Web3 gaming, where the ownership of in-game assets is in the hands of users, is the future according to a flurry of entrepreneurs.
The play-to-earn model is one of the most popular rewards in the space to date. Veterans of the gaming industry argue that P2E games are unsustainable because they have attracted millions of players and billions of dollars from investors.
They say these games are the brainchild of financial engineers who want to make a lot of money quickly.
The rise and fall of Axie Inifity is telling. The game's sales volume plummeted in July after peaking at $754 million in November.
Maciej Burno says that most GameFi developers are not game developers.
Burno is one of a number of gaming veterans who believe in the power of the ledger. The public perception that web3 games are all scammy and trashy is something they want to change. Instead, they want to build games that are fun and sustainable, while at the same time using Cryptocurrencies as a way to reward creators.
The problem with P2E, as seen by See Wan Toong, a former senior technical director at Electronic Arts, is that users have to spend money to start playing.
Users can buy and breed cute blob-like creatures called axies in the form of non-fungible token that are verified on the block. The token, the game's native currency, can be cashed out if sales from the NFTs goes towards funding rewards.
The game needs to have a constant influx of new users or it will lose its financing source. Critics compared P2E games to pyramid schemes.
Many of the P2E titles are not games in the strictest sense. They are similar to Defi, a product with gamified features. The free-to-play, mindless mobile games that they have opposed for years were dismissed by the hardcore gaming community.
It can be tempting to make hundreds of dollars per month by clicking on a computer screen in a developing country. Many people lost their jobs during the Pandemic in the Philippines, which led to the creation of AxieInfinity. The game is boring to them.
Simon Davis, CEO of Mighty Bear Games, a Singapore-based web3 gaming studio that just raised $10 million in a token sale, thinks there is a bit of elitism in the reviews.
Western countries tend to dismiss things that are popular in other countries and not be as respectful as they should be. People don't buy high-end gaming rigs and consoles in countries with low incomes. It is interesting to give people both entertainment and economic benefits.
Davis used to be a design manager at the company. I don't think it's a motivator because you're playing a game to have fun Someone can decide to stop playing the game and get some of their investment back. I don't think that's a bad thing
While Davis recognizes the value of P2E, like many other experienced game developers entering web 3, he is pouring resources into perfect the gameplay first and foremost. Butter Royale, a hit on Apple Arcade, was one of the games produced by his studio. The first web3 title will be a third-person battle Royale that uses the token economy.
Some developers argue that games can be enjoyable and profitable. Even in more developed parts of the world, people are motivated to play video games.
Is it possible to remember World of Horde? A group of people in Vietnam and Indonesia are being hired by a group of people in the game.
When you look at a traditional game, people are putting a lot of money into the gateway, but it is on the other side of the spectrum. They don't get anything back.
Burno concurs. People want to play for fun and they are willing to spend money that makes them feel happy, but there are also people who want to invest so you can give them a tool to invest
More rewards are promised for developers of games based on the internet's technology. Developers make money by pushing an update every six to eight weeks in free-to-play games. Users get annoyed when you try to squeeze money out of them.
In web3 games, developers get a small percentage of every transaction, which is recorded on the block chain. Davis says creating a game that people want to keep playing for a long time and creating value for the players who want to trade between themselves is all you have to worry about.
Red Door Digital takes a different approach to making a game sustainable. Unless users want to start earning or have real value in their assets, they don't have to buy the platform's token.
The value of the game will increase when there is a recurring user base. The increase in value goes to people who are trying to make money.
Like many web3 games, Red Door Digital's platform offers utility token, which are used like in-game currency for purchasing skins, items, and so on. Voting on critical project decisions will be possible for users who contribute to the game. The utility token can be traded, while the governance token can't.
Developers are still working to improve their token economy, but investors are already pouring money into their ventures. In the second quarter of the year, there was a whopping $2.5 billion in funding for blockchain games. Private gaming companies raised about 30% of their capital in the first half of the year, according to a report by Drake Star.
Some legacy studios and publishers seem to be on the side of caution despite the huge amount of money going into web3 games. The world's largest gaming company has no plans to develop web3 games.
If anyone creates an initiative that doesn't work, it's the end of their career. They will have to answer the question. They need to invest in a couple of companies to see how it goes.
The gold rush into web3 is posing challenges to cryptographers. An Asia-based game focused fund manager is frustrated that investors want to know if his fund has a web3 angle.
They wouldn't want to invest if I said I didn't.
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