The first quarter of 2022 saw a massive 2,000 percent explosion in blockchain-based game activity when compared with Q1 of 2021, according to a . This unprecedented growth, which ‘came out of nowhere’, is largely due to the pandemic-driven rise in popularity of .
No place evidently embraced the P2E craze to the extent seen in the Philippines. Since the COVID-19 pandemic and into the economic stagnation that’s only creeping up on us now, Filipinos turned to popular P2E games like “Axie Infinity” to make ends meet. In fact, the P2E phenomenon became so widespread that “” sprung up, where groups of gamers and investors train together to share gaming profits. As of March, 520 P2E gaming guilds operated in the Pacific-island nation.
Eventually, the P2E model that enabled some users to earn profits for playing passed as it was intensively extractive to the games’ economy. When the supply of Axie Infinity’s utility token surpassed its demand, prices freefell. Other P2E blockchain games, such as “Pegaxys,” experienced similar problems.
The Future of Web3 gaming
Blockchain gaming’s explosion can be attributed to last year’s crypto bull market and NFT craze, built on overhyping and token launches. As the market cooled off in early 2022, before transitioning into a crypto winter, the P2E buzz faded away. Yet, investments in the blockchain gaming sector remained on an upswing.
A whopping $4 billion poured into the industry in 2021, jumping to in the first half of 2022 alone. To this point, leading tech VC firm Andreeson Horowitz launched a called the Games Fund One, dedicated exclusively to investment opportunities within the blockchain gaming vertical.
With fresh influxes of cash and a seemingly endless list of blockchain-based games and gaming platforms flooding the scene, it became clear that many of these games lack a creative concept, let alone an enjoyable user experience. Traditional gamers hold negative attitudes toward common Web3 tenants in blockchain gaming, specifically crypto and NFT elements- a , which polled nearly 7,000 gamers, found. Additionally, non-crypto gamers tend to see barriers in the forms of wallets and the perception that crypto is bad for the environment.
With the P2E model in the rearview mirror, but blockchain gaming’s growing investments, the question begging to be asked is: How long can blockchain gaming stay relevant with a general lack of attention to gameplay and UX?
Overemphasizing Crypto
Blockchain gaming’s quality and problems are well documented, resulting from an emphasis on monetization via token launches and prices, NFTs, and P2E economics. This almost always came at the expense of important features that would attract gamers, not crypto-native enthusiasts looking to earn a token.
It almost felt like developers were rushing to create games as quickly as possible so they could pump their token and onboard new users—or wallets, as user counts are referred to in the blockchain gaming world. Unsurprisingly this led to a lot of games with boring narratives, poor engines, ineffective NFT integrations, and other features or—lack thereof—that caused actual gamers to say “no thank you.”
Additionally, games are being designed with unsustainable economies, aka ponzinomics, that rely heavily on new players joining and expecting to make a profit. Like with any Ponzi scheme, this model is unsustainable and harms the entire industry. That means even users who were there to primarily make money, rather than for the gameplay, were likely to lose a lot of money. This isn’t quite a winning formula for long-term success.
It’s important to mention that there are blockchain games out there that are fun to play and leverage NFTs in a way that both crypto enthusiasts and traditional gamers can get on board with. But they are the exception rather than the rule.
The aforementioned Coda study noted a disconnect between Web3 and traditional gamers, which, of course, isn’t surprising. This is perhaps because, according to the report, the main reason people play blockchain games is for the crypto and NFTs.
Considering that gamemakers are catering to the crypto crowd, this also shouldn’t be a big shock. Gaming projects and studios have every right to build games that resonate with their audience. But investing as much in the quality of the game as in the game’s economy and crypto side isn’t going to turn away the crypto gamers. It may, however, attract mainstream gamers to crypto, which ultimately is a fundamental mission of Web3.
A New Approach
But does better gameplay mean blockchain gaming startups should be working to build the next “Call of Duty,” “Grand Theft Auto,” “Fortnite,” or “Pokemon?” Not necessarily, actually. Franchises like those have massive budgets that startups simply don’t, and beyond that, part of blockchain gaming’s appeal is supposed to be that it’s new and taking a different approach to gaming. Instead, they should focus on building a game that would resonate with a specific niche community of gamers. Several indie crypto games, such as “The Six Dragons” have embodied this concept with relative success.
Correcting the problematic trends in Web3 gaming requires a new approach. Prioritizing mainstream appeal rather than the crypto elements means putting the UX at the center of the game development process. By default, this means strategically putting the token aspects of the game on the side, at least at the start.
To this point, blockchain-gaming projects shouldn’t even think about their token launch before they are satisfied with their game—storyline, graphics, UX, and overall gameplay. Improving things like the visuals and narratives will undoubtedly attract more of the world’s , laying the foundation for a product that will in turn produce a community capable of supporting an in-game economy and the eventual token launch.
While there’s no need to build the next Call of Duty, blockchain-gaming projects would massively benefit from the expertise and experience of veteran developers from the traditional gaming industry to help build the next generation of Web3 games—or at the very least, to advise in the process. Their expertise can be invaluable to small startups working on developing blockchain games. Recruiting outside developers to help generate crossover appeal can also help with the business side because their expertise may also cover how to maximize the in-game economy.
Leveraging outside support from traditional gaming experts will not only contribute to an all-around better game, but it will also show traditional gamers that blockchain and Web3 can also successfully impact the gaming world.
The problem is not how to integrate blockchain into the gaming sphere, but how to actually build a game that can effectively leverage Web3 technologies, including NFTs. Integrating NFTs into games smoothly is not so simple. Instead of enhancing the gaming experience, they too often disrupt the game, unless, of course, NFTs are the player’s motivation to play in the first place.
NFTs have already been heavily integrated into new mobile games and have even been leveraged by traditional gaming studios, including ” last year, which was met with anything but a warm reception. Despite the cold reception, major mainstream developers are still gung ho about using NFTs in new games. In fact, PubG creator Brendan Greene is currently working on a , “Artemis,” which will feature NFTs. In traditional gaming, NFTs are already here, and they will continue to be used in blockchain games going forward.
To smoothly integrate NFTs into a specific game, developers need to consider what type of people play the game and what their motivations for playing are. By considering these factors, developers can find clues on how to use NFTs to entice crypto gamers while not turning off traditional gamers.
Of course, ultimately, NFTs will never be the selling point for traditional gamers—quality and UX reign supreme with this demographic. Sidelining token launches temporarily to focus on the game itself, hiring veteran developers from the traditional gaming industry, and strategically and tactically integrating NFTs in the right way will help blockchain gaming stay relevant and live up to investors’ expectations.
It’s not blockchain gaming’s responsibility to help convert users into crypto enthusiasts. But focusing more on the experience and less on the tokens will benefit the overall crypto ecosystem.
By Adrian Krion, CEO and maker of the user-friendly gaming wallet .
Lead image generated with stable diffusion.
