Web3 gaming is overcoming past failures and negative perceptions to gain momentum in 2024.
Ask most gamers what they think of blockchain gaming and they’ll likely scoff. Along with metaverse and NFT, blockchain gaming has become a toxic word in many circles. Can’t blame gamers - blockchain gaming is missing the whole point of gaming, to have fun.
With such promising features that would improve the overall gaming life cycle - scalability, ownership, and interoperability - how did web3 get it so wrong?
In the past five years, reports show that 75.5% of web3 games have failed. There have been a number of contributing factors to this: web3 games suffered from poor UX and design, gameplays were often thinly veiled financial schemes, and the collapse of the NFT market dragged down some of the more nuanced applications of NFTs, gaming included. A theme at the recent Gamesbeat Awards was that “blockchain needs to be fun” – an aspect that may have once been lost in the “play to earn” (P2E) craze from those hoping to make quick money.
Perhaps paradoxically, 2024 is shaping up differently as increased investments, renewed pizzazz, technological leaps, and other factors alter the trajectory of the gaming sector.
In particular, 5 promising developments underway are likely to drive web3 gaming to new levels of popularity, and most importantly, new levels of entertainment.
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1. Investments in Web3 Gaming Start To Bear Fruit
In 2023, $2.3 billion USD was invested into blockchain gaming projects — $600M alone in the third quarter. Major ecosystem leaders like Anomica Brands have been steadily investing across the web3 gaming space. The influx of capital this year, despite a range-bound mood in the broader crypto market, demonstrates an underlying commitment to the long-term potential of web3 gaming.
The impact of these investments is not immediate, but cumulative. The gaming development cycle is typically lengthy with an average of three to seven years in development, even when not taking into account new technologies like blockchain and NFTs. The cumulative impact of investments over the past couple of years should begin to bear fruit, with web3 games likely to emerge in 2024 that are more complex, thoughtful, and as entertaining as traditional ones.
2. “GameFi” Provides a Much-Needed Upgrade to In-Game Economics
Some of the earliest web3 games were marketed as P2E games. These applications, though they resembled games, were thinly veiled token farming operations, rife with risks like rug pulls, and were impossible to explain to anyone outside of our community. P2E inadvertently became a symbol of the challenges in merging crypto with gaming, specifically by revealing that crypto has a tendency to financialize everything, and ‘missing the forest for the trees.’ Games deserve to be fun, not necessarily financially productive.
However, games are not devoid of financial incentives. Robust, complex, deeply integrated in-game economics exist across the traditional gaming ecosystem. An approach to these types of game economies is necessary — the crypto ecosystem just happened to strike out epically on its first attempt. In fact, 80% of blockchain gamers have expressed interest in using their crypto for in-game transactions.
3. The NFT Ecosystem Has Matured From Its JPEG Infancy
In 2021, Steam, the dominant PC gaming marketplace, outlawed any games built on the blockchain or with NFT utilities. Quite a buzz kill for the start of the ‘web3 gaming revolution’. Whether it was a result of consumer safety from unregistered securities or back to the thesis - gamers just want to have fun - many of the gatekeepers of the gaming world stopped web3 in its tracks by targeting NFTs specifically.
A lot has changed though during the bear market of 2023 when it comes to NFTs. Instead of being the centerpieces as they were in 2021, NFTs will be used as tools that enhance the gaming experience with players having a new sense of control over their gameplay by the ability to own, sell or trade in-game assets. Roblox, for example, reported that its Gen Z audience bought 1.6 billion digital fashion items and accessories in the first three quarters of 2023, up 38% year over year, signaling the growing importance of digital identity and expression among the younger generation.
4. No One Expected Candy Crush - Would They Have Expected Pixels?
This year, Pixels, a farming game, became the first web3 game since Axie Infinity to surpass 100,000 daily active users, which has seen major interest in countries such as the Philippines. The Philippines, along with Nigeria, Pakistan, Singapore, Vietnam, South Korea, Hong Kong, China and the UAE, have been among the top 15 countries most interested in web3 gaming-related search terms according to Google Analytics data, for 3 consecutive years from 2021 to 2023.
This points to a potential massive global reach of web3 gaming. Countries in APAC regions have shown growing interest in blockchain games when it comes to mobile gaming and North America accounted for the highest market size for blockchain gamers with over $30 billion market size in 2022. While Candy Crush wasn’t released with the expectation that its core audience would be women over 30, do we ever really know what to expect when these games are released?
5. The Ecosystem Has Found and Built the “Missing Pieces” of Web3 Gaming
The newly announced game from Pudgy Penguins, Pudgy World, is a fantastic example of how gaming can be both blockchain native, and gain interest from non-crypto natives.
https://twitter.com/pudgypenguins/status/1733672528453705819
A report from the Blockchain Game Alliance showed that 51% of users believe player onboarding is the biggest obstacle. Pudgy World is said to be an open-world, immersive multiplayer experience in which not only can Pudgy holders easily begin playing, but so can those who own Pudgy Toys – it's as simple as scanning a QR code to create an account (Webkinz, anyone?). Removing web3 roadblocks is a massive step forward when it comes to this new era of gaming.
In addition, communication plays a vital role in gaming, whether it’s between players, NPCs and players, or between the game and the player. But in web3 games, no scalable and user-friendly decentralized communication solution has existed — until now. In 2023, a variety of companies are now offering cheap, fast, private, and secure decentralized communication. The emergence of these technologies indicates that the blockchain ecosystem is now equipped with the necessary tools to create engaging games.
While the integration of blockchain technology, including NFTs and cryptocurrency, offers innovative monetization and ownership possibilities, the core appeal of any game fundamentally lies in its entertainment value. This year, the gamers won the battle and were heard loud and clear about the pitfalls of current blockchain gaming. But the growing pains have clearly led to a change, the proof is in the data. The next gen of games (built on blockchain) is expected to offer not just novel economic models but also a genuinely enjoyable and immersive gaming experience, fulfilling the promise of blockchain technology in revolutionizing the gaming sector. Maybe just don’t call it blockchain or web3 gaming - call it gaming!!
About the Author
Harsh Rajat is the founder and project lead of Push Protocol, the leading web3 communication network for cross-chain notifications and messaging. He has over 12 years of experience in mobile apps, gaming, ecommerce, fintech, and blockchain. Harsh started his career in 2009 developing mobile apps and games, including the popular app "360 Browser." In 2018, he joined the blockchain industry as a CTO and later created Push Protocol to address the lack of a decentralized notification protocol for web 2.0 services. Harsh has spoken and judged at various tech conferences and hackathons, including Messari Mainnet, ETHCC, ETHDenver, and NFT NYC.
About Push Protocol
Push is the communication protocol of web3. Push protocol enables cross-chain notifications and messaging for dapps, wallets, and services tied to wallet addresses in an open, gasless, and platform-agnostic fashion. The open communication layer allows any crypto wallet /frontend to tap into the network and get the communication across.
Social handles
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