Web3. This term has recently made headlines around the world, with tech executives and startups increasingly jumping on a bandwagon.
Web3’s popularity among the tech community and investors is not without reason; it provides today’s users with something they want: more freedom and control over their online presence.
While the word “Web3” will become more prevalent, many people are still attempting to figure out what it means and how they may profit from this new technology.
Table of Contents
Right off the bat, what exactly is Web3?
Decentralisation is the essential word here. While the current internet is primarily reliant on huge corporations’ systems and servers to function, we can expect more self-governance in the Web3 world, as our online activities and data will be hosted on blockchain-based networks rather than corporate servers.
As the name suggests, Web3 follows Web1 and Web2. Let’s take a look at the major features of each evolutionary step:
- Web1: The original World Wide Web, which relied on open source and open standards. It led to the rise of some of the largest internet companies to ever exist, such as Google and Amazon.
- Web2: More focused on user-generated content, Web2 ushered in the era of blogs, wikis, and social networks. It was built on some of the same Web1 technologies but also enabled social connection and content creation.
- Web3: The new Web3 features a value-exchange model rather than the simple exchange of information, as well as self-sovereignty and the major decentralisation of the Internet.
- Anyone can use an anonymous single-sign-on to participate in the Web3 universe without the need for a central authority to act as a gatekeeper. In other words, users would not be forced to divulge personal data in order to perform specific tasks, such as conducting transactions, and they will be able to verify their ownership using a public, transparent blockchain.
Why should Web3 pique the interest of internet users?
Consider the following scenario: you publish a post on your social media channels, the post gets famous, and you are fully compensated for your participation in the activity. This sounds fantastic, particularly for the makers out there.
Tokenization — whether in the form of non-fungible tokens (NFTs) or fungible tokens (cryptocurrency)— is how such an arrangement is made possible. Returning to our example, you may use an NFT to claim ownership of this post and then trade it with others to earn money without having to share the profits with the platform where the post is hosted.
Where are we with Web3 gaming?
While Web3 is still in its early stages, we are getting closer to this reality by the day, with more and more Web3 decentralised applications (dapps) and games being developed.
In the gaming industry, today’s Web3-based games provide new revenue potential for both producers and users. While creators profit by creating valuable digital assets and monetising them through the transfer of ownership, players can profit by investing in and dealing in these digital assets. This concept appears to be a pipe dream, but there are issues in today’s Web3 gaming that the industry must address.
For starters, existing Web3-based games rely on simplistic gaming mechanics, which limits the enjoyment components for players and, as a result, may result in low retention and a short lifespan.
The digital assets (i.e. NFTs) in these games are often built as opulent collectables with artificial scarcity, which works for specialised communities but creates a double-edged sword that hinders more people from embracing these games. Because these games rely on new players to survive, the high hurdles to entry call the long-term viability of this economic model into doubt.
Do we really need Web3-based games?
The rise of Web3 is changing the entire landscape of gaming, introducing new and revolutionary ways of playing that involve blockchains, cryptocurrency, and non-fungible tokens (NFTs). But the biggest impact Web3 is having on this new world of gaming? It is democratising the many different aspects of gaming and providing brand new ways for players to find success! Never before have we seen such a model that places so much power in the players’ hands, and instead of concentrating that power within one single game, players can carry it throughout many games within the entire ecosystem.
The truth is that technology will continue to improve, as will player expectations. Remember those old Snake games you used to play as a kid? It used to be enough to keep you entertained for hours, but the sensation may no longer be the same now. Because you have access to games with better graphics, more engaging storylines, or fully engaged communities, you will automatically choose the ‘better’ alternative and see these features as something you will look for in a game that you play. Here, Web3-based games which offer more ownership and economic opportunities to players serve as an attractive solution that both creators and players increasingly embrace.
Sooner or later, the ability to shape the gaming experience and play-to-earn capabilities will be the norms that players expect to see in a game.
Coming back to our question, do we really need Web3-based games? If not now, it will be a preferred option in the future. So the industry has to closely monitor its development and adopt this technology to stay relevant.
What exactly is this decentralised ownership?
Consider yourself to be in an action game. You bought a weapon in this game and decided that you no longer needed it because you received a more powerful one. Most of the time, all you could do was keep this old weapon of yours. In Web3-based games, this is not the case. In secondary marketplaces, you can sell your old weapon as a digital item. This turns your in-game weapon into an investment that will benefit you for the rest of its life, rather than a one-time expense.
As more Web3-based games come to life, you might be able to bring your digital assets and use them across different games. You might even trade your digital assets with other players’ assets as you wish in a secure manner, as every transaction is captured and validated in the blockchain. These abilities, of course, will allow you to have a better, more personalised gaming experience.
Navigating the Web3 gaming
There is still a lot to be done to define how Web3-based games will transform the industry. In addressing this, industry players have to come together to develop a universe where players can invest in digital assets at reasonable prices and grow them through their own active participation in the games.
1. Interoperability and ownership
The potential of blockchains and NFTs to provide true ownership and interoperability in gaming creates the most opportunities for players in the Web3 metaverse.
NFTs are the new face of Web3 gaming, and you’ve definitely noticed their popularity skyrocketing recently. This is because they provide something that earlier gaming models did not: the ability to actually own practically any form of unique in-game asset or object.
In conventional gaming, a player would purchase an in-game object unique to that game. But what happens when that same gamer switches to a different game? All of the effort and money spent acquiring the item, or numerous objects, is wasted. It’s something we’ve all experienced! Consider how many gaming products are currently wasting away in the virtual world.
Interoperability is the right solution for this in Web3 gaming. Gamers no longer have to spend money on these products because they can be transferred between games. This gives the players more control and allows them to freely switch between as many titles as they desire.
And if a player no longer wants to carry that item or finds it useful, there’s no need to worry! They can simply sell it on secondary marketplaces, transforming in-game NFTs into an investment rather than a one-time buy.
2. Integration of Our Past
Every single gamer has their own beloved titles. They could be the games they are best at, or maybe those that they grew up playing, among many other reasons. Gaming is personal — it would be tragic to leave behind all of the existing titles that brought so much fun to generations.
Thankfully the Web3 gaming ecosystem is listening to players and enabling the transition of these existing titles by upgrading them into the new in-game buying and selling model. Imagine all of your favorite games being extended into the metaverse — something none of us could have ever imagined! Web3 is not just creating an entirely new type of gaming, but it’s also enabling the integration of our past.
3. Gaming Focused on the Player
With these new opportunities brought on by Web3, gamers will find an ecosystem that is tailored to them, not just big tech. There are many new ways to earn and win, especially through the ecosystem’s promise of digital asset ownership and interoperability. On top of all of that, it is making room for our past rather than wiping it away, providing the right balance of the familiar and the new.
Within the Web3 environment, the role of gaming will be to bring back true decentralisation and power to the players!
4. Effortless Integration Of Web3 Games
Due to the continued popularity of online gaming, it was only a matter of time before we saw solutions that would bridge the gap between Web2 and Web3 gaming. This is being largely done through APIs that connect established game development environments with blockchains for ease of production.
This is a dream come true for many passionate developers who can build on engines they are familiar with and easily make games compatible with Web3. This has many benefits, including the easy integration of crypto wallets, Non-Fungible Tokens, decentralised marketplaces, multi-chain interoperability, mobile optimization, and alternative fundraising through tokenization.
This feature is likely to become more prominent as the Web3 gaming environment grows and develops, as it confers many benefits including efficiency, scalability, and customization.
Web3 Gaming: Seeing into the Future
All Games Moving To The Blockchain
The advantages of decentralised gaming are self-evident. There is no tracking or selling of data to third parties, and information is protected and anonymous. Blockchains eliminate the problem of double-spending, which means there are no fraudulent payments like there are in the traditional credit and debit payment systems.
Furthermore, Google, Microsoft, Apple, Steam, and other centralised companies charge upwards of 30% for the “luxury” of selling games on their platforms. This percentage, according to the majority of developers, is unjustified.
Finally, this gets to the heart of the matter. Web2 gaming profits were characterised by large actors who dominated the market and reaped a disproportionate share of the rewards. The gaming developers did not receive adequate compensation for their efforts, while end-users were charged a premium and had no real authority. This is changing as Web3 games have low development fees and end-users are given tokens or NFTs with which to grow their holdings and make governance decisions about the game’s future.
With all of this in mind, it’s no surprise that developers are flocking to Web3. It’s a place to create gaming communities rather than gaming monopolies. Collaboration is the hallmark of decentralised gaming development.
Getting Involved With Web3 Gaming
While the ability to develop on Web3 might seem daunting, it’s a lot easier than you might think and specialised knowledge is not required – patience and interest are the essential ingredients. For instance, you can build an NFT-based browser game through BuildSpace, whether you are a developer, engineer, or just a student. It will get you familiar with dApps and the wider ecosystem of NFTs and cryptocurrencies.
The best part is that you can work alongside developers in a fixed communication channel. Games development is always done as part of a team. You can also use traditional engines like Unreal or Unity and connect them to Web3 through the available SDKs (which are currently very limited in number).
Overcoming Existing Hurdles
Despite the numerous advantages, there are also obstacles to overcome. To avoid a small number of users from becoming too strong, the tokenization incentives mechanism must be perfect. It must also find a balance amongst all stakeholders, including developers, gamers, investors, and media outlets. It’s vital to realise that the issue isn’t just investors or marketers; it’s when these groups wield too much power. For highly successful games, they are still required.
It’s difficult to strike a balance between rewards and a great gaming experience. Ultimately, games like Axie Infinity are about investment rather than gameplay, which is not a path that creators will want to go. Rewards in an interesting game should be a result of effort rather than the primary cause of the activity itself. The distinction may appear minor, but it should be play-and-earn rather than play-to-earn.
There are also technical issues to contend with. Due to Ethereum network congestion, games such as Crypto Kitties were subjected to exorbitant gas fees. Other blockchains, such as Solana and Polygon, may be faster, cheaper, and more scalable. Despite all of the talk about scalability and efficiency, many blockchain games are relatively slow due to smart contract constraints.
It’s also important to keep in mind that while Ethereum remains dominant in the NFT and gaming market, this may not always be the case. It has been proven to have scalability and pricing inefficiencies even if it remains a solid place to get started. Solana could be an improved chain with better speeds, efficiency, and scalability. Polygon is also known to have made a number of acquisitions and partnerships in the Web3 gaming world.
The existing gaming industry has done nothing wrong. However, play-to-earn games add a huge difference by introducing the functionalities of blockchain in gaming. You could have games that let you earn income only by playing them. In addition, players could earn in crypto or NFTs, which they can choose to trade.
Regardless, the future of Web3 gaming is going to involve interoperability between blockchains and subchains that allows developers to work on very specific and customised games for their target audiences. Both gamers and developers will see more equitable rewards and a higher calibre of published games through distributed ledger technology.
With so much positive buzz surrounding popular games that use the “play-to-earn” model, such as Axie Infinity, it’s natural to wonder how they’ll fare in the future. The powerful support of blockchain to ensure security and transparency, as well as the participation of NFTs and the formation of massive communities, would be prominent highlights of new blockchain-based games. Let us wait and see how this new generation of games shapes up with blockchain in web 3.0.