Thanks to the pandemic, the gaming industry has seen a massive boost in its growth, making it one of the fastest-growing industries. In 2020, gaming grew by 10% and is said to continue growing at an annual compound rate of 4.4%.
The emergence of new technology, making games more accessible, benefits the gaming ecosystem by sparking the interest of new gamers. But, for many it’s not just about entertainment, it is also a major source of income.
What is Web3?
Web3 is the third generation of the internet. The idea behind it is to empower all the users of the internet by giving them ownership over their data and incentivizing the internet’s users for their attention. Instead of being controlled by big tech, users are mobilized by having full ownership of their data which gives them more power to be involved in the governing of platforms. To read more on Web3 go here.
Web3 gaming explained
Web3 gaming applies the ideology of Web3 to the gaming industry. The concept behind it is to use decentralized technology to enable users to receive the maximum value out of their gaming experience.
While there are many third-party ways to earn from gaming such as Youtube and Twitch, crypto games are designed to reward gamers directly in-game for their time playing. This is a way for Web3 gaming companies to share the value that gamers generate with the gamers themselves.
The Web3 gaming infrastructure is built on blockchain technologies.
This next generation of gaming removes barriers so you will no longer have to lose Unlike in traditional games, in Web3, players do not lose their in-game purchases if they leave a game or delete their account. Assets bought in Web3 games are linked directly to your blockchain identity (or wallet), so you can carry them with you to any game.
A glance at the gaming industry
Gamers are responsible for a large percentage of the sales and purchases that gaming companies receive, yet they receive none of this revenue. To earn a livable wage, gamers have to work extensively creating content on other platforms such as Youtube. While this is great for some, it is not sustainable or desirable for all gamers.
Gamers should have a share in the value they bring gaming companies.
What problems does Web3 solve?
Problems with traditional gaming
- Unfair compensation
Similar to content creators on social media platforms, creators of gaming content aren’t always able to properly monetize their content.
For those who are able to monetize their content, it tends to be at a very low rate and not true to the full value they bring to platforms. In addition to this, a large portion of their earnings is taken by the platform. Twitch, a livestreaming platform for gamers, takes 50% of every creator’s earnings.
- Lack of access to data
Traditional games store all in-game information on their own servers, which gives them complete control over how they use gamers’ data. This is a big risk to data privacy and security. It is also a downfall for gamers as this information can be very useful for them.
- Limitations trading in-game assets
In traditional gaming, assets bought within a game only hold value in that game’s ecosystem. They are limited in how they trade their assets because they cannot be traded in other marketplaces.
How does Web3 solve problems?
Web3 combats the problems created by traditional gaming platforms by transferring the ownership of data to gamers. This gives them the freedom to decide where and how their data can be used.
Additionally, blockchain technology allows for interoperability, so that gamers are able to carry their assets and gaming identities across different Web3 gaming platforms.
Through the direct compensation models that the technology enables, gamers do not have to worry about unfair compensation or depending on platforms to make their earnings.
Web3 gaming infrastructure
The web3 gaming ecosystem is very diverse, with many builders in the space experimenting with different gaming models and different game genres. The true potential is yet to be fully tapped into.
Different types of Web3 games
- Play-to-Earn (P2E)
- Free-to-Play (F2P)
- Hybrid Game
- Virtual Games
Play-to-Earn Games (P2E)
The concept behind play-to-earn games is that you earn rewards the more you play a game. By completing tasks and quests you are able to earn crypto tokens or in-game assets that are stored on a blockchain as an NFT. These assets can be traded in gaming marketplaces and the tokens can be traded on crypto marketplaces. You can also convert these earnings to traditional currencies to be used in the real world.
Usually these games have a barrier to entry; you are required to hold the games crypto token in your wallet to gain access and start playing.
Free-to-Play Games (F2P)
Free-to-play games do not require or rely on players to spend any money to play a game. Instead, the gaming company relies on advertisements, selling in-game assets and expansion packs to make their revenue.
Gods Unchained is a popular free-to-play crypto game. It also happens to be a hybrid game.
Hybrid Games are powered by traditional gaming platforms, however, the in-game assets are powered by blockchain. This enables new possibilities in monetization models that games can use.
Play-and-own games are similar to P2E games as they reward gamers with assets based on their gaming activity. The main difference is that the incentive of play-and-own games is not simply just to earn, the model encourages a player-driven economy that values the effort players put into progressing in a game. This value translates into the full ownership of assets that the players receive.
Move-to-earn games are exactly what they sound like. As you move, you earn digital assets from a gaming app. In Web2, there are apps like Sweatcoin which gives users points based on how many steps they take in a day. These points can be converted to gift cards to stores such as Starbucks.
The Web3 rendition of this is called STEPN. The app rewards users in GST tokens for exercise completed throughout the day. You are able to earn as much as 5 GST, or $4.65 a day, on STEPN.
Metaverse games provide players with access to 3D virtual worlds where they are able to create their own identities through avatars and explore different surroundings. It is an open, shared and permanent virtual world that gives players full ownership of their data and idenities.
Virtual games are similar to metaverse games, however, virtual games are fully immersive. Virtual games make use of VR technology to give you the experience of being “inside” a game. To play a virtual game you are required to own VR gear.
Top Web3 games
Though various games are already in the Web3 gaming ecosystem, Web3 gaming cannot fully be understood without knowing about the top three OG platforms. These Web3 gaming platforms are pioneers in leading the development of crypto gaming infrastructure and culture.
Axie Infinity is an NFT-based crypto game created on the Ethereum blockchain. It is a community game where players buy creatures. In the game, you can battle, explore or breed your pet creature.
Cryptovoxels is a virtual world where you can buy land, construct buildings, create an avatar, explore and even display digital art in a virtual gallery. Like Axie Infinity, it is also built on the Ethereum blockchain.
Decentraland is a 3D virtual world that was created after Cryptovoxels. The game also allows you to buy plots of land and explore with an avatar to partake in different mini-games and activities.