Let’s mark the 10th year of evolution of Web3 games. Since the inception of Ethereum, gaming has been a prominent sector in the crypto space. Developers have tapped into the potential of crypto’s interoperability, player-owned economies, and tradable digital assets, prompting significant interest from industry leaders to advance Web3 gaming. By the end of last year, gaming constituted a substantial portion of blockchain activities, with considerable growth in Q1 2023. Globally, there are millions of gamers, making gaming a significant entry point into the world of crypto. The success seen in NFTs and specific GameFi projects showcases the potential, but there remains a long road ahead to fully realize this vision.

To foresee the future of Web3 gaming, it’s crucial to reflect on the past decade of on-chain games and the lessons learned. Understanding past shortcomings will guide us in navigating the future of this industry. Let’s delve into the history.

The Early Days of Crypto Gaming

On-chain gaming began in 2014 with Huntercoin, which served as an experiment to test multiplayer blockchain applications and the feasibility of blockchain in gaming environments. Players collected coins in a virtual world, competing against each other. Despite the eventual dominance of bots, Huntercoin proved that blockchain could support fully developed game worlds.

First Major Success

Following Ethereum’s launch, the first significant on-chain game was CryptoKitties in 2017. This game allowed users to buy, sell, and breed unique digital cats (NFTs). At its peak, CryptoKitties accounted for over 25% of Ethereum’s network activity. Despite its initial success, the game’s lack of sustainable mechanics led to a decline in interest and asset values.

Evolution of Web3 Games and Expansion

Axie Infinity built on the concept of owning and breeding digital pets, adding features like battling and building. It introduced the “play to earn” model, attracting over 1 million monthly active users by August 2021. Some players, especially in the Philippines, reported earning over $1,000 a month. However, Axie Infinity faced challenges due to thin gameplay mechanics and inflated asset speculation. The game’s high entry costs and reliance on new users contributed to a decline in its user base. Axie has since added more content and developed its own blockchain to address these issues.

Virtual Worlds and User-Generated Content

Around the same time, Decentraland and Sandbox explored decentralized content creation by selling virtual land for users to build their own experiences. Despite initial excitement, both platforms struggled with scalability and high land prices, limiting user participation.

Innovative Gameplay Mechanics

A new genre of fully on-chain games has emerged, leveraging blockchain technology for innovative gameplay mechanics. Games like Dark Forest, which uses zero-knowledge proofs, have demonstrated new possibilities for provably fair gaming. While these games haven’t achieved massive success, they highlight the potential for player-owned assets.

Current Landscape and Infrastructure

The Web3 gaming ecosystem has grown rapidly, with diverse games ranging from trading and strategy to adventure and role-playing. Games like Splinterlands and Axie Infinity have launched their own chains, creating robust ecosystems. Infrastructure companies like Immutable X and Forte have also emerged, improving the developer experience and bridging Web2 and Web3. All the while, QORPO Game Studio is introducing a sustainable, holistic Web3 ecosystem, that merges games, marketplace, and esports interface, all in one platform, powered by one studio token. 

Strides Into Web3 Esports 

Another step into GameFi evolution takes on competitive gaming. Esports presents a promising avenue for the mainstream adoption of Web3 gaming, offering a dynamic solution to some of the inherent challenges faced by play-to-earn models. The esports industry, already valued at over $1.44 billion in 2022 and projected to reach $5.48 billion by 2029, demonstrates robust growth and a thriving community. 

By tapping into this established market, Web3 games can leverage esports’ competitive spirit and community-driven nature to attract and retain players. Unlike the often criticized play-to-earn model, which is seen as inflated and unsustainable, esports fosters genuine competition and skill development, aligning with the ethos of Web3’s decentralized and transparent principles.

Blockchain technology offers significant benefits to the esports landscape, enhancing transparency, security, and fairness. The immutable nature of blockchain ensures that tournament results, player statistics, and prize distributions are transparent and tamper-proof, eliminating doubts about data authenticity. 

Decentralization further democratizes the esports ecosystem, enabling community-driven governance models where stakeholders have a voice in decision-making processes. Smart contracts can automate prize distribution, ensuring efficiency and trust among participants. Additionally, blockchain’s global accessibility allows players from diverse regions to compete on an equal footing, fostering inclusivity and broadening the talent pool.

Lessons Learned

Retention Over Acquisition

Effective retention strategies are crucial. Gamers should not earn thousands of dollars monthly from basic games, and entry costs should not be prohibitively high. Games that attract users solely for financial gain risk losing them to better opportunities.

Value of Ownership

Web3 games have shown higher retention and longer play times compared to traditional games, partly due to incentivized playtesting. Ownership and attachment to digital assets have a significant impact on player behavior, encouraging quicker iterations based on community feedback.

Emergence of New Gamer Categories

Web3 gaming has introduced a new category of players, the “octopi,” who invest heavily in the game’s economy. Unlike traditional “whales,” who dominate gameplay content, octopi focus on maximizing asset value, aligning closely with the game’s future.

Rise of User-Generated Content

User-generated content (UGC) is becoming increasingly important. Web3 games can reward users more easily, fostering a more engaged and creative community. Decentralized content development creates better economics for developers and more engaging experiences for players.

Composability in Gaming

While the idea of fully interoperable game assets is appealing, practical and gameplay considerations make it challenging. Instead, composability should allow players to leverage assets from previous games to enhance new gaming experiences.

Current State and Future Prospects

Web3 games currently lag behind traditional games in terms of enjoyment. Many are repetitive and rely on new user acquisition to stay profitable. However, legendary studios like CCP are exploring the space, suggesting that player-first ownership models will eventually lead to more engaging and sustainable games.