How Does Web3 Gaming Work?

Web3 gaming relies on blockchain, NFTs, and cryptocurrencies. Unlike traditional games, it offers true ownership of digital assets and promotes decentralized economies. The rise of Web3 is transforming the video game industry. Many studios are exploring this technology to create interactive experiences. The growing adoption of blockchains enhances transparency and strengthens player involvement. This article explains how Web3 gaming works. It details its technologies, business models, and challenges. It also explores the evolution prospects of this industry in the Web3 era.

The technological foundations of Web3 Gaming

Web3 gaming relies on innovative technologies that are transforming the video game industry. Blockchain, cryptocurrencies, and NFTs play a central role in this revolution.

Blockchain

Blockchain is a decentralized database that records transactions transparently and securely. It operates without intermediaries and guarantees the authenticity of stored information.

In Web3 gaming, blockchain ensures ownership of digital assets. It allows players to own in-game items without relying on a publisher. Each transaction is verifiable and immutable, reducing the risk of fraud.

Several blockchains support Web3 games. Ethereum is the most used due to its advanced infrastructure and compatibility with NFTs. Immutable X offers a fee-free and faster alternative. These platforms facilitate the integration of blockchain into video games.

Cryptocurrencies and Tokens

Cryptocurrencies facilitate exchanges in Web3 games. They serve as virtual currency to purchase items or pay for services. Unlike traditional currencies, they operate without a central authority.

Web3 games use different types of tokens. Utility tokens allow access to specific features. They are used, for instance, to pay transaction fees or unlock exclusive content.

Governance tokens give power to players. They allow players to vote on important decisions related to the game. This model promotes community management and enhances user involvement.

Non-Fungible Tokens (NFTs)

NFTs are unique digital assets stored on the blockchain. Unlike cryptocurrencies, they are not interchangeable. Each NFT has its own characteristics and specific value.

In Web3 games, NFTs represent virtual items, land, or characters. They guarantee ownership of in-game assets and allow players to freely trade their belongings.

NFTs bring several advantages. They ensure verifiable scarcity, which increases the value of items. They also offer interoperability, allowing players to use their assets across multiple compatible games. This flexibility transforms the user experience and opens new economic possibilities.

The Game Mechanics Unique to Web3

Web3 gaming introduces new game mechanics based on blockchain. These models allow players to interact differently with virtual worlds and own exploitable digital assets beyond a single game.

Play-to-Earn (P2E)

The Play-to-Earn (P2E) model rewards players with cryptocurrencies or NFTs. Every action in the game can generate digital assets with real value.

Axie Infinity illustrates how P2E works. Players breed and battle creatures called Axies, represented by NFTs. By winning battles, they earn tokens that can be exchanged for traditional currencies.

The economic impact of the game has been significant. In the Philippines, many players have used Axie Infinity as a source of income. However, the collapse of token prices and excessive speculation revealed the model’s limitations. This case highlighted the need for a sustainable economy to ensure the viability of P2E games.

Play-and-Own (P&O)

Play-and-Own (P&O) focuses on ownership of digital assets rather than monetization. This model gives players full control over their virtual items without the obligation to sell.

Illuvium embodies this approach. This open-world RPG revolves around capturing creatures called Illuvials. Each Illuvial is an NFT that the player can keep, improve, or sell at their discretion.

Unlike P2E, P&O reduces dependence on cryptocurrency fluctuations. It prioritizes a more immersive gaming experience and encourages sustainable use of in-game assets. This model limits speculation and strengthens players’ attachment to their virtual items.

Asset Interoperability

Interoperability allows players to use their digital assets across multiple compatible games and platforms. Items acquired in one game are no longer limited to a single environment.

Some blockchain standards, like ERC-721 and ERC-1155, facilitate this compatibility. Players can transfer their NFTs between different games without losing their value. This flexibility enhances the user experience by creating a connected ecosystem.

The economic impact is also significant. Players have total freedom to manage their assets. Development studios benefit from a larger market and can create interconnected experiences. This approach fosters a new economic dynamic in the video game industry.

Practical cases of Web3 Games

Some Web3 games perfectly illustrate the innovations brought by blockchain. They exploit NFTs and cryptocurrencies to transform the player experience.

Axie Infinity

Axie Infinity is based on a strategic gameplay where players breed and battle creatures called Axies. Each Axie is a unique NFT that can be bought, sold, or improved.

The game’s economy relies on the token Smooth Love Potion (SLP), used for rewards and transactions. Players earn these tokens by participating in battles and completing missions.

The game has faced several challenges. High adoption has led to scalability issues on Ethereum. High transaction fees and network congestion have affected the player experience. To address these issues, Axie Infinity launched Ronin, a sidechain optimized to reduce costs and improve transaction fluidity.

Illuvium

Illuvium is an open-world RPG combining exploration and strategic combat. It takes place in a fantasy universe where players capture creatures called Illuvials.

Each Illuvial is an NFT that possesses unique characteristics. Players can collect, train, and resell them on decentralized marketplaces.

The game focuses on an immersive experience by combining blockchain with traditional RPG mechanics. It offers an alternative to Play-to-Earn by valuing ownership of digital assets without imposing a speculative economic model.

Some Initiatives from Major Publishers

Major publishers are exploring the integration of NFTs into their games. Ubisoft launched Quartz, a platform allowing the purchase of limited edition items in the form of NFTs.

The experimentation began with Tom Clancy’s Ghost Recon Breakpoint. Ubisoft offered players unique skins that could be traded on the blockchain.

The community reacted negatively. Many players criticized an attempt at excessive monetization. In response to the criticism, Ubisoft adjusted its strategy while continuing its research on Web3 technologies.

The challenges and controversies of Web3 Gaming

Web3 gaming brings innovations, but also raises criticisms. Its adoption faces several obstacles, including player reactions, environmental issues, and regulatory challenges.

Reception by players and developers

The integration of cryptos and NFTs in video games divides the community. Some players appreciate the possibility of owning digital assets. Others denounce an attempt at abusive monetization.

Skepticism stems from several fears. Some players believe that blockchain diverts the essence of gaming by fostering speculation. The pursuit of profit sometimes takes precedence over the gaming experience.

Scams and fraudulent projects fuel this distrust. Many NFT games have attracted investors before disappearing, leaving players with worthless assets. This lack of transparency tarnishes the image of Web3 gaming and hinders its adoption.

Developers do not all share the same opinion. Some see blockchain as an opportunity to innovate. Others consider it as an unnecessary technology that increases development costs without improving the user experience.

Environmental considerations

The ecological impact of blockchain raises concerns. Blockchains operating with proof of work (Proof of Work) consume a significant amount of energy. Bitcoin and Ethereum, before its upgrade, were among the most energy-consuming networks.

This excessive consumption harms the image of blockchain-based games. Many players in Web3 gaming are looking to limit this impact by adopting more sustainable solutions.

The transition to proof of stake (Proof of Stake) significantly reduces energy consumption. Ethereum adopted this mechanism, thereby decreasing its carbon footprint by over 99%. Other blockchains like Solana and Polygon also favor this model.

Some initiatives aim to make Web3 gaming more sustainable. Projects compensate for their carbon footprint by funding ecological programs. Others develop technical solutions to optimize the energy efficiency of transactions.

Regulations and legal aspects

The absence of a regulatory framework complicates the growth of Web3 gaming. NFTs and cryptos remain poorly defined legally. Their status varies by country, which hinders adoption by major video game companies.

Money laundering represents a major risk. The anonymity of transactions on some blockchains facilitates illegal activities. Regulators are looking to impose rules to limit these abuses and protect users.

Consumers need to be informed about the risks associated with NFTs and cryptos. Some players invest in digital assets without understanding their volatility. A clear regulatory framework would help avoid fraud and govern the use of digital assets in video games.

Future perspectives of Web3 Gaming

Web3 gaming continues to evolve and attracts a growing number of players and developers. Technological advancements and new economic models accelerate its adoption.

Growing adoption and technological maturation

Blockchain infrastructures are advancing to meet the needs of large-scale games. Next-generation blockchains improve transaction speeds and reduce costs.

Scalability solutions like sidechains and sharding optimize performance. These innovations ensure better fluidity and make Web3 games accessible to a wider audience.

User experience is becoming more intuitive. Games are simplifying the integration of wallets and blockchain transactions. The removal of technical obstacles encourages adoption by traditional players.

New opportunities for developers and content creators

NFTs offer creators new sources of income. Artists and developers can sell their creations directly without intermediaries. This autonomy enhances innovation and values unique content.

Distribution platforms are evolving towards decentralized models. They allow independent studios to publish their games without relying on large companies. This change opens the market to a greater diversity of games.

The transformation of the relationship between players and developers

Players actively participate in game development. DAOs (decentralized autonomous organizations) give them a role in the governance of projects. This approach democratizes decision-making and strengthens community engagement.

The co-creation of content is becoming a viable business model. Players develop in-game items or experiences and receive compensation. This dynamic transforms the gaming ecosystem by making users active participants in development.

Web3 gaming relies on blockchain, cryptos, and NFTs. It transforms the ownership of in-game assets and introduces new economic models. Its development brings innovations but also raises technical, environmental, and regulatory challenges. The future of Web3 gaming depends on the evolution of infrastructures and acceptance by players. Technological improvements will facilitate its mass adoption. The decentralization of gaming Web 3 and co-creation will enhance community involvement. If studios succeed in balancing innovation and user experience, Web3 could sustainably redefine the video game industry.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.