Gaming vets promise to make blockchain gaming fun and sustainable - TechCrunch

Gaming vets promise to make blockchain gaming fun and sustainable – TechCrunch

unbridled success Axie Infinity and StepN have convinced a wave of entrepreneurs that web3 gaming, where ownership of in-game assets is in the hands of users by adopting blockchain rather than a centralized platform, is the future.

Some of the biggest hits in the space to date reward users with tokens that can be cashed in in what is known as a ‘play to earn’ model. While P2E games have attracted millions of gamers and billions of dollars in investors, game industry veterans argue that it is fundamentally unsustainable.

These games are the brainchild of financial engineers aiming to get rich quickly rather than experienced developers who build legacy businesses, they say.

The dramatic rise and fall of Axie Inifity is telling. After peaking at $754 million in November when bitcoin hit an all-time high, the game’s monthly sales volume dropped to $4.5 million in July.

“Most GameFi developers are not game developers,” said Maciej Burno, who leads the new metaverse business for Polish game studio Reality.

Burno is among a group of gaming veterans who believe in blockchain technology around the world who are trying to bring blockchain gaming into the mainstream. Their vision is to counter the general impression that web3 games, made famous by P2E, are all deceptive and trivial. Instead, they want to create fun and sustainable games, while introducing cryptocurrency as a new way to motivate gamers and creators alike.

Is it a game?

The problem with P2E, as See Wan Toong, former chief technical officer of Electronic Arts and CTO at web3 games startup Red Door Digital sees it, is that users have to spend money up front to start playing.

In Axie Infinity, users buy and generate cute blob-like objects called Axies in the form of non-fungible tokens that are authenticated on the blockchain. The sales from the NFTs then go towards funding rewards for those who earn tokens through play, and can in turn cash out the tokens, which are the game’s original cryptocurrency.

This means that for the game to be sustainable, it must have a constant influx of new users or lose its funding source. That’s why critics compare P2E games to pyramid schemes.

Toong argues that many P2E titles are not games in the strict sense of the word. They are akin to decentralized finance, or DeFi, and are products with endearing features. Die-hard gamers dismiss Axie Infinity as “simple” or even “boring,” unlike the free mobile games they’ve been opposing for years.

But for those who live in developing countries, the prospect of making several hundred dollars a month by clicking on a computer screen can be tempting. This is why Axie Infinity has largely taken off in countries like the Philippines during the pandemic when so many people lost their jobs. For them, the game is more like work than fun.

“I think there’s a bit of elitism in that,” Simon Davis, CEO of Mighty Bear Games, a Singapore-based 3 game studio that just raised $10 million selling tokens, says of Axie Infinity critics.

“There is a tendency in Western countries to dismiss things that are common in other parts of the world and not be as respectable as they should be. If you look especially in Southeast Asia and Latin America, countries where income is likely to be lower, people are not buying high-quality gaming consoles and consoles. It is interesting to provide people not only with entertainment but also with potential economic positives.”

“I don’t like the term play to win,” continues Davis, former director of design at Ubisoft. “I don’t think it should be a primary motive because you are playing a game to have fun. But then someone can decide that they don’t want to play the game anymore and get some of their investment back then. I don’t see how that is a bad thing.”

play and win

While Davis understands the value of P2E, like many experienced game developers entering web3, he makes the resources to perfect the gameplay first and foremost. His studio was producing traditional games, such as the official Disney Pixar game and Butter Royale, which were a hit on Apple Arcade, before switching to the blockchain. It will soon launch its first title on the web, web3, a third-person multiplayer battle royale game that includes the token economy.

Games can be fun to play And the Some blockchain game developers argue that it is profitable. It’s not news that players are motivated to make money – even in the most advanced parts of the world.

Remember World of Warcraft? There is already a group of players in the MMO [massively multiplayer online] The game that employs a lot of people in Vietnam and Indonesia to grow gold,” notes Toong.

“When you look at a traditional game, people put millions or billions of dollars in the gate, but it’s on the other side. They don’t get any value back,” Toong adds.

Berno agrees. “People want to play for fun and are willing to spend money that makes them happy, but there are also people who want to invest, so you can give them a tool to invest.”

The developers also promised bigger rewards from integrated blockchain games. Davis notes that in free games, which are a popular monetization model today, developers earn income by paying an update every “six to eight weeks.” “Users get annoyed that you try to withdraw money from them every two months.”

In contrast, in web 3 games, developers get a small percentage of each in-game transaction, recorded on the blockchain. “The only thing you have to worry about is creating a game that people want to keep playing for a very long time and creating value for those assets for players who want to trade amongst themselves,” Davis says.

icons

To make the blockchain game sustainable, Toong’s Red Door Digital is taking a different approach than Axie Infinity. Users do not need to buy platform tokens to start playing – unless they want to start earning or get real value in their assets.

When the game maintains a repeat user base, the value of the game will increase and outside investors will join, Toong believes. “All of that increase in value then goes to the people who play for financial returns.”

Like many web3 games, Red Door Digital platform offers useful tokens, which are used as in-game currency to purchase skins, items, etc., as well as governance tokens. Users who contribute to the game will receive governance tokens and will be able to vote on critical project decisions. Utility tokens can be traded, while governance tokens have no liquidity to strip them of any speculative value.

While developers are still working on improving their token economy, investors are already pumping big money into their startups. Blockchain games attracted a whopping $2.5 billion in funding in the second quarter, according to DappRadar, a data company that tracks decentralized applications. In H1, blockchain games accounted for about 30% of the total capital raised by private game companies, according to a report by investment bank Drake Star.

Despite VC money pouring into web 3 games, some older studios and publishers seem to err on the side of caution. Tencent, the world’s largest gaming company, has no development plans for general knowledge web3 games.

“Reputation is important to a company, so if anyone creating this initiative fails, that’s the end of their career,” says Toong. “So the only way for them to invest in a crypto company or two is to see how it goes.”

The gold rush to the Web 3 poses challenges to crypto-skeptics in the gaming arena. A gaming-focused fund manager based in Asia He is frustrated that the investors he meets these days are very interested in seeing if his fund has a web3 angle.

“If I say I don’t, they don’t want to invest.”

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