Vietnam has recently become a hub for blockchain-based studios. Hiker Studio, Sky Mavis, Topebox, Wolffun, Thetan Area, etc. are some of the most popular NFT ones; and the movement seems to be growing at a rapid pace. While it was the wildly popular ‘play and earn’ game Axie Infinity from Sky Mavis studio that really kicked off the movement, newer NFT games such as HeroVerse from Hiker Studio are reaching new heights with monthly revenue of $364 million. Axie came very close to the regional market in a very short time, and this had major ripple effects across the industry.
It’s not that these startups are only launching successful games for their regional markets, but they have also been able to attract major investments from overseas. Sky Mavis recently raised $152 million via venture capitalists and also from celebrity investors such as Alexis Ohanian, co-founder of Reddit, and Mark Cuban, owner of American basketball team Dallas Mavericks. Smaller studios such as Topebox have also been able to raise a million in investments, as well as Thetan Arena, which did not disclose their raised amount. So, what we are seeing here is a full-fledged market creation.
While blockchain and NFT based games are clearly becoming a major trend, the development of an industry ecosystem around them is the next logical step. Startups such as Crowdhero and Championfy are aiming exactly for the same. The former is enabling gaming studios to open up to micro-investments and process payment to investors in NFTs, whereas the latter is giving them a chance to showcase their projects on the Championfy platform. These startups aim to establish Southeast Asia as the biggest hub of crypto gaming, and they might just be successful!
But, beyond the support of an ecosystem and numerous gaming studios sprouting up throughout the country, there are certain regulatory reasons that are also leading to the Vietnamese NFT based gaming boom. Let’s consider all the angles!
What’s special about Vietnam?
There is a dilemma regarding crypto-based transactions in the country. Purchases based on cryptocurrencies are still not legal in Vietnam, but, owing to such currency or using it as investment options is allowed. So, players of Axie Infinity can enter the game by purchasing tokens through mined cryptos, but can not do the same with normal online payments. In the case of NFTs, the laws are similarly vague. This is not to say that the Vietnamese government is not interested in the segment, as they have asked the central bank to look into the technology.
The step that the government takes regarding legalizing crypto-based transactions will be majorly decisive for the newfound gaming industry. The demand for owning cryptos in the country is quite high, especially due to the rising popularity of the play and earn games. If the government were to completely ban such transactions, the entire industry may have to shift to another Southeast Asian state. But, most studio heads are looking forward to a positive outcome from the government, as they believe it can bring a large amount of boost to the national GDP.
However, developers have various tactics themselves that can be put to use regardless of governmental steps.
A unique support system
Marketing and industry trends can often be more helpful than one would imagine. The popularity of Championfy offering NFT rewards for playing games on their platform has urged other studios to try and operate within the Metaverse. And a documentary on Axie Infinity almost doubled their user base overnight, and led to massive popularity for the play and earn genre of games overall. People were actually making a living only from playing this game, which is unimaginable anywhere else in the world.
Certain aspects of Vietnam, and Southeast Asia as a whole, that really help popularize the NFT gaming industry is that most of these games are played on smartphones, which the population clearly prefers to playing PC games. So, a gaming segment that was highly reserved for a niche has suddenly been opened to the mainstream population. And this has brought investors such as Hong Kong based Animoca Brands into the fray, making it a burgeoning industry.
A separate economy has also arisen out of these games. Axie Infinity, where you need to purchase 3 ‘Axie’s or tokens to play; is out of reach for the common Southeast Asian person. However, lending such Axies has in itself become a trade for many. So, we see unique perks of launching such a game in a developing economy. While recreating this model is quite impossible, it can be stated that trying to develop out-of-the-box ideas is the path towards success for most of these studios. As of now, the Philippines is also another major market for NFT gaming, apart from Vietnam.
Future funding plans
While NFT based games may not be as popular in developed countries, these studios will need to attract the market to ensure funding. This is why the studios must concentrate on creating unique and engaging games, rather than simply trying to copy the success of one play-and-earn game.
Investors are also interested in seeing the diversity and variety in these games. Most of the venture capitalists entering this segment are not too interested in how interesting the games are, rather, they are looking at the target market and the probable reaction. Axie Infinity is still the number one game in the market, but it has started to drop revenue lines as competition rises. So, this is the perfect time for investors to step in and project the next big break.
The users of these platforms have also become more mature over time, and this is helping less popular games get their due. If this trend continues, and the Vietnamese government gives the green signal for crypto-based transactions; it will almost double the number of players participating in NFT games.