Blockchain gaming is gradually growing but there has been some slowdown in 2022. Also, there remains much antipathy towards Web3 gaming from traditional gamers; scams, hacks and crypto crashes have not aided the cause. Let’s examine some of the issues as the curtain falls on 2022.

Investment In Blockchain Gaming

A report from the DappRadar on October 12th, 2022, suggest investments in Web3 gaming in 2022 will

“end up being lower by 8.8%, tallying around $9.25 billion, as the investors’ bullish outlook on the blockchain gaming industry holds.”

Although 2022 has been a difficult year for crypto, investors committed more than $3.4 billion to gaming and NFTs by October 2022. However, since November 2021 the crypto market has lost approximately $2.7 trillion. This is a staggering amount, but speculation is that the crypto market will return to a bull market in future.

FTX Collapse And Embezzlement Charges

The recent collapse of the FTX Trading platform for crypto was another damaging scandal for the credibility of crypto tokens. FTX Founder Sam Bankman-Fried was charged for “orchestrating a scheme to defraud equity investors in FTX Trading” (Schwartz, Brian, CNBC.com). It sent shockwaves throughout the blockchain sectors.

A Resolute No From Steam

Uncertainty about crypto is not new and Steam announced in Autumn 2021 they would not be hosting crypto or NFTs to protect their reputation. Valve  adamantly declared there would be no NFTs or crypto tokens on the Steam platform. As one of the biggest gaming platforms with 134 million users, this was a worrying turn of events for Web3 gaming studios and investors. 

Fear of Fraud and Scams 

Evovled Ape  is a classic example of an NFT scam which added fuel to the fires of discontent. Evolve Ape was an NFT developer who created and sold 10,000 unique NFTs, playable in-game characters. However, the head of the project vanished a week before the game was due to launch, stealing 798 Ethereum coins ($2.7 million dollars) set aside for game development. NFT investors were left in shock. 

Volatile Pricing & Markets.

Then came the crash of the so-called Terra stable coin in May 2022 where investors lost tens of billions of dollars. This was a huge shock to crypto investors and Web3 gaming and fears of so-called ponzi schemes and market crashes were exacerbated. 

Web3 Gaming Ecosystems

Many traditional gamers stand against blockchain gaming because of the poor perception of crypto safety and not wanting to be charged even more money for gaming. However, microtransactions have been part of gaming since 2006 when Bethesda sold horse armour for $2.50. Moreover, the blockchain promises to give gamers economic self-autonomy to buy and sell NFTs and use them in different games i.e. interoperability. Despite scams like Evolve Ape, once the security of NFT trading is more established, we could see gamers trading NFT skins and items in decentralized Web3 ecosystems. 

Blockchain Game Design

The high prevalence of poorly designed Web3 games, more about earning crypto than creating a fun game, has been a clear downside for Web3 gaming. However, the tide is turning with higher caliber games now being produced as blockchain gaming developers seek to promote long term sustainability with fantastic titles players love.

Is The Tide Turning For Web3 Gaming As 2022 Ends?

Only 2000 Gaming Apps On The Blockchain

DappRadar cited ‘fewer than 2,000 gaming applications currently use the blockchain' shows that Web3 gaming is still in an early stage of development. In fact, an article in December 2022 on the World Economic Forum website explained why ‘mass adoption is still some distance away’. WEF experts explained that the development cycle of a videogame takes years in terms of development, distribution, design and infrastructure before you get significant growth and uptake. 

Epic Games and Blockchain Gaming

Though Steam took definitive action against adopting NFTs and crypto gaming tokens, Epic games showed an openness to incorporating blockchain gaming in Autumn 2021. Then in June 2022, it was announced that Epic Games would have their first Web3 game by the end of the year, partnering with Gala Games, a Web3 startup for a Western type battle royale. 

Big Brands Coming On Board

Epic Games CEO Tim Sweeney first said in autumn 2021 that Epic was not planning to get involved with NFTs. However, that changed with EA, Activision, Warners, Zynga and Epic all joining together for ‘Pirates’, a Web3 game. Common sense suggests that mass adoption is only a matter of time with global brands getting involved in NFT and Crypto gaming. 

Household brands will need to overcome issues around security and safety from scams, crypto collapse etc to achieve mass adoption. Furthermore, they need to produce Web3 games that players love. The global brands also need to have the capability to host millions, if not 100s of millions of players. Web3 gaming will have to focus on security, scaling and decentralisation of systems to be the true heir apparent to Web2 gaming. 

Wishing you a very happy Christmas and 2023!

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