Gaming has changed a lot over the years and blockchain technology is revolutionizing how we view video games.
After reading this, you'll understand:
Web3 projects create new gaming economies by letting players buy and sell their in-game items.
Web3 games aren't stored on the blockchain; they use traditional gaming and web2 technology for the gaming environment.
Developers use smart contracts to bridge the gap between the web2 software and its web3 components
Gaming has changed a lot over the years, and now, blockchain technology is revolutionizing how we view video games. Web3 gaming incorporates distributed ledgers, non-fungible tokens (NFTs), and decentralization to give players more control over their favorite franchises. The gaming sector accounted for 49% of all daily blockchain activity in 2022 and has shown no sign of slowing down.
In this article, we'll dive into web3 gaming as well as its benefits, use cases, and future.
Web3 games are those that incorporate distributed ledger technology (DLT). Using DLT, these games can enhance transparency and security, reward players with crypto assets, and democratize the development process. These games often mint in-game items as NFTs, giving gamers full ownership of their in-game digital assets.
It's important to note that web3 games aren't stored on the blockchain. Instead, these games use traditional gaming and web2 technology for the gaming environment. Players connect their wallets to the game, and developers use smart contracts to bridge the gap between the web2 software and its web3 components.
Smart contracts play an integral role in the web3 gaming space. When players earn digital assets like gaming NFTs or fungible tokens, smart contracts are used to send them to the players' wallets. If developers set up a gaming DAO, smart contracts are used to tally votes.
Theoretically, any web2 game could be converted into a web3 game. In fact, developers such as Ubisoft and Square Enix have incorporated web3 elements into some of their games, including popular franchises like "Tom Clancy Ghost Recon."
Decentralization is one of the fundamental features of blockchain-based gaming. Many developers use gaming dApps to support in-game transactions and blockchain interactions. These dApps rely on a series of interconnected nodes rather than a centralized server.
Considering the decentralized node operators, player asset ownership, and decentralized governance structures, web3 games are generally more player-driven than web2 games.
The web3 gaming ecosystem has many benefits, including enhanced transparency, security, and privacy. In this section, we'll take a deeper look at the many reasons web3 gaming is flourishing.
The web2 gaming industry has been scrutinized for lack of transparency. Many publishers force their game developers to sign NDAs and only show in-game footage once they've created a polished demo. While this is still possible in the web3 ecosystem, its decentralized nature makes it less likely. Many blockchain gaming developers share their games’ progress as they’re created and even let players vote on development decisions.
Transactions and item minting are stored in publicly distributed ledgers, giving players insight into how many copies of each item will exist.
Web3 projects create new gaming economies by letting players buy and sell their in-game items. For example, "Gods Unchained" allows players to trade their cards on the secondary market. Many web2 trading card games, such as "Hearthstone" and "Magic the Gathering Arena," reward players with cards, but they can't be sold to others.
It's true that some web2 games, such as "Magic the Gathering Online," let you buy and sell in-game items. However, these items are stored on a centralized server; if the developer shuts the server down, the items disappear.
Web3 games store many elements on-chain, including items, achievements, and cryptocurrency rewards. These games can use distributed ledgers to store player data on-chain, providing enhanced account security through decentralization and cryptography. On-chain account data storage makes these games less susceptible to hacking because there is no single point of failure.
NFT-based skins, characters, and items can be used between various games. This novel idea may not be realized any time soon, but companies like Sony are interested in making it a reality.
Gaming interoperability would be incredibly difficult to pull off, as developers must account for items being transferred to their games from other franchises. As you can imagine, crafting hundreds of items for an "Elder Scrolls" game that look identical to items earned in "The Legend of Zelda" would be a substantial developmental burden.
However, we could soon see video games that provide players with comparable gaming assets based on the quality of a player's wallet contents. For example, if you earned a rare armor in "The Legend of Zelda," you'd be awarded a rare armor in "Elder Scrolls" after connecting your crypto wallet.
Play-to-earn games. These games allow people to profit as they play. Often, players are awarded NFTs for completing missions or ranking on daily, weekly, or monthly leaderboards. These NFTs can be used in the game or sold to others on the secondary market. In some cases, play-to-earn games award players with cryptocurrency tokens.
Metaverse and virtual worlds. Virtual land plots can be represented as NFTs, letting players buy and sell them on the secondary market. Many web3 metaverse projects let players buy items in their gaming worlds using cryptocurrency.
Gaming DAOs. DAOs impact web3 gaming in various ways. For one, investment DAOs collectively invest in web3 gaming projects. Video game publishing companies can be structured as DAOs, letting their employees vote on important business decisions and share in company profits. Web3 gaming projects, such as Decentraland, use governance tokens to let players make decisions about the game's growth and development.
Web3 gaming accounts for a significant portion of all blockchain transactions, and many reports suggest we'll see its popularity grow exponentially over the next five years. Still, web3 games have yet to be accepted by the mainstream gaming ecosystem, and the ever-changing regulatory landscape is sure to present challenges.
For web3 gaming to reach widespread adoption, developers and publishers must use DLTs with a track record of fast, secure transactions. The Hedera network is an excellent choice, thanks to its lightning-fast Hashgraph consensus mechanism. Additionally, Hedera is partnered with industry leaders in the gaming industry, such as Ubisoft.
“Ubisoft has been a pioneer in its engagement with distributed ledger technology, and the decision to directly engage with THF (The Hedera Foundation) to enhance the support it provides to entertainment and gaming innovators provides tremendous opportunities for developers, startups and users alike,” said Alex Russman, Director of the Metaverse Fund at the HBAR Foundation.