In recent years, the intersection of blockchain technology and gaming has ignited intense speculation about the gaming industry's future. And the industry keeps evolving: by 2025, the Web3 gaming market is expected to grow at a compound annual growth rate (CAGR) of 70.3% (Source: Binance Research) as investment funds keep watching out for new promising projects.

The world of Web3 promises a decentralised, transparent, and immersive gaming experience, granting players ownership of in-game assets, true digital scarcity, and unparalleled security. As blockchain technology continues to evolve and gain traction, it begs the question: Is Web3 the future of gaming?

In this article, we'll explore the concept of Web3 gaming, the transformative opportunities it offers for gamers, developers, and the industry as a whole, and some of the challenges it faces. We'll also highlight the Web3 gaming ecosystems SubQuery supports.

What exactly is Web3 Gaming?

Web3 gaming, or blockchain gaming, integrates blockchain technology into game development and operation, offering several key innovations over traditional centralised games:

  1. True Ownership: Players own in-game assets such as gaming skins which are digital designs that gamers can use to customize their video game characters, weapons, accessories, digital properties, etc. as NFTs, which can be traded, sold, or transferred independently of the game.
  2. Decentralised Economies: Players can earn cryptocurrency through gameplay, providing real-world value for their in-game efforts.
  3. Smart Contracts and Wallets: Smart contracts enable the transfer of digital assets, like gaming NFTs or fungible tokens, directly to players' wallets when earned. Furthermore, when developers create a gaming DAO, smart contracts facilitate and tally votes, ensuring transparent and efficient decision-making within the gaming community.
  4. Transparency and Security: Blockchain ensures transparent and secure game mechanics and transactions, reducing the risk of fraud and cheating.

The Difference between Web3 Gaming and Web2 Gaming

Web2 games focus solely on entertainment, offering no opportunities for you to earn money or own valuable in-game assets.  In contrast, Web3 games embrace the play-to-earn model, allowing you to monetise your gameplay by earning cryptocurrencies or NFTs. 

In theory, any web2 game has the potential to "transform" into a web3 game by incorporating the elements that were mentioned in the previous paragraph.

Web2 / Web3 Crossovers

Notable developers like Ubisoft have begun integrating web3 elements into some of their games. Ubisoft is probably one of the earliest publishers to enter the Web3 space and embrace blockchain and NFT technology. It first started by integrating NFTs into one of its popular games, Ghost Recon back in early 2022. However, this project ended abruptly after four months due to a lack of interest in gamers.

That didn’t stop Ubisoft from further exploring the Web3 space. They are currently building a tactical free-to-play RPG game called Champions Tactics which is set to launch sometime this year.

Caption: Screenshot of what we can expect from Champion Tactics, the upcoming PVP RPG developed by Ubisoft 

The Current Challenges of Web3 Gaming

While Web3 gaming holds massive potential, it also faces several challenges:

Difficult Onboarding Process

Managing wallets, private keys, and understanding smart contracts can be challenging for non-crypto-native gamers. This remains the biggest obstacle to scaling the industry. Simplifying these processes is crucial for mass adoption.

Poor Economics

Most of the Play-2-Earn games are popular among users, who essentially view these games as a form of labour today, not as entertainment. This leads to failures in the long run because users are not incentivised to stay long once the rewards dry up. 

Players were stuck in a mining loop, grinding out the value of characters whilst reliant on a Ponzi scheme that required a constant flow of new players to substantiate any accrued value.

Caption: The previous darling of the play-to-earn gaming world, Axie Infinity ($AXS) had an explosive start in 2021 but now struggles with deflation and lower player earnings

Poor Gaming Experience

Most conversation about web3 games in the last crypto cycle today usually goes: 

“The graphics and gameplay are bad. No serious gamer would ever touch a web3 game with all the unnecessary hyped-up tokens and magic money.”

The lack of fun and engaging games, coupled with complicated onboarding and user experience, is a major issue. Users must constantly ask themselves: Would they play this game if it weren't Web3?

AAA Web3 Games: Web3 Gaming’s Redemption Arc

The key problem with most of the previous cycle of web3 games that didn’t make it is that many developers are using web3 not because it is useful, but because it’s a novelty and almost guarantees a “quick buck”. This approach has resulted in a flood of low-quality games that fail to deliver on the potential of web3 technology.

To improve the state of web3 gaming, developers today are moving toward building games that are actually fun in the form of AAA web3 games, which are high-budget, high-profile video games produced and distributed by major and well-known publishers within the gaming industry. 

These games, backed by established gaming studios and boasting higher production values, have the potential to raise the bar for web3 gaming experiences. A few examples of upcoming AAA web3 games that are getting mainstream attention this year include:

1. Shrapnel

Built on the Avalanche blockchain Shrapnel is the first AAA revolutionary game combines breathtaking visuals with blockchain functionality. Players will also be able to customise their assets, participate in battles, and stake its native $SHRAP coins as part of the ultimate Play-to-Earn game experience.

Caption: Shrapnel integrates Unreal Engine 5.2 and Anybrain to deliver a high-quality game experience.

2. Big Time

Developed by industry veterans from Epic Games, Riot Games, and Blizzard, Big Time is an action RPG that aims to bring high-quality graphics, engaging gameplay, and an expansive in-game universe to the world of web3 gaming. Players can collect and trade unique NFT items, creating real-world value for their in-game assets while experiencing an immersive adventure.

3. Gunzilla

Another Avalanche-based blockchain project, Off the Grid is a 150-player battle royale game that will be released across PC, PlayStation 5, and Xbox Series X and S. 

No release date has been announced yet for Off the Grid, though the team mentioned that a date will be “unveiled at an upcoming event” and that the game will launch simultaneously across all platforms. Gunzilla Games has also had strategic partnerships and engagement with top-tier gaming influencers such as Dr Disrespect, Clix, and ImperialHal, which has garnered widespread attention in the gaming space.

Web3 Ecosystems That SubQuery Supports

  1. Immutable zkeVM: Immutable zkEVM is a groundbreaking gaming chain that merges EVM compatibility, affordability, scalability, and Ethereum-grade security. It is also the first EVM-compatible chain with enforceable royalty fees, plus access to Immutable and Polygon’s growing ecosystem of over a million players and $2B in investor funding for games.
  2. Reef: Reef Chain is an EVM-compatible blockchain tailored for DeFi, NFT and gaming applications.
  3. Furya: The Furya blockchain, built on the robust and flexible Cosmos-SDK, is a cutting-edge platform designed to revolutionize gaming services and development.
  4. Gafi Network: The Gafi Network is a layer one blockchain made on Substrate designed for high-frequency apps and blockchain gaming. 
  5. Ninja Blaze: Ninja Blaze is a gaming platform with fully blockchain-based games built on the Injective blockchain that is revolutionising the market and providing players with full transparency and integrity. 

The Future of Web3 Gaming

Web3 gaming is changing how we perceive and interact with video games. The potential benefits of web3, such as true digital scarcity, secure transactions, and player-driven economies, hold significant promise for reshaping the gaming landscape. 

However, it's essential to acknowledge the challenges that lie ahead, including scalability issues, regulatory concerns, and the need for widespread adoption.

Nevertheless, with continued innovation and collaboration within the gaming and blockchain communities, web3 has the potential to revolutionise the industry, ushering in a new era of gaming that empowers players and developers alike.

About SubQuery

SubQuery Network is innovating web3 infrastructure with tools that empower builders to decentralise the future. Our fast, flexible, and open data indexer supercharges dApps on over 190 networks, enabling a user-focused web3 world. Soon, our Data Node will provide breakthroughs in the RPC industry, and deliver decentralisation without compromise. We pioneer the web3 revolution for visionaries and forward-thinkers. We’re not just a company — we’re a movement driving an inclusive and decentralised web3 era. Let’s shape the future of web3, together.

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