Written by: TENG YAN

Compiled by: Xiaobai Navigation Coderworld

People often ask me what I think about Web3 games. So I wanted to outline my current thoughts in written form.

Let me be clear up front: I am not an expert. This is not a comprehensive analysis that dives into the granular metrics of the gaming world like MAU or D14, etc. Please consider this to be a reflection of my focus in the gaming space based on personal conversations and research.

Why choose games?

Recently, I have come to realize that games arecryptocurrencyOne of the few areas where this is a game changer.

What I mean is that in the next two years, games will attract 10 million to 100 million+ daily active users.BlockchainUsers. Games have the potential to achieve this because (1)They are naturally social- Not only multiplayer games, but even single-player games like Elden Ring and God of War use onlineCommunityand content becomes social, and (2)They have a real tendency to spread (Remember Flappy Birds? ) .

• The financial sector is undoubtedly critical - it will integrate with the back end of our financial infrastructure and bring benefits to everyone - but most people are not interested in finance.

• Art has found a good product-market fit through NFTs. But art is ultimately a niche market that serves a wealthy audience. Its market growth and path to wider acceptance will likely be a slow process.

And the game is… fun, engaging, and most importantly, enjoyable. The numbers don’t lie:

• In 2023, there will be more than 3 billion active video game players worldwide. Mobile gaming is the most popular gaming platform, with more than 1.7 billion mobile gamers worldwide.

• The global gaming market is worth approximately $385 billion.

• Asia Pacific is the largest gaming market, accounting for nearly half of global gaming revenue, followed by the United States and China.

• 202Xiaobai Navigation3 years, the average age of players is 36 years old, and most have been playing the game for 15 years.

A killer Web3 game is enough to lead the trend.

Building a Toyota Camry or building a spaceship?

I see two different approaches to Web3 gaming.

1. Build a Toyota Camry - Make the fun game first, then addBlockchainand NFTs;

2. Build a spaceship - fully support NFT andBlockchain.

I will elaborate on these metaphors in the following explanations.

Toyota Camry - Traditional Game Studio

Legendary venture capitalist Vinod Khosla once said, “Startups, not institutional incumbents, generate the vast majority of innovation.”

But here's an observation from my good friend Kiet from thecoreloop, who says: Making good games is more of an art than a science. To be successful, you need to deeply understand the complexities of the industry. This is a skill that traditional studios have honed over the years.

So, I pay attention to what the big names in the gaming industry are doing in the Web3 space because they have successfully made great games.

Building a car is a straightforward business, we know how to do it and have done it many times. Toyota Camry is carefully designed to stand out in the crowded car market with its reliability and performance. It debuted in 1980 and has launched 8 generations of Camry so far. Each new generation of Camry model requires about 3-5 years of research, design, testing and manufacturing coordination from start to finish. It is the fifth best-selling car in the United States, with more than 300,000 units sold each year.

Like building a Camry, gaming giants focus on what they have been good at for years - making engaging games - and then add blockchain and NFTs as value-added features. Crypto is not the main selling point here, but it is like adding a turbocharger to your Camry. It improves performance and provides a boost.

Several major game studios are actively dipping their toes into the Web3 gaming world, often by adapting their existing successful titles. This makes sense: developing Web3 games requires studios to master two key elements simultaneously. (1) They must build an engaging and enjoyable gaming experience, and (2) they need to get the in-game digital economy right.

By leveraging established IP that already has a strong player base and a track record of delivering engaging game experiences, these studios effectively reduce risk in (1). This allows them to focus primarily on (2), optimizing the economic game experience.

Let me give you 4 examples of traditional game studios entering Web3:

• Take-Two/Zynga → Sugartown (this is a new IP);

• Square Enix → Symbiogenesis;

• Nexon → Maple Story N;

• CCP Games → EVE online.

In contrast, Square Enix's foray into blockchain, Symbiogenesis, feels a bit stuck in the past, as if it was conceived during the NFT bull run when royalties were still important, and not much has changed since then. I've been a Final Fantasy fan since I was a kid. I bought a PS5 to play the recent FF16.

Maple Story N is an interesting example. It reinforces ownership where in-game items are NFTs, making them inherently scarce and composable. Additionally, they are pushing user-generated content, allowing players to make their own in-game items and market them,

Introducing blockchain assets or circuits into games that already have large and active player bases, such as Maple Story N or CSGO, can add value through more meaningful player loops or additional revenue streams…

…NEXON is best positioned to continue developing Maple Story Universe and set the benchmark for how blockchain can be better utilized, rather than just taking cash opportunities. —Delphi Digital/JACL, “Why Asia Will Lead Web3 Gaming”

As more experiments unfold, the first studio to successfully find the right formula may find itself with a pot of gold.

Spaceship: A fully on-chain game

A friend who manages a large gaming guild once said to me: “If you only lightly integrate NFTs orTokenIf you’re not into Web3 games, you’re not tapping into the full potential. You might as well be making regular games. The ones who succeed are going to be the ones who fully commit to blockchain.”

So we have fully blockchain-enabled gaming, or “Autonomous Worlds” (AW), which are to gaming what SpaceX was to space travel in the early 2000s.

Building a rocket/spacecraft is a complex undertaking that requires years of research, development, and testing. The Falcon 1 rocket took more than seven years to develop before it was successfully launched, costing more than $100 million and nearly bankrupting SpaceX.

From fuel to life support systems, every element is critical to the journey and requires complex engineering and precision. They need to be thoroughly tested and refined to withstand the rigors of space. Developing the propulsion system is one of the most challenging aspects of the process. It requires innovative solutions to generate the necessary thrust to escape the Earth's gravity.

Similarly, AWs is doing something we have never done before. It is fully committed to the blockchain stack. It uses the blockchain to store all data, and smart contracts to execute game logic and rules in a client-agnostic way.

Why do we want to put these games on the blockchain? I can think of 3 reasons:

• Eliminate platform risk: A friend of mine was once a top Overwatch player in China. She played for 7 years and knew the entire game. However, her gaming career came to an abrupt end when Blizzard terminated its 14-year licensing agreement with NetEase. AWs can mitigate this risk. As long as the blockchain network is functioning properly, the game will continue to exist, free from the shenanigans of central authorities. That friend? She later switched careers to build her own full-scale blockchain game studio.

• Endless user-generated content: UGC is a hot word these days, and for good reason. People love to be part of the creative process. Games also benefit from having new content all the time. In AWs,CommunityIt’s not just about being a passive consumer; it’s about being an active participant. Players can create tools and enhancements — permissionless modifications — effectively blurring the line between players and developers. This collaborative ecosystem can enrich the gaming experience.

• Skyscraping (Composability): The modular nature of AWs is another highlight. Developers can focus on building new things without having to reinvent the wheel, using modules that were previously created and used in on-chain games (for example, upgrade modules or mission modules on the chain). Imagine the possibility of integrating different universes - such as Marvel and DC comics - into a single gaming environment. Although there may be licensing issues, the technology itself will not be an obstacle.

The game still needs to attract audiences through engaging gameplay. However, when these three elements are combined, it indicates a new and original form of gaming with great future potential.

apix Seems to hold similar views:

The potential market for this new form of gaming remains unknown (just as the market for space was uncertain in the early days of SpaceX). Will it appeal only to today’s crypto-native users, or does it have the potential to enter the mainstream market? Only time will tell. And it may take a while.

One thing is for sure: I love new and original forms of crypto. While the road ahead is uncertain, early adopters are likely to capture a lot of value if the space thrives.

Pro Tip: I'm watching Pirate Nation closely.

In between

What about Illuvium, Parallel, and other crypto-native game studios? Making Web3 games is hard. It requires two very different sets of skills:

1. Encryption expertise：Not only technical knowledge of blockchain is required, but also understanding of crypto-native behavior,TokenEconomics and Economic Design

2. Game design and distribution: This space is largely dominated by Web2 practices. Complexities include designing engaging incentive loops, optimizing player spending, and mastering performance marketing.

Today, many Web3 native game teams are very strong at (1), but it’s questionable whether they have a competitive advantage at (2). Especially given that they face strong, well-capitalized Web2 studios with strong existing IP. Teams that have extensive experience in the Web2 gaming space and have raised enough money are likely to succeed.

加密原生的 Web3 游戏工作室通常需要从头开始构建新的 IP，这是一项具有挑战性的任务。其中一些已经推出了市值达 8 到 9 位数的Token，这已经包含了大量用户采用。

In summary, Web3 gaming is at a critical crossroads. We have incumbent giants with mature IPs and a deep understanding of game design and distribution. We also have crypto-native teams that are pushing the frontier of on-chain gaming. One thing is clear, those who can master the combination of the new and the old will be the ones who will have great success in the future.

The article comes from the Internet:The crossroads of Web3 games: traditional IP or starting over?

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