Many people are not so sure what exactly Web 3 gaming is, unless they happen to work in the space. It’s definitely not gambling – more online gaming; definitely not a funky crypto-only type of game – more the future of gaming.
I wanted to share my insights and some takeaways from a recent panel discussion I had the pleasure of moderating at the Zebu Live event in London earlier this month. The panel Unlocking the Ultimate Gaming Metaverse: Secrets to Success featured top Web 3 gaming experts such as Robby Yung, CEO of Animoca Brands; Robert (Robbie) Cochrane, co-founder of Cryptoverse; Saro McKenna, CEO of Dacoco, the creator of the first blockchain game Alien Worlds, and Ian Emerson, investor at Fabrik Venture.
I encourage you to watch the stream, and if you are curious and want to dive deeper, check out the further discussion I’ve hosted on FinancialFox.
Is the metaverse a game?
Many people think Web 3 Games = Metaverse. Well, semantically speaking, that’s not correct.
The notion of the metaverse has been a source of fascination, debate, and sometimes confusion in recent years.
Many envision it as a virtual realm where people interact, work, and socialise, blurring boundaries between the digital and physical worlds. However, it’s essential to clarify that the Metaverse itself is not a game, although games play a significant role within it.
“A game is one type of experience,” says Robbie.
The Metaverse is a vast, interconnected virtual universe where various experiences can take place, games being just one aspect.
The Metaverse encompasses multiple applications and activities, ranging from social interactions and commerce to work and education. Within this universe, games exist as entertainment, just as they do in the real world.
“A metaverse combines different types of experiences. It doesn’t only have to be games, it can also be social experiences, it can be meet-ups; it can be a variety of experiences on a platform that also houses games. If you think of the metaverse as an infrastructure layer in my view and a game is something that would be built on top of it,” Robbie adds.
When we talk about Web 3, we’re talking about the next generation or evolutionary stage of the internet. The metaverse as a decentralised and community-driven universe is one part of this.
Increasingly, one of the favourite ways for individuals to engage virtually, and now to monetise assets earned while playing, gaming has established itself as an important part of Web 3 – and consequently, the Metaverse. This is why we call it Web 3 Gaming: the future of gaming.
User engagement (defining ‘user’ as client or potential client in the virtual world) is something all brands, companies and businesses aim to achieve and maximise. Games can help with this, as long as they are fun to play over and over again.
How do we keep people engaged in the metaverse via game mechanics?
Keeping people engaged in the Metaverse is a crucial challenge. Games have the potential to play a pivotal role in this endeavour by providing immersive and interactive experiences.
“That’s what it’s really about isn’t it,” says Dacoco CEO, Saro McKenna.
“Human beings want to spend time or interact or learn or whatever it is that’s being offered by that space. I see tech as having made this possible and the community is the emergent property of the technology . Which is actually really cool because this decentralised technology has given rise to people who want to interact.”
Game mechanics, such as achievements, rewards and social features, can enhance engagement. However, it’s important to strike a balance between gaming and other metaverse activities to ensure that it remains a diverse and engaging space.
Debate around play-to-earn models
Web3 gaming represents a new frontier, leveraging blockchain technology to introduce unique dynamics. The ‘play-to-earn’ model, where players can earn real-world rewards for in-game activities, has stirred controversy.
Some argue that it shifts the focus away from pure enjoyment, making games feel more like work. But remember – people want to make money, and playing professionally has to offer some financial reward, especially now that blockchain is enabling digital asset monetisation.
“My very cynical take is that making money is fun, so you can think of some of the components that blockchain introduced like metagames on top of core games which could help find other ways to interact with the economy and community,” notes Ian Emerson, investor at Fabrik Ventures.
“Then you can separate from traditional games.”
Web 3 is all about asset ownership and monetisation. The balance between monetising in-game assets and experiences is crucial. While ownership of virtual assets is essential, monetisation should not overshadow the overall gaming experience. It’s vital to take a well-rounded approach that caters to both player ownership and game development sustainability. – in other words, balancing fun and profit.
Best recipes are mixed model
A hybrid approach, combining ‘free-to-play’ and ‘play-and-earn’ models, could be the key to creating a dynamic gaming ecosystem within the Metaverse. This approach caters to a broader audience, accommodating both players seeking entertainment and those looking for financial incentives.
“A more appropriate term is probably game-fi, as this is the intersection of gamification and financialisation,” says CEO of Animoca Brands, Robby Yung.
Another area bringing bright, solution-focused minds together is cross-platform compatibility and asset interoperability.
If you own a car in game, it is now your digital asset, and you might want to use it in another game rather than having to buy it again. Seamless compatibility and interoperability of in-game assets across different platforms are pivotal in the Metaverse. Gamers invest time and money in their digital assets, and they should have the freedom to use them across various experiences. Cross-platform compatibility and interoperability make this possible.
There are obviously challenges as each world and game is different, which is why we need interoperability standards and consensus.
Utility tokens – yes or no?
In-game tokens or coins have the potential to boost engagement. They can provide incentives for players to participate, trade and invest in the virtual world. However, their impact should be balanced, and the decision to introduce a listed token should be carefully considered to prevent unintended ‘financialisation’.
“I always encourage developers to think of fungible tokens within the game as utility tokens because it allows your players who are passionate and devoted to have a stake in the game,” added Robby.
“It’s an important principle to able to share the fruits of their effort in a way; because as a stakeholder that’s where you spend your time so you can get some benefit from that.”
Remember: individual fun is great, but it can keep you on the hook. The real deal in Web 3 is the community.
Web 3 Gaming is a multimillion-dollar industry. Recently, a report by DappRadar revealed that blockchain gaming received more than $.2.3 billion in investment this year. Konvoy Ventures launched a $150m fund to back nearly 30 Web3 gaming firms over the next two and a half years.
But where is the investment coming from?
To create the ultimate metaverse gaming experience, investment in infrastructure and user experience is paramount. As the Metaverse depends on seamless connectivity and an intuitive interface, substantial investments are needed to realise this vision. Furthermore, geographical variations in investment trends and the rise of Web3 gaming in Asia provide intriguing insights into the future of this digital frontier.
The intersection of gaming and the metaverse is a dynamic and complex landscape. While the metaverse itself is not a game, it encompasses a wide array of experiences, including gaming.
Striking a balance between fun and financial incentives, ensuring asset interoperability, and making thoughtful decisions about in-game tokens are all essential elements for the sustainable growth of the metaverse. Investments in infrastructure and user experience will be key in shaping the future of this exciting digital frontier.