Recently, the Web3 gaming sector has been extremely hot. I’ve observed that many people are asking what blockchain games are and how to invest in them. Instead of being overwhelmed by various project information, today I will clarify the entire sector’s logic for everyone.

Let’s start with the phenomenon. Among the projects launched last year by a major exchange, at least half are related to gaming, ranging from AI companion games, Layer 3 public chains, farm games, to cross-chain gaming platforms. These are not small projects. What does this fully indicate? It shows that both institutions and the market are optimistic about this direction.

So, what exactly does blockchain gaming include? Simply put, the entire ecosystem is divided into three layers. The bottom layer is the gaming public chain, which provides infrastructure for all blockchain games, such as IMX, Ronin, Gala. The middle layer is the blockchain gaming guilds, which initially were just player-organized discussion groups, but with the rise of the play-to-earn model, they have gradually evolved into profit-making organizations offering NFT leasing, boosting services, skill training, and some have even grown into investment firms. The third layer is the actual games.

Regarding game types, now basically all Web2 gameplay has been moved onto the chain. RPGs and FPS are the absolute mainstream, with fierce competition and the highest potential for hit titles. Strategy games and sandbox types follow, while simulation and card games have relatively less potential. If you want to make money in this sector, my advice is to focus on RPGs and FPS.

What kind of games are likely to become hits? I’ve summarized three key factors. First is the funding scale—generally, projects with over $10 million in funding tend to have decent fundamentals, at least with enough money to ensure quality. Second is the background of the founding team—this is very important because most blockchain games, to put it simply, are just Web2 gameplay copied onto the chain, with limited innovation, so storytelling becomes crucial. The team should ideally have over five years of game development experience or have participated in Web2 blockbuster games. Third is the quality of the game itself—at least reaching AAA level, which can attract players. AAA game development has high barriers and costs, so these projects are less likely to run away. If a game meets any two of these conditions, it has the potential to become a hit.

After discussing the criteria, let’s talk about investment methods. Currently, I see three main ways. The simplest is to buy tokens directly and enter once the tokens are listed on exchanges. This method has moderate risk, but you should know that over half of the tokens of most blockchain games are generated within the game, so secondary market buyers are essentially taking over the game players’ positions.

The second way is to buy NFTs. Honestly, this has the lowest cost-effectiveness. While NFTs as primary assets have large appreciation potential, they suffer from poor liquidity, and if the project fails, they become worthless. Additionally, NFT quantities are limited, making investment thresholds high and capital capacity constrained. Compared to buying tokens, the risk is higher, and the returns are not necessarily proportional, making this approach less worthwhile.

The third and truly profitable way is participating in “gold farming” (playing to earn). This offers the highest potential returns with relatively lower risk. The most profitable period for a project is usually during testing, when the number of participants is small. Early players can often earn dozens of times their investment, through token generation, NFT appreciation, airdrops, and profit sharing. However, such high returns are not accessible to everyone.

To participate in gold farming, you need to prepare three things. First, evaluate the project’s prospects from multiple angles and estimate your potential earnings. Second, develop a gold farming strategy to maximize benefits. Third, assess whether you have enough time and gaming skills to achieve your goals. That’s why the threshold for gold farming is so high—you need research ability, time, and gaming skills. Most investors lack these conditions, so early participation in blockchain games involves far fewer people compared to other sectors.

In summary, the question of what blockchain gaming is no longer the main issue; the key is how you participate. Choose a method based on your time, ability, and capital, and be more rational than blindly following the trend.