Introduction to Web3 Gaming

The Internet, since its inception in the early 1990s, has undergone a remarkable evolution. It has gone from a system for making information accessible, to one where users can own and trade digital goods. Alongside this, Web3 gaming has opened up new possibilities for both game developers and gamers. More and more games of this type are now appearing on the market.

Similarly, increasing numbers of game producers are adopting Web3 and adding new blockchain-based games to their portfolio. These often make use of non-fungible tokens (NFTs).

Web3

To understand the future of Web3 gaming, we firstly need to explore the concept of Web3. Web3 is a term for the vision of a new and better Internet, based on blockchain, with cryptocurrencies and NFTs. Essentially, it is designed to give power back to users by enabling forms of direct ownership.

The Internet that most people know today, is based on trust in a group of large private companies. These companies, of course, control the resources of their users. Web3 introduces the possibility of breaking free from this system and owning one’s own resources directly. This offers considerable opportunities to a variety of sectors, paving the way for things such as Web3 gaming.

The fundamental elements underlying Web3 are as follows: decentralization, ownership, resistance to censorship and native payments.

Web3 allows direct ownership of its digital assets through NFTs. Ownership and control are thus decentralized. Users and builders can own pieces of Internet services by owning both NFTs and fungible tokens. Moreover, when a user decides to leave a platform, its resources and reputation can be moved to another platform.

The Gaming Sector

The world of gaming has undergone significant development over the last decade. There has been staggering growth in the number of users and in the turnover of gaming companies.

To understand the possibilities of Web3 gaming, you need to appreciate that video games have become the world’s biggest entertainment. Indeed, the number of gamers expected in 2023 is more than three billion. Globally, gaming is now worth more than 200 billion dollars and is growing by more than 10% per year.

Game creation is extremely active at the moment. For example, during 2022 so far, an average of 25 new games have been published on Steam each day.

Web3 Gaming: Play-to-Earn Games

NFT games, also known as play-to-earn (P2E) games, come within the realm of Web3 gaming. These games reward players with tokens or NFTs for time spent playing. Tokens are usually the main reward, while NFTs are earned in specific situations. In addition, players can buy NFTs from other players and keep them until their value increases before reselling them.

The possibility of earning money is one of the main incentives for players to actively participate in these games. Indeed, this is why P2E games have gained popularity in recent years.

An example of this category of games is Axie Infinity.

Sky Mavis is, significantly, the largest producer of P2E games in the world, with a share of approximately 35%.

We will now consider how Web3 gaming sits within the current gaming industry.

Where the Gaming Industry is Now

The market research company Interpret surveyed 1,500 console and PC gamers. Notably, they found that 56% were interested in earning NFTs through gaming. This shows, therefore, that a substantial appetite for Web3 gaming exists among traditional gamers.

Absolute Reports latest study estimates that the size of the global P2E market will reach $2845.1 million by 2028. This is combined with a compound annual growth rate of 20.4% over the 2022-2028 forecast period.

Game Studios and Companies: Moving Towards Web3 Gaming

Several traditional gaming companies are now very large. These include, for instance, Sony, Microsoft, Nintendo, Tencent, Electronic Arts, Epic Games, Ubisoft and Take-Two Interactive.

In addition, the landscape of game producers is populated by smaller companies that are often independent. These smaller companies are sometimes also shareholders in the big players. There are more than 2,500 game studios based in the US alone.

The fact that Web3 gaming will be integral to the future of video games is a view shared by manufacturers. As a result, many of them have already started to move in that direction. For example, by financing start-ups, marketing new Web3-based games and integrating Web3 into existing games. Manufacturers have also developed strategic plans that involve releasing new Web3-based games. These are significant steps towards Web3 gaming becoming more prevalent.

For instance, two of the leading game companies, Ubisoft and Take-Two, recently participated in a $40 million funding round. The money was raised by Horizon, a game developer that has already published several blockchain-based titles. Ubisoft, in particular, has supported several other Web3 start-ups as well.

Ubisoft has also been experimenting with NFTs and blockchain technology for years. In fact, in late 2021, it released NFTs in-game for the Ghost Recon Breakpoint game.

At the same time, Take-Two acquired mobile game producer Zynga, which is currently working on NFT-based games.

Epic Games, the famous Fortnite developer, has moved into Web3 gaming with Blankos Block Party. This game was launched in 2020 by Mythical Games and has over one million players. 

Web3 Gaming Trends

There are also other facts that confirm the positive trend in the industry. One such indicator is the number of companies joining the Blockchain Game Alliance. This organization is committed to promoting blockchain within the game industry. Founded in 2018, it has over 300 members in 56 countries. In 2021, it welcomed 198 of these members, an increase of 186% from its membership in 2020. This suggests that companies within the game industry have recently taken more notice of Web3 gaming and its possibilities.

Additionally, the data tracker DappRadar reports that there are 398 active blockchain games (an increase of 92% in one year). These are defined as those that have at least one active wallet in the last 24 hours within the game. The total number of blockchain games, including inactive ones, has risen by 71% over the past year to 1,179.

In terms of Web3 gaming trends, blockchain games already make up a significant share of blockchain activity. Nevertheless, DappRadar found that blockchain games further increased their share by three percentage points in the second quarter of 2022. In the same period, gaming activity accounted for 52% of all unique active wallets (UAWs), with almost 1.1 million UAWs.

Conclusions

To summarize, games are becoming more sophisticated over time in terms of the narrative, graphics and opportunities they offer. Increasingly we see the integration of economic parts that make games an area in which money can be earned. 

This is not just for gamers, but also for companies, professional organizations and investors.

Analysts see the Web3 gaming trend growing steadily over the next few years. Of course, this is why many companies have entered the sector and are gearing their strategy towards Web3 gaming.