Web3 games promised a complete transformation from the traditional world of gaming, which has been marred by centralized control, a lack of true ownership, monetization restrictions, player exploitation, a lack of transparency, inefficient asset exchange, and data privacy concerns.
While web3 games can bring a big change in the ever-growing gaming world by utilizing blockchain technology, cryptocurrency, NFTs, and new business models such as play-to-earn (P2E), for that to happen, the industry needs to see vast adoption, which is far from being realized.
In fact, according to a 2023 DappRadar report, the market witnessed the death of several prominent Web games. Another report indicates that over 30% (more than 1,300) of blockchain games were discontinued last year. Additionally, investment in the sector fell by 62% to $2.9 bln across 163 deals—a 19% decrease from previous years.
While the figures are disappointing, things seem to be turning around this year. In the first quarter of 2024, blockchain games recorded an average of 2.1 million unique active wallets daily, an increase from the 1.1 million active users per day seen last year.
Interestingly, the popular game from 2021, Axie Infinity, continues to rule in the in-game NFT market. The likes of Alien World, meanwhile, are the most popular in the Web3 gaming landscape, having 9.6 million unique active wallets last quarter. This goes on to show that the sector has managed to show some resilience.
Gaming tokens, too, are seeing a revival. According to CoinGecko, the top GameFi coins have a collective market cap of over $20 billion.
Moreover, the Web3 gaming industry has been making strides in adoption, with the major traditional gaming studios like Ubisoft entering the crypto world. Web3 games are also gaining acceptance on mainstream platforms such as the iOS AppStore, Google Play Store, and Epic Games Store.
However, investment in the sector dropped 57% from the previous quarter, recording $288 million in 1Q24. Despite this, funds are beginning to flow in, albeit slowly, which will provide the industry with the necessary resources to develop games that the mainstream audience is actually interested in and don't require jumping through the hoops that even crypto natives find off-putting.
"We, as an industry, are realizing that while a robust infrastructure is necessary for Web3 gaming's growth, user experience is just as, if not more important. And this is what new games are focusing on," said Websea, a crypto project empowering the youth with its digital asset trading platform.
Besides UX and UI improvements, another way Web3 gaming can achieve traction is by leveraging the latest technological advancement, such as AI, which has been impacting businesses across all sectors. With AI mania sweeping the world, this integration can not only help blockchain gaming capture mainstream attention but also offer better gaming experiences to players.
In a really short period of time, generative AI has become ubiquitous, and new AI-centered products are popping up every day. The power of generative AI lies in the fact that with just a prompt, anyone can create images, videos, text, music, code, and do much more.
When it comes to gaming, players seek one thing: a fun game to play. And with AI, Web3 developers can deliver just that. Using the technology, players can easily generate unique and creative in-game items that they exclusively own without needing any prior knowledge. Additionally, AI can be used to create customized characters, interesting and fun gameplay, and dynamic environments at speed for an immersive gaming experience.
"We at WebSea have realized the potential of combining two of the biggest trends, AI and blockchain gaming, hence the integration into the trading platform," noted Websea.
The exchange utilizes new business models such as Play to Earn, Create to Earn, Social to Earn, Trade to Earn, and Contribute to Earn. Meanwhile, Websea's unique AI system, featuring trading assistance, asset allocation, strategy recommendations, and predictive analytics, will be made available to users to make the most of crypto and gaming.
"AI has the capability, for the first time, to allow individual creators to make their vision into real games. Meanwhile, small, independent game developers can leverage this tech to create large and far more advanced games with ease, allowing them to reach the masses, something they haven't been able to do before," stated Websea. "This way, AI can not only change the face of gaming but can help take the Web3 gaming industry forward and fast."
So, with the advent of AI and a focus on UI, Web3 gaming is ready to offer new and enhanced experiences and gain mainstream attention and adoption.
