The Web3 space is still waiting on that “killer game” — the one that would propel blockchain and NFT gaming to mainstream waters; however, it’s not waiting still — it’s moving, expanding, and growing into a prominent industry that has the potential to become more than just another subsector of Web3 and blockchain industry.
According to the latest blockchain gaming report by Web3 Studios, powered by Polygon Labs and Blockchain Game Alliance, Web3 gaming continued the rapid growth it recorded in the past years, with an estimated market size of 3 billion dollars expected in 2023 alone. The report also comes with contributions from some of the major players in the industry, including Dragos Dunica, co-founder at DappRadar, Mathieu Nouzareth, the US CEO at Sandbox, and other significant contributors to the development of the sector.
Some of the key takeaways from the Blockchain Gaming Report, which also mentions the latest industry learnings from GDC, bring us to several conclusions:
- We are early.
- Blockchain technology has immense potential in the broader gaming industry.
- The industry needs to refocus on building sustainable and fun games.
- The emergence of new gaming models is a testament to the understanding of the development rate, the inflow of resources, and building rich micro-economies and the broader range of enriched experiences for stakeholders, priming the Web3 gaming industry to reach its bigger goals.
Extracting Trends at GDC
Sharing the learnings from GDC, Peter Kieltyka, co-founder and CEO at Horizon Blockchain Games, mentions the prevalence of Web3 games at GDC 2023, comparing the last two years at the same conference when the overall interest for blockchain games in game developers was lower. Sharing the positive sentiment for blockchain gaming and Web3 gaming space, Kieltyka also shares insights on the Web3 landscape, framing and reshuffling developers’ priorities.
By all means, blockchain gaming is yet to start maturing. However, as the executive summary in the report states, “the fundamental pieces of a sweeping transformation are beginning to fall neatly into place.“
This year’s GDC taught us that game devs want to join Web3 by looking to add Web3 models and elements to their games rather than planning the game development and designing games around Web3. This provides an insight into gaming platforms to provide the necessary API for Game Studios and developers to easily integrate Web3 elements while focusing on designing their games without the need to get involved with blockchain in that process. Vorto provides API based on the same model, allowing seamless Web3 integrations.
Perhaps one of the most interesting sections in Web3 Studio’s Blockchain Gaming Report is the market overview, painting the broader state of blockchain gaming with the diverse range of games emerging in the sector.
As the industry evolves and develops, we can classify games into five distinctive groups or classes:
1. Virtual Worlds like The Sandbox — the earliest examples of blockchain games with great interest that pertains.
2. First-generation Games — these games pioneered Web3 gaming space, such as Axie Infinity or Hash Rush, currently preparing for Early Access.
3. Fully On-chain Games — like Dark Forest, where every action is recorded on the blockchain.
4. Mobile Games — World of the Abyss is a good example, and you can find it, try it out, and play it on our Playground.
5. Emerging Game Models — games like Cricket Star Manager and Dogami bring new dynamics to Web3 games, such as NFT coop dynamics.
Of course, these games would only matter if having the ability to reach and retain players, which is where service platforms like EPIC League or Vorto come into play, offering game distribution and dedicated Marketplaces. Along with distribution, infrastructure, game development, communities, data, analytics, and game development, all play a significant role in forming the market.
The Impact of Blockchain Gaming
As blockchain and Web3 games develop and become comparable to AAA titles in gameplay quality and the industry is improving the game experience and ecosystem, Web3 gaming is looking at the opportunity of being valued at over $70 billion by the end of 2030 — and that’s a bottom-up prediction.
Considering the size of the market and the adoption rate, with incumbents from traditional gaming, like Ubisoft, bringing more revenue streams to the industry and the ability to shift virtual items to an open and standardized format so that players could genuinely own them, Web3 gaming could reach the predicted value by 2030.
The broader goal of blockchain gaming key players in the industry is to revolutionize the gaming landscape. For that, the industry needs to refocus on creating fun and sustainable games that could measure with killer titles in traditional gaming or Web2 while bringing micro-economies, true ownership, and blockchain elements as an additional value that doesn’t exist in the gaming milieu of Web2 gaming.
The Future (and the Past) of Web3 Gaming
And could you believe that everything started with CryptoKitties — an Ethereum-based crypto game where users could breed, collect and trade digital cats? And this was less than six years ago, in 2017, while Web3 and blockchain gaming has come a long way since CryptoKitties launched. Then, an unsuspecting catalyst for interest in other blockchain games, CryptoKitties, would later condition more than a positive sentiment for P2E propelled by the popularity of Axie Infinity.
Axie Infinity significantly impacted the industry, attracting millions of players interested in playing to earn and earn while playing. The game generated more revenue in fees than Bitcoin and Ethereum combined at one point and peaked at over $17.5 million in daily highs. With early adopters and major investors endorsing Axie Infinity, other game studios saw an opportunity in the P2E model, which soon led to the sector’s rapid growth and the realization that Play-to-Earn wasn’t a sustainable model. This discovery prompted the industry players to focus on developing new blockchain game models that prioritize “fun, immersive, and meaningful experiences for all stakeholders and not the unilateral extraction of value from the system.” as the Report by Web3 Studios concludes.
A foundational shift in the industry is already in force, with new teams and old teams reprioritizing their goals and already working on thoughtful token and gaming models that place long-term sustainability in the first plan. That “killer game” certainly needs some “killer” investments, and judging by the number of blockchain game investments in 2022, some teams out there might be already working on the next big title.
The future of blockchain gaming will undoubtedly be formed and shaped by development strategies inspired by these findings, as the industry is apparently here to stay rather than vanish as yet another blockchain-fueled fed.
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