Web3 Gaming Has Bigger Challenges Than Crypto Winter

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When I first had the idea for this piece, we looked set for a glorious Web3 summer. Blockchain gaming was the latest craze, following the fall 2021 NFT profile picture hype. Investors invested, millions of players played flagship games, and dozens of crypto gaming guilds sprung up to enable play-to-earn games. The hysteria caused when blockchain gaming was mentioned in conjunction with a major publisher or mainstream video game reflected the reality that virtually all, public or private, were closely watching blockchain strategies.

This hype cycle masked a series of fundamental threats to the longevity of Web3 gaming that have been exposed by the “crypto winter” we are in now. Play-to-earn is suddenly widely seen as untenable. Rudimentary blockchain first games weren’t fun anymore when the numbers stopped going up. And yet, it’s safe to say that not many people bet against web3 technology and gaming in the long run. Investments in the blockchain gaming sector have already broken $5 billion in 2022, compared to $4.2 billion in all of 2021. The Web3 gaming industry should not take this as a sign that the crypto winter will be little more than a cold snap, and pray his challenges melt away. If it hopes to be more than a gaming niche, Web3 gaming may not look the same as it does today when it comes out of its winter hibernation.

Image Credit: Infinite Arcade

If so, the current model of web3 gaming of silo economies and experiences will quickly become an insurmountable barrier for the vast majority of the roughly 3 billion daily gamers worldwide – for whom high friction equals little fun. So while the investment in blockchain gaming remains significant and awareness is widespread, there is still a lot of work to be done before mainstream adoption can follow. Clearly, blockchain gaming needs to evolve by providing fun, convenience and choice to scale up to the mass market.

Scale Web3 Gaming

The financialization of various in-game items and, most importantly, of people time, has undoubtedly created space in gaming for new types of players and even non-playing personas such as investors and game guilds. Any successful model of blockchain gaming will therefore undoubtedly include elements of investment and beneficial ownership. But the most important thing is to encourage mass adoption. The blockchain gaming game that succeeds among the average players (aka “normies”) will also become the greatest Web3 onboarder on the planet.

Gamer NFT. Image Credit: Infinite Arcade

Billions of gamers worldwide play games because they are fun. They rely on free-to-play content and use every device available to them (mainly mobile). A Web3 gaming model that compromises these mass market dynamics by being blockchain first rather than fun first is unsustainable and unscalable. So the starting point for any blockchain gaming model should be what made gaming great in the first place: fun. From this position, we can enhance games with blockchain, creating a versatile offering that caters to and offers choice to gamers of all kinds, crypto natives and everyone in between. That’s the holy grail of Web3 gaming.

Platforms, not just games

So if making blockchain gaming viable in the long run is a matter of providing scale, convenience and choice to players, then it makes sense that we need blockchain gaming platforms, not just blockchain games. Why?

Simply because it is impossible to create a single game that engages and engages billions of players, both inside and outside the blockchain. Assuming people want to keep playing multiple games like they do now, having tens of thousands of separate, unique blockchain game economies won’t be feasible. Users would accumulate dozens of different wallets and tokens on multiple blockchains — a far cry from the seamless interfaces and payment infrastructures ubiquitous in mainstream gaming and entertainment, such as music and video streaming.

Instead of the next great game, we should instead be thinking about how to create a blockchain gaming platform that rivals the size and variety of Steam or the Apple App Store. But instead of walled gardens run by Web2 tech giants, imagine what those platforms might look like if they were married to Web3’s core tenets: transparency, decentralization, and community ownership.

Retooling Web3 Gaming

If we’re right, the shift of gaming from Web2 to Web3 will be much more significant than, say, an upgrade from PS4 to PS5 or iOS15 to iOS16. Instead of a shiny reskin with some fancy upgrades, it’s a chance to rebuild fundamental elements of the video game world, provide a fair reward for people’s valuable time and talent, provide ownership of their favorite games and experiences, and giving players a say in how the game industry evolves.

If we’re wrong, it will be a case of ‘always winter, but never Christmas’ for Web3 gaming, which will be doomed to remain a standalone set of niche experiences. This is inevitable if we view crypto winter as a blip rather than a time to fundamentally rethink our approach. To make Web3 gaming scalable, we need to focus on making it suitable for everyone, with multiple ways of playing and engaging. Ideally, this should be within a small number of versatile ecosystems that bring multiple games together under one economy and one seamless UX; avoiding the interoperability limitations of Web2 “metaverse” platforms.

Şekip Can Gökalp is a Founder and Strategy Leader at Infinite Arcade

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