Web3 gaming is caught in a paradox.
It has great potential, and its innovations may change the gaming experience. Still, it faces more skepticism than ever because many projects struggle to meet expectations, and some early attempts have failed to deliver on their hyped promises.
So now, many gamers feel the sheer frustration of this paradox. Brycent, for example, a well-known figure in the Web3 gaming space, made a tweet that sums this up:
“90% of the current Web3 games are doing it wrong.” Blockchain is the tech value add, not the secret sauce that makes your game great. Start by creating gaming worlds that excite gamers and gamers will want ownership because the game is incredible.
Many gamers like him think blockchain technology should enhance the gaming experience rather than be the main focus. However, many games are still being built this way, which is frustrating.
For many players, Web3 offers the chance to own and earn real assets. But it is often overshadowed by games that focus more on money than on good gameplay.
While some projects are beginning to find a balance between blockchain and engaging game design. Many others still lack this balance. Gamers like Brycent feel frustrated. They find games dull when they have boring loops and little content.
They want games to focus on fun and engaging experiences first. Blockchain technology should be a complement, not the main draw. And this has created a stern look towards web3 games; with many failed TGEs, and a narrative that’s looking uninteresting.
As the industry grows, one key question remains: How can Web3 gaming keep its promises while being fun? Or is Web3 Games Dead?
Is Web3 Games Dead, Or Not?
Web3 games surged in 2024, achieving a 308% increase in daily active users, totaling 6.6 million.
Industry leaders like Park from Ava Labs expect Web3 gaming to hit 50 million monthly active users (MAUs) by 2025. They also believe a major publisher will heavily invest in this space.
However, the sad truth about Web3 games is that 75% of the games launched between 2018 and 2023 collapsed within a year. After analyzing over 3,200 GameFi projects in 2024, ChainPlay and Storible reported that 93% of Web3 games are considered “dead.”
However, when you study the industry, you notice the dichotomy in people’s opinions.
Web3 games depend heavily on cryptocurrencies and NFTs to determine the value of their in-game rewards and assets. Their unstable prices lower player participation and make them hesitate to invest time and resources.
There are problems with poor gameplay, scams, and a lack of fun. Yellowpanther, the founder of gaminggridX, reiterated this in his recent tweet:
“I’m not gonna sugarcoat it. Web3 gaming in January has been so boring.”
While these all portray Web3 gaming as dead, according to ChainPlay and Storible’s study, it is consolidated. Web3 gaming is evolving. The industry now emphasizes quality and player-focused experiences.
Still, “Many feel like finance apps, not real games. We need AAA-quality experiences that people play for enjoyment, not just profit.” –– as a user on X said.
“Web2 gamers feel very negative about Web3 games. Kadan Stadelmann, CTO of Komodo Platform, said the industry mainly focuses on tokens and tech. This shift often overlooks creating fun experiences.”
The failure of some significant Web3 gaming projects also reinforced the skepticism of some web2 gamers.
A good example is Metroverse, a game similar to Sim City that raised $8 million during its first release in January 2022. However, the team failed to deliver despite its funding, leading to its collapse.
A good question to ask is why these games suffer. A survey by the Blockchain Game Alliance (BGA) included 623 people. It found that 53.9% of them said onboarding and poor user experience are the biggest challenges in the industry.
However, Web3 gaming may not be as dead as we think; as ChainPlay and Storible’s study show, the industry is consolidating.
The Dappradar report shows a big drop in investment for Web3 Gaming and Metaverse Projects. This pullback happened from the second to the third quarter of 2024.
The 314% increase in the second quarter, which dropped by 90% in the third quarter, suggested that investors were losing interest. Zhu told BeInCrypto that a closer look at the chart reveals something interesting. The drop in traditional gaming investments has opened doors for projects with real traction and clear value.
This shift has made investors more interested in high-quality, innovative projects. They are less focused on oversaturated cash-grab projects. Games such as Illuvium, Big Time, Citizen Conflict, Off the Grid, Pirate Nation, and Star Atlas are at the forefront of high-quality, immersive gaming.
The story about web3 games may sound like it’s over, but the reality is different. Many games feel alive, and the data shows a different picture. Here’s what I mean:
Web3 Gaming Projections are on track for Growth
Fortune Business Insights noted that the blockchain gaming market was about $154 billion in 2023. It is expected to grow at a rate of around 300% and reach $64 billion by 2030.
Key players such as Illuvium, Gods Unchained, QORPO, Pirate Nation, and Off The Grid are pushing for more gamers to trade NFTs and want major platforms like Epic Games to get involved.
By the end of 2024, web3 gaming had 7.4 million daily Unique Active Wallets (dUAW). It also saw over 5.7 billion on-chain gaming transactions. DappRadar said this was a 421% rise from last year, setting a new record.
Countries like the Philippines, Indonesia, and Vietnam have been at the forefront of Web3 gaming adoption. Southeast Asia and Latin America are great places for Web3 gaming. There are many gamers there, and these games offer an alternative income source.
Due to the adoption of Web3 games, the overall gaming market in Southeast Asia is projected to reach $7.1 billion in 2028. At this rate, it would be difficult to call the industry dead.
Several leading VC firms are actively investing in Web3 games. For example, a16z set aside $600 million from the $7.2 billion raised for gaming. Also, Parallel Studios aims to grow the Parallel TCG universe. They will invest their $35 million to develop projects like Colony and Wayfinder.
Various partnerships between traditional gaming studios and blockchain companies are also increasing. Popular are Square Enix and Elixir Games, GameStop and Immutable, and Electronic Arts (EA) with Mythical Games.
The Industry is Consolidating; It could yet thrive
The most significant shift we are seeing in blockchain gaming is the priority of making games that are fun and easy to play.
In his interview with Crypto News, Sebastien Borget, co-founder of Sandbox, re-affirmed this notion:
The key to making Web3 gaming mainstream isn’t just about the blockchain; it’s about creating fun and engaging experiences. People will come for the gameplay and stay for the ownership.
The best games are the ones you want to play, not the ones you get paid to; that’s a direct quote from Eclipse, an Innovative gaming L1 chain.
The next wave of Web3 games being built is shifting back to gameplay first, where earning is a bonus, not the core loop. Layer 2 projects like Optimism, Arbitrum, and Polygon’s zkEVM boost transaction speed and lower gas fees significantly.
Games like Gods Unchained use ImmutableX. This provides a smooth gaming experience and gas-free transactions. Axie Infinity also switched to the Ronin sidechain to reduce costs and deliver a smooth gaming experience.
With tools like Sequence by Horizon Blockchain Games and Magic Link, starting a new game is faster. Players can get a custodial wallet and start the game in seconds. This is much easier than dealing with the tricky process of seed phrases.
Games like Saakuru Labs are even integrated with Discord and Telegram to decrease the entry barriers to the game. The innovation and changes are not just exciting; they tackle many of the problems gamers face within these games.
Web3 gaming is undergoing a significant shift.
A premium is placed on the quality of gameplay and how blockchain technology enhances rather than defines it.
Many people, including some KOLs, are talking about the death of Web3 gaming. But for any industry to change, it must eliminate the bad parts. That’s just a metaphor.
But that’s precisely what we are experiencing now; if you’re a gamer, fix your focus on the potential behind high-quality web3 games, play the best
The future of gaming isn’t just about NFTs or tokens; it’s about fun games that leverage blockchain to improve the gaming experience.