Funding for cryptocurrency-linked startups peaked in March 2023 with almost $190 million going into startups in the industry in just a week. Web3 gaming saw significant investor interest. Web3 game developer, CCP Games, based in Reykjavik secured a majority of the funds.
The startup received a $40 million seed round led by the famous venture capitalist firm Andreessen Horowitz. Other participating investors include Nexon, HASHED, Kingsway Capital, BITKRAFT, Makers Fund, and others. The company said it will use the money to accelerate the studio’s virtual world gaming development.
“With advancements made within the blockchain, we can forge a new universe deeply imbued with our expertise in player agency and autonomy, empowering players to engage in new ways,” said Hilmar Veigar Pétursson, CEO of CCP Games.
Alibaba Cloud to unveil blockchain lab for Web3 game development
Alibaba Cloud, the center overseeing Alibaba Group’s digital technology and intelligence, plans to launch a blockchain laboratory in Shibuya, Japan sometime in April 2023. The aim is to assist Japanese game developers with recognizing the commercial potential of the Web3 age—especially Web3 gaming.
The lab will serve as an incubation center that will help the developers to keep up with the competition in the Web3 era. According to information shared by Alibaba on 22 March 2023, the lab will be a converging center for Web3 game developers to share ideas and learn about the latest blockchain technology.
The opening of the new lab is a collaborative effort between Tokyu Real Estate Co., Ltd. and Skeleton Crew Studio which specializes in VR and game creation. The studio is also the brain behind “BitSummit”, the largest annual convergence of indie games in Kyoto.
For now, the lab will be accessible to a handpicked group of customers and hackathon participants working jointly on development projects with Alibaba Cloud. Engineers from partner firms with specialties in blockchain and Alibaba Cloud will be available to offer onsite technical assistance.
There will be regular seminars, networking events, and workshops for participating Web3 game developers which will allow them to discuss the latest developments in Web3 technology. The Web3 game developers will also have direct access to Alibaba Cloud’s Web3 partner ecosystem.
One such partner is Safeheron which offers a secure place for safe-keeping digital assets. Also, blockchain infrastructure enhances the scalability, speed, and overall performance of Web3 games development projects.
Added to the package is NodeReal, a prominent distributor of video games as well as COCOS-BCX which offers scaling solutions for the Web3 gaming environment. Alibaba Cloud said it would offer blockchain node service in Japan before the end of 2023.
Web3 gaming will onboard 100 million gamers in 2 years
Co-founder and president of Immutable, a Web3 gaming company, Robbie Ferguson and Ryan Wyatt, president of Polygon Labs, two major players in the Web3 gaming space spoke with TechCrunch+ and revealed its enormous expansion potential in coming years. According to the duo, Web3 will attract 10 to 100 million gamers in two years’ time.
“We are going to see 40% of the web3 games [ever] built to go live over the next 12 to 18 months, which will be a huge amount of attempts or shot-on-goal to have those 100 million players,” Ferguson said.
Should the prediction come to fruition, it will represent a massive level of decentralized gaming adoption like never seen in the industry. On Monday, 20 March 2023, Web3 gaming firm Immutable partnered with layer-2 blockchain Polygon to expand the adoption and scaling of the subsector.
The focus of the collaboration will be on making the building process of Web3 games faster, easier to use, and less risky for bigger gaming studios and indie developers to get on board.
“What is required is incredible infrastructure for them to build an incredible customer experience where players can use this,” said Ferguson. “Over $100 billion are spent by players annually on in-game items. This is not the box copy of Fortnite or the ability to download a game. This is literally [money spent on] skins, costumes, and Candy Crush coins.”
Ferguson stressed that web3 gaming can make these assets ownable by the players after spending the money rather than remaining with a third-party company.
Web3 gaming has led to the evolution of play-to-earn (P2E)
In the past, people played games for fun. However, with Web3 gaming, the attention is shifting to play-to-earn (P2E). for seasonal gamers, the main attraction is the ability to enjoy their game and earn money in the process.
With Web3 gaming, the dynamics are shifting from a developer-focused to a player-focused ecosystem, giving gamers the chance to own in-game assets which they can sell later at a profit while also earning real rewards for their game success. P2E is one of the glaring examples of the value blockchain can offer to traditional gaming.
Web2 gaming has been criticized for lacking true democracy. Game creators call the shots and players have little or no say on how Web2 games will evolve. Gamer’s privacy is also limited. Prior to playing a game, users are forced to accept a long list of terms and conditions that shift the balance of power.
Also, traditional gaming lacks the right structure for an open economy where gamers earn revenue. While Web3 gaming is a direct competitor to Web2, it needs games that are just as excellent and competitive to grab the attention of gamers.
Although Web3 is decentralized, it is important to have measures to protect the community and maintain the integrity of the project. Such measures should deter predatory practices from bad actors who may want to purchase the majority of governance tokens and vote in favor of unhealthy changes.
Advantages of Web3 gaming over traditional gaming
From 2021 to 2022, activities in Web3 gaming jumped by 2000%. More developers showed interest in creating games for Web3 during this period. According to Electric Capital partner, Maria Shen, more Web2 developers are switching to Web3 technology because of its flexibility.
While P2E is one of the features of Web3 gaming that will interest casual gamers, there are myriads of other benefits that the new platform can offer. In fact, it evens the playing field for both the developer and the gamers. Some of the benefits are listed below.
Players own in-game assets
Traditionally, in-game digital assets are owned and controlled by the developers. With Web3 models, the framework will change from player-as-consumer to player-as-owner. However, there is the danger of violating gamers’ trust. Many crypto and NFT gaming projects in the past were mere fundraisers in disguise.
Play to earn
With distributed ledgers, it has become possible for gamers to earn revenue while enjoying their favorite game. By completing certain tasks or progressing through the game, players can earn money because asset ownership is linked to each player.
Axie Infinity by Sky Mavis is one of the clearcut examples of how players can earn NFTs and cryptocurrencies by battling, breeding, and trading digital pets. It is not surprising that it has risen to become one of the biggest Web3 games.
Web3 games will be interoperable
Imagine how Facebook makes it possible to grant access to external applications. That is how with Web3, gamers can move and share assets like avatars across different platforms. This is possible because blockchain allows storing, exchanging, and programming information—and Web3 is integrated with blockchain.
The future of gaming is changing but is every gamer ready?
While the prospects of Web3 gaming are exciting, the biggest challenge lies in adoption. From our understanding, players of Web3 games will need to keep their internet always on. However, this has been one of the biggest red flags among traditional gamers.
Some traditional game developers have come under fire for making gamers keep their internet always on—even in solo campaigns. Recently, Arkane was forced to rethink that strategy for its upcoming release, Redfall, after gamers voiced their protest.
Also, most gamers are only drawn to triple-A titles, especially YouTubers. So far, the Web3 games we have seen are better suited for youngsters and not hardcore gamers. How fast Web3 games can catch up to the triple-A expectations is yet to be determined.
Will you ditch Web2 games for Web3 games any time soon? Share your thoughts in the comment box below.
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