GB Summit 2024: What will it take to get Web3 games to hit the mainstream?

It’s been about a decade of Web3 gaming, and the killer app that will transform the space has yet to be identified — but billions of dollars already invested in this space is starting to bear some fruit. What will bring Web3 out into the mainstream, and how do developers capture the attention of new and Web3-savvy players alike? We’re close, said Dan Nikolaides, CTO at Studio 369, during the Web3 panel at this year’s GamesBeat Summit.

“We’ve solved most of the UX barriers,” Nikolaides said. “We’ve solved most, from a user perspective, all those issues, especially with the web2.5 concept, free-to-play first. I think the next big frontier that we haven’t really crossed yet is, how do we bridge the gap to the remaining Web2 skeptics, and also, how do we fix the go-to-market business side path for a game developer? We’ve found it’s very challenging to get a game out into Web3.”

Folks getting pissed about innovation is a green flag, said Canaan Linder, CEO of Stardust.

“If you look back at mobile and freemium and free-to-play, it really expanded the people that could play games, and everybody was mad about it,” he said. “We see the same thing in crypto. If you ask me where in the cycle we’re at with crypto gaming, we’re at the same point in the innovation curve that we were in 2009, when everybody was screaming that mobile games weren’t going to work out. I’m very bullish on Web3-based games, just because of how many people are screaming that they’re not real.”

What will it take to get a game in front of an appreciative audience? Of course it’s about creating a game that would be good no matter what technology it was built on. But it’s also about discoverability, said Joseph Cooper, CEO of Earn Alliance.

“You can’t go to the app stores or Steam right now. They don’t support crypto,” he said. “Even on Epic, there is no category to find crypto games. There’s no crypto game filter. Discoverability is one of the key things for the go-to-market that we need to help the space. And then of course showcasing the good work that people are doing, so that other people can connect with them.”

Harnessing the real power of blockchain

The first charge is to design a good game, before you worry about how it fits into the technology available, Linder said. And if it can’t, design something that can, but with the understanding that the technology is always on the cusp of evolution.

“That’s something that I think is lost. You see a lot of games that are built on this cross-section in time with the technology that’s available today, instead of looking to the future and understanding that at a certain point, no one is going to know what blockchain is,” he said. “It’s just going to be gaming. Design for that.”

Blockchain’s greatest benefit is that it is permissionless, Cooper said.

“Anybody should be able to contribute to the ecosystem of a game. And I think that’s the power,” he said. “I wouldn’t have found my passion in programming without being able to create maps in StarCraft. It was a way I could show up and start learning and contributing to that ecosystem, and hopefully making maps that people enjoyed playing. That’s a powerful thing for user-generated content, for being able to create economies.”

The full potential of the technology hasn’t been realized yet though, Nikolaides added.

“The question, really, is what’s your appetite for risk, and how much do you want to push for true innovation?” he said. “The real strength of the future of Web3 is exactly what Coop was saying. From an ethos perspective, it pushes you into this idea that you’re creating an open ecosystem, which is great. It’s setting the stage for what we’ll push to in the future. We’re not there yet, but I’m excited to see what’s coming.”

The games that thrive in web3

Are there games that will have an edge in the new frontier of gaming?

“I go back to things that people want to play. That’s the number one. Star Atlas made a big splash because it’s a cool concept, a huge concept,” Nikolaides said. “It’s Star Citizen-esque in scope. That makes a big splash and people are excited. There are different ways in which you can try to capture an audience. That’s one way of doing it. Then the other way of doing it is in this very future-looking, experimental way. It’s just going to be about who wants to take the leap into developing a really cool, well-thought-out, well-designed version that’s purely on chain.”

Last Remains, which has a quarter million players on the Epic game store with zero marketing, is special in part because of the NFTs that 70% of their users have extracted and collected, Cooper said — and they actually have value.

“One of the top characters just sold for $1700. Some of those people own, and they could be making money, but they don’t know. We don’t advertise it,” he said. “It’s an extraction game. You roam around looking for these collectibles you can find. But the thing is, you can’t keep it unless you win that match. There are 30 other players and thousands of zombies. That’s the kind of thing that I think is fun. And then when you attach value to it, it’s pretty cool. I think there’s a lot of esports and more hardcore competitive play that can happen within the space.”

The crypto question

Crypto is having some legal trouble now, and being able to collect the coin is no longer a selling point for most players. While there’s some talk of doing away with the coin aspect of the game, Linder doesn’t think that aspect will entirely vanish.  

“As someone who learned how to code creating Runescape bots and sold hundreds of thousands of dollars of Runescape gold, I do think currencies play a part in some games, specifically open world games,” he said. “Games that are more closed off, single-player, even if they have skills-based multiplayer components, they aren’t quite as unique as some of the open-world games today. Most of the games and tokens are unfortunately not going to find product-market fit. Some will. Those will be wildly successful. But most, unfortunately, won’t.”

In Web2, there have always been gold farmers, with black markets for in-demand items, Nikolaides added. And that could be a feature instead of a bug.

“At a certain point you just have to ask yourself, why are we trying to close that off?” he said. “Why aren’t we just embracing this, being open about it, and trying to design into the framework of that economy and that system something that’s balanced and that works and that at least has open rules that people can abide by and understand how it works when they get into the game?”

Especially coming from a Web2 background, they already know how to create a free-to-play game with premium currencies that actually works — and isn’t a token just another kind of premium currency?

There’s a lot of utility in tokens, but there are also still a lot of questions, Cooper said.

“A lot of the problems come around raising money and putting money around a value of it,” he said. “I think we’re in a kind of a Kickstarter moment, where we’re funding these projects and seeing projects not going anywhere. In a World of Warcraft, MMO scenario, we’re not selling in-app purchases for gold. But at the same time, we’re trading it in an economy.”

If the developer took a fee for every trade, Blizzard would make a great deal of money — and so the precedent, or at least an understanding of what the possibility looks like, already exists. Monopoly Go, which actually sells currency, made $2 billion over the last nine months — but also wants to own that economy outright, rather than allow peer-to-peer transactions.

There are just lots of questions and experimentation,” Cooper said. “It’s up to game developers to put our minds together and see what makes sense. Then we’ll see where the law sits as we keep exploring.”

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