"Out with the Old Guard, in with the New" has been the refrain in the cryptosphere for more than ten years.
It is logical. In the big view, the financial crisis of 2008 was a trigger. People demanded a new global reserve currency, which led to the creation of DeFi, an entirely new financial system in addition to a cultural movement. In particular, web3 and bitcoin spurred a campaign to destabilise established power structures.
This revolutionary energy still drives web3 space today. It draws Founders, developers, and users to innovative new projects, with NFTs, DeFi, DAOs, and Web3 Games being the key ones.
However, it is illogical to assume that the entirety of web3 should be revolutionary. It presents an untrue binary choice: either accept it or reject it. When in reality, many web 3 projects need to be evolutionary, not revolutionary, to flourish. They must improve upon the best aspects of earlier times. In particular, this is true of web-based gaming.
Web3 games are currently in their initial wave. Many of them are currently concentrating on play-to-earn. Instead of putting entertaining and interesting gameplay first, they are primarily focused on making money. We worry that web3 gaming will never become mainstream and that many initiatives will fail if it remains tuned in this way, with an emphasis on those who want to earn money rather than play.
We think that in order for web3 gaming to flourish, it must build upon the most successful web2 gaming. Web2 game pioneers are among the most talented businesspeople we've ever seen when it comes to developing products, inspiring engagement, and generally comprehending user psychology. The product psychology that made games so important and fun in the web2 era, before some users' primary motivation was to make money, should be embraced by web3 gaming projects today.
We think that the winning approach is to enhance what worked effectively in web2 games with the amazing new features and concepts of web3. There will soon be a new wave of games that accomplish exactly this, which could alter gaming forever.
Web3 Gaming Is Growing
Web3 gaming is expanding. A staggering 49 percent of blockchain usage in 2021 was related to gaming. The number of daily active wallet connections to blockchain-based games reached over 1.4 million in the past year, surpassing DeFi as the most popular category.
In 2022, growth has continued. In March 2022, Web3 games drew 1.22 million unique active wallets, or 52% of blockchain activity. Games are the entry point for bringing in net-new users to web3.
Even if these statistics currently pale in contrast to web2 games, which will have more than 3 billion players by 2021, the stakes are only rising as growth picks up.
Axie Infinity, the early leader in this market, has drawn a lot of attention and criticism, particularly in the wake of a costly $620 million network breach. Since the hack, Axie has lost a lot of popularity, yet they remain difficult to ignore. With a total of $1.3 billion in sales, it is the fourth most valuable dApp year to date. In the last six months, they have fallen to eighth place, and during the past three months, they haven't even been ranked. Most of this decline, which many people are unaware of, occurred prior to the attack, which begs the question: why? Gaming and cryptocurrency will remain intertwined over time. Visit Suffescom Solutions Inc.'s website if you're still attempting to decide which is the greatest Web3 Development Company.
The Dangers of Giving "Earn" Priority Over "Play"
Although Axie Infinity has undoubtedly achieved great success, there are still important lessons to be gained. The hack did indeed slow growth. However, if you're employing the play-to-earn strategy, there are other things to bear in mind. Axie Infinity's creator, Sky Mavis, produced an engaging gameplay experience, but the major lure for consumers has been its potential financial advantages.
A good living salary in many developing nations, players have at some point made up to $1,000 per month from playing full-time. Over 40% of Axie's users reside in the Philippines, where playing the game has become a new employment. However, in order for a game to be successful long-term, game producers must carefully plan for sustainable in-game economies and prepare for times when most players won't be able to earn in the game.
People have been known to pay a lot of money to enter a game. In-game items (such as Axies) are being sold on Axie's NFT marketplace for an average price of $787.
The demand for in-game assets is currently being driven by new users, but as the proportion of new users compared to all users declines (which will happen eventually in any game), they'll need to find alternative sources of demand to support current prices. Any possibility of maintaining demand will come from boosting existing users' in-game participation and activity. Users won't only be unable to support themselves financially from the game without such engagement-based demand, but they will also really lose their investment.
Web3 gaming cannot survive on a pay-to-play revolution alone. Simply put, web3 must support excellent games.