Based on the technology that powers the ever-popular cryptocurrencies such as Bitcoin and Ethereum, blockchain gaming is taking off really fast. It provides true ownership of in-game assets to players that can be cashed out and converted to fiat money (a government-issued currency not backed by commodities like gold). Gamers can even transfer their assets from one blockchain game to another. These games are based on a play-to-earn model, enabling gamers to monetise the time invested here. Perhaps, this is the primary driving force behind the blockchain gaming industry's sudden boom.
The Blockchain Game Alliance's Annual Report 2021 highlighted that the third-quarter revenue of this industry amounted to $2.3 billion. Nearly 22 percent of Non-Fungible Tokens (NFTs) traded this quarter were blockchain games' assets. Suffice to say that blockchain gaming has its finger on the pulse of NFTs. By the end of 2022, the overall gaming industry (including Web2 and Web3) is forecasted to reach $196 billion. Industry experts are confident that it will tap this potential market in the coming years. After all, Web3 is the future.
Now the question is, what separates Web3 gaming from Web2?
Web2 Gaming Vs Web3 Gaming
Games that are not based on blockchain technology and are entirely under the control of game developers are categorised as Web2 games. However, over the period, certain limitations of Web2 games are bringing it down.
The whole ecosystem of Web2 video games is under developers' control. There is little freedom for the players. In contrast, Web3 games offer more space to players, allowing them to actively contribute to the expansion of the gaming universe. User-generated content is encouraged, and players are given ownership of the same. In-game trading helps players shape the in-game economy according to themselves.
Web3 games also provides gamers with the opportunity to earn while playing, making blockchain gaming a secondary source of income. In addition, in Web2 gaming, services can be denied to players by studios and developers. But, there is no such denial in a Web3 gaming environment.
Hurdles to Cross
Even though Web3 gaming appears to be the logical next step in the evolution of gaming, it still has to overcome certain challenges. This includes:
Acceptance: Due to the complexity of cryptocurrency and blockchain technology, many people are unable to grasp its true potential. With traditional institutions vehemently opposing cryptocurrencies and decentralisation, people are sceptical of the same. It will take some time and awareness to realise the worth of cryptocurrency, blockchain gaming, NFTs, and Web3.
Lack of Awareness: Irrespective of people's knowledge of these cutting-edge advancements, blockchain, and NFTs are still considered temporary buzzwords with limited attention given to blockchain-based games, and their unprecedented benefits.
Inconsistency: Vagueness plague not only Web3 gaming but Web3 in general. On the Internet, there are loads of uncertain values and semantically-duplicated items. Web3 still has to find a consistent way to deal with these problems. Currently, most Web3 developers employ fuzzy logic and probabilistic reasoning technologies to deal with these problems.
Quality of Games: As Web3 gaming is still in its infancy, the titles available might not be as pleasing as some of the currently established ones. For instance, you won't be able to find a game like GTA5 or FIFA22 on the blockchain. However, with traction being gained by blockchain games and more developers moving towards Web3, this issue will be resolved soon.
Regulatory Framework: The regulatory framework surrounding cryptocurrencies and NFTs have also hindered many players and developers. This stops them from exploring blockchain games.
The blockchain gaming industry is expanding exponentially (280 percent in 2019). Naturally, many big players are also investing in it. This includes popular names like 1Dapper Labs (crypto kitties), Gala Games (Echoes of Empire), and ANIMOCA BRANDS.
Blockchain gaming has made it possible for gamers to sustain themselves, and the gaming economy to grow naturally. The P2E (play-to-earn) model in blockchain games is perceived as the white knight in decentralised armour. These games are also highly-accessible. If you have access to the Internet and a device, you can jump right in and start earning crypto assets through blockchain games.
It is time to jump on the blockchain gaming bandwagon and take steps towards the new-age era of futuristic innovation.
Siddharth Jaiswal is founder, Sportzchain. Views are personal, and do not represent the stand of this publication.