If you’ve ever had parents scolding you for wasting time on gaming and never quite knew how to respond well, now you can. With Web 3 gaming and current game-streaming efforts offering an economic upside, an industry that was essentially a medium of entertainment and sporting, is getting redefined as a newly minted creator economy. No wonder, the $1.8-billion gaming market in the country is expected to treble in size to $3.9 billion by 2025, as per a recent KPMG assessment.
Just a decade back, what most people knew of gaming was typically in the context of its earlier avatars of Web 1 or Web 2 gaming. Web 1 was the era of solo gaming over early console set-ups. You competed against yourself, practicing game scenarios over and over with the attempt to improve time and score. Casual, single-person games today like word games, Sudoku, etc. still mimic a Web1 gaming behaviour. But as much as that worked as entertainment, the lack of interactivity did not quite unleash a mainstream gaming culture. Web 2 made that happen.
With the coming of technology that allowed connectivity and interactivity between multiple computers, the internet gaming experience underwent a sharp evolution. You could now enjoy multi-player games with anyone across the globe, logging into a social gaming revolution from home. Under Web 2 you found friends on the internet, connected over interests in chat forums, and joined communities that bonded over all things gaming and esports. Although, the game publisher-developer-broadcaster ecosystem still played a key role in shaping that experience. Web3 aims to reimagine gaming experiences by putting the consumer in the driver’s seat.
Power in the hands of players
At the core of the Web3 experience are independence, consent, and collaboration. By shifting powers from a centralized authority or gaming company to a DAO (which is pretty much governed by pre-set community rules enforced via a blockchain), the idea is to give people, and in this context gamers, a voice. It starts with putting the ownership of in-game assets (coins, tokens, drops, skins, etc.) in your hands. You are free to trade them without worrying about loss of privacy, loss of possession, or depending on a third party to approve your access to assets. You can also acquire ones that are not specific to a particular game. So, you don’t just lose an asset when you quit playing a game or say the game gets suspended, but you can leverage it across multiple games – giving them unprecedented interoperability. Next, with decentralized decision-making, there is a higher likelihood of the value of your assets being preserved. No more scenarios where an arbitrary game rule change by a publisher decimates the value of your assets earned after hours of loyal gameplay.
What’s more, serious and loyal gamers also get the opportunity to earn governance tokens, effectively getting voting rights to how a game evolves. Your decisions around game rules, defining the gameplay experience, and even how you get to earn from it have real potential to see the light of day if they are popular in your DAO community. Now isn’t that a prime example of democracy in action?
Value for gameplay and loyalty
The most transformative aspect that Web3 gaming is pushing is how it can take you from passive play or pay-to-play (P2P) models to play-to-earn ones. In P2P, players invest money to get a better gameplay experience. In such a case, developers are likely to push out updates every few months to create a continuous source of monetisation, which might end up frustrating audiences. Web3 gaming (especially Crypto gaming) turns this on its head by rewarding players for the time and effort they have spent in gameplay. It could be in the form of tradable cryptocurrencies or NFTs that function like collector’s items whose exchange value can get decided by the buyer and seller without the intervention of any other authority. For developers, it means getting a small percentage of every in-game transaction which is recorded on the blockchain, bypassing the need for intrusive updates that may ruin the audience experience. This evolution of in-game economies allows different entities and players to bring healthy liquidity to the gaming world. Already we’ve begun to see early use cases of commerce in game streaming scenarios.
Towards good game
Another way in which decentralized gaming improves the playing experience is by addressing issues around cheating and hacks. With distributed servers, the possibility of hacks is near nil, so issues like data loss, cheating, or manipulation of game rules, which can ruin the play experience, become improbable.
But even as a Web3-led world seems inevitable, how fast the industry ecosystem evolves to unlock its potential will define its growth rate. Firstly, countering public impressions about the sustainability of Web3 gaming models must become a strong focus area. Is it possible to have games that tick all the boxes – fun, engaging, and operating on a robust incentive program without them being short-lived wonders? Next, as user-generated content is central to a sustainable engagement experience today, how equipped are game-streaming companies to provide a canvas for unique content creation and earn-while-you-play opportunities? Thirdly, with monetization capabilities becoming an attractive proposition to attract more gamers, real work needs to be done to create trustable digital assets that wouldn’t be susceptible to volatility and rapid price changes. While there are people who believe that looking at games as an ‘earning’ proposition is myopic, what everyone agrees with is that for the industry to truly grow, we need to go back to the basics. Creating a great game and playing experience is the foundation and everything else is just potential waiting to be unleashed.
Views expressed above are the author’s own.
END OF ARTICLE