TL;DR: Web3 games use blockchain to give players true ownership of in-game assets like NFTs and cryptocurrency, which they can trade, sell, or use across compatible games or even outside the game. They introduce play-and-earn mechanics, letting players earn crypto rewards, and enable decentralized governance so players can help shape the future of their favorite games.

Blockchain gaming 101

As of mid-2024, gaming accounted for 30% of all blockchain activity, with 2.1 million daily active wallets in play. Web3 gaming plays a major role in this surge, combining blockchain technology with gameplay to change how players experience and engage with their favorite titles.

Gone are the days when gaming was only about high scores and bragging rights. In traditional games, players spent countless hours collecting items or achievements that held value only within the game. Meanwhile, in-game purchases often felt like a one-sided deal—money spent on digital assets that boosted the developer’s bottom line but offered players absolutely nothing once they left the game.

But with Web3 games, you can now earn real rewards while playing super fun games. Blockchain gives players the ability to trade, sell, or even use your character, items, and, most importantly, your hard-earned loot across different games. Even more importantly, this transformation turns games into interconnected ecosystems where effort and creativity can now be worth something outside the game as well!

This blog post covers everything you need to know about Web3 games—what they are, how they work, their economic impact, and the top Web3 games on games you should be playing.

What are Web3 games?

Web3 games are video games powered by blockchain technology, designed to give players true ownership of their in-game assets. These assets—such as characters, weapons, and skins—are stored on a decentralized ledger as non-fungible tokens (NFTs) or cryptocurrencies. Unlike traditional games, where assets are locked within the platform, Web3 games allow players to trade, sell, or use these assets across compatible games. This is made possible through smart contracts, which are self-executing programs on the blockchain. These smart contracts securely and automatically handle transactions by writing the agreement’s terms of the agreement into lines of code. In this way, they automate the transaction’s management, ensuring all digital transactions are authentic and secure.

Web3 games also offer features like play-to-earn mechanics, enabling players to earn cryptocurrency for participating in the game, and decentralized governance structures, giving communities a direct role in shaping how games evolve.

Why are Web3 games important?

To understand why Web3 games matter, it’s first important to look at the limitations of traditional gaming. In Web2 games, players spend countless hours collecting characters, weapons, or achievements. Yet these assets hold no real-world value and remain under the control of game developers. If a game shuts down or changes its rules, those hard-earned items can vanish overnight. This is exactly what happened 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 had grown up on “WoW,” with one writing on Weibo, China’s X-like platform, that they’d shed tears over the years of progress and they’d lost.

Built on blockchain technology, web3 gaming introduces decentralization. This means no single entity controls the game or its assets. Instead, control is distributed across the game’s many users. Players own their in-game items outright, stored securely in digital wallets, to be used or traded at a moment’s notice. This independence ensures assets aren’t tied to a single game or developer, offering players far more value and protection.

Web3 gaming benefits

Web3 gaming introduces several innovative benefits that enhance the player experience and gaming ecosystems alike:

  • Ownership: Items you earn or buy in Web3 games are represented by Non-Fungible Tokens (NFTs) and other digital tokens. These are unique digital items stored on the blockchain. They can often be traded, sold, or used across different games, giving players full control over their virtual goods. And unlike in traditional games, these items don’t disappear if a game shuts down.
  • Decentralized marketplaces: Blockchain enables peer-to-peer trading of items without relying on centralized intermediaries. This system ensures fair pricing, reduces fraud, and gives players more control over transactions.
  • Interoperability: Favorite in-game accessories or superpowers can sometimes be taken to a new adventure. Doing so enhances the value of digital belongings and creates a more connected gaming ecosystem. This flexibility adds long-term value to in-game achievements.
  • Transparency: All transactions are recorded on the blockchain, making it easy to verify ownership and ensuring the security of the in-game economy.
  • Community-driven development: Decentralized Autonomous Organizations (DAOs), communities that make decisions based on votes from members, allow players to have a say in game updates, storylines, weapons, and rewards.

How do Web3 games work?

Web3 games rely on a combination of advanced blockchain tools and decentralized systems to power their unique gaming environments. Let’s break down the process that makes these games function.

Step 1

In-game assets such as weapons, characters, or skins are tokenized as Non-Fungible Tokens (NFTs) or cryptocurrencies. These tokens are created and stored on a blockchain, ensuring each asset is unique, verifiable, and securely transferable.

Step 2

Web3 games integrate with a blockchain network that manages ownership records and processes transactions. This decentralized infrastructure ensures that game data, assets, and transactions remain secure, tamper-proof, and transparent.

Step 3

Smart contracts, which are self-executing programs on the blockchain, enforce game rules and automate processes.

Step 4

Players link their blockchain wallets to the game. These wallets act as gateways for managing in-game assets, collecting rewards, and performing trades. Wallets also store staking assets or cryptocurrencies earned through gameplay.

Step 5

Players buy, sell, or trade NFTs and tokens directly with others using decentralized finance (DeFi) platforms (Blockchain verifies and records these transactions, ensuring trustless exchanges and ownership transparency):

    • Staking: Players lock their assets within the game or related networks to earn passive rewards. For example, in “Alien Worlds,” players can stake the game’s native cryptocurrency, TLM, to earn rewards, generating passive income while engaging with the game.
    • Yield farming: Players provide liquidity to the game’s economy or external protocols, earning additional tokens in return. This is the case in “Axie Infinity,” where 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.
    • Trading and marketplaces: Assets can be traded on decentralized marketplaces, enabling secure, peer-to-peer exchanges without middlemen, like in “Gods Unchained.” In the game, players collect NFT cards representing different characters and items.

Step 6

Some Web3 games allow players to use their NFTs or in-game items across different platforms, provided they share compatible standards. For example:

    • A sword earned in one game could be usable in another.
    • Characters or achievements might carry over into sequels or partner games.

    Bonus web3 gaming functionality

    Additionally, many Web3 games implement decentralized autonomous organizations (DAOs), giving players a say in game development. Players vote on updates, features, or economic adjustments, ensuring the game evolves in a way that benefits its community. And emerging technologies like Extended Reality (XR) hardware (smart glasses, haptic gloves) and interoperable media standards enhance immersive experiences, bridging gaming with the metaverse.

    Explore top Starknet games

    Focus Tree dapp

    Focus Tree

    A web3 focus app to help you spend less time on your phone by growing a virtual garden.

    Play games

    Web3 gaming’s economic impact

    Web3 games are creating real income opportunities for players. Built on blockchain technology, they have introduced virtual economies where players earn real income through tournaments, trading assets, and completing in-game challenges. This shift, known as play-and-earn, rewards skill and effort while turning gaming into a viable career path.

    Take” Parallel,” a sci-fi card game that raised $50 million in 2021 and secured three Game of the Year awards in 2023, 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. The game boosts developers’ earnings while generating revenue from card sales and transaction fees.

    The economic impact extends beyond gaming itself. Web3 games generate jobs, enable marketplaces for digital assets, and drive new investment opportunities. Blockchain ensures security and transparency within these economies, making them more robust and trustworthy. As the space matures, these virtual economies are poised to play a growing role in the global economy.

    Web3 games on Starknet

    Starknet is a Layer 2 (L2) validity rollup that massively scales Ethereum. It offers the optimal environment for building Web3 games with super-fast transactions and ultra-low fees, while inheriting Ethereum’s security.

    Starknet is also the only L2 with native account abstraction, dramatically enhancing the network’s dApp user experience (UX). This built-in advantage makes it easy for game builders to provide familiar Web2-esque features, such as logging in with face and fingerprint ID. It also facilitates the use of session keys, which minimize the times a player is prompted to sign a transaction for smoother gameplay.

    Popular games on Starknet today

    • Blob Arena is a turn-based battle game where players put their “Blobert” into the arena and duke it out. Powered by the Grug’s Lair game studio, Blob Arena partnered with Armored MMA to reskin the game to include Blobertized AMMA fighters. If you’re wondering what exactly AMMA is, picture an MMA fight, except the fighters wear medieval armor and swing at each other with axes and swords.

    AMMA Blobert

    AMMA is so hot that Joe Rogan recently shouted it out on his podcast! Stay tuned for updates on the reskin, and check out the AMMA fight taking place in Nashville on November 16th.

    • Influence is a space-strategy game on Starknet mainnet. A massively multiplayer online game (MMO), Influence challenges players to survive in a hostile asteroid belt that mimics real-world orbital mechanics.

    influence

    Players in the game mine resources, grow food, and travel past a quarter of a million asteroids orbiting in real time. Built on blockchain, the Influence world is shaped entirely by humans (no non-playable characters (NPCs)!). Players operate and control and share their own in-game assets with alliance mates as they see fit.

    • Loot Survivor is an onchain dungeon-crawler game on Starknet, where players armor up and battle monsters head-on. The trick is to choose the right armor and weapon, and strategically decide which traits to invest in for your character: charisma, intelligence, dexterity, and others.

    loot survivor

    Conclusion

    The future of Web3 games looks promising. Looking forward, advances in AR/VR tech will make these games even more immersive. This, 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. The result: an ecosystem that makes it simpler for players to earn and trade.

    Web3 game developers face challenges like managing upfront costs, keeping in-game economies stable, and handling the ups and downs of cryptocurrency values. Staying compliant with local regulations is key to ensuring fair play and keeping players safe. Developers also need to address ethical concerns like gambling mechanics or risks tied to money laundering. The question is, how far can Web3 games push the boundaries of what’s economically possible in gaming?

    If you’re ready to own your gaming experience, the Starknet ecosystem has something for every gamer. Check it out to conquer the cosmos and earn rewards. Explore it now.

    Starknet Gaming Landscape

    Want to know more about some of the great games on Starknet? Follow these hot games on X:

    Web3 Games FAQs

    • The main difference lies in the ownership and value of in-game assets. In traditional games, players invest time collecting items and achievements that hold no value outside the game. Web3 games, powered by blockchain technology, allow players to truly own their in-game assets as NFTs or tokens, which can be traded, sold, or used across different platforms. This gives players real ownership and the ability to earn tangible rewards, creating value beyond the game itself.

    • Web3 games enhance ownership and control for players by using blockchain technology to create a decentralized system. Players’ assets are represented as NFTs or tokens stored in digital wallets, not on centralized servers. This allows players to truly own, trade, and sell their in-game items across different platforms. Smart contracts govern game rules and transactions, ensuring security and integrity. Additionally, decentralized marketplaces enable direct player-to-player trading without intermediaries, while community-driven development through DAOs gives players a voice in shaping the games’ future.

    • Decentralized marketplaces in Web3 gaming offer several benefits. They allow players to trade NFTs directly with each other without intermediaries, ensuring fairer prices and reducing the risk of fraud. These marketplaces increase transparency, as all transactions are recorded on the blockchain and can be publicly verified. They also provide greater liquidity for in-game assets, making it easier for players to buy, sell, or trade their digital goods. Additionally, decentralized marketplaces support the interoperability of assets across different games, enhancing the overall value and utility of players’ digital belongings.

    • Players can earn real rewards in Web3 games through various mechanisms. They can earn in-game currencies by completing tasks, winning battles, or achieving milestones, which can often be traded for real money. Collecting and trading NFTs representing characters or items is another way to generate value. Some games incorporate DeFi elements like staking and yield farming, allowing players to earn passive income by locking up assets or providing liquidity. These earning opportunities create a new economic model where players can potentially generate real income while enjoying their gaming experience.

    • Web3 games are creating new income opportunities for players and innovative monetization strategies for developers. Players can earn real money through in-game activities, NFT trading, and DeFi mechanisms. Developers benefit from traditional sales and in-app purchases, as well as new revenue streams like transaction fees on NFT marketplaces, secondary market sales, and royalties from digital asset trades. This economic model is exemplified by games like “Parallel,” which has achieved significant success by enabling players to earn tradable in-game currency while generating revenue through card sales and transaction fees.