For years, playing video games was relatively simple. You turn on your computer or console, boot up your game of choice, load a previous save (or jump straight into online play), and have fun.
However, within the past year, a new library of words has entered the dictionary. Whether it’s play-to-earn, play-to-wallet, GameFi, or the much infamous ‘NFT’, gaming is getting a little more complicated.
These “Web 3” games, as they are known, are primarily based on blockchain technology. Unlike traditional gaming, users can own in-game assets, earn cryptocurrency by playing, and participate in a decentralized in-game economy. Unlike server-based games, there is no single point of failure, and goods, services, and tradable assets can be bought and sold in a decentralized marketplace. Skins and cosmetic features – in the form of NFTs – can also be freely traded on the secondary market.
Sounds great, doesn’t it? Well, a survey conducted by Coda Labs of nearly 7,000 gamers found that not everyone is so enthused. To qualify for their Global Web3 Gamer Study, potential respondents had to play a video game at least twice per month and perform at least one crypto action, such as buying or selling an NFT. The results found that mainstream gamers feel negatively towards common tenants of web3 gaming, such as cryptocurrency and NFTs. A statistic that will surprise few people.
The survey also found that only 52% of mainstream gamers are unfamiliar with any Web3 gaming term. 12% of gamers have tried to play a Web3 game, and only 15% of respondents who had not played a Web3 game were interested in doing so. Why? Well, a major factor is the lack of understanding and engagement with the complex world of Web3. For example, only 6% of mainstream gamers have ever used a blockchain wallet or bought an NFT.
Web3 Gaming? this is complex
For many potential players, Web3 games are not very intuitive. According to Damian Bartlett, team lead at W3E, which recently hosted the world’s first LAN Web3 eSports tournament and first played competitively, the biggest barrier is access.
“When I first moved from Web2 to Web3, it was not a quick decision. I watched it for several months and was just so confused that I didn’t take that step sooner. There are a lot of games that you sign up for because something caught your eye. And then suddenly you are hit in the pocket; You’re inundated with seed phrases and all these terms that are very confusing to someone new to Web3 gaming.”
Refining the first time user experience (or FTUE) is critical to the growth of the industry. Game developers of all stripes will tell you that FTUE best determines whether a player stays and plays, or leaves never to return. Web 3 games, which often involve a long learning curve, struggle especially hard in this area, especially with non-crypto natives.
Popular games like Splinterlands – where each in-game card is owned as an NFT – have had problems simplifying their UIs. All games have to do is avoid drowning new users in details. But, it’s tough for the Web3 model, which comes with a whole dictionary of new words.
“On top of every Web 3 game is a whole economic model that new players need to adopt. Often, UX can be a bit of an information overload for all that learning,” says Liam Labistour, their Director of Development.
Too Much Crypto Too Soon?
Additionally, crypto values do not necessarily align with their target audience. One player’s fundamental principle is another’s fringe benefit. Traditional gamers often don’t care about self-custody and the ability to actually own in-game assets.
“On the contrary, it intimidates them to deal with wallets, private keys and passphrases,” says Dirk Luth, co-founder and co-CEO of Upland. They want someone to be able to contact them when they lose or forget their password. When I look at some web3 games, I still have the subjective feeling that they are designed not by game people but by crypto people who focus less on great UI/UX.
just not that much fun?
Insiders and players agree that many studios put the horse before the cart. Failing to create an attractive product before adding Web3 elements. Pavel Baines, Bluzel’s co-founder and CEO, who has previously served as GM and CFO for video game studios — including ThreeWave Software and Disney Interactive Studios — is one such skeptic.
“I would say that most Web 3 games so far are not fun enough to get non-crypto natives,” he says. “The same thing happened with mobile or free-to-play when it entered the US. Console gamers didn’t care as long as they saw something fun and engaging. Gamers would go through hoops to have a good game. In Web3 Nothing fun to cross right now.”
According to Alexey Culvets, co-founder and CEO of Walken.io, there needs to be a sustainable, back-to-basics approach where gameplay comes first, and “play-to-earn” is an added benefit. “People are playing modern Web3 games not because they’re having fun, but because they’re chasing profits. Often losing money and ultimately player fatigue.
a more sustainable model
It is widely acknowledged that a move away from pongenomics – in which early adopters benefit from investments from new participants – is essential for the space to grow. Ponzinomics is fundamentally an unsustainable model that requires uninterrupted development to work. No sport can realistically aspire to this.
“The next generation of web3 gaming will require a significantly more sustainable economy – probably a combination of web2 and web3 revenue,” says Alexey. “It will no longer be called ‘play-to-earn’, but ‘play-to-own’ and ‘play-to-create’. Which is very close to the essence of what Web3 is basically about.”
However, investment data for 2022 suggests that those with deep pockets are still bullish about the long-term future. A September report by DappRadar found that investors poured nearly $748 million into the industry in August alone. So someone, somewhere believes that there is going to be fun.
An industry rebrand is on the cards
In recent months, we have seen the industry soft-relaunching the concept of ‘NFTs’. The term is gradually being replaced by the term “digital collectible”. A term that most gamers already understand and that carries very little baggage.
Perhaps the most notable example is Reddit’s NFT launch in June of this year, which chose instead to use the “digital collectible” moniker. Between then and November, about 2.8 million users switched to Web3 without knowing it. Beating OpenSea’s 2.3 million users, the undisputed king of the NFT marketplace.
Given the success of Reddit, stealth may be the best way to approach the conversion to Web3 gaming. Pavel agrees. “Let’s be honest NFT is a terrible product category name. Why are we using a technical term? We don’t call it a locomotive, we say let’s take a train.
Web3: The New Mobile Gaming?
In many ways, the early problems of Web3 gaming are similar to those experienced by the mobile gaming industry a decade ago. Back then, it was the in-game advertising, the lack of quality storytelling, and the general feeling of being “accidental” that bothered many.
“I think we’re looking at a big unknown with web3 gaming, possibly as big a disruption as free-to-play. It was also an unconventional business model that gamers didn’t want and many still hate, then It is also the most successful model for mobile games,” explains Marja Kontinen, Director of Marketing at the Decenterland Foundation.
Since then, mobile gaming has taken off. By 2021, the industry has grown to be larger than console and PC gaming combined, contributing approximately 57% of global video game revenue. But to replicate that success, established game houses will need to see the viability of the Web3 model.
“It’s time for pioneers to build, test, and figure out how to connect communities, provide new types of entertainment, and decentralize control over gameplay design to their users — as Roblox has done. I think we’re about to start to see what this capability can be, rather than just graphic layers on top of financial models.
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