Web3 Gaming Investments Surpass $2.3B in 2023; Shift from Play-to-Earn to True Asset Ownership
Summary:
The Web3 gaming sector has seen an influx of $600 million in Q3 2023, pushing the annual investment to exceed $2.3 billion, according to DappRadar. Despite market corrections, blockchain gaming remains stable, and the sector is gearing up for the next bull run. The industry is shifting away from play-to-earn models towards gameplay models emphasizing digital asset ownership and creating vibrant game economies. Also, nonfungible tokens (NFTs) are being used as a business model, allowing players to have a financial stake in the games. As the next bull market approaches, industry experts expect attention to shift from price to gaming experience, with success being defined by the ability to offer unique user experiences.
Recent reports from DappRadar reveal that an additional $600 million was invested into Web3 gaming initiatives in the third quarter of 2023, pushing the yearly total to surpass $2.3 billion. Moreover, a report from the blockchain gaming community, Game7, suggests that Web3 gaming remains steady, undeterred by market changes. Even after a sustained bearish market, crypto appears to be priming for its next bullish phase, and industry professionals were contacted by Cointelegraph to give an overview of the current state of the Web3 gaming sector.
Michael Powell, the lead for product marketing at Immutable, interprets the overall tranquil state of the broader crypto market as an advantage for the Web3 gaming environment. He explains that in marketplaces dominated by speculation and buzz, it's easy to get side-tracked by the latest trend. He credits Web3 gaming entities who took advantage of this lull to build value-adding products and establish long-term strategies as the major catalyst behind investor interest. He also noted a gradual shift from play-to-earn models towards more sustainable gameplay models that underscore true digital asset ownership and create flourishing economies for gaming.
A number of anticipated Web3 games are about to launch, according to Omar Ghanem, the co-founder and CEO of Web3 gaming platform Gam3s.GG. He observes that the space has evolved significantly in the past two to three years with respect to quality and standards. Drawing comparatives with 2022 figures, Gam3s.GG’s Uluç Yuca, another proponent of Web3 gaming, reveals that there is an increase in developer activity, attributable to factors such as the potential for mass adoption of Web3 gaming, its unique selling point, investment diversification, and robust community support.
DappRadar's report also details that the game Axie Infinity racked up over $90 million in transaction volume, nearly doubling that of its closest competitor, Gods Unchained, which recorded $55 million. Most games tell a similar narrative, according to Can Azizoglu, CEO of Coinoxs. But emerging trends like the rise of casual gaming studios may suggest a changing landscape. Ghanem also acknowledged the significance of team strategy. For instance, Axie Infinity's focus on the Southeast Asia market through numerous scholarship initiatives has helped it maintain its lead.
In terms of game execution, Uluç Yuca claims that the dominance of one game might create a barrier for newcomers, which could limit diversity and the introduction of novel ideas in the sector. However, with more investment, we’re likely to see more major games emerging on the market, promising further innovation and a wider range of game titles to engage a wide player base, says Powell.
While the play-to-earn (P2E) concept drove the biggest wave of Web3 gaming in 2022, attracting beyond-gaming audiences with the potential to earn real-world value from in-game assets, its popularity began to fade. Players started seeking games focusing more on the actual experience of gameplay. Further, a Blockchain Game Alliance (BGA) report from early 2023 suggested that improvements in general gameplay should be prioritized over P2E features.
Industry execs also noted the shift away from tokens as a form of currency and towards nonfungible tokens (NFTs) as a new business model. This allows the players to have a financial stake in a particular game, driving their alignment with the game's success, and as a result, makes them more likely to become ardent supporters of games they love.
The industry now predicts a shift in focus away from price movements towards a focus on the gaming experience when the next crypto bull market arrives, as the underlying potential and technology of Web3 gaming can attract sustained interest in the long term. While the future of Web3 gaming is difficult to predict, the consensus is that its success will be determined by its ability to offer unique experiences for users, no matter the state of the market.
Published At
12/13/2023 3:01:00 AM
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