Possible Models for the Web 3 Gaming IndustryMarch 8, 2022
Web 3 video games, sometimes known as GameFi, quietly transformed the entire world of cryptocurrencies. They presently make up around 49 percent of entire crypto blockchain use across the globe. In player terms, numbers are just as impressive. Since 2021, over 1.4 million active monthly users have interacted with some form of blockchain gaming. Venture capitalists and funds have invested over 4 billion USD so far in the realm of GameFi. What is more, the insanely strong growth of the NFT marketplaces also accelerated the development and growth of blockchain gaming.
NFTs that were connected to the gaming domain generated some 4.5 billion USD in direct trading volume. One in five of all NFTs that were sold in 2021 were connected or a part of a blockchain gaming project. Much of that process was due to the expansion of the play-to-earn games and their tokens, also known as P2E. Among them, Axie Infinity managed to generate the highest level of attention from the gaming audience. But, it was not alone by any means. Now, many companies are trying to figure out what is the future of GameFi and how it can help not just its gaming niche, but also esports, mainstream gaming, and all other aspects of the wider game industry.
Backlash and Turbulence
The development of GameFi has not been all smiles and sunshine, despite the clear successes. After the initial slow-moving appearance of blockchain gaming, their synchronization with the expansion of NFTs did provide numerous benefits, but also some negative backlash from the public. That boiled down to a sense that the NFT market is mainly all about using the buzzwords of the crypto age and delivering next to nothing new. The same saw developers like the company behind the massively successful, decades-long gaming franchise like The Worms decide to drop their NFT project.
The reason was the incredibly big negative reaction of the gaming public and other developers. Stories like these are nothing new in recent months in the GameFi space. But, the same process has not been a flash in the pan because of the fact that so many developers did produce games that offer a novel experience. That allowed them to survive all manner of turbulence and keep growing, even if that growth is now winding down somewhat across the GameFi board. That means that the search for the new models of GameFi gaming is still as active as it ever was.
Case of Axie Infinity
Axie Infinity is by all relevant measures the key breakout success of the blockchain gaming principles. It was initially built on the ethereum blockchain and since its conception, its popularity has skyrocketed. By 2021 its AXS token grew in price some 31,500 percent and became what is today the best showcase of the potential of GameFi. It demonstrated that its token-based model is able to cover the needs of the gaming community but also deliver on the promise of a cryptocurrency system that is fully blended with the rest of the content. Prior to that, many ideas based on the ideas of GameFi blockchain employed hybrid solutions that would simply superimpose these crypto setups on existing games.
Axie did the opposite and built the entire game on the blockchain network. In its case, the AXS token plays the governance role, while the SLP token was used as a means of distributing in-game rewards. That proved to be a great option for the same game and its growing community, while at the same time it also allowed for the technical blockchain factors that define the use of the same network. But, it is not the only option when it comes to GameFi models and their possibilities.
AAA Industry take on GameFi
Axie popularity was noted across the gaming specter and some players managed to earn impressive amounts of BTC tokens through the same game. But, other companies, especially those from the big leagues of AAA gaming, did not want to immediately replicate the same GameFi principles. Instead, they tried other avenues. Ubisoft, for example, created its Ubisoft Quartz, a dedicated platform for the trading and collecting of in-game NFTs.
However, yet again, the project came across a drastic level of backlash. Some studios, like SuperGaming, a massive development company from India, openly stated that some gaming projects are now looking to multi-level marketing schemes for inspiration for their new releases. That level of negative PR, coupled with a lack of real technical success means that no true blockchain gaming projects will see the light of day from a AAA or even an AA studio anytime soon.
Key Web 3 Elements
There is no doubt in the development community, both that of the wider industry and that which is working in the field of GameFi that Web 3 features and functionalities have to be a part of those new blockchain gaming models. They are key features of any version of the metaverse that is currently being built in so many quarters but only those who will have their actual access – meaning a level of decentralized cross-integration that overcomes anything seen presently – will survive to become the actual future metaverse.
NFTs are going to be a part of that structure, but they are not going to be the entirety of it. The current craze related to these tokens is already dying down and the upcoming Crypto winter will not be gentle on the same domain. But, it is much easier to mint out NFTs than to connect a game to a Web 3 service and especially design one from scratch. Those that try to find problems related to sustainability and effectiveness demand huge teams and a lot of testing to iron the problems out. But, massive companies that can put those resources in play are still staying away. Still, there is no stopping progress and most experts agree that by 2024 the world will see many more successful GameFi projects that will be able to rival Axie.