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Anyone who has been surfing the Internet in the last year has certainly come across the term Web3. For those who don’t know, Web3 is essentially the next generation of the Internet. It is a key aspect of the much-vaunted metaverse, alongside other emerging technologies such as blockchain, artificial intelligence (AI), virtual reality (VR), augmented reality (AR), 5G and the Internet of Things (IoT).
Proponents of Web3 argue that the technology will usher in an era of decentralization that will be hallmarked by user-owned content and permissionless transactions.
Of course, there is still a long way to go before Web3 is fully operational and available to the general public. But the effects of the technology are already showing up in some industries.
The impact of Web3 is already being felt in the gaming industry
Related: Become a Web3 programmer in your own time
One of the areas where Web3 is expected to have a profound impact is the gaming industry. Video games and digital gaming spaces with Web3 properties already exist, with the best examples being Axie Infinity and Decentraland.
Decentraland is a three-dimensional world where players can explore museums and art houses, and buy and develop virtual real estate.
Another example of Web3 gaming is the increasingly popular fantasy soccer game Sorare. In this game, players can use cryptocurrencies to buy tickets from professional soccer players from major leagues around the world. Cards in play vary in rarity, and the rarer the card, the higher its value.
The game also has a marketplace where players can buy and sell cards. A rare card featuring Manchester United striker Cristiano Ronaldo was recently sold at Sorare for more than $400,000.
Web3 will transform monetization in gaming
See also: 3 reasons why Web3 needs protocols and not service providers
In the old days, video game publishers made most of their money from selling physical or digital copies of their games and all related goods that they could conjure up.
As for the players, for the most part, the only benefit they got from gaming was the fun they had while playing. Gamers spend tons of money on game titles, in-game items, and even additional downloadable content (DLC).
However, these games and any in-game items purchased by the players often lost their value once the player exited the game or became tired of the game, since they never actually owned anything they purchased in-game.
See also: Web3 is the future of the creator economy
With the advent of Web3 and associated technologies such as blockchain, cryptocurrencies and non-fungible tokens (NFTs), the traditional monetization model for games is being turned on its head.
Blockchains are immutable ledgers that securely record every transaction on a network and enable the creation of NFTs.
NFTs represent unique and verifiable data tied to virtually everything, including in-game assets such as weapons, costumes, avatars, and virtual land. Web3 allows NFT-based game items to be moved across different platforms and sold to other players on secondary marketplaces.
See Also: Elon Musk changes his avatar to the image of an NFT from the Bored Ape Yacht Club Collection
Some Web3 games may also offer players the opportunity to earn passive income through in-game staking and yield farming of cryptocurrencies.
Players receiving tangible financial rewards for the time and effort they put into games is a fundamental premise that will level the gaming inequality that has existed for so long. It will also provide a relatively risk-free way to introduce millions of people to crypto.
For developers, the revenue streams will be more diverse in Web3. Developers can offer a range of in-game purchases and operate in-game marketplaces and peer-to-peer trading. Activities in these markets would provide an endless source of income for game developers. Web3 game developers could increase their income from games by continually releasing new NFT assets into games as they evolve.
Web3 gaming communities are the future
Related: Meet the Toys for the Metaverse Age
As we enter the age of the metaverse, the next phase of gaming evolution will consist of expansive, bespoke game publishing platforms that will bring game developers and gaming communities together.
While the concept is still evolving, a few projects are popping up to get a head start in what promises to be a lucrative area for players, developers, and investors.
One such project laying the groundwork for such merged gaming communities is Iskra. The South Korea-based project is building a Web3 gaming ecosystem that will support both game developers and gaming enthusiasts in their Web3 journeys. With emerging platforms like Iskra, there is hope that Web3 can become a home for gaming communities rather than gaming monopolies.
New principles to guide the Web3 gaming space
Now it’s up to the game developers to create fun and exciting titles, because regardless of the opportunity to make money, players will not flock to a dreary and boring game. As we move forward, game developers in the Web3 space should consider design principles that uphold the spirit of Web3, which is based on the belief that everyone involved must be fairly evaluated and rewarded.
Equitable distribution of loot between players and developers can only be achieved when games are free, fair, transparent, and inherently decentralized. Web3 games should decouple gaming from spending as a condition of earning.
Related Topics: What content creators and entrepreneurs need to know about Web3
In the Web3 era, more games should move away from the old pay-to-win model where players spend real money to get in-game benefits. This model made gaming less fun and discriminatory, as players without access to capital were forced to grind harder and longer to progress in games. At the same time, their paying counterparts rushed through them.
The advent of Web3 should also bring an unprecedented level of transparency to gaming. All important financial data of a gaming platform should be shared openly. Information about how a system generates money and how the revenue is distributed should also be made clear.
The equitable distribution of rewards between players and developers that Web3 will hopefully bring about should build trust, increase engagement, and create new revenue opportunities for gaming communities.
Decentralization is the foundation of Web3 and hence games anchored on the technology are expected to utilize blockchains to record and verify game results and in-game transactions. Web3-based games can build themselves as Decentralized Autonomous Organizations (DAOs) to meaningfully involve their communities in ownership and governance.
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