Over the last several decades, technological advancements have revolutionized the gaming industry. We are on the verge of another significant advancement in the gaming industry, and I am very excited about it! The transition of the gaming industry from free-to-play to pay-to-win will completely alter the industry’s dynamics. This is why I’ve decided to begin writing down my thoughts on it.
While we will discuss the benefits and drawbacks of a Web3 gaming industry, let me explain briefly what blockchain-based gaming has to offer and how it can transform the industry.
A Glimpse of the Prestige Gaming Ecosystem:
In 2022, the gaming industry is expected to generate nearly $160 billion in revenue. In the current gaming industry structure, gamers invest time and resources to play games for little to no monetary reward. They buy a lot of in-game items, level up their characters, and reach the zillionth level, but they don’t have the option to directly monetize their skills or assets in the game. In fact, if they stop playing the game, they will be unable to do anything with the money and time they have invested in it. So, despite putting in a lot of effort in-game and spending real money, players don’t get to own anything.
Methods for Gaming to Survive in Web3:
1) Asset Scarcity & Ownership
Almost all games now sell in-app utilities, which account for more than half of all gaming revenue. These in-game assets are typically limitless and are sold to players via In-App Purchases, or IAPs. Even after paying for these assets, players in Web 2.0 gaming do not truly own them.
Blockchain technology will allow for in-game asset ownership as well as digital scarcity. In Web3, each asset will have a limited supply and will be owned by players after the sale. When a player purchases an asset, the technology ties the asset to the player rather than the game, effectively making them investors. Players should be able to sell these scarce digital assets to others within and outside of the game because they own them.
2) Earn Money While Playing:
Players do not typically earn money while playing games on Web 2.0. Instead, players attempt to monetize their gaming skills through streaming and e-sports, both of which require significant investment. Web3 allows players to earn money while playing and monetize their gaming skills within the game.
Games will become economies, with players receiving real economic incentives based on how well they perform in a game. Players earn cryptocurrency as they progress through the levels or complete tasks, which they can then exchange for other crypto-assets or fiat currency.
Traditionally, gaming ecosystems have been siloed, with one game not interacting with another. Typically, assets from one game cannot be used in another. However, in the blockchain-based ecosystem, there will be projects that complement one another with portability features, and users will be able to switch between games. They will be able to transfer their digital assets to other games, such as NFTs in the form of skins, avatars, or weapons.
Underpinning Technologies/Utilities at Work:
1) The NFTs
NFT is a technology that, like any other digital currency, enables digital asset scarcity and ownership. NFTs can be stored in the wallet and transferred between wallets. In-game assets will be converted into NFTs in blockchain-based games, allowing asset ownership. Similar to RPG or role-playing games, assets are classified into common, special, uncommon, epic, and legendary types. NFTs can define rarity in Web3. The best players in the game will collect the rarest NFTs and sell them to others.
2) About Tokens
Tokens will be the currency upon which the entire game’s economy will be built. These tokens will incentivize every participant in the gaming ecosystem, whether it is the team that creates the game, the community that helps support the game, or the players who play the game. As the token’s value rises, everyone benefits. This, in turn, would lead to the game’s expansion. Players will be able to exchange their tokens for real money via trading exchanges after earning and reaping the benefits of their hard work in the game.
3) The Blockchain
Blockchain is typically open, permissionless, and immutable. Anyone can interact with it and build on top of it. Building blocks, similar to Legos, can be stacked on top of one another. Similarly, the nature of openness and permission lessness allows one to build a game over another, making the gaming ecosystem interoperable.
About Web3 Potential:-
Web3 has the potential to fundamentally alter the gaming industry. Gaming in the Web3 world may allow players to earn money while playing the game. In this new era of gaming, if players spend money on purchasing an asset, they will own it. They will also be able to sell it to other players both inside and outside the game. The demand for web3 game development services is rising in 2023, many leading game development experts said. Experts believe that India, as one of the largest markets for gamers and crypto users, is best suited to lead the growth in Web3 gaming.
The Metaverse concept will be powered by Web 3 technologies such as blockchain. The metaverse can also be viewed as a virtual representation of the real world. Avatars are virtual representations of players that allow them to interact with places, objects, and other players. Items could be transferred between different games and game universes using blockchain, resulting in a digital multiverse. Simultaneously, the gaming industry will expand in tandem with the growing number of Web3 users.