From plummeting prices to high-profile layoffs and bankruptcies, the crypto bear has fully emerged from hibernation amid high summer. Yet one sector remains bullish, the blockchain gaming industry is, in fact, experiencing explosive growth and thriving in the proverbial crypto winter.
According to a report by DappRadar, in the first quarter of 2022 alone, investors have poured US$2.5 billion into blockchain games, a significant and substantial increase from the US$4 billion raised in the whole of 2021.
This corroborates strongly with the view from many experts that gaming is truly the best use case for crypto, and blockchain gaming activity has surged 2,000 percent in the last year.
This isn’t too surprising as the gaming industry is known to be very resilient and, in some ways, “recession-proof”. The idea is that during a recession, people will spend more time at home, seeking inexpensive forms of entertainment or generally look for video games that operate on a longer-tail business model, representing good value for money.
But with such a meteoric rise comes the question of sustainability. How can game developers efficiently scale up to effectively meet the rising demand for new blockchain gaming experiences, and ensure that their ecosystem is effectively future-proofed?
While demand for blockchain gaming is surging, there remain many challenges that hinder the long-term viability of the space. To drive mainstream adoption, the user experience must be good.
Security and legitimacy are also important considerations due to an evolving business model which challenges who really holds the value in blockchain games. Scams, hacks, and misleading projects are rampant and discredit the good work that has been ongoing to upgrade gaming infrastructure.
We have seen high-profile cases, such as what has been dubbed the “largest exploit” in the history of the space, when popular blockchain game Axie Infinity’s Ronin network suffered an eye-watering loss of US$625 million earlier this year. This presents a huge roadblock to onboarding users.
Game developers are also well aware of these challenges. For many long-standing AAA publishers from traditional gaming, they will have to manage their reputations, as well as protect their intellectual property (IP), so they have understandably been hesitant about diving headfirst into blockchain technology.
Fun first
Beyond the barriers of entry, however, a significant pain point to address revolves around the actual gaming experience, and whether it provides something simple, yet seemingly elusive according to critics: fun.
Too many blockchain-based game developers and publishers today tunnel vision on their monetisation models, project tokenomics or emphasise a play-to-earn model with game mechanics geared heavily towards earning rather than playing.
Also Read: Why the Web3-enabled gaming world still has hope
It’s simply not scalable. Focusing on monetary rewards without prioritising gameplay does not motivate users to continue playing the game. The attempt to financialise gaming without regard for the spirit of why we play games simply turns a fun, recreational activity into a job. It causes the fractionalisation of a player base, turning a community driven by gameplay into one where users are seen as mere market participants.
This is the fundamental reason why there is still so much apprehension from conventional gamers and gaming platforms, who view blockchain gaming as a cash grab and the antithesis of everything they stand for.
As it currently stands, games on the blockchain are generally not fun. This is not necessarily down to the aspiring and well-meaning game developers, but perhaps the limitations of current blockchain architecture.
This is very simply how games are judged to be “fun” or “good” in the blockchain. Nobody wants to pay high gas fees to execute actions within a gaming metaverse or wait for 15-seconds to five minutes for a transaction to be confirmed.
Current consensus mechanisms are geared so much towards decentralisation, security, and privacy that they can come at the expense of speed, performance, and cost. For blockchain-powered solutions to be attractive to game developers and succeed in winning the hearts and minds of players, they need to be highly scalable with high transaction speeds and low/zero gas fees for users. They must have a well-designed user interface, be fully optimised for performance, and be interoperable between various multiverses.
Bridging two worlds
Another issue for the flagging interest in blockchain gaming is that there has been very little buy-in from major gaming brands, developers, and studios from the traditional gaming world thus far. The process of IP development for blockchain games is complex, and major IP holders are right to be concerned about how their brands are deployed, monetized, and used on a blockchain.
When we examine how traditional IPs are created, they are usually a derivative of mass-consumed media. For example, Mickey Mouse was popularised by the Steamboat Willie movie, and Gundam mechas have pretty much defined a genre since their debut in the Mobile Suit Gundam TV series.
However, in the Web3 world, without the long-established credibility and brands such as Disney and Bandai Namco, IP conceptualisation begins with creation for a limited number of people, using NFTs as a limited-edition product.
Also Read: Exploring the creator economy in gaming
This means that many NFT developers are spending big on branding to increase the value of their collections rather than investing in-game mechanics, functionality and interfaces in the hopes that their husk of a game will move on to join the mass market.
It is clear that for blockchain gaming to succeed, it cannot do so alone. Rather it must acknowledge its limitations and embrace the value and expertise that traditional gaming brands can offer.
What we’re seeing now is more and more buy-in from traditional game developers and gaming companies, who are now realising the tremendous value that blockchain gaming offers to players and developers alike.
For instance, the Oasys project, which was just only announced this year, has already been backed by the likes of Bandai Namco, Ubisoft and SEGA – huge brands and stalwarts of the traditional gaming industry, and some of the biggest game companies in the world.
Not one single company holds the key to surmounting the aforementioned problems. Rather, an ecosystem approach is necessary. Just as more institutional investment legitimised crypto over the years, the interest and participation of traditional gaming company brands will also help accelerate the growth of blockchain gaming.
The Oasys project has quickly recognised this paradigm and quickly brought in as many partners, validators and investors across a wide range of Web2 and Web3 leaders. Aside from working with the aforementioned gaming developers, Oasys also recently partnered with ConsenSys to produce an industry-first, gaming-optimised wallet for players, as well as announced a collaboration with Mythical Games, a leading crypto-native games developer, to serve as an initial validator.
By leveraging the strengths of different stakeholders, there is a more efficient use of resources and industry expertise to propel growth. The time is now for all of us collectively in the blockchain gaming industry to dig deeper and build a robust gaming architecture that can not only ride out winter but also emerge from it stronger.
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