The road and Dream of Web3 games
Web3 games: the present and future
Joel John, Siddharth
South wind
Original source: Unitimes wechat official account
It's easy to criticize Web3 games in their current form. They have a crappy experience. Users need to store a key, pass through an on-ramp, and spend thousands of dollars to play the game. Why bother when traditional console games can be a better experience for a fraction of the cost to the player? Who wants to face a crowd of people screaming and screaming when they lose money on a crappy Web3 game? 例 句 : We will make it. What about Web3 game fans? Well, I won't. I love grand theft auto v and red dead redemption, and it's far too far-fetched for a current Web3 game to compete with them.
But as an investor who spends a lot of time in games, I think there are certain aspects of Web3 games that we don't notice. So today I want to take a moment to explain why this isn't a fad that's likely to die out in the next few years. This topic intrigued me when I looked at the Nansen platform's industry NFT index. I've noticed that the 50-game index has dropped by 65% since the beginning of the year (see chart below). By comparison, the STANDARD & Poor's 500 index is down 17%. Bitcoin is down 37%. It's a good thing we have StepN to help people make a living by walking.
Why no one cares
Irony aside, the argument against Web3 games is relatively simple. First, there are high barriers to entry in terms of technical skills and capital. When you start playing Web3 games, the graphics are very different from traditional AAA games. Assuming the graphics can be ignored, these games often lack a story. But who plays games for stories these days. Perhaps there is a strong community for Web3 games? Probably not. The Web3 gaming community can be filled with users looking to make a quick buck. Well, maybe there's a lot of money to be made? Probably not. The market is saturated and since the second quarter of 2021,"While playing"(P2E) Capital income in the game economy has decreased.
The weird thing about Web3 games is that we created financial instruments out of something historically "interesting". In general, no one cares about the virtual land sold for a high price in the "metasomes" because, historically, ordinary people spent their weekends strolling in real parks rather than using their digital avatars to wander through digital space. However, according to the Financial Times,That is changing. People are meeting in "virtual nightclubs" in the metasverse.
Ubisoft originally planned to introduce NFT in games, but had to abandon the plan due to low approval ratings.
If we inflate the price of visiting local amenities (like parks) by using digital devices, and somehow call it a good and reasonable future, then people will naturally get angry. This happens when studios like Ubisoft try to hardcode NFT into their gaming experiences (with low approval ratings). But that commercialization is in the digital realm, not the physical one.
Historically, business was an expression of skill, talent and dedication. Today, business has dirty and hypocritical hands. The pay-to-win model of gaming stifles equality and fairness, making people angry. (Note: In this pay-to-win model, players can buy items or skills to gain an advantage in the game). Don't worry, this isn't a lengthy article about why the current state of Web3 games sucks. I think a lot of people hate Web3 games because we look at them from a traditional perspective. But these new genres are going to be important because they focus on...(1) Ownership and (2)& NBSP; Liquidity of assets. They are not reinventing the wheel, but innovating on top of it.
Why you should care.
The limitations of Steam, the centralized secondary market for traditional games, at a gaming conference last month.
I learned the importance of ownership in games from a speech given by crypto game enthusiast @Ancient001. It basically boils down to three factorsVerify the scarcity of an asset, the source of the asset, and the ability of the user to actually "own" the asset. When a traditional game studio releases a limited edition in-game asset, it's hard to verify this claim. In the ticketing world, it has become common for issuers to buy concert tickets and sell them at a markup on the secondary market. Now, there's nothing stopping game studios from doing this.
By contrast, when you buy an NFT today, it's very simple to verify the historical ownership of the NFT through Ethereum's distributed ledger.Now try it on Steam, a traditional secondary market for games: you can see the records of people who bought a game item in the past, but it's almost impossible to verify. Why is this important? This is because of the frequent use of in-game assets for fraud and money laundering. This is what Valve (an American video game company)& NBSP; A problem recently admitted.
Finally, there is the concept of ownership. What makes digital assets running on immutable blockchain ledgers interesting is that they are hard to seize without using due process of law. One could argue that the USDC can now "blacklist" addresses, but that would only happen in the event of a major incident such as hacking or extortion. Allowing users to own digital assets without the risk of their assets lapsing allows sectors of society that historically have not been able to fully access banking services to engage in ways that were not possible before. The gaming market has been around for more than 20 years, but the ability to withdraw game revenues into accounts that can't be blocked by PayPal or banks has only recently emerged.
Web3 game & have spentAxie Infinity It is controversial because we have never before had a mechanism for the most sophisticated financial institutions to interact with retail participants. While we have Robinhood and Citadel, these interactions are all in a single region of the world and focused on regulated and historic assets. How do you assess which NFT in Web3 games will soar in price?
Axie's assets soared because the game connected to a low-wage labor market, organized largely through gaming guilds made up of sophisticated traders and hedge funds. Web3 games are both a means of leisure and financial engineering, where the motivator is no longer just community, entertainment or diversion, but the ability to obtain life-changing funding or livelihood now comes into play. This has changed the dynamics of traditional games and the way users interact with them.
Capital market acts as sculptor & NBSP;
2021, according to a report by the Blockchain Gaming Alliance (BGA) 4 billion dollarsPut into the Web3 gaming infrastructure, in the first quarter of 2022, about 2.5 billion dollarsEnter the field. What we don't realize when we talk about the industry is,Founders have an incentive to transition from the old ad-driven model to a token-based model because they have access to readily available capital and higher valuations.
In terms of scale, gamers in the U.S. will spend $30 billion on hardware, streaming donations, subscriptions, and game purchases in 2021. According to a report by EY, Indian gamers will spend about $1.5 billion on online games in 2021. So we're in an environment where there's almost as much investment flowing into the gaming ecosystem each quarter as there's game revenue each month. In the long run, it's not healthy.
Top: Monthly video game revenues in the US, in $billion.
Depending on what resources you use -- some of the biggest Web3 games today have around a million users. According to the from Dune The Analytics platform query results in a total of 4 million DeFi users at the time of writing. OpenSea, a benchmark used by NFT, had about half a million active traders a month at its peak. In other words,We're still figuring out how to reach the 100 million user base for blockchain-based apps.
The big game studios have the advantage of being the first retail focused app with tens of millions of users. By default, "Free to Play". You need a huge user base to keep going. (Note: Freemium games tend to provide players with complete game content and make money by selling virtual game items such as skins and emoticons.)If these studios can convert a portion of their user base to Web3 native users, they can achieve extremely high valuations. They have an incentive to focus on how to generate revenue and what will help them deliver the most value to shareholders.
Games as platforms;
Another reason why Web3 games are likely to stay is that,They unlock entirely different themes of economic activity - traders, speculators and unionsCan help create a self-sustaining ecosystem that benefits both Web3 game publishers and players. The ideal game should evolve as a platform, not just sell items once. Independent third-party users will be able to create services, develop experiences, and sell them. You think that's far-fetched? Check out the following twitter interaction:
"Fortnite is primarily a game," Tim Sweeney, founder and CEO of Fortnite game publisher Epic Games, wrote back. "But with every update and every creative map, fortnite is getting closer to becoming a platform. 2021 is going to be a very interesting year."
Tim Sweeney is CEO of Epic Games, the company behind Fortnite. When I opened the game recently, it felt like an NFT-driven world, with independent artists selling costumes, game maps, and improvements to the game itself. The path to this goal already exists. Games like Grand Theft Auto V, Battlefield 2042, and Age of Empires all have custom servers or mod-based game plug-ins. These game changes currently do not allow creators to earn revenue from fees. Ideally, a Web3-based game should reward both the studio (like Epic) and the creator of the mod.
An example of user-generated content on Fortnite Why will games become platforms? First, it reduces the studio's efforts to keep users engaged. Players can find new experiences developed by other players and retain a vested interest. Second, the distribution of big games means that independent, creative developers can make money without having to worry about finding an audience. Third, it paves the way for more revenue from in-game subscriptions and purchases.Games becoming platforms means we're going to see more user-generated content. This, in turn, keeps players (and viewers) engaged for longer.
Finance primitives of Web3 & NBSP;
Web3 native games are at the intersection of financial infrastructure and gaming experience. If the independent community can use things like DAO Tools such as decentralized autonomous organizations and multi-sigs, or collecting in-game assets as payment, will open up new avenues for users that were previously unavailable. These communities also use unconventional incentives. For example, instead of paying with cash, users reward each other with in-game assets.
In essence, Web3 games-related DAOs can take away the "boring" aspects of DAOs and show the average person the importance of alternative collaboration tools. DeFi rebuilt the financial markets.Web3 games essentially gamify financial markets, enabling eight-year-olds to trade with experienced Wall Street traders. It's elegant and adventurous.
The idea of using the same NFT for multiple games is somewhat flawed. I don't think interoperability of game assets will happen as quickly as we'd like. Today's studios have no incentive to make in-game reputation and assets interoperable. A closed ecosystem means that people who enter a game stay there for a long time because they can no longer move all their assets elsewhere.
That's why GRAND Theft Auto v didn't get a major upgrade for a long time. Developers know that people who have spent hundreds of hours playing the game are not going to jump to other places, even if they upgrade only gradually. The chart above is proof of this trend. Although the Rockstar Games (Us game publisher)& NBSP; No new games were released, but viewers continued to flock to streams related to the game.
So how will user transition happen? Interoperability is not the way forward in my view.liquidityIs. Remember last time I said that games have an incentive to introduce financialization to attract traders? Games can benefit by charging a percentage of the transaction fee, just as OpenSea charges for NFT transactions on its platform today. If the game asset uses Token standard (erC-1155), it is only a matter of time before a market emerges for these assets.
Gamers trade these assets rather than trying to move them. Price discovery will be delayed by initially unclear data on the scarcity and availability of these assets. For example, when a game comes with new characters and weapons, there is a learning curve to evaluate the cost and attributes of the weapons, and to experiment with different character-weapon combinations to play the game. In the market model, these types of weapons will become very rare and expensive, rather than being arbitrarily priced by game developers. Imagine the efficient market hypothesis applied to the digital economy in games.
Community & amp; identity
So far, we've looked at why Web3 games exist from a capital market and business perspective. We believe there is another reason, and that is people. I've been saying for a long time that the P2E (Earn while you play) model is popular because it offers higher revenue. But the idea of money as a motive alone can be flawed. Digital-first forms of labor, such as those brought by the P2E model, also bring oneA sense of community, dignity and choices that traditional jobs don't allow today.
The idea that making money from games will solve all the problems of today's labor market is utopian, and I don't support it. But it's fair to say that digitally first forms of labor, such as in-game "grinding," have paved the way for key skills such as communication, collaboration and coordination. In an increasingly digital workforce, traditional forms of education are likely to fail to equip students with these skills.
Guilds like IndiGG allow players to find people with similar tastes and connect them with potential revenue generating opportunities. This was evident in their work with Skyweaver. The game itself is free, but players who participate through the guild receive monetary gains from a $100,000 bonus pool. This may not seem like much to the average knowledge worker reading this, but if you're from a small town with no immediate economic opportunities around you, it could be life-changing.
It's often hard to find the right guild. Even when games are involved, economic exploitation of labor is possible. It takes seven to 12 days for a person to join a guild. According to & have spent Respct.co Company founder & NBSP; Utsav Singla And & have spent Srijan Jain Only one out of every 1,000 applicants is accepted. The learning curve for new users is steep, including how to set up a wallet, how to join Discord, how to filter the right games, and finally how to join a guild. Respct.co has built a platform that allows players to be supported throughout the cycle, from discovering the game (just like you do on Steam) to getting revenue paid into your bank account.
We have yet to realize that digital workplaces like games are the richest source of data for hiring people. For example, the average age at which esports players retire is about 26. But they've spent a lot of time in the gaming ecosystem over the years, and their footprints are often verifiable. Time spent playing the game, their partners, and levels unlocked in the game can all be verified and stored digitally. As long as privacy concerns are properly addressed, this can be very useful in hiring.
Web3 native games will eventually lead to a rich on-chain identity layer. Unlike LinkedIn, many of the claims in Web3 can be immediately verified. In the future, employers will use these data sets as a reference for college degrees. If you're hiring a community manager -- what's more valuable? Is it a degree, or is it thousands of hours of work in community coordination? I think I know what to choose.
Write at the end.
Just looking at Web3 games from the perspective of game graphics and user experience is like looking at a glass of water. You have a limited view of what's possible. Instead, we must look at the macroeconomic factors that bring people to these games: shrinking labor markets, the growing aspirations of young people in emerging countries, the rise of parallel financial infrastructure, and the challenges of monetizing existing games.
The amount of money Web3 games attract means the founders will continue to develop them, even though the vast majority of them will slowly die, as most VC-backed startups do. They will create an alternative way for us to look at games. They are not only a means of leisure, but also an economic ecosystem that can sustain very different user profiles. This could involve traders, anchors, researchers and service providers. In my opinion,Web3 games are the Trojan horse that will bring the most users to the crypto world. They focus on younger users who are tech-savvy and comfortable with digitally first asset ownership.
The challenge for studios and developers building games is to balance economic activity with fun. Make your game too complex and users will avoid it. Without ownership and liquidity, users will continue to play traditional AAA games. Balancing the two is necessary to bring 100 million users to Web3 through games.
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