The gaming industry has grown massively over the past decade. It has overtaken the movie and music industries in terms of revenue to become one of the biggest entertainment industries worldwide. As of 2021, the total revenue from gaming stood at $198.40 billion.
The wide adoption of smartphones is a chief reason for this rise. Smartphones made gaming more accessible. It also opened the doors of gaming to new target demographics. Because of these factors, the majority of the gaming industry revenue is from iOS and Android.
Similar to how smartphones skyrocketed industry revenue, there is another technology that experts predict to create a similar breakthrough: Web3 Gaming.
What is Web3 Gaming
Web3 is the next stage of the internet with blockchain and other decentralized technologies.
The current stage of the internet is largely in the control of a select few dominant companies. A lot of policies and norms are dictated by these huge platforms.
Web3 will challenge these existing control structures. It will be devoid of any central authority thanks to its decentralized nature. Thus, it aims to return the power back to users.
Web3 Gaming is the synthesis of a decentralized internet with gaming. Web3 game development companies aim to democratize gaming with the introduction of play-to-earn mechanics. incorporation of NFT assets, and decentralized distribution of user data.
The Three Key Factors in Web3 Game Development
A few key elements play a crucial role in Web3 and make the gaming experience different from other forms of gaming:
Blockchain is a distributed ledger of data. Unlike centralized servers, blockchains distribute data and store it in a decentralized manner as blocks.
Hence, data stored in the blockchain is more reliable. It is also less susceptible to security risks and downtimes.
Tokens are virtual currencies built on top of an existing cryptocurrency.
They are similar to in-app coins in apps and games. People can use tokens to unlock additional features and to buy items such as weapons and power-ups.
Most tokens can be converted into cryptocurrencies (this plays a huge role in Web3 gaming). Some tokens can even be directly converted into cash.
NFTs (non-fungible tokens) are proofs of ownership of an asset (mostly a digital asset.) This proof is recorded on the blockchain and is hence immutable.
For example, if you buy an NFT digital artwork from an artist, the blockchain will record that the artwork now belongs to you. Anyone from any part of the world can look into the blockchain and see the proof that you are the owner of the particular artwork you purchased.
The Three Reasons Why Web 3.0 Gaming Will Take Off
There are several reasons why Web3 will revolutionize gaming. Below we list 3 of them:
In Web2.0, power is consolidated among a few central authorities (mostly developers and shareholders.) These groups of people make all the important decisions.
With Web3.0, all this will change.
Take the example of Gaming DAOs. Gaming DAOS are player-driven communities that handle Web3 projects. In these communities, the power is decentralized and distributed among the people in the community. Decision-making is done through governance tokens, with holders of these tokens being able to vote on key decisions. And using smart contracts, most of the operations are made transparent and automated.
In Web3.0, systems like Gaming DAOs will pop up and return the power back to users.
IAPs bring in the majority of the revenue in gaming. For developers, IAPs are a huge boon.
However, for players IAPs have the drawback of being a value loss. Once players buy an IAP, it cannot be re-used. It cannot be sold to another player. The value merely exists inside the game.
On the other hand, the play-to-earn mechanics in Web3 gives players ownership of the assets they have bought in the game.
The assets will be NFTs and players will even be able to trade them among other players. This opens the opportunity for users to make a profit from playing the game.
In today’s games. the assets players own exist solely inside the virtual world of that particular game. Players cannot transfer the assets to another game. So once the player ceases to play that game, all monetary or non-monetary investment made is lost.
In Web3, however, assets will be interoperable. Meaning players will be able to transfer the assets they own in one game to another one and use it there. As a result, players will not lose the value of their investments as they will be retained in the long run.
2 Reasons for the Aversion to Web3 Game Development
Despite all the possibilities, Web3 has been on the recieving end of a lot of backlash from the gaming and game development community. Particularly for two reasons:
- Resistance to Change
Most industries have an aversion to change. The resistance to Web3 within the gaming industry can be seen as a natural byproduct of that.
Because web3 will challenge a lot of the existing norms in gaming. It will introduce players to a novel way of gaming. One where they get to experience a new way to play.
Hence, a lot of people are resistant to change, as is the case with all new technologies.
Web3 has received a lot of negative reputation. Because there have been a lot of scams and carelessly executed projects. This has led a lot of people to distrust Web3 gaming.
However, the reality is that there are a lot of Web3 gaming projects with immense potential being developed. These Web3 game development projects have high-standard security protocols and ensure players’ data and investment stays safe.
Web3 gaming is growing. Even though it is in its early stages, it has boomed. Where it will eventually lead to remains to be seen.
There is already tons of buzz around the term and the technology. And people have strong opinions on its future.
Some estimate that the play-to-earn mechanics, the decentralization, interoperability, and other unique opportunities of the platform will make it boom. Others meanwhile speculate that the whole thing is a fad.
But whatever the case is, Web3 is here to stay. It has the potential to radically alter the way we use the internet and the way we play games.