Web3 Gaming Evolves, Showing Signs of Progress Despite Challenges

Despite the challenges faced by Web3 gaming, including significant venture capital funding without commensurate success and the closure of several studios, the technology's potential should not be underestimated. The core of Web3 gaming is about giving players real ownership of their in-game assets, identities, and achievements, which is a significant shift from traditional gaming where these assets belong to the publisher. This ownership extends to tradable items like weapons or land, as well as non-transferable badges of reputation, guild history, or verifiable skill. The concept of player ownership in gaming is not new, as evidenced by the massive markets for CS:GO skins or World of Warcraft gold. However, these economies have been fragmented and at risk of being shut down by centralized publishers. Web3 makes these economies open, interoperable, player-owned, and player-driven.

Ownership has always been the foundation of Web3 gaming, and the play-to-earn model was an experimental approach that demonstrated the potential for open and permissionless virtual economies on blockchain. The industry is now evolving with a stronger focus on sustainable economies, better tokenomics, deeper gameplay, and long-term player engagement. Comparing Web3 gaming to Web2 gaming can be disappointing, as traditional gaming has had decades to fine-tune game design, build massive player bases, and develop successful business models. In contrast, Web3 gaming is still in its experimental phase, and throwing money at a brand new category does not instantly create new games that people love.

The author, with over 20 years of experience in game development, has seen every major shift in gaming get dismissed before it took over. Mobile gaming, free-to-play models, esports, and digital skins were all initially met with skepticism before becoming major successes. Web3 gaming is now at a similar inflection point. The author's interest in blockchain gaming began with CryptoKitties, which demonstrated the concept of digital ownership that no one could take away. Despite the challenges and lack of support in the early days, the author and others continued to build and experiment, leading to the breakthrough of Axie Infinity in 2021. This success brought recognition and investment to Web3 gaming, but the market crash in 2022 led to renewed skepticism.

Despite the current challenges, there are signs of progress in Web3 gaming. Axie Infinity's Ronin blockchain has millions of active users, with significant growth in NFT trading volume and a permissionless system that invites experimentation. Pixels, a farming game on Ronin, has shown strong player engagement and a sustainable virtual economy. Parallel, a trading card game on Ethereum, hosted a world championship in Las Vegas, demonstrating the crossover of traditional esports players to Web3 gaming. These examples show the traction and innovation in Web3 gaming, with better infrastructure, growing communities, and sustainable virtual economies. Those who dismiss Web3 gaming today are missing the bigger picture and the potential for future breakthroughs. The author encourages continued investment and innovation in Web3 gaming, despite the challenges and skepticism.