Web 2.5; A Thoughtful Approach to Web 3 Gaming

8 min readAug 6, 2022

While the blockchain space has been abuzz with terms in the last couple years, one has risen to the top and become something many have come to recognize outside of the blockchain space: Web 3.

What is Web 3? Well, it’s best described as the next version of the internet. The argument is that currently the internet is stuck in version 2 with updates slowly dripped out to try and keep users engaged. While we have seen impressive innovations in the last 20 years such as social networks and apps that span various types of interaction and utility (Twitter, TikTok, Instagram, etc.), it appears that creativity is drying up across the space as many core designs have become increasingly outdated.

The accumulation of value in the top stifles community engagement and creators who can make or break a project’s success. The strongest example of this is the blatant failure to reward community members providing content beyond superficial merits and participation badges.

One of these core characteristics is company centric profit capture in which revenue is directly distributed in a top-down fashion to corporate leaders and shareholders.

The primary issue here is that the accumulation of value in the top stifles community engagement and creators who can make or break a project’s success. The strongest example of this is the blatant failure to reward community members providing content beyond superficial merits and participation badges.

Enter Web 3

Web 3 was not an initial goal of the blockchain community. Instead, it was born of a messy amalgamation of DAOs, decentralized token distribution models, public treasuries, and individually owned assets. Over time, the idea of Web 3 crystalized into a decentralized internet that features open transparency and users who own their content.

Sounds great right?

Of course, waves of blockchain-based projects lovingly embraced the term, and with full-throated cries of rewarding their community, attempted to create the next iteration of web-based companies.

The core premise that Web 3 companies must sell digital collectables or tokens in advance to fund a blockchain project is flawed, because it leaves players and investors holding useless assets when the project fails to ever get off the ground.

Whoops, What Happened?

2022 has been rough. Investors are now taking a harsh and sobering look at many blockchain projects that have unraveled due to poor management, value-extraction designs, and a general lack of community engagement.

The core premise that Web 3 companies must sell digital collectables or tokens in advance to fund a blockchain project is flawed, because it leaves players and investors holding useless assets when the project fails to ever get off the ground.

Were we a bit too ambitious in naming blockchain as the next iteration of the internet? In all honesty, it’s too soon to tell.

But one thing is apparent: we need to walk before we run.

Many projects born of a desire to become the Web 3 project of our time have collapsed from what now appears to be an attempt to re-invent a Web 2 company model in a Web 3 environment with gimmicky blockchain mechanics. This was especially true of many attempts to combine blockchain mechanics with traditional game design. However, it has become painfully obvious that not only do people dislike the idea of shoving blockchain mechanics in where they aren’t appropriate, but that the idea of “play-to-earn” was doomed from the start.

It’s time to take a step back and re-evaluate what transparent, decentralized, and trust-less systems can provide to support both the creators and the users.

Web 3 Gaming

The core premise of transparency and ownership seems like it should resonate with gamers. But while there is a large group of gamers curious about how blockchain could be thoughtfully included, there is an even louder group wanting nothing to do with it.

There appears to be two prevailing reasons why gamers dislike the idea of blockchain in gaming.

They fear it’s another type of monetization they will be forced to pay in order to enjoy content gated behind blockchain paywalls.
They fear gaming should remain valueless in the sense that a game should not be built with the idea assets could be speculated on.

These two fears are compounded by all the projects that fail to force players to pre-purchase and then never launch. These are valid concerns and it’s no surprise that even our most ardent fans will question Little Orbit’s decision to get into this space.

Enter Web 2.5

While we are very excited about the concepts blockchain technology, and are taking our first steps of experimentation, Little Orbit wants to be careful of how it affects the actual experience of playing games.

Ships That Fight Underground (STFU) is our first game experimenting with this new approach.

Play-to-earn, win-to-earn, play-and earn, whatever the current shiny catch-phrase may be, all rely on the same idea: if you play this game you could earn money for it.

Even without researching the outcome of the many projects who embraced these phrases, one could likely determine what happened: “earners” and speculators drained the game’s economy and the projects have all mostly failed. A game built primarily to provide earning potential is simply not sustainable.

With that in mind, we have devised a different approach to the implementation of blockchain technology: we build a sandbox accessible to all gamers, give them a key, and let them decide which doors to open.

Our solution eliminates the requirement for players to pre-purchase digital collectables or tokens as a barrier to participate, which means there is no possibility of taking their money and not delivering on our project.

The Hybrid Approach

With STFU, we’re implementing what we call Web 2.5: core game design and development from a dedicated and talented team, revenue distribution that rewards the community, and players having the choice over interacting with blockchain mechanics.

Our solution eliminates the requirement for players to pre-purchase digital collectables or tokens as a barrier to participate, which means there is no possibility of taking their money and not delivering on our project. At the same time, we attempt to support the mobility of assets and rewarding the creators who make our game great.

Through continued conversation with the gaming community we have determined one of their primary concerns with the implementation of blockchain technology is the selling of game assets directly as digital collectables. This appears to reinforce digital assets as being a vehicle for the speculation of value and risks prioritizing only their value instead of their utility.

The simplified process for a player to create digital assets of game items

With that in mind, we have determined the fairest way to introduce digital collectables is to put the process completely in the hands of the players. All game assets are initially created in a centralized database as is typical with conventional gaming. But through the player journey, players are given the option to convert game item to a digital asset. Some will play with this explicit goal, some may completely avoid it.

Over time, this process will naturally fill out the blockchain economy. Scarcity of assets are maintained not through cost gating but through game rarity mechanics. This creates a fair system in which every player has control of what they access, a core component of games-as-a-service. But it also allows for the preservation of blockchain gamers who prefer designed rarity limitations (i.e., max 1,000 of a given ship allowed in digital collectable form).

In order to ensure there are enough assets minted on chain for those wishing to take part in blockchain mechanics, we created a fair distribution model. This allows us to ensure that anyone who has created value in the blockchain economy will not have scarcity ballooned by a never ending deluge of minted assets and that we can distribute these assets in a way achievable by all players.

STFU is, primarily, a F2P game.

STFU will follow a traditional free-to-play model where players can enjoy gameplay at their own pace with no required investment. Without spending a dime, a player could earn a ship, take part in gameplay in order to convert the ship to an digital collectable, then trade it to another player or take part in mechanics that implement on-chain resources.

Given there is no power-over with ships stored on blockchain, all ships are able to compete in multiplayer and co-op game modes. In competitive gameplay, a F2P corporate ship is indistinguishable in its abilities from collectable chain ships, though each ship will have access to some unique cosmetics not available to the other.

All gameplay modes are available to every player regardless of what ship they are playing. Once we take our planned crafting system live, there will be variations of crafting requirements as digital collectable chain ships can access blockchain resources, but the end goal of ship power is the same and gated only by the skill and creativity of it’s pilot.

Creator Revenue Distribution

With a forward eye on supporting the community interacting with STFU in the model of a games-as-a-service, we have made it paramount to experiment with various models for revenue sharing and distribution. While another article will follow that fully breaks down this design and our reasoning for the approach, the overview is as stated.

Those who support and create content (levels, designs, mods, streamers) for the game will have access to a % of ongoing gaming revenue. Players are able to access this through typical payment processing or through blockchain. While we prefer providing this distribution through blockchain given the transparency and asset ownership verification, we will leave it up to the creators (and their followers) to choose a path.

In the end, our goal is to marry the successes of Web 2 with the ideals of Web 3 in a sustainable and fair way that brings both communities together.

Now, let’s STFU and start this journey!