The Gaming Industry Doesn't Need Web3?
So who does? And why we may be seeing the history of mobile replay in web3 gaming
Happy hump day! Today we have some thought-provoking content, about the state of crypto gaming. Who is all this Web3 really for? What we will cover today.
- Who really needs Web3?
- Does history often rhyme? Comparing web3 gaming to mobile gaming
Who really needs Web3, gamers or game studios?
Yesterday Coindesk dropped an opinion piece reflecting on whether gaming needs web3. Considering we can officially say sayonara to the bull market, this reflection is timely. So let's dive into what they had to say.
The gaming industry may not need web3
The global gaming industry market cap for 2022 is around $222B and is projected to increase 50% over the next 4 years... 🤯
That's a lot of money already circulating in the industry with relatively high growth potential. Add that to these other reasons
- Plenty of other innovations are happening outside of web3 in the game industry, like VR hardware, AR software, and engines like Unreal games.
- Despite the pace of innovation in web3, the current infrastructure cannot scale to meet the computing power requirement of AAA games.
incumbent AAA game studios have little incentive to truly explore web3 technology.
But gamers might...
Web3 principles of sovereignty and collaboration offer gamers a way to benefit from their commitment to a game. Many gamers share these principles as well. As for web3 games, these principles come as a promise of
- True asset ownership
- Financial opportunity
- Creative feedback loop with the studio
These promises are ones that games in web2 would find difficult to make. Despite this, gamers have been the most vocal critics of current iterations of web3 games. The main criticisms are around disappointing gameplay, unsustainable economies, and to some extent, fraud.
What would fix this?
Tackling gameplay is the conclusion the article comes to. Gamers want engaging gameplay, aesthetic appeal, and an experience that is not overfinancialized in addition to the benefits web3 brings.
Both need web3. When we take a look at other analogs in other industries, like electric cars in the auto industry, similar arguments were made around infrastructure. It wasn't until Tesla proved that this was a product with high demand and worked out the kinks that the incumbent made a move. We are seeing a similar trend with incumbents in gaming. First they deny, grieve then they join the movement as infrastructure improves.
As for gameplay, many builders have recognized this and are actively working to solve this problem. The next generation of web3 games would have more engaging experiences.
Our hot take, overfinancialized games are not really an issue. Some players enjoy economic games as their full-contact sport. The real question is how big the market is for those kinds of games. We expect to see game financialization as a spectrum following a normal distribution.
We are curious to hear what you think.
Web3 gaming now looks like mobile gaming in its infancy
If you travelled back in time to around 2005 and looked at the mobile game market, you would likely see the same droll found in crypto gaming today. Games were basic, graphics simple and underwhelming, and many were lacking in proper control mechanics. The same is often said of web3 games today. The most downloaded mobile game of that year was SNAKE, for crying out loud.
Back then, many looked at mobile games as a passing fad for the "casual gamer" who didn't harness the true gaming power of a PC or a platform console. Even seasoned developers of AAA titles looked at the burgeoning industry with some distrust. Fast forward a bit, and mobile games make up a significant market share (60%) of games today. Titles like Fortnite, Among Us, and Stumble Guys are taking over today's mobile gaming youth.
What's this got to do with web3 games?
Web3 games brought a new feature to the gaming world - True Asset Ownership, through NFTs (Non-Fungible Tokens). This sole web3 component brings a lot of power back into the hands of players. However, the crypto gaming space is marred with complaints of overly simple titles, clunky UI and graphics that don't make you go "Wow". Sound familiar?
However, glancing at the recent past of mobile gaming and the eventual success with the market share the then underdog took, it is clear that the earliest games are not indicative of the future of the industry. I suppose only time will tell...
The sneaky news you may have missed
- Temasek's Vertex Leads $4M Investment in CARV: Temasek's investment arm "Vertex" has led a $4M round for "CARV", The LA-based start-up. CARV began solving gamer data rights issues by working on gamer credentials. It is also building data infrastructure and analytics to help game studios better understand what drives their users and quickly reach the desired group of users.
- Rockstar Games Bans NFTs on GTA Servers: Last week, Rockstar Games updated its website stating that fan-made Grand Theft Auto V servers can no longer utilize cryptocurrencies or crypto assets, specifically NFTs. We saw a similar move from Microsoft this past year with Minecraft servers. Oddly enough, Rockstar's parent company Take-Two Interactive is actively investing in NFTs and crypto technology. The firm acquired Zynga (mobile game studio) earlier this year with plans to collectively explore “Web3 opportunities,". Take-Two also recently invested in Web3 Gaming platform Horizon. The ban on Custom GTA servers is likely a move to protect the company from external lawsuits, reflecting on the state of regulation in crypto at this point in time.
Until Next time...
While you get to polishing these gems, I've got more alpacas to hunt.
What do you think of today's edition?
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