Web3’s Transformative Impact
Following the evolution of blockchain technology, several major industries and sectors have implemented it into their products. This technology has extended its potentials to healthcare, law enforcement, banking and finance, education etc.
Web3 sets a pace in changing our interactions with the internet. It has as one of its objectives, to enable a more decentralized and democratic connection between users and applications. It aims to build a decentralized internet, where users have more control over their data and digital assets without middlemen.
Web3 is set to revolutionize a lot of traditional companies which gaming is a part of. Through novelties like decentralized autonomous organizations, crypto-secured gaming wallets and the metaverse, it aims to contribute to the financial strength of the gaming sector.
Web3 gaming otherwise known as blockchain gaming is a value-exchange gaming model based on a peer-to-peer blockchain. Users can own and trade in-game assets and collectibles in the form of unique NFTs using cryptocurrencies.
The assets are handled and traded on decentralized marketplaces through the use of smart contracts. Web3 gaming model is basically geared towards a play-to-earn protocol through the use of cryptocurrencies and NFTs.
Due to the fact that they are decentralized projects, Web3 games ensures a system that verifies ownership, transparency, security and gives higher control to the players unlike in the traditional gaming system where users are only permitted to use in-game assets and cannot claim ownership over them.
How Do Web3 Games Work?
Web3 games are built on decentralized blockchain platforms, such as Ethereum, or Solana, and make use of cryptocurrency or digital assets as in-game items or currency. It uses the notion of blockchain technology as a fundamental component of the game’s economy.
In Web3 gaming, the game logic and data are stored on the blockchain, which promotes transparent and secure interactions between players.
Players get to interact with the game using their own digital wallets, which are also stored on the blockchain. The importance of Crypto wallets for players on Web3 gaming cannot be overemphasized, as its an essential tool that aids interaction with blockchain-based services.
Each Web3 game usually uses smart contacts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code and are automatically executed when certain conditions are met.
In Web3 gaming, smart contracts are used to enforce things such as payments, game rules, and ownership of items. Smart contracts are also used in the creation of new types of games, such as skill-based games, and enable the creation of decentralized autonomous organizations (DAOs) that can govern the development and distribution of games in the system.
Another important component of Web3 games is the concept of “play-to-earn”. This lets players to earn cryptocurrency or digital assets (such as NFTs or other collectibles) by playing the game and completing certain tasks or challenges. These earned items can further be traded, transferred, used within the game or even on other platforms.
The decentralization of Web3 games lies in the fact that there is no central authority controlling the game. It is rather run by a network of computers that make up the blockchain, making it more resilient to censorship or unnecessary interference.
Rather than centralized servers, blockchain technology allows for the provision of a tamper-proof ledger of all interactions in the game and guarantees verifiable algorithms.
Its decentralized nature encourages greater input and feedback from the community which helps in constructing the game’s direction and development, while players earn rewards for their contribution.
Web3 games stretches its potentials to include partnership and co-creation between developers and players in the gaming industry through the use of decentralized applications that are built on blockchain technology.
Unique Features of Web3 Gaming
Web3 gaming offers several potential unique features which makes it more attractive when compared to the traditional gaming model. It offers a new standard that is self-sovereign, community driven and has a high transparency among so many other features.
One fundamental feature web3 games have is decentralization. Due to the fact that they are built on decentralized technologies, they are not controlled by a single entity.
This promotes transparency, ensures security, autonomy, fairness and maximum control over in-game assets.
Without an intermediary, these games are made seamlessly accessible to gamers, the entire process which includes buying cryptocurrency, setting up a wallet account etc. is made readily easy as it does not require complicated technical knowledge.
Web3 games makes use of blockchain to ensure that no one cheats or tampers with the game environment, promoting transparency and the integrity of the game.
Web3 gaming promotes ownership (self-sovereignty), interoperability and control of in-game assets. Through the use of NFTs, players can truly own their in-game assets, this goes further to imply that they can buy, trade, transfer, sell or use their items across several platforms outside the game, which in turn maximizes their financial worth. The players can even carry on their in-game items over to their next gaming platform, which creates a more connected gaming experience.
Another feature is the rewards involved. Web3 games often involve the use of cryptocurrency and tokens, which can be used to reward players for their active contributions, gaming skills, and achievements in the game.
By this, they created a new incentive structure that is aligned with the interest of the players. In play-to-earn games, players earn money from their in-game victories, like completing tasks which is a huge source of income generation.
The use of blockchain offers a way to trace the source of digital assets, enabling developers and players to easily track the owners of specific assets and transaction, directly increasing the transparency of the game’s economy.
The replication of in-game items which has been observed in the traditional gaming system is not supported in Web3 games due to the fact that items are stored on the blockchain.
Web3 games permits digital scarcity with the creation of unique, rare and valuable in-game assets, the developers can guarantee that the in-game items are scarce and not prone to inflationary pressure.
Web3 Games vs. Traditional Games
There are several key differences between web3 games and the traditional gaming system. The most pronounced difference lies in how the game data is stored and managed.
The traditional gaming setups have a centralized method where the game is clearly handled by a single entity or organization, having services at specific locations for storage and organization.
In web3 gaming on the other hand, the operations are dispersed such that the game data is stored across varying nodes on the network using blockchain where records are stored in a distributed manner.
In traditional games, the controlling command of the games are in the hands of the game owners or administrators. They can freely modify the game or its features at any given time without seeking the consent or contribution of the players.
Web3 games hands control over to the players by giving them voting rights, which permits them to contribute to future updates made in the game.
Players in the traditional gaming model do not have ownership rights over in-game items as they lie in the hands of the developers or game owners. The reverse is the case with Web3 games.
Web3 games promotes ownership of in-game items and achievements. This means that players can easily buy, trade, exchange assets in the digital marketplace thereby bringing real-world value to the players.
Another distinguishing factor is the payment model. It is on record that traditional games majorly follow either of these three payment models, which includes:
- One-time purchase
- Subscription model
- In-game purchase
Players are required to spend fiat currency for these games. Web3 games differ as they run on cryptocurrency and digital assets. Smart contracts are used to automatically aid in the exchange of these assets, totally scraping out the need for a middle-man. Web3 games use the following model to reward players:
- Play-to-earn
- Move-to-earn
- Sleep-to-earn
- Wear-to-earn etc.
Unlike in the traditional games, web3 games offer players an opportunity to monetize their gaming experiences.
It allows players to customize their gaming environment with preferences that is unique to them, thereby making it a player-driven experience. It also offers a lot of freedom by giving players full reins over their interactive virtual environment.
In the traditional gaming model, it’s just the player and the game. Web3 offers a whole new level of an interactive and immersive gaming experience for payers. Players get to interact not only with the game but with the virtual environment and other players.
Web3 games also creates room for partnership and co-creation between developers and players allowing for a more supportive and large community unlike in traditional games where features and developments are only handled by a team of developers.
Risks of Web3 Gaming
Web3 games offer an out-of-this-world kind of experience for players as it is totally immersive with cool virtual environment. Despite its striking potentials, it poses several risks that players should be aware of and developers should make updates to.
Generally, there has been reported issues concerning user adoption and mainstream reception.
Web3 gaming is still in its infancy stages and can be considered complex and difficult for non-tech savvy/crypto novices to navigate through. This can lead to an entry barrier for some potential players and developers.
The game community should work towards making it more accessible and increasing mainstream adoption by creating awareness, educating players about the potentials of web3 games and helping them understand the protocols involved for an effective gaming experience.
Although web3 games are generally considered more secured than the traditional ones as they are built on decentralized networks, they can still be vulnerable to security breaches, cyber-attacks, etc. which could result to a drastic loss.
Players are advised to cautiously manage their login info and private keys, ensuring to make use of secure and highly approved crypto wallets to store their digital assets.
The volatile nature of cryptocurrency prices could pose another risk for players. The rapid and instable fluctuation in the value of cryptocurrencies can also lead to players losing their money or assets if the value of the cryptocurrency in their possession decreases suddenly.
Another risk is the reduction of the “fun” vibe enshrouded in the whole concept of “gaming” as web3 might likely focus mainly on financial incentives. Players may be too focused on earning that they may miss out on the whole immersive gaming experience, I mean it’s a game which is supposed to imply “fun”.
Developers for web3 games should endeavor to prioritize the “fun” part while developing, designing and creating features. This could potentially attract more players and make the web3 games more exciting when compared to its counterpart.
Web3 games also faces regulatory risks as it is largely unregulated, which means that players have limited remedy in case they face any cyberattacks or cheated by a gaming platform. There is no central authority to intervene on behalf of the players when a complaint is being tabled, and the uncertainty around taxation, licensing and Anti-Money Laundering regulations is a cause for concern.
Developers and players alike should be aware of all these risks and make efforts to fulfill existing appropriate guidelines.
Examples of Web3 Games
There are different examples of Web3 games, but the major factor that unites them all is the fact that they are built on blockchain technology, often integrate elements of DeFi and NFTs.
There are lots of examples of available web3 games and with the rapid evolution of blockchain technology, we can expect to see an explosion of more innovative and immersive games in the future of web3 games. Among the examples are:
- CryptoKitties known as one of the first popular Ethereum-based games, cryptokitties began the race for web3 games in 2017. It is a game where players can collect, breed, and trade digital cats as NFTs. The value for each is determined by how rare it is and using blockchain technology, the uniqueness and ownership of each digital cat is guaranteed.
- The Sandbox which is another example was released in 2018. Here, players get to build, own, and monetize their own virtual worlds, in-game assets as NFTs using blockchain technology.
- Axie Infinity, developed by Sky Mavis is one of the most popular blockchain games due to the role it played during the pandemic in 2021. It is a Pokémon-inspired play-to-earn metaverse game where players can collect, breed, and battle creatures called Axies. It also uses blockchain technology for ownership and trading of Axies as NFTs.
- God’s Unchained is an Ethereum-based collectible card game, wherein players can buy, sell, and trade cards as NFTs. It uses smart contracts for ownership and trading.
- Decentraland, also an Ethereum-based virtual reality world platform was created in 2015 by Estaban Ordano and Ariel Meilich. It offers users opportunities to buy and sell real digital estates, while monetizing their experience, discovering, interacting and playing games within the virtual world.
The Future of Web3 Games
Web3 games by introducing blockchain technology and metaverse has completely revolutionized the gaming industry as they ushered in financial incentives.
It is a positive and welcomed development towards building a digital gaming system, bringing in the financial aspect while taking steps further ahead of the traditional model.
The potentials of Web3 games are highly prominent although they are still far from mainstream adoption, this makes some people to believe that web3 games may not replace the traditional ones as they offer different experiences and target different audiences.
Web3 games have the potential to create amazing opportunities and revenue streams for both players and the industry at large. With its rapid developments, we should brace ourselves for more exciting, interactive, immersive games and a stronger sense of community.
Its future is likely to be characterized by increased decentralization, interoperability, attractive innovations and a more player-driven gaming experience.
The few risks we mentioned earlier however, needs to be properly addressed for web3 to attain its full potential.
