Depending on who you ask, blockchain gaming is either the next big thing in Web3 or a detestable trend that companies should avoid indulging.
The space is divided, and taking an objective temperature on the matter can be challenging. Minecraft banned NFTs from their iconic title, GameStop opened an NFT marketplace, the WAX blockchain has become a hub for Web3 gaming, and Axie Infinity is doing its best to bounce back from a comically painful $615-million hack that took place earlier this year. Even two of the most popular NFT-based games, Decentraland, and The Sandbox, struggle to break 1,000 active monthly users.
Regardless of how any person or organization feels about blockchain-based games, however, they’ll likely impact the industry’s future significantly. The changes NFTs will bring to the industry, in the long run, remain to be seen. But we can take some educated guesses.
The future of blockchain gaming
To better understand the state of the blockchain gaming space, nft now spoke to Şekip Gökalp, the Core Strategist of the Web3 gaming startup Infinite Arcade. The startup produces a meta layer that introduces metaverse dynamics like NFT ownership into existing game titles, and they work with gaming studios to make their existing titles more profitable.
Gökalp is also the CEO and co-founder of the mobile games publishing platform Coda, which launched Infinite Arcade in February after dedicating nearly all of its resources to preparing for the future of blockchain gaming. The Coda platform has become so popular that it hosts over 15,000 mobile game developers.
“We started a soul search,” Gökalp said of the company’s recent pivot to blockchain gaming. “We tried to understand: what is our role in a very late-stage mobile gaming market where there is little room for disruption and innovation left?”
The answer? Honing in on Web3. Gökalp dabbled in Bitcoin in 2014 after being introduced to crypto by friends and later began investing in early-stage Web3 tech startups in 2016 after selling an ad tech company he had successfully built. In 2021, when Axie Infinity and The Sandbox made waves in the gaming space, he felt eager to get as close as possible. “At some point, I realized I was spending as much time exploring these games for fun as I was running a company,” Gökalp said. “That’s what led to Infinite Arcade.”
It’s telling that a highly successful free-to-play gaming platform essentially gutted its legacy business to dive into blockchain gaming. When asked if IA is betting on the future of that industry, Gökalp was blunt: “100 percent.”
It’s a staunchly pro-blockchain perspective to take in a field of wildly-varying opinions on the technology’s prospects in the gaming world. But Gökalp isn’t bothered by even the more vocally anti-blockchain naysayers out there, since he believes the disagreement is healthy and not unlike the world of crypto itself.
“There’s so much out there in both camps,” Gökalp reflected. “There is crazy tribalism of all sorts. Within crypto, there is no unity either. So, I find it healthy that people speak up and criticize things. But saying a specific technology is not good for A, B, or C use cases is a pretty blanket statement and very often just wrong.”
Gökalp believes the genie is out of the bottle with blockchain technology. It’s simply not possible for the tech to disappear entirely. Whether people like it or not, Web3 will have its place and use cases for games.
Ownership, not P2E use cases, will drive mainstream adoption
Gökalp agrees with skeptics that developers of play-to-earn games need to focus more on “play” and less on “earn” if they want to attract users. The current focus on financialization use cases, he believes, is also likely a natural part of the evolution of Web3 in the gaming space.
“The fun core of a game is really what makes the game a game,” Gökalp emphasized. “But new possibilities with crypto — actual ownership of assets and tokens and all of this happening in real-time on-chain without anyone needing permission for that — that opened up a very obvious financialization use case for a lot of things. And I think it’s also fairly natural in hindsight. Maybe a few years from now, when we look at this early exploration phase where the money is emphasized, that will feel very normal.”
However, Gökalp emphasized that the studios making the best games are the ones who win in gaming markets. By definition, this means the best games are the ones that keep their players coming back.
“The financialization use cases are niche,” Gökalp said. “And it won’t be the mainstream use case. I think ownership will be mainstream. Owning things that come out of a game you play has the biggest chance to make things mainstream in the long term.”
Gökalp also mentions that, in speaking to game developers, VC funds, and investors in the last six months, it’s clear to him that the projects receiving support are not the ones that are focusing on that financial aspect. The games with fundamental Web3 principles at heart seem to be the most attractive in that regard.
Web3 needs to face its technical problem
Like many in the Web3 space, Gökalp believes that the technical barrier that Web3 presents to the average person is one of the main things preventing its mainstream adoption, whether in gaming or any other space.
“People need a seamless, invisible, completely abstracted away kind of experience, whether they’re touching a blockchain indirectly or directly,” Gökalp elaborated. “For them, it needs to be as easy as logging into Spotify using your Facebook login, and everything else is taken care of in the background. And only at the moment when you want to extract assets, which requires an immutable chain, then you potentially need to be aware that you’re moving funds or assets and you can lose them.”
Gaming, Gökalp says, is the most likely candidate to help onboard people to Web3. As one of the world’s most popular forms of consumed entertainment, it’s simply more likely to do so than any other industry. It’s also inherently open to the principles upon which Web3 is built, compared to other industries.
“I’m not an idealist, but I think it’s games,” Gökalp said to nft now. “They’re way more decentralized, way more bottom-up, creativity-driven, with the right type of minds and the right type of people. Social media is owned by companies that will only suffer from true decentralization. And they know it. And they don’t want it. And it’s clear that they are trying to get ahead of it and try to own it. I respect the conviction. But obviously, we know from their prior behavior what the most likely future behavior will be from those companies. I hope that they don’t win Web3, too.”
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