to ASEAN’s strong affinity with gaming, but in fact, highly accelerated by many socio-economic issues and challenges ASEAN society faced. Until today, in the Philippines alone, around 71% of the population does not have a bank account, and of the 1.7 billion unbanked people worldwide, 290 million are from the ASEAN region. Living day-to-day and earning a median of $500 a month makes it hard for many to make ends meet. Combining all this with the enormous repercussions caused by COVID-19 and little to no government aid, people in the ASEAN countries needed other sources of income. So, when the introduction of play-to-earn blockchain games came about, many saw it as an opportunity to earn extra income, and so began the fast adoption of GameFi.
Notably, the most popular GameFi use case is the play-to-earn (P2E) game Axie Infinity. Created by the Vietnamese startup Sky Mavis, the game started a revolution in ASEAN society, especially around 2020-2021 in the Philippines. Axie Infinity offered people an easy and low-cost way to make extra money when income was a shortcoming. The barrier to entry was low, as one could play the game on both mobile and desktop. Many people who didn’t have previous experience with gaming or crypto started to play the game. People all around Southeast Asia could earn rewards and points in the game and transfer their winnings into fiat to spend on necessities. Learn more about how Axie Infinity made an impact during Covid-19 here.
As the game grew in popularity, the price of Axies rose. The cute little in-game avatars were now going for about $100 instead of the original $3 to $4 rate, meaning not everyone could afford to buy them and start playing the game. P2E income is enough to make a living and greatly supplements most of ASEAN society’s income; thus, people need to access the games. The introduction of Gaming Guilds, like Yield Guild Games (YGG), made it possible for people with low capital to borrow gaming assets to play the game at a low cost and, in return, give a percentage of earnings back to the guild.
What’s next for GameFi in Southeast Asia?
Southeast Asia is one of the world's most booming markets regarding crypto. Irrespective of the genre, GameFi (P2E specifically) is concentrated around Southeast Asia. The P2E industry has grown 188% since 2021 and reached over 61,000 searches per month. And in the upcoming months, the developments in the sector look promising for further growth.
Some developments that are interesting to follow and put Southeast Asia at the forefront of GameFi are the rising interest from mainstream Web2 gaming companies toward Web3 and blockchain-based game development. Just recently, Thailand-based esports and gaming company Ampverse announced the launch of its new metaverse-focused business division, Ampverse Web3. As aforementioned, esports is one of the biggest gaming genres in Southeast Asia, and Ampverse has a massive footprint around the region. Ampverse’s new metaverse arm aims to create a strong community around Web3 and promises to use its platform to educate gamers about NFTs, P2E, and other GameFi-related topics.
Similarly, Singapore-based startup Game Space aims to launch dozens more projects before mid-2023. The startup aims to move away from “GameFi 1.0,” as we currently know it, and focus the development of its new games to be a balanced combination of earning and having fun while playing.
Crypto-focused entrepreneurs in Southeast Asia and institutional investors understand the growing potential of GameFi within the following years. GameFi and decentralization tackle a genuine issue in ASEAN society: the high percentage of unbanked people and low-income earners. The future of blockchain gaming is undoubtedly an exciting one to watch.
