How Web3 is transforming gaming from industry to economy

How Web3 is transforming gaming from industry to economy ...

The metaverse and the metaverse are two of the most popular technology areas right now. According to Crunchbase, recent funding rounds for Polygon Technologies and Alchemy worth a combined $650 million. In early March, a group of heavyweight investors, including billionaire Bill Ackman and gaming giant Animoca Brands, announced a new Web3 venture fund that focuses on the metaverse, gaming, and social applications. Around the same time, Griffin Gaming Partners, a gaming-focused VC fund, said

This wave of investment isn''t just about making more, bigger, better games. Web3 is adapting the way that games are developed and built, incentivizing and engaging users and developers with the promise of token-based rewards. However, the transition from the traditional gaming model is so important that within a few years, well no longer refers to gaming as an industry but as an economy.

Crowdsourcing game development

This transformation is already underway, as we can see in the way game studios are changing their development process. In the established industry model, a small handful of game studios are responsible for the lions share of revenue through the well-planned release of big-name game titles like Call of Duty and Player Unknown: Battlegrounds.

These games are generally developed in a black box, and intellectual property is understoodably carefully guarded as it includes the studios major intangible asset. Studios invest significant amounts in marketing games through online campaigns. It is also a challenge to hire game developers, as there is a relatively small pool of people to meet the overwhelming demand for new gaming content.

While things are changing, games like Roblox are introducing a new form of user-generated content (UGC) capable of crowdsourcing, reaching loyal players and supporters. There are also active groups of modders who modify game or in-game scenarios, often hosted on private servers.

This is a win-win scenario for game studios. It keeps a steady stream of new content coming to satisfy players without requiring the company to keep developers on the payroll. Those who develop game content are paid for their efforts, creating a new source of income. Such a concept encourages organic marketing through word of mouth and viral content.

UGC: A natural fit for Web3

The Web3 model incorporates economics into the game''s central premise, thus creating open, decentralized spaces where anyone may join and contribute to the formation or development of the game.

Because of this model, Web3 games do not necessarily need to engage users through CGI-type graphics and intricate plot advancements. Instead, there is a focus on asset ownership, community building, and engagement through interaction.

Web3 has become more apparent in terms of gaming and finance. In traditional games, assets only exist inside the game and aren''t portable. In contrast, assets in Web3 games can be transferred into other environments where they also have value and can be traded on the open market via decentralized exchanges. Gamers may also use these assets in DeFi applications as collateral for loans.

Gaming in the gig economy

Were we at the start of this shift, but we believe that gaming will become part of the gig economy model that now dominates almost every other internet sector. Unlike freelance game development, the earnest is determined by their gameplay and other involvement.

In this age, emerging technologies will bring forth new marketing and branding opportunities. Right now, luxury brands are collaborating with game studios, such as Balenciagas and Fortnite. In the future gaming economy, brands will be wooing the next generation of gaming influencers who can compete in decentralized metaverses and Web3 applications.

From esports to P2E

If this seems too far-fetched, then we only need to look into what has happened on the player side in the last decade or so, and what is happening today. The emergence of the MOBA (Multiplayer Online Battle Arena) genre, which pits teams against one another, led to the esports market. What else is esports that, by 2019, is expected to cost esports $1 billion and $1.6 billion by 2024. Last year, esports players received over $200 million in prizes.

We see the blockchain trend emerging from Axie Infinity, The Sandbox, and Splinterlands. Play-to-earn offers another way for gamers to generate income during the epidemic, and it proved enormously popular in Asian countries as a way of replacing lost income. In 2021, investment in the game industry reached new highs, and Forbes credits this increase to an influx of funding for blockchain-based games.

One of the greatest benefits of the transition from the gaming industry to the gaming economy is that it does not attempt to emulate or replace the existing gaming industry model. In parallel, those same fans and many other gamers and developers may participate and benefit from the Web3 play-to-earn and create-to-earn gaming economies. Ultimately, the transition will provide benefits for everyone who loves gaming.

Mobland''s founder is Roy Liu.

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