Web 3.0 Gaming Isn’t Just About Asset Ownership – It’s Much Bigger

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People think they know the value of Web 3.0 gaming – that it’s all about users owning their own in-game assets as non-fungible tokens (NFTs).

This view is the most common misperception in the space, and it’s flat-out wrong. Ownership matters, but limiting the value of Web 3.0 gaming to ownership misses the full picture – the potential for blockchain-based incentives to expand the gaming industry beyond even its current size.

Web 3.0 driving a world of monetization models for gamers

The innovation that is getting far less attention could be far more valuable – a world of monetization models for gamers, game builders and the communities that support them.

Right now, game developers have limited points of sale to reach both experienced gamers and casual ones. They may sell their game through a console, an app store or a service like Steam, for example.

But what if they could multiply their storefronts to include the entire internet, monetizing thousands and thousands of virtual spaces?

Consider the possibilities for developers if they were able to capture not just the new game market – but also the secondary resale market so that they receive a portion back for each new user interacting with the game.

Games built on the blockchain are able to access a market so much larger than their current one, giving creators the ability to reach far more than they previously could.

It’s the difference between only being able to sell your game in a closed system, such as a single app store, and being able to sell it through a Shopify site that can integrate with every app and marketplace on the internet.

Consider this year’s League of Legends World Finals, where VIP guests were given a badge that, on the front of it, gave an ominous warning – anyone who sold or transferred that badge to another person would be immediately banned from the event.

That’s the current gaming economic model, intensely focused on keeping as strict a user moat, and as tight control over your closed game ecosystem, as possible.

Under a more open, blockchain-enabled economic model, you could create that VIP badge as an NFT.

Event organizers, instead of trying to restrict access, could instead let VIP holders sell that ticket to anybody, and each time it sold, the organizers would earn another five percent of that ticket – resale value they weren’t able to harness before.

Smart contract-enforced royalties allow creators to receive compensation each time their digital assets are bought, sold or traded, ensuring fair compensation and long-term benefits – an economic innovation most game developers could benefit from.

NFT assets are good for the gamer/purchaser of that NFT. If the owner no longer has use for it, then they can get a portion of their money back.

And those blockchain assets are also good for the devs, who get that royalty, allowing them to monetize their assets wherever things are sold, while also making it easier for them to grow their community of supporters.

Although most prominent Web 2.0 games feature in-game digital currencies, they lack the economic guarantees inherent to Web 3.0 games, such as publicly accessible information on quantity, inflation and reward schedules.

Expanding the possibilities of in-game asset ownership

If you own an NFT, you also own a history of that ownership and all the traits of that asset are stored on the blockchain.

If you are playing a Web 2.0 game, then you do not ‘own’ anything you earn or purchase in the game, outside of that game server.

This essentially makes all game assets temporary ‘IOUs’ from game developers – and particularly nebulous ones, since in-game currencies or assets often collapse as soon as the server/game they exist in is no longer supported by its makers.

Future generations of gamers are likely to prioritize true ownership of digital assets that NFTs offer over the mere IOUs provided by centralized Web 2.0 servers.

And that is a truly valuable proposition for those gamers and game developers interested in playing and building on the blockchain – especially when combined with the expanded economic models for gaming made possible by the advent of blockchain.

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Jack O’Holleran is the co-founder and CEO of SKALE Labs – the team behind SKALE, the world’s fastest blockchain, designed for ultra-fast, secure, user-centric Ethereum scaling. Jack is a veteran Silicon Valley Technology entrepreneur with a deep background in machine learning/AI technologies and blockchain.

 

Featured Image: Shutterstock/Alexander56891/INelson

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