Crypto markets have suffered severe declines in terms of price in the recent past, especially since Axie $625 million Drain hack of the North Korean hacker organization Lazarus Group in March 2022.
Many thought leaders, venture capitalists, and stakeholders within the Web3 community consistently emphasize the potential of gaming as one of the most compelling use cases for blockchain technology. Some of the most successful games we’ve seen recently, like Axie Infinity, StepN and more, are and have been part of the infamous “play to win” model – a critical catalyst in bringing millions of people to Web3. But with the current market conditions and industry forecasts, what is the future of game to win and gamefi models?
G4AL CEO Manel Sort, former VP at King, has thoughts on what it will take for Web3 and GameFi to live up to their proclaimed hype. Manel says that with over 3 billion active Web2 players, Web3 has a long way to go. With 25 years of experience in the video game industry and over 60 titles developed and published on a wide range of platforms, many of them to critical acclaim, Manel’s theory on games remains strong.
Manel sees this market as an opportunity for Web3 games to potentially revolutionize the way Web3 games and game studios operate.
“Free-to-play models with in-game transactions have generated higher revenues and work for larger audiences better than pay-to-play models, and play-to-earn models will,” Manel said.
Web3 Games as an ecosystem was created in response to many games such as Fortnite and PUBG, which allowed users to perform in-game microtransactions from the purchase of custom outfits, skins, weapons, and more. The idea of taking that vision further was exciting as it enabled interoperability between games, ownership of digital assets, and ultimately the creation of an immersive ecosystem. Manel has 25 years of experience as a developer, producer, studio manager, and CEO, delivering over 60 games and over $1 billion in revenue. With his learning of Web2 gamers as the audience for mass Web3 adoption, he admits that the Games as a Service model (such as Fortnite, Pokemon Go, PUBG and more) of recurring revenue has outperformed all other models, including games. Mainstream AAA like Grand Theft Auto Franchise, Halo and more.
“Blockchain and Web3 are gaining a lot of traction from people around the world who associate it with openness and decentralization. But as we work towards interoperability within gaming, digital ownership, and improving issues within the current Web3 gaming space, it is also important to understand the platforms, the target markets, and their needs,” says blockchain expert Adria Mir. and games on G4AL. While the vision of interoperability has yet to be recognized by traditional gaming media and outlets, the concept of bundling NFTs and games with monetary incentives remains a topic of discussion.
Statistics from the Web2 gaming space show how valuable digital assets are to gamers, even without the speculative monetary value and even if no one makes any money from them. Various examples of in-game purchases within famous titles such as FIFA and CS:GO report sales of over $150,000 for “furs”. Minecraft recently took a stance on NFTs with a ‘no-go’; however, despite that line, the game still earns revenue from microtransactions within its marketplace, allowing Minecraft-based NFT games and developers to use its open source code. That begs the question of whether blockchain and web3 gaming is just a more economically immersive experience than current in-game markets.
“We don’t think gamers flock to blockchain games just to make money because the idea of games is to have fun. And that is why we are creating Elemental Raiders with a free version, where people can go and have fun! continues Adria from G4AL; the studio behind Elemental Raiders.
The play to win model has not been sustainable, so it is essential to understand that the growth of Web3 games should be fostered through developer and ecosystem building models that are fun rather than an economic incentive under the P2E paradigm.
“We focused on creating a game that some people can come play and others can win as a benefit of being really good at the game. The underlying equation is not to attract people based on the fact that they can make money, but on the fact that they can have fun! For this market to be big, it will require Web2 aka normal gamers to be in it. Normal players don’t play to win money; they play games for fun. That doesn’t exist in Web3 yet, and that’s why most of the players in Web3 are crypto-native, and that’s what we’re trying to change with Elemental Raiders and our studio at G4AL.”