Gaming vets promise to make blockchain gaming fun and sustainable – TechCrunch

Happy success with Axie Infinity and Step N has convinced a flurry of entrepreneurs that the future is web3 gaming, where ownership of gaming assets is in the hands of users through the adoption of blockchain rather than a centralized platform.

Some of the biggest hits in the world today reward users with tokens that can be cashed out in a so-called “play to earn” model. While P2E games have attracted millions of players and billions of dollars from investors, gaming industry veterans argue that they are fundamentally flawed.

They say these games are the brainchild of financial engineers looking to get rich quick, rather than experienced developers creating works that stand the test of time.

Axie Inifity’s dramatic rise and fall is telling. After the peak at $754 million in November when bitcoin hit an all-time high, the game’s monthly sales fell to $4.5 million in July.

“Most GameFi developers are not game developers,” says Maciej Burno, who heads up the metauniverse new business at Polish game studio Reality.

Bourneau is among a group of blockchain-believing gaming veterans around the world who are trying to bring blockchain gaming into the mainstream. Their vision is to counter the public perception that web3 games promoted by P2E are all scams and junk. Instead, they want to create games that are both fun and environmentally friendly, while introducing cryptocurrencies as a new way to incentivize gamers and creators.

Is this a game?

The problem with P2E, according to Si Wang Tung, former senior CTO of Electronic Arts and CTO of web3 gaming startup Red Door Digital, is that users have to spend money up front to start playing.

In Axie Infinity, users buy and breed cute blob-like creatures called Axies as irreplaceable tokens that are authenticated on the blockchain. Sales from NFTs then go to fund rewards for those who earn tokens by playing, and the tokens, the game’s native cryptocurrency, can in turn be cashed out.

That is, for the game to be sustainable, it must have a constant flow of new users, otherwise it will lose its source of funding. This is why critics compare P2E games to pyramid schemes.

Many of P2E’s titles aren’t actually games by the strict definition, Tung claims. They are more like decentralized finance, or DeFi, products with gamified features. Axie Infinity is being dismissed by hardcore gamers as “simple” or even “boring”, similar to the free-to-play mindless mobile games they’ve railed against for years.

But for those who live in developing countries, the prospect does several hundred dollars a month, clicking on a computer screen can be tempting. That’s largely why Axie Infinity took off in countries like the Philippines during the pandemic, when many lost their jobs. For them, the game is more like work than fun.

“I think there’s an element of elitism about it,” Simon Davies, CEO of Mighty Bear Games, the Singapore-based web3 game studio that just raised $10 million in a token sale, says of Axie Infinity’s critics.

“There is a tendency in Western countries to reject what is popular in other parts of the world and not be as respectful as it should be. If you look especially in Southeast Asia and Latin America, and in countries where incomes are probably lower, people are not buying high-end gaming rigs and consoles. It’s interesting to give people not only entertainment, but also potential economic benefit.”

“I don’t like the term ‘play to earn,'” continues Davis, a former design manager at Ubisoft. “I don’t think that should be the primary motivation because you’re playing the game for fun. But then someone might decide they don’t want to play the game anymore and get some of their investment back. I don’t understand how bad it is.’

Play and earn

While Davies recognizes the value of P2E, as do many other experienced web3 game developers, he primarily invests resources in improving gameplay. His studio created conventional games such as the official Disney and Pixar game and Butter Royale, the Apple Arcade hit, before moving to blockchain. He will soon release his first web3 title, a a third-person multiplayer battle royale which includes a token economy.

A game can be fun to play at the same time and profitable, some blockchain game developers claim. It’s not news that gamers are motivated to make money — even in more developed parts of the world.

“Remember World of Warcraft? MMOs already have a group of players [massively multiplayer online] a game that employs a lot of people in Vietnam and Indonesia to mine gold,” notes Tung.

“If you look at the traditional game, people are putting millions or billions of dollars into the gateway, but this is the other extreme. They don’t get any value back,” Tung adds.

Burno agrees. “People want to play for fun, and they are willing to spend money to make them feel happy, but there are also those who want to invest, so you can give them a tool to invest.”

Developers are also promised greater rewards from blockchain-integrated games. In free-to-play games, a common monetization model today, developers make a profit by releasing an update every “six to eight weeks,” Davis notes. “Users are annoyed that you’re trying to squeeze money out of them every two months.”

In contrast, in web3 games, developers receive a small percentage of each in-game transaction that is recorded on the blockchain. “So the only thing you have to worry about is creating a game that people will want to play for a very long time and creating value for those player assets that want to trade with each other,” Davis says.


To make the blockchain game sustainable, Red Door Digital Toong takes a different approach than Axie Infinity. Users do not need to buy platform tokens to start playing, unless they want to start earning or have real value for their assets.

If the game maintains a constant number of users, the value of the game will increase and outside investors will join it, according to Tung. “All of that increase in value then goes to the people playing to make a financial profit.”

Like many other web3 games, the Red Door Digital platform offers utility tokens that are used as in-game currencies to purchase skins, items, and so on, as well as control tokens. Users who contribute to the game will receive control tokens and will be able to vote on important design decisions. Utility tokens can be traded, while governance tokens have no liquidity to rob them of their speculative value.

While developers are still working on optimizing their token economy, investors are already pouring big money into their startups. Blockchain Games Raised a Whopping $2.5 Billion in Funding in Q2 according to DappRadar, a data processing company that tracks decentralized applications. In the first half of the year, blockchain games accounted for about 30% of all capital raised by private gaming companies, and the report investment bank Drake Star reveals.

​​​​​​​While venture capital money is pouring into web3 games, some legacy studios and publishers seem to be cautious. Tencent, the world’s largest gaming company, has no plans to develop web3 games that are widely known.

“Reputation is a big thing for a corporation, so if someone who creates this initiative fails, it’s the end of their career. They will have to answer on the board,” says Tung. “So the only way for them is to invest in one or two crypto companies to see how it goes.”

The web3 gold rush is also creating problems for crypto-skeptics in the gaming arena. Fund manager focused on gaming in Asia disappointed that the investors he meets these days are very interested in whether his fund has a web3 angle.

“If I say no, they don’t want to invest.”

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