Web3 Gaming Into 2023 (and Beyond)
Despite the bears over-running the cryptocurrency market for the greater part of 2022, Web3 gaming remained a high-profile vertical, with maturing models such as Play-and-Earn and Fun-to-Earn showing a much different focus on the role of blockchain within gaming as a trend across the industry. Even within this unfavorable period dubbed Crypto Winter, gaming continues to show why it is a “weatherproof industry.”
Web3 gaming sector turned out to be a place of refuge in unpredictable times and a source of entertainment when having fun in bite-size chunks or losing oneself for hours on end. Though the Web3 formula remains a work in progress, the role of tokenized objects and gamified NFTs remains a vital part of the future of gaming, where we will no longer refer to them as blockchain games but rather simply gaming powered by blockchain technologies. With this first wild ride of the maiden hype cycle now settling behind us, the industry has and will survive with a definite role for NFTs and other digital asset-based classes. Web3 gaming is now moving beyond a mere trend and evolving into real virtual economies based on digital assets as functional and valuable items.
Back in 2021, the estimated value for the entire Web3 sector was $3.2 billion, surpassing $38 billion in 2022. Web3 gaming alone saw $8 billion in investments in 2022, accounting for 21% of all blockchain investments.
Evidently, Web3 gaming outlives the hype that seems to have become a standard in the blockchain industry whenever a new trend emerges. However, the sector did take several blows, dipping from 49% in August to 19% in December, observing investments percentage in comparison to cryptocurrency.
Even though only 5.7% of Web3 applications and Dapps are games, gaming activity makes up 52% of all Unique Active Wallets (UAW), with nearly 1.1 million UAWs (Unique Active Wallets) in Q2 2022, according to DappRadar.
Here, UAW is an important metric as it not only shows the number of active wallets connected to specific games and Dapps but also traces players’ activity within a blockchain-based environment, including transactions.
Evaluating relevant data points for the past year, what can we expect from Web3 gaming in 2023 (and beyond)?
Builders Keep Building
Despite the FTX collapse and the ongoing Crypto Winter, Web3 builders keep building, which is partly what’s fueling the bright future of the sector. Wombat, a Play-to-Earn app by Spielworks, is one of the projects with a successful launch in 2022 after a crowdfunding campaign in July of the same year. The project is expanding with Web3 marketplaces, a swapping service, and a long list of game titles powered by P2E incentives.
The continuous progression and development of applications, games, and blockchain-based gaming infrastructure allowed Web3 gaming to survive the cryptocurrency turmoil that inevitably affects the market of gaming NFTs as well.
As NFTs have become a staple of Web3 games with in-game currencies backing the game tokenomics, these assets often attract players to join and start playing to earn. Of course, some of these apps contain still illiquid NFTs and serve the model of Pay-to-Play to access in-game incentivization systems.
In this narrative, indie developers and independent game studios are not the only actors that run the Web3 gaming sector — major players in the traditional gaming industry are also joining, launching, and announcing their own Web3 game titles. This further testifies to the prominent and profitable future of Web3 and blockchain-based games.
Even though some projects halted or have disappeared from the map amidst the crisis, prominent projects are surfacing and showing resilience — Star Terra’s dedication to continue building, Bitmates’ remarkable development over the year and Nyan Cat’s resilience on Solana are only some examples of having builders keep building even when challenged by obstacles.
Platforms will play a critical role in the future growth opportunities of the industry moving forward by freeing the hands of the Studio teams to focus on the one thing that matters — building a fun and winning game that appeals to its users. As one of the emerging players in Web3 gaming, Vorto also continues to build in 2023 towards providing the Web3 backend full-stack support for Developers and Game Studios. This type of ready launchpad allows even aspiring Development teams to trial, launch, quickly fail, and therefore fix faster so that they do not need to build and maintain the whole stack themselves for the sake of a single IP. Packaged tools for a customized experience.
Players Keep Playing
Players in Web3 can be roughly categorized into two groups based on their motivation to enter the Web3 gaming industry as one of the key players of this still relatively new and exciting ecosystem — a small but deep pocket of the Metaverse.
One group of players is into Web3 games to earn — these players want to monetize their gameplay, already have their wallets ready and connected to the marketplace/platform of choice, and they are ready to grind even, whether the game is fun or not. Based on location, these players mainly come from the Asian subcontinent and often perceive the Web3 gaming sector as a fun and easy way to make some pocket money or find their next big investment.
The other group of players, generally from western countries (western Europe, the US, Australia, Canada, and New Zealand), are looking for the next “it” game to spend time on and enjoy. Monetization of playtime, in this case, is irrelevant or poses as a neat “side effect” of the Play-and-Earn model.
However, there is also a group of players, and that can be found in both mentioned player demographics, that is highly motivated by incentives in the form of NFTs and the very fact that they can own and mint their in-game items to use them in the game, redeem or trade. This is where Web3 games take the shape that sets them apart from the traditional gaming sector.
Web3 players keep playing as the number of Unique Active Wallets connected to blockchain-based games is on the rise, and the Web3 gaming sector keeps expanding into 2023 and beyond.
Investors Keep Investing
According to the Q2 2022 report on blockchain games by DappRadar, blockchain games, NFTs, and specifically NFTs related to Web3 games, have been the least impacted during heavily bearish markets or have outperformed other digital assets, such as cryptocurrencies and utility tokens.
Even during the market slowdown, the number of Unique Active Wallets connected to Web3 and blockchain games continues to grow along with UAWs related to NFTs, that way showing resilience to stubborn market dips. Investors may see this resilience as a sign of profitability, which is why investments keep pouring into Web3 gaming, with $2.5 billion in Q2 2022 alone.
Observing game studios, devs, the interest of players, and encouraging numbers with gradual growth in the sector from one quarter to the next, investors keep investing, pushing further development of Web3 gaming under a bullish banner.
However, Web3 games felt the impact of numerous negative factors in Q3 and Q4 2022, also taking on a downward trend in the number of Active Unique Wallets during that period. That is how the last quarter of 2022 paints a different picture through the prism of AUW numbers.
When it comes to allocating investments in the sector, it can be noted that Venture Capital firms are projecting ROI from five to ten years into the future, primarily investing in Web3 gaming infrastructure and game development. Investing in Web3 studios and platforms with experience in traditional gaming also seems to have become a practice in the second half of 2022, and this trend is set to continue in 2023.
Vorto Keeps Supporting
The idea behind Web3 gaming service platforms & infrastructure is to allow developers and game studios to focus on building a fun game with engaging gameplay without worrying about infrastructure, investments, blockchain, marketplace integrations, tokenomics, NFT implementations, and other aspects outside the scope of game development. This way, players are getting hours of fun gameplay that perfectly balances the presence of in-game tokenomics and blockchain elements and entertainment as the staple of gaming in the traditional sense.
With access to a dedicated Marketplace, players can buy, sell, and trade valuable assets that they purchase or win in the game, monetizing their playtime and involvement. Vorto keeps providing support through API tools for developers and a dedicated Store and Marketplace, so builders can keep building and players keep playing.
Get in Touch with Vorto
We always love to hear from game studios, players, devs, and crypto fans alike, so follow us on Twitter and join our Telegram group for more discussions about everything Web3. You can find more about what Vorto can offer your game on our Medium page or reach out to our team at firstname.lastname@example.org.