In Asia, for the parents of generations X and Y, video games were often the source of headaches and arguments with their children. As teenagers immersed themselves in the virtual world of fire-spitting dragons, club-wielding warlords and magical sorcery, parents worried their kids were wasting their time and money on activities that would yield little value in the long run.
Fast forward to 2022. In Manila, Philippines, not only has the social stigma on video game players disappeared but skilled players are hailed as smart, resourceful entrepreneurs who are helping to usher the country into the digital era. Such an increasingly positive view of video game players is spreading throughout Southeast Asia. This transformed perception hinges heavily on one phenomenon: GameFi.
Read more: GameFi’s Promise and Reality Are Still Worlds Apart
GameFi, also known as “play-to-earn” (P2E), is the financialization of gaming by leveraging blockchain technology. In the beginning, video games started with a pay-to-play model before transitioning into the standard freemium model.
Today, players in the GameFi world can earn and trade digital assets that can be converted into fiat to help supplement everyday financial transactions. Simply put, many of the so-called “game addicts” whom their parents worried about are now monetizing their talents and creating a sustainable income stream for themselves and their families.
Digital native and early adopters
GameFi is undoubtedly a monumental game-changer for Southeast Asia, and current economic conditions and fast-spreading digital adoption in the region could make it the global capital of the P2E model.
According to official data, only around 30% of adults in the Philippines have traditional bank accounts, compared with close to 100% in neighboring Asia countries, including South Korea, Taiwan and Japan. Southeast Asian countries like Cambodia, Indonesia and Vietnam also have populations that are relatively unbanked.
However, among the top 15 countries that use MetaMask, the Philippines ranked first with the most active users, followed by Vietnam (third), India (sixth), Indonesia (ninth) and Thailand (10th). These rankings offer evidence that many people in Southeast Asian countries are bypassing traditional banking routes and are quickly adopting Web 3 applications.
Moreover, the income that many players in the region earn from P2E games is enough to make a living or greatly supplement their current income. This scenario differs from the U.S. and other countries with high costs of living, where P2E income is not as important for people to support themselves. Southeast Asia will remain fertile ground for GameFi to flourish.