Web3, otherwise referred to as the decentralized web, is currently one of the most discussed topics within tech circles. But what exactly does this new iteration of the internet entail?
To put it simply, Web3 introduces a transparent internet ecosystem built on three main fundamentals: the blockchain that hosts all data on asset ownership and historical transactions, smart contracts which act as the middleman through pre-coded application logic and digital assets that can represent on-chain or off-chain value.
Although still in its early stages, innovation in Web3 is happening at a faster rate compared to other technological niches. First was the crypto mania that saw leading coins like Bitcoin and Ethereum gain massive popularity. Then came Decentralized Finance (DeFi), a relatively new niche designed to decentralize financial services. Currently, over $42 billion is locked in various DeFi protocols.
But it’s the NFT and metaverse hype that has fueled the Web3 concept like wildfire, imagine owning a unique digital token which has a utility in virtual worlds like Decentraland and The Sandbox. Both of these platforms are changing how we interact with today’s industries, particularly the gaming sector. That said, let’s take a deeper look at how Web3 is impacting this billion-dollar market.
Getting Started on Web3 Gaming
If you have been following the developments in crypto closely, it is obvious by now that Web3 gaming is a big deal despite the ongoing market turmoil. According to the latest Dappradar market report, blockchain-oriented games accounted for close to 50% of the activity this year. Well, it comes as no surprise given the growing interest in the play-to-earn model.
“Despite the harsh market conditions, Web3 games continue to be a driving force for the dapp industry. In Q3, gaming activity accounted for almost half of all blockchain activity tracked by DappRadar across 50 networks, with 912,000 daily Unique Active Wallets (UAW) interacting with games’ smart contracts in September.” – reads the report.
The big question, however, is how Web3 adds value to the entire gaming ecosystem? Before going into the details, it is noteworthy that getting started on NFT gaming is not rocket science. Ofcourse one might require some technical knowledge to make digital collectible purchases on markets like Opensea and Rarible. But that is not always the case.
Unlike in the earlier days, NFT gamers/enthusiasts can leverage Web3 platforms such as Looking Glass Labs (LGL) for the curation of metaverse-compatible 3D assets. LGL’s leading brand, House of Kibaa assists both individuals and businesses to design functional art and collectibles that can exist simultaneously across different NFT blockchain environments.
Changing the Dynamics of the Gaming Industry
And now to the fundamental impact, Web3 as an upcoming space has generally changed the nature of gaming infrastructures to a big extent. Gone are the days when gaming publishers pocketed all the profits; in Web3 gaming, even the players are incentivized through ecosystem rewards that can be monetized through NFT marketplaces.
So, how exactly does it work? Let’s take the example of Axie Infinity, a Web3 game that rose to popularity at the height of the covid pandemic. The gameplay simply involves purchasing cute NFT monsters and pitting them against each other, players who win earn Smooth Love Portion (SLP) tokens that can be traded for money on various exchanges.
While the returns from SLP tokens have since diminished given the tough market conditions, Axie Infinity has become a source of livelihood for gamers in developing countries such as The Philippines. What’s more interesting is that the Web3 gaming ecosystem is now much bigger, featuring popular card games like Splinterlands and Sorare.
As for the intersection between traditional games and Web3, there has been a growing interest from traditional gaming publishers, including those that were initially reluctant to accommodate Web3 infrastructures. For instance, Epic games stores recently stated it would allow other producers to deploy NFT games provided they are regulatory compliant.
Meanwhile, Atari has launched a massive social and gaming experience in The Sandbox metaverse.
“We are incredibly excited to share Atari Sunnyvale with The Sandbox community, and we know it will draw more Atari fans to the growing platform…
“I am particularly eager for people to experience the elaborate and wondrous environments based on our games that have been created by Sandbox partner studio, Metaworld Entertainments.”
- Director of Atari X, Tyler Drewitz.
NFTs, Web3 and the metaverse are here to stay, this is evident from the reception and capital inflows over the past two years. However, stakeholders in the crypto and gaming industries need to join forces to level up the standard of innovation. A majority of the play-to-earn games that currently exist can barely compete with established Web2 games in terms of quality: graphics, gameplay and the level of interactiveness. With Web3 coming of age, the only way to completely revolutionize the gaming industry is by addressing most of these shortcomings.
Disclaimer: The information provided in this article is solely the author’s opinion and not investment advice – it is provided for educational purposes only. By using this, you agree that the information does not constitute any investment or financial instructions. Do conduct your own research and reach out to financial advisors before making any investment decisions.