A December 2023 report from CoinGecko revealed that 72.5 percent of the world’s top gaming studios are making significant investments, transitions, and acquisitions in Web3 gaming. Additionally, at the end of 2023, Game7’s “State of Web3 Gaming” report revealed that over $15 billion had been poured into Web3 games since 2018.

Considering 29 of the world’s top 40 gaming studios are investing in Web3, alongside other blockchain and Web2 projects that are moving into the space, it’s safe to say that Web3 game funding is having its golden hour.

Which areas of web3 gaming need the most work?

Only 7 of the top 40 global gaming companies are building blockchain games in-house (Take-Two Interactive, Nexon, Bandai Namco, Konami Holdings, Krafton, Square Enix, and Ubisoft). The other 22 involved in Web3 gaming are doing so indirectly by supporting infrastructure, developing strategic partnerships, supporting talented studios, and empowering creativity. They’ve recognized that while building a Web3 game is complex, creating an environment for success is more doable.

With growing investment, interest, and development in Web3 gaming, studios can now use their improved access to resources for certain targeted upgrades. We expect to see gameplay fun, game lore, graphics, community growth, player retention, and sustainable monetization models being key development areas for our fellow game studios.

Building more fun & engagement into web3 games

Where the first wave of Web3 games got things wrong was that they were financially rewarding, but they weren’t fun to play. This led to gamers repeating certain behaviors and actions in these games to maximize profits. Now that game studios do have funds to play with, they can focus on the primary goal—delivering fun and innovative gameplay that increases player retention. Shrapnel, Star Atlas, Gods Unchained, and Metalcore, have all done just that. But, as Web2 gaming giants like Ubisoft, Square Enix, and Zynga are also building in Web3, the race is on to create the most fun game for the masses.

Visual development set for boost

Early Web3 games were visually limited because they lacked development funds. Now that this financial issue is being overcome, Web3 game developers can focus on creating the most eye-catching and visually stunning developments ever. With the support of AI in that process, the creative limits are being pushed further and further. The first titles with constantly changing Generative AI environments and NPCs that evolve through interaction and exploration are already starting to hit the market.

For Web3 gaming to reach the next level, we expect to see game developers pay more attention to game lore – the thrilling details and stories behind the games, the characters, the worlds, the cities, the relationships, and all of their intertwined histories. Some Web3 game cut-scenes are starting to look like they’re taken straight out of Hollywood movies, while the storytelling has evolved to a level where some games could easily franchise into fiction novels, physical toys, and fan-favorite TV series. Many Web3 games aspire to become popular culture, and when, not if, that happens, the course of Web3 gaming will shift again. Before that happens, the hard work and lore design must come first.

If you build a community, it will grow

The old idea that “If you build it, they will come” simply doesn’t work in Web3. This is both a social space and a self-owned industry that seeks to empower autonomy. For those reasons, every game in Web3 spends time and resources on its marketing, community engagement, moderation, player base growth, and governance. We all have to; it’s part of the process, but it’s also one of the most rewarding and exciting aspects of Web3 game development.

Guilds, Hubs, and DAOs have become crucial to Web3 gaming. The community contributions help make unique games tailored to the wants and needs of those who want to play them. Designing quests and updates becomes a team activity, and voting power can make development a democratic effort. Players should have a say in new gameplay elements and see what interests them most being incorporated into the games. That is Web3 gaming in a nutshell.

While community-driven metaverses haven’t always connected with their target audience, the belief that social gaming is moving in the right direction remains. Getting the balance right between digital community space and the exciting gaming world is the race right now, and there are huge players from both Web2 and Web3 vying to take pole position.

Sustainable monetization models

We’ve touched on how early Web2 games became boring, finance-driven, and repetitive; anyone who witnessed it knows we can’t let it happen again. Thankfully, that seems resigned to the past. Still, the point remains that Web3 gaming is an industry that needs to pay more attention to sustainable economies, avoiding hyperinflation and high barriers to entry while allowing players to create value rather than extract it. Native tokens, NFTs, wallets, and transactions will all play a massive role in Web3 gaming, but they also need to be designed in an accessible and user-friendly manner. Failure to do so will not be tolerated by gamers.

We are already seeing major Web3 titles make NFTs and blockchain features optional, which means that NFTs are not always required for participation. We expect to see more titles using this opt-out method as a friendly way to bring more Web2 players into their ecosystems. If game studios want to attract more players and slowly onboard them to Web3, then Web2-friendly policies are another crucial area for development.

Final summary of web3 gaming’s new future

Investment is pouring in from dozens of multi-billion dollar companies to develop a successful Web3 gaming world that will deliver the next big hit. If game concepts are enjoyable and the teams behind them are of a high standard, receiving funding should no longer be an issue. This means the best and most engaging game concepts can come to fruition. Some already have and are ready to play right now.

We are at the start of a golden era with limitless possibilities. For gamers, it’s time to start exploring the Web3 gaming ecosystem and finding titles they love.

Matt Candler is the CEO at Studio 369. Matt started working in the game industry in 1995 at Activision, contributing to the MechWarrior 2 franchise and has been producing, publishing, and financing games ever since. He was heavily involved in both production and business development on MechWarrior 2, Battlezone 2, and Dark Reign and oversaw development at Pandemic Studios and Nihilistic.

During his career, Matt has shipped over 100+ titles, including many top hits on PC, console, mobile, and VR. At Paramount, Matt and his team built a digital publishing division focusing on iPhone, Xbox, and Playstation, including Iron Man, Top Gun, Days of Thunder, Star Trek, and many more. Then, at Skybound, he served as Executive Producer on over 12 different titles, most notably The Walking Dead.

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