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Crypto gaming sucks – but developers can fix it

What we have today in terms of web3 games doesn’t work. Play-to-earn didn’t work and neither will play-to-earn or X-to/and-earn. Additionally, traditional players view nonfungible tokens (NFTs) with suspicion. They dive into expensive monkeys and are skeptical of major game publishers using the lipstick of NFTs for further monetization.

Nobody knows yet what a successful Web3 game will look like. To get there, we need more developers experimenting with more models. We need an infrastructure that lowers the barriers to Web3 game development and makes it easy for developers to experiment. That’s why it’s imperative to invest in developing the underlying infrastructure, rather than getting carried away by the speculative hype.

The Web3 gaming infrastructure can be divided into two phases:

  • Pre-release: Pre-game launch infrastructure
  • Post-Release: Post-game launch infrastructure.

In both phases of development, Web3 gaming requires a technical infrastructure (blockchains, analytics and tools), a financial infrastructure (marketplaces and launchpads) and a third category that includes both types of infrastructure, such as: B. Metaverse platforms and guilds.

Navigating the Mint in pre-release development

Game developers have a wide range of options to choose from when deciding where and how to shape the game’s NFTs. Specialized gaming blockchains like ImmutableX and Klaytn offer low to no gas fees and high throughput.

Many games also set up their own blockchains to enjoy maximum flexibility and scalability. Axie Infinity launched the Ronin sidechain and DeFi Kingdoms has an Avalanche subnet called DFK Chain. However, starting an independent chain is not technically easy.

Upcoming players like Saga are trying to capture this new demand by offering a simplified experience for developers looking to start their own chains.

Unique active wallets connected to DeFi and GameFi applications from January 2022 to August 2022. Source: DappRadar

In the future, besides building their own chains, Web3 game developers will opt for the easiest experience with full-stack Web2.5 integrators that simply offer SDK and API toolkits. Forte, Stardust, and Particle Network are examples of full-stack infrastructure providers focused on the developer experience.

Inflationary tokenomics are on the way out

Web3 Games has the option to fund initial development by pre-selling in-game tokens and game assets. We have witnessed the rise and fall of the inflationary token economic model.

Going forward, the sale of tokens and game assets, particularly those with equity-like governance and ownership characteristics, will become more selective. Projects will whitelist or prioritize buyers who are players or significant contributors, such as: B. Content creators, infrastructure providers and community managers.

The mechanisms of social commitment must increase

The infrastructure for Web3 gaming growth and engagement is in a tricky chicken-and-egg situation as traction is still relatively low due to a lack of compelling games.

But once a few Web3 games reach critical mass, the network effects of identity data will allow these platforms to bootstrap and innovate faster together.

Related: GameFi developers could face hefty fines and hard times

Aside from the lack of compelling games, Web3 games lack familiar aspects like reviews and social features. There is great scope for competition and innovation as users can easily port to new entrants without losing their fortunes.

Unlocking Asset (NFT) utility

Web3 games generally share value with their players and the community. Instead of buying everything from the game developers, players can earn or buy in-game assets and currency from each other, creating a player economy.

For mature Web3 gaming economies, productive digital assets become an attractive source of income through rental, loan, or stake. In fact, successful games may even choose to invade their own financial layer by creating internal backup products considering how lucrative this can be, as in the case of Axie Infinity’s marketplace or StepN’s new decentralized exchange.

Guilds and Metaverse Platforms

Finally, there are guilds and metaverse platforms that provide game funding, integrations, and partnerships. They are well positioned to become focal points for Web3 gaming, like major publishers and distributors in traditional gaming. The key difference is that the players and creators own significant stakes and can contribute via management by decentralized autonomous organizations.

The Sandbox and Decentraland are the leading Metaverse platforms. But both require creators to buy land up front, so a lot of land has been sold to speculators who don’t contribute anything significant to the ecosystem. Mona takes a different approach, which is free upfront for creators until a space is minted and sold.

Related: Prepare for federal authorities to begin prosecuting NFT traders

Meanwhile, Web3 gaming guilds like Yield Guild Games and Merit Circle have onboarded thousands of players to support upcoming games, most notably Axie Infinity.

The guilds are forced to differentiate themselves in the face of increasing competition. Snack Club, for example, uses Loud, Brazil’s largest esports and gaming lifestyle group with 300 million followers. Jambo is building an African super app that includes games, telecom services and decentralized finance.

Games play an essential role in our lives and have long been a frontier of human experimentation. What we’ve seen so far with Web3 games is part of these experiments. Undoubtedly, there are many pitfalls.

Most iterations of the Web3 gaming economy today are problematic because everyone assumes they will make money from gaming. That’s not how economies work. So let’s not confuse speculative hype, which is volatile and impermanent, with actual acceptance and commitment.

Shi Khai Wei is General Partner and Chief Operations Officer of LongHash Ventures, a Web3-focused venture fund and accelerator. In 2021, Shi Khai was named a Forbes 30 Under 30 in recognition of his achievements. Previously, he was a management consultant at McKinsey & Company focusing on digital transformation and analytics in the financial and telecom sectors in Southeast Asia.

Saga, Particle Network, Mona, and Jumbo – mentioned in this article – are LongHash portfolio companies. This article is for general informational purposes and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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