June 6, 2024 · Reading Time: 4 minutes Page last updated June 10, 2024

How Web3 games are changing the gaming industry forever

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Gone are the days when gaming was just about high scores and bragging rights. With Web3 games, you can now earn real rewards while playing super fun games.

Traditionally, players would invest hours in games, collecting items and achievements that held no value outside the game. But thanks to Web3 and blockchain technology, your character, items, and, most importantly, your hard-earned loot can now be worth something outside the game!

Understanding Web3 and blockchain in gaming

Web3 is the third era of the internet, focusing on decentralization. This means no single entity controls the data or assets on Web3 games; instead, control is distributed across the game’s many users. Unlike Web2, where companies like Facebook and Google manage user data in a centralized server, Web3 uses blockchain technology.

Despite the popularity of Web2 games, they have significant drawbacks. One major issue is limited ownership—players don’t truly own their in-game assets, which can be lost or changed by the game’s developers.

That’s no trivial matter.

When Blizzard Entertainment ceased server operations in China, millions of “World of Warcraft” players in the country lost access to the game. Many of these players grew up on “WoW,” with one writing on Weibo, China’s X-like platform, about having shed tears over the event.

Additionally, Web2 user information is stored on third-party servers, raising privacy issues. What’s more, Web2 games usually don’t let players earn rewards that can be used outside of the game, nor do they enable using in-game characters across different games. This limits their value and versatility.

Conversely, in Web3 gaming, blockchain technology is used to create a decentralized system where no single entity controls the data or assets. This decentralization means game assets are not stored on a single server. Instead, players store assets in digital wallets, ready to be used or traded at a moment’s notice.

Additionally, the rules of these games are governed by smart contracts—self-executing contracts with the terms of the agreement written into lines of code. These smart contracts manage transactions automatically, ensuring the integrity and security of all digital transactions.

In this way, blockchain technology empowers players to truly own, trade, and sell in-game assets across different platforms, while enjoying the following benefits:

  • Ownership: Items you earn or buy in Web3 games are represented by Non-Fungible Tokens (NFTs) and other digital tokens, which are unique digital items stored on the blockchain. These NFTs or tokens can often be traded, sold, or used across different games, giving players full control over their virtual goods.
  • Decentralized marketplaces: These platforms allow players to trade NFTs directly with each other, without needing a middleman. This system ensures fair prices and reduces the chances of fraud.
  • Interoperability: Favorite in-game accessories or superpowers can sometimes be taken to a new adventure, enhancing the value of digital belongings and providing flexibility that wasn’t possible before.
  • Transparency: Blockchain records all transactions publicly, ensuring anyone can verify all transactions and ownership claims. This transparency adds a layer of security and trust to the system.
  • Community-driven development: Decentralized Autonomous Organizations (DAOs), communities that make decisions based on votes from members, give players a direct role in shaping the future of the games, including their storylines, weapons, and rewards.

Mechanisms of Web3 games

Web3 and blockchain’s greater control and ownership open the door for real opportunities for players to earn as they play.

Here’s how:

  • By earning in-game currency: Many Web3 games allow players to earn in-game currency by completing tasks, winning battles, or achieving milestones. For example, in “Axie Infinity,” players earn Smooth Love Potion (SLP) by battling their Axies (digital pets). This currency can be used within the game or traded for real money.
  • By collecting NFTs: In “Gods Unchained” and other Web3 games, players collect NFT cards representing different characters and items, which can be traded on various marketplaces, adding real-world value and creating a sense of permanence and security for these digital assets.
  • By staking and yield farming: Some Web3 games integrate DeFi (Decentralized Finance) elements like staking, where players lock up their assets to support network operations and earn rewards, and yield farming, which involves providing liquidity to DeFi protocols in exchange for returns. In “Alien Worlds,” players can stake the game’s native cryptocurrency, TLM, to earn rewards, generating passive income while engaging with the game.

Web3 gaming’s economic impact

Web3 games are creating real income opportunities for players. Take “Parallel,” a sci-fi digital card game, for example. In 2021, “Parallel” raised $50 million, and, in 2023, the game secured three Game of the Year awards, despite being in beta. How’d they do it? By enabling players to build decks and face off in ranked matches to earn PRIME, the in-game currency, which can also be traded for real money.

For developers, Web3 games offer innovative monetization strategies. Beyond the traditional sales and in-app purchases, developers can now earn through transaction fees on NFT marketplaces, secondary market sales, and even royalties when players trade digital assets. “Parallel” demonstrates these strategies effectively, boosting developers’ earnings while generating revenue from card sales and transaction fees.

Conclusion

The future of Web3 games looks promising. Looking forward, advances in AR/VR tech will make these games even more immersive, while faster CPUs and GPUs will make gameplay smoother and more accessible. As blockchain tech improves, we’ll see enhanced privacy and easier cryptocurrency transactions, making it simpler for players to earn and trade.

That said, developers need to keep an eye on challenges like game sustainability, initial investment costs, and the fluctuating value of cryptocurrencies. This, while staying on top of regulatory requirements in target locations to ensure fair play and security for all gamers, and steering clear of gambling, money laundering, and other ethical concerns.

If you’re ready to level up your gaming experience, the Starknet ecosystem has something for every gamer, where you can conquer the cosmos and earn rewards. Explore it now.

Starknet Gaming Landscape

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