Web3 gaming has bigger challenges than the crypto winter

When I first had the idea for this piece, we looked set for a glorious Web3 summer. Blockchain gaming was the latest craze, following the NFT profile picture hype of fall 2021. Investors were investing, millions of players were playing flagship games, and dozens of crypto gaming guilds were springing up to facilitate ‘play-to-earn’ gaming. The hysteria provoked anytime blockchain gaming was mentioned in conjunction with a major publisher or mainstream video game reflected the reality that pretty much all of them, publicly or privately, were looking closely at blockchain strategies. 

This hype cycle masked a series of fundamental threats to Web3 gaming’s longevity which have been laid bare by the ‘crypto winter’ we are now in the midst of. Play-to-earn is suddenly widely seen as unsustainable. Rudimentary blockchain-first games stopped being fun when numbers stopped going up. And yet, it’s safe to say not many are betting against Web3 technology and gaming in the long run. Investment in the blockchain gaming sector has already broken $5 billion in 2022, compared to $4.2 billion across the whole of 2021. The Web3 gaming industry mustn’t take this as a sign that crypto winter will be little more than a cold snap, and pray its challenges melt away. If it hopes to be more than a gaming niche, Web3 gaming cannot look the same as it does today when it emerges from its wintry hibernation. 

If it does, Web3 gaming’s current model of siloed economies and experiences will quickly become an insurmountable barrier for the vast majority of the 3 billion or so daily gamers worldwide — for whom high friction equates to low fun. So while investment in blockchain gaming remains considerable, and awareness of it is widespread, there’s a lot of work to be done before mainstream adoption can follow suit. It’s clear that blockchain gaming must evolve by providing fun, ease and choice to scale to the mass market.

Scaling Web3 gaming

The financialization of various in-game items and, most importantly, of people’s time, has undoubtedly created room in gaming for new types of player and even non-playing personas such as investors and gaming guilds. Any successful model of blockchain gaming will therefore undoubtedly include elements of investment and economy ownership. But the most important piece is driving mass adoption. The blockchain gaming play that succeeds with the average players (aka “normies”) will also become the biggest Web3 onboarder on Earth.

Billions of gamers worldwide play games because they’re fun. They rely on free-to-play content and use whatever device is available to them (mainly mobile). A Web3 gaming model that compromises these mass-market dynamics by being blockchain-first rather than fun-first is unsustainable and unscalable. The starting point for any blockchain gaming model, then, should be what made gaming great in the first place — fun. From this position, we can enhance games with blockchain, creating a multifaceted offer that caters to and provides choice to gamers of all types, crypto natives, and everyone else in between. That’s the holy grail of Web3 gaming. 

Platforms, not just games

So, if making blockchain gaming viable in the long term is a case of providing scale, ease and choice to players, it stands to reason that we need blockchain gaming platforms, not just blockchain games. Why?

Quite simply because creating a single game that appeals to and retains billions of players is impossible, on- or off-blockchain. Assuming people want to continue playing multiple games as they do currently, it’s not going to be viable to have tens of thousands of separate, unique blockchain game economies. Users would accrue dozens of different wallets and tokens on multiple blockchains — a far cry from the seamless interfaces and payment infrastructures that are ubiquitous in mainstream gaming and entertainment such as music and video streaming.

Rather than the next great game, we should instead be thinking about how we create a blockchain gaming platform that rivals the size and variety of Steam or the Apple App Store. But instead of walled gardens run by Web2 tech giants, imagine what those platforms could look like when married with the key principles of Web3: transparency, decentralization and community ownership.

Retooling Web3 gaming

If we get it right, gaming’s shift from Web2 to Web3 will be much more significant than, say, an upgrade from PS4 to PS5 or iOS15 to iOS16. Rather than a shiny reskin with a few nice upgrades, it’s a chance to rebuild fundamental elements of the video games world, provide fair reward for people’s valuable time and talent, offer ownership of their favorite games and experiences, and give players a say in how the game industry evolves. 

If we get it wrong, it will be a case of ‘always winter, but never Christmas’ for Web3 gaming, which will be doomed to remain a siloed series of niche experiences. This is inevitable if we treat crypto winter as a blip rather than a time to fundamentally retool our approach. To enable Web3 gaming to scale, we need to focus on making it cater to everyone, with multiple ways of playing and engaging. Ideally, this needs to be within a small number of multifaceted ecosystems that bring together multiple games under one economy and one seamless UX; avoiding the interoperability constraints of Web2 “metaverse” platforms. 

Şekip Can Gökalp is a founding contributor and strategy lead at Infinite Arcade.