Web3 Gaming. Is it still going strong?

In our very first Thunder Dive article, we are going to dive deeper into the topic of how Web3 Gaming is doing. ThunderCore Blog has talked about Web3 gaming many times in the past, but what has happened in recent times? Are we expected to see any new development or any new products in this field? Which companies are on the rise and what are the core obstacles? Straying away from simply talking about the hottest topics or simple introductions, let’s dive into the depths of Web3 gaming.

What is Web3 Gaming?

To go into what Web3 Gaming is or all that it constitutes can easily turn this article into a 100-page essay. With that in mind, we will only touch lightly on what Web3 gaming is and discuss more about its history and current development. For some more detailed information on all the tidbits of Web3 Gaming, visit articles like this one or this one. 

Web3 Gaming at its simplest is combining Web3 technology with gaming. What this means is implementing characteristics like decentralization and immutability into the gaming ecosystems. Things like game asset ownership becomes much safer and data transparency makes it so the ecosystem is more player-driven. 

Through integrating blockchain technology, gaming ecosystems could see leaps in development for things like interoperability betweens games and platforms while introducing play-to-earn elements that adds a whole new layer. This opens up the possibility of tapping into completely new genres of games that have yet to be explored. Ever wonder if “Ready Player One” could become a reality? It’s the belief of many that Web3 gaming will open the door to the metaverse; a concept that has yet to be fully realized. 

The potential is seemingly endless and while certain features may be hard to implement, Web3 gaming paints a world that is prime for exploration.

How was Web3 Gaming Before?

Web3 gaming started all the way back in 2014 but what really attracted all the spotlight was the popularity of CryptoKitties in 2017. CryptoKitties merged blockchain with gaming by letting players breed and trade non-fungible digital kitties. Its success was such that it took up a large chunk of Ethereum’s network activity at the time and crypto enthusiasts everywhere knew about CryptoKitties.

CryptoKitties, however, eventually faded away due to the “gaming” aspect being unbelievably shallow. After all, at least half of what makes up Web3 gaming is still the “gaming” part. Faced with this obstacle, it became apparent that simply integrating the technology wasn’t going to be enough, the game itself still has to be appealing to users. 

As time went on, many more companies decided to dip their toe into Web3 gaming, not only polishing what has already been done previously but also innovating on the depth and complexity of these games. Companies like the Sandbox are exploring the potential of creating the metaverse through blockchain technology while others like Dapper Labs are focused on using NFTs as the foundational blocks for Web3 games. 

As we continue through the 2020s, Web3 gaming companies or related companies have only picked up their pace. Giants like Immutable X (IMX) have seen incredible growth in 2023 and into 2024, highlighting the massive potential of Web3 gaming. Even Web2 game companies have begun looking into and dipping their toe into potentially bringing Web3 elements to existing games. With resources and attention filled to the brim, things are still looking great for Web3 gaming.

How is Web3 Gaming Now?

Companies focusing on gaming and NFTs like Immutable X (IMX) have continued their success with immense growth kicking off 2024. This has highlighted the importance of NFTs in line with Web3 gaming development as many enthusiasts believe that gaming is where NFTs will really anchor their position. 

There has also been more focus on infrastructure rather than actual games. IMX recently announced their zkEVM launch, offering a gaming chain that is much more efficient and affordable for developers. Even giants like Arbitrum have recently launched their Gaming Catalyst Program which aims to further gaming development on the popular layer 2 chain, supporting the growth of its foundational infrastructure and talent pool. 

Looking even further beyond, Web2 companies like Ubisoft and Electronic Arts (EA) have also announced their interest in Web3 gaming and 2024 will really become the year to see if there are any advancements in merging Web3 with Web2. Web3 and Web2 gaming can never be completely separated and it is vital, like with any other Web3 or blockchain integration, for Web2 parties to be involved. Collaborations have already been announced between several Web2 and Web3 companies and it’ll be exciting to see where it all goes.

Building from the ground up with a focus on infrastructure and merging Web3 with Web2 instead of replacing Web2, this is the direction that Web3 gaming will look towards in the coming year. With over $26 billion in market cap at the time of writing for GameFi, gaming enthusiasts definitely have more to look forward to. But not everything is sunshine and rainbows for GameFi, there are still many glaring issues that have to be solved and success will depend on how the landscape tackles these issues.

What are the Biggest Hurdles?

There are several problems that Web3 gaming still face and will need to solve and here are some of them:

Lack of infrastructure and technology: While advances in infrastructure and the underlying technology have been great, there is still a lot of room for improvement. Things like scalability, speed, and efficiency will be the biggest hurdle for how fast games can be made and developed. Without proper tools to build games with, advancement will only be bottlenecked and companies have started to realize that. 

Money is distracting: Most Web3 gaming will have some sort of pay-to-earn system implemented and it’s very easy for such a system to warp the nature of gaming itself. Users will be coming to the game not to play but to “earn” or “invest”. This then creates a community loyal not to the game but whatever asset is being offered. Asset loyalty can be great if there is stability but volatility has always been a core characteristic for crypto. Building a game where players are loyal to the game will be one of if not the biggest obstacle for making Web3 games something that will stick around for the long term. 

Fun is the most important thing: What makes gamers stick around? Games last not because they are tapping into some revolutionary technology but rather because they are fun. If the game itself isn’t fun, retention and user stickiness will be low. A lot of Web3 game companies lack the vision to make a fun game and focus too much on utilizing the technology. The average gamer will most likely not care about how blockchain technology is enhancing their ownership of in-game assets. They care about “fun”. 

Lack of experience: Web3 gaming, like Web3 anything, is relatively new. This means that those involved will have limited experience and sometimes even no experience with what they are doing or what they want to achieve. Many Web3 gaming companies lack Web2 gaming experience. Game operation isn’t something you can do right off the bat, especially when it comes to live ops. This means that companies will either have to source talent from Web2 companies or accumulate experience over time. One will cost money and the other will cost time, serving as obstacles for any up and coming company. 

These are some of the core issues that Web3 gaming faces but while they might seem monumental, companies all over the world have been working hard to tackle them be it fundamentally or strategically. How companies tackle these issues will determine where Web3 gaming will go for the years to come.

What is the Outlook?

During Taipei Blockchain Week in December 2023, Yat Siu of Animoca Brands said that he believes 2024 to be the year of Web3 Gaming/GameFi. It’s undeniable that many companies have been making strides in this space and just looking at the market charts will show you that many of them have been growing at astronomical rates. This growth signals not only their position within the market but also general interest from users everywhere.

With NFTs still around despite the heavy hit it took in 2022, ZK rollups providing efficiency to game development, and the recent rising market, Web3 Gaming certainly looks like it has even more room for growth. Noting issues that need to be addressed and are continuously being worked on, the dream of shooting aliens together in a metaverse powered by blockchain technology might be closer to being attained than you think.

About ThunderCore

​​ThunderCore is an EVM-compatible blockchain featuring a breakthrough consensus protocol, PaLa, allowing lightning-fast efficiency. With users in more than 100 countries, this blockchain emphasizes a growing global reach. ThunderCore offers a native currency, TT, and nurtures an innovative ecosystem within the TT Wallet mobile app. GameFi has always been something ThunderCore has kept an eye on and we hope to see more development in the months and years to come.

What’s Next?

Many exciting things are happening and ThunderCore Blog will be touching on some of them! With things like the Bitcoin halving and a deadline for a spot ETH ETF coming up, we will certainly be talking about them in future Thunder Buzz articles! We will also look to launch more Thunder Dive articles where we look deeper into this industry as a whole. Watch out for more from ThunderCore Blog!