Web3 Gaming: What the experts say 💬  

Insights from Twitter Space on Web3 gaming hosted by Symbiote

Before we dive into the topic, here are a few interesting tidbits from a recent Twitter Space hosted by Symbiote on “Web3 Gaming - Web 3 vs Web 2 vs Web 2.5.” We hosted Christina (ReadyGG), Chen Li (Youbi) and David (Kronos) and had a cracker of a conversation. 👇️ 

🌏 Innovation in Asia: The discussion highlighted Asia's leading role in innovating new ideas, business models, and game development, with lower development costs making it an attractive investment region.

🔍 Solving Pain Points: Web 3 is seen as a solution to traditional gaming pain points, particularly in ownership and tracking of in-game assets, offering a more transparent and decentralized approach.

🎓 Developer Education: Developers face obstacles understanding financial models in web 3, such as gas fees, and there is a need for education to encourage their active participation in the space.

🎮 Player and Developer Ease of Entry: There needs to be an emphasis on making entry into web 3 gaming easy for both players and developers, addressing user flow, and reducing friction in understanding financial models and associated costs.

🚀 Innovative Game Models: Expectation of the emergence of innovative game models in the next few months, addressing issues of sustainability, player retention, and providing unique experiences in the crypto gaming space.

The Money Has Kept Flowing In… 📊

This quarter (Q3 2023) witnessed Web3 gaming projects raising a significant $600 million, taking the year’s tally to $2.3 billion.Though it’s lower compared to last year, it is important to take note of the different market dynamics this year.¹

Notable investments and fundraises¹ 💰

• A16z launched the Speedrun accelerator, aiming to invest up to $75 million in pre-seed startups combining gaming and technology.

• Animoca Brands invested $30 million in hi, the creator of the first NFT avatar-customized debit card.

• Inworld AI secured $50 million from Lightspeed Venture Partners.

• Valhalla Ventures introduced a $66 million VC fund targeting deeptech and gaming startups.

• Futureverse received $54 million in funding for its innovative blend of AI and metaverse technology.

Where are the Investments Going? 💸

Around 44% of investments in Web3 gaming this quarter were directed towards bolstering infrastructure. This encompasses critical aspects such as blockchain development, gaming engines, and marketplaces. Investment in infrastructure is paramount for ensuring the sustained growth and success of the Web3 gaming sector.

Also, a significant allocation of funds has gone to investment firms, highlighting the strong confidence and commitment of venture capitalists in the future of the Web3 gaming industry, indicating their willingness to support emerging gaming sensations.¹

"Asia's vibrant community of developers and gamers inspires increased investments and active engagement in the gaming market." - quote from the Twitter Space

Which Games are Trending?🎯

In Q3 2023, several Web3 games emerged as major trends in the industry:

• Sweat Economy (Sweatcoin): A move-to-earn game that rewards users for physical activity.

• Alien Worlds (Trilium): A metaverse game where players can mine Trillium, the game's native cryptocurrency.

• Splinterlands (Dark Energy Crystals): A digital collectible card game where players can earn rewards through battles.

These games have gained popularity by offering players the opportunity to earn tangible real-world value while enjoying their gameplay. This marks a significant shift from traditional games where players typically spend money without any monetary return.

Hot Chains: WAX, BNB, and Arbitrum ⛓️

In the world of Web3 games, the most trending chains in Q3 2023 were WAX and BNB Chain. WAX is a blockchain specifically tailored for gaming, while BNB Chain stands as a popular general-purpose blockchain.²  

Additionally, Arbitrum, a layer-2 scaling solution for Ethereum, has been steadily gaining popularity among Web3 games due to its low gas fees and rapid transaction times, which are highly valued by gamers.

One prominent example of this trend towards Arbitrum is Mighty Bear Games' decision to shift its focus to this platform. Mighty Bear Games, the developer behind the popular Web3 game Axie Infinity, adopting Arbitrum reflects the growing recognition of Arbitrum's importance within the Web3 gaming ecosystem.⁴

Collision of AI and Web3 Gaming 🤖

Artificial Intelligence (AI) is playing an increasingly vital role in the Web3 gaming landscape.

• AI is being used for fraud detection and prevention, including identifying and combating gaming bots.

• AI enhances the gaming experience by offering personalized recommendations based on a player's history.

• AI is increasingly integrated into web3 game development to enhance player interaction and engagement. AI-powered NFTs are gaining prominence, offering dynamic collectibles with animation and generative capabilities, creating unique and personalized experiences for users.

• Apps like Midjourney use AI to generate art from text inputs, and web3 games utilize AI to create diverse character/avatar NFTs that can be rendered into playable 2D or 3D models.

One standout real world example is the team behind Proto, a project that truly amazed industry observers at GDC (Game Developers’ Conference) 2023 ³

• Trey Smith and Kyle Klemmer, the creators of the web3 game Mech, were facing the same challenges as many others in the field, so they decided to build tools to help themselves and other developers.

• Trey described their tool, Proto, as an AI game engine that allows you to create entire game worlds through simple text prompts. You type in what you want, and Proto brings it to life.

"Emphasizing ease of entry for players and developers is crucial to address user flow and reduce friction in understanding financial models." - quote from the Space

The Metaverse Crunch 🌆

In Q3 2023, trading volumes within metaverse platforms, including land sales, experienced a notable decline, reaching a yearly low. This dip could be attributed to various factors, including economic downturns and the early-stage development of many metaverse projects.

Nevertheless, amidst this metaverse crunch, positive developments have emerged.

Animoca Brands secured $20 million in funding to support its Mocaverse initiative, with the aim of strengthening its ecosystem and promoting broader adoption of Web3. Mocaverse aspires to become a key player in Web3 gaming, metaverse culture, and entertainment, reshaping the narrative in these domains.¹

Looking into our Crystal Ball 🔮

The future of Web3 gaming holds significant promise:

1. Entry of More AAA Game Developers: As the Web3 gaming industry matures and attracts greater investment, anticipate more AAA game developers entering the fray. This influx will contribute to the creation of higher-quality and more polished Web3 games.

2. Innovative Gameplay Experiences: As Web3 gaming technology evolves, expect the emergence of innovative and engaging gameplay experiences, drawing more gamers into the space and fostering continued growth.

3. Deeper Integration with the Metaverse: As the metaverse evolves, we anticipate tighter integration with Web3 gaming, providing gamers with novel and immersive experiences.

In summary, the future of Web3 gaming shines brightly. While still in its early stages, the industry is buoyed by substantial investment and mounting interest. As technology evolves and more AAA game developers engage, the landscape promises higher-quality, captivating Web3 games, attracting a growing community of gamers and driving further expansion.

References

1) State of Blockchain Gaming in Q3 2023, DappRadar

https://dappradar.com/blog/state-of-blockchain-gaming-in-q3-2023 

2) Web3 gaming report Q3 2023, Fungies

https://fungies.io/2023/08/31/web3-gaming-report-q3-2023/ 

3) The six biggest web3 gaming trends we learned at GDC, Sequence

https://medium.com/0xsequence/six-web3-gaming-trends-at-gdc-f3c60ed4bd3c 

4) Mighty Bear Games will publish Mighty Action Heroes on Arbitrum blockchain

https://venturebeat.com/games/mighty-bear-games-will-publish-mighty-action-heroes-on-arbitrum-blockchain/