Take “The Apprentice,” add a dash of “Shark Tank,” and toss in 16 crypto enthusiasts competing for a six-figure prize package and you’ve got “The Next Crypto Gem,” a new competition reality show debuting in September.
“Working with comedians, such as Adam, will allow us to lower the knowledge barrier, making crypto and Web3 more fun and accessible to attract more youth, who will ultimately be the key builder to bring our society forward, to a more crypto-friendly future.” Gracy Chen, the managing director of Bitget, said in the press release.
The DappRadar report also noted that the shifts in trading volume and network activity may be partially attributed to “the emerging popularity of ‘low barrier entry’ NFTs. These assets, smaller in individual value, cater to a wider audience,” and “a broader shift in the NFT market towards platforms that offer more affordable and accessible NFT options.”
On July 6, Meta released their Twitter-alternative, Threads, and it’s already handily passed 100 million downloads. One of the interesting promises of the new app is that it will support ActivityPub, a decentralized social media protocol, which means users will be able to interact with other platforms in the so-called fediverse like Mastodon and vice versa.
Coach McNugget invites players to start the fun by finding four McDonald’s signs, and what gamer doesn’t seek an adventure like this? But off I went to find them. By playing the game, players can earn rewards including a 100,000 SAND shared prize pool (roughly $44,000) and “mystery boxes,” according to a press release.
The numbers don’t improve if you compare the first half of 2023 to the same period in 2022. In 2022, Web3 startups raised nearly $16 billion in the first half of the year, but this year’s fundraises have totaled just $3.6 billion — a 78% drop.
This week, Google made a big shift in their policy towards NFTs, allowing apps in the Google Play store to include the ability to buy, sell or earn tokenized assets. Meanwhile, Starbucks Odyssey, the brand’s Web3 loyalty program, announced their next Stamp would be “designed by Aku,” the NFT character launched by former LA Dodgers player-turned-artist Micah Johnson. In other news, Snoop Doog and a16z-backed decentralized music venture Sound announced a $20 million funding round and we got another “phygital” sneaker drop.
Google Play announced a major shift in policy today, allowing developers to incorporate digital assets such as NFTs into their apps and games in the store. Companies that decide to offer the ability to buy, sell or earn tokenized assets will be required to make it clear in the Play Console that there are blockchain-based elements in the app.
The fact that the player cards are NFTs is “behind the scenes” for most players, Linden noted, who are able to play the game without purchasing any NFTs. “Every player gets a wallet in the game, and then most of them probably don’t know it’s a wallet until they want to start interacting with the marketplace to buy, sell or trade.”
In April 2023, a digital item with distinct, rare traits was sold to a gamer for $400,000 reportedly paid for in cryptocurrency. Digital assets similar to this one have garnered $100 million in overall sales the same month. But the $400K sale wasn’t for a non-fungible token (NFT) – it was a skin in Counter-Strike:Global Offensive, more commonly shortened to just “CS:GO”.
When I start conversations about Web3 with gamers, I often hear the same objections: that NFTs are “useless” “scammy” or “expensive;” that this is just another way for gaming studios to extract value from players; that gaming doesn’t need blockchain; and that crypto is “too difficult” to deal with. Many also argue that current Web3 games just aren’t that fun.
But the appetite for in-game items on secondary marketplaces is booming, indicating that gamers understand the value of in-game items, though they often deal with a considerable amount of friction to buy and sell these items. And digital currency is very much part of Web2 games like Fortnite and Roblox that scores of users pour millions of dollars into every year. Roblox has over 66 million daily active users (DAUs) as of May 2023 and made $7 million a day in 2022, much of it in the game’s native currency Robux, which can only be used within the Roblox ecosystem and has zero value outside of it.
While other industries like entertainment and loyalty programs have the potential to onboard millions of new users into Web3, gaming provides fertile ground for the seeds of mass adoption. Gamers are already familiar with virtual currency and understand how to buy and earn in-game assets. And while there are nearly 8 billion people in the world, over 3 billion of us play video games pointing to a considerable amount of the population primed for a gamified digital future.
This particular combination of opportunities was noted by Alex Connolly, co-founder and CTO at Immutable. “Gaming is the perfect candidate for spurring Web3 mass adoption simply because there are so many gamers in the world who are already used to trading digital items and buying digital things,” he said.
Yat Siu, co-founder and CEO of Web3 giant Animoca Labs, agrees that the gaming industry offers a robust framework for transitioning users from Web2 into Web3. “Gaming is basically a cultural and entertainment phenomenon that is bigger than movies and music. And gamers and people who play games already have a relationship with virtual assets and items.”
Healthy supply and demand
In order to create a winning economic formula, there needs to be both consumer demand as well as an opportunity for profit for the people feeding the supply.
“Gaming is the biggest industry when it comes to entertainment,” said Urvit Goel, vice president and head of global business development at Polygon Labs. “It’s bigger than music and movies combined. And there is a very clear use case here. No one’s spending as much on digital assets in any other industry than gaming.”
But according to experts, what’s lacking in the gaming industry today is the ability for gamers to truly own their in-game items and profit alongside developers and studios.
“We already have a huge community – billions of people who spend hundreds of billions of dollars every year on buying items that they don’t truly own,” Connolly explained.
Siu also noted that unlike other industries like music that have moved from the physical to digital realms through streaming, gaming is a “digital-first culture” that has had an impact on the physical world.
“Why do we have curved screens?” Siu provided an example of a gaming need that impacted real-world design. “It’s because people wanted to experience their games in a curved environment. And so the virtual purpose drove physical needs, which is different from any other industries.”
“It’s one of the main arguments why we think gaming is just so powerful and so influential and has driven so much innovation,” he added. “It would seem logical to us that it would do the same for the metaverse and digital ownership.”
The offer of true ownership
Web3 gaming presents a unique opportunity for gamers to truly own their in-game assets, thanks to blockchain technology, which allows in-game items like “skins” (also known as “cosmetic” items that change the look of a character but offer no advantage in the actual game) to exist as non-fungible tokens (NFTs).
Currently, when players want to buy items like skins from huge Web2 games like CS:GO, Rust, League of Legends, Valorant or Fortnite, they can buy them directly from the game or via marketplaces like Steam.
But selling these items or even just giving them away is a bit trickier. One person I spoke with spoke about how he had created a dummy Fortnite account for his child before they turned 13 (the actual age you are allowed to play most games), but then when his child actually turned 13 and wanted his own account, there was no way to transfer any of the skins or V-Bucks (Fortnite’s digital currency) to his child’s new account. At that point, most of the items were not available to purchase or earn anymore, as they are tied to Fortnite’s ever-evolving seasons and ever-changing item shop.
There are some marketplaces on services such as Steam for players to buy and sell items from certain games, but there are price limits on Steam so no item can be listed for more than $1,800. The $400,000 CS:GO skin sale mentioned earlier wasn’t done in-game and the transaction wasn’t made directly between the two parties, but rather it relied on a third-party broker to set up the auction, take payments and transfer the assets.
Spencer Tucker, chief gaming officer at Yuga Labs, the parent company of the Bored Ape Yacht Club and Otherside Metaverse, told CoinDesk that gamers don’t “really yet understand what Web3 or blockchain technology really offers the players.”
But to him, the use case is clear. “It’s about just getting something back for what you put into it, in terms of possessing some sort of interoperable utility.”
He gives an example of someone who bought a character in-game for $500. “You can’t trade that character. You can’t give that character to somebody else. You can’t do anything with it. And so your $500 is effectively going to nothing.”
Instead of these in-game assets being trapped and losing all value, putting these assets on-chain as NFTs allows direct peer-to-peer transfers, and eliminates the need to trust third parties with your assets, money or access to your accounts. A user can gift their Fortnite skins and V-Bucks to a new account. A pricey CS:GO skin can be transferred directly from the owner to the buyer without the friction, cost and risk of using a third party.
Web3 allows individuals to decide whether to “trade it to somebody for something else, sell it or sit on it to see if it grows in value” – all options previously unavailable to them.
Polygon’s Goel echoed this issue with the current Web2 model, explaining that in-game items effectively go to waste once a player grows tired of a game. “There are games that I’m done playing and it’s like, ‘well, I spent my time, money and energy on this and there are other folks that actually might find value in these items and I can’t give it to them, I can’t sell it to them, I can’t trade it.’”
Empowering creators and community
Another aspect that has allowed non-blockchain games like Minecraft, Roblox and Fortnite to grow in popularity and retain its users is that each game allows players to also be creators and contributors.
Siu explained that Minecraft’s passionate community has created a network effect that has led to its long-term success.
“People buy Minecraft today, not because they want to play just Minecraft. It’s because they want to access the ecosystem of Minecraft, like the forges and all these external sorts of environments.” Siu said. “Microsoft continues to sell Minecraft copies of licenses because of the ecosystem that has emerged outside.”
“User-generated content (UGC) is the future of gaming, as far as I’m concerned,” Tucker said, tying the idea to Roblox’s breakthrough success.
“Imagine that UGC happening in your own ecosystem, and the opportunity for somebody who creates there can have financial upside,” Tucker said. “[In Web3], they can sell that experience or generate eyeballs or monetize it however they decide to do so. It engages the community, and now they have skin in the game, which reinforces that ownership and interoperability component and all these things operate together to create a durable experience.”
Easing development and onboarding
While user-generated content is a great way to decentralize the content mill and expand a user base, creating the right tools is essential for great games to build upon.
Although a lot of the focus is on the end user, both Connolly and Goel stressed the importance of investing in the development behind the scenes as well.
When asked what it would take to get a billion players to Web3 gaming, Connolly started by identifying “two massive challenges,” in the space right now. “The first one is the infrastructure that exists today to support Web3 games isn’t mature enough. It doesn’t smooth over enough of the user experience issues, it doesn’t deal with scale well and it has problems with security.”
Immutable recently launched the Immutable Passport to “support the next generation of Web3 games by solving their user experience, onboarding, transaction and purchase, and game development challenges,” Connolly said. “This is how you get a high-quality game to the market as quickly as possible.”
Goel said that Polygon’s focus has been on supporting developers in building excellent consumer experiences.
“The promise around digital ownership is something that people want,” Goel said. “They just don’t care how we get there. And NFTs are a way to get there, but the masses don’t want to hear about the technology, they just want the thing to run.”
“The biggest barrier of entry isn’t cost,” Tucker added, “it’s actually the friction around the technology, like wallet creation.”
Tucker believes that technology gradually moves mass adoption and noted how fast smartphones became ubiquitous. Similar to smartphones, he said, Web3 will also hit that inflection point where its use cases become more widespread.
“It kind of happens when something really breaks through and then it’s just good,” Tucker said.
The importance of the fun factor
While “fun” wasn’t universally agreed upon as the most important factor for mass adoption by the experts we talked to, the majority of leaders in the space come back to the point that games are supposed to be fun. According to a 2022 report on U.S. gamers, most people play video games because it brings joy (93%), provides mental stimulation (91%) and allows players to relieve stress (89%).
“A lot of the games we will actually see in the market are not very fun,” Connolly said, noting it as the second massive challenge in the space. “We think that all it will take to reverse this perception is a high-quality game that people simply want to play and that just happens to support Web3 asset ownership.”
Tucker agreed that fun was important, but added that a breakthrough hit would also need to give “players an experience that they don’t ever want to remove themselves from because it’s just so much better than what they had before.” Yuga seemed to have cracked some of the code for its Dookey Dash game, which while not the most graphically impressive or complex game, was fun enough to entice players to spend an average of 28 hours in the games’ sewer to top the leaderboard and win a one-of-a-kind, highly valuable NFT reward.
This layer of value is one of the things that Siu thinks makes Web3 gaming such an attractive proposition. While games obviously have to be enjoyable, Siu stressed that a player’s time should be given actual value.
“Your relationship to the game changes if you know that your time in the game is worth thousands of dollars to the game,” Siu said. “If you’re a guild leader in a game, it’s probably worth much more than sort of a casual player, and that should be somehow enumerated.”
Siu also noted that esports, a $1.4 billion industry that draws in millions of viewers at live events and through streaming platforms could benefit enormously from the verification that on-chain gaming provides.
“One of the challenges with esports right now is that it relies on video screens for verification of events in the competition,” Siu said. “But if everything is on-chain, you have a way of verifying everything.” He noted that this would not only benefit the tournament but also the lucrative sports betting industry, which could leverage blockchain to authenticate results.
Experts said that the next big Web3 game could be a AAA game or could be a mobile game that offers a more accessible user experience.
“I’m not sold that it’s going to be a high-end PC game or a high-end graphics game that’s going to be dragged to mainstream adoption,” Goel said. “There are more mobile devices in people’s hands than PCs and there are more people that have played Candy Crush than say, Madden from EA.”
While experts have brought forward ideas for the future of blockchain gaming and its potential to bring in the next million users to Web3, it’s unclear when that watershed moment will arrive, though they agree it is not far off.
With heavy investment in the space over the past 18 months, Connolly predicts that innovative products will make waves within the next 12 to 18 months “simply because that’s how long it takes to build a really great game.”
“There’s some really awesome stuff coming,” he said.
Goel predicts that some of the “most advanced games” are currently in the final stages of development and are slated to release in the near future. “We think that by the end of this year, there should be a handful of really fun, directionally triple-A games.”
Siu noted that Animoca Brands has invested in “over 140 games” so far, many of which are set to come out by early next year. “It takes a few years to make a good game. So that means that the true effects of the mass onboarding I think will happen in the next 12 to 18 months.”
In the end, it’s not a question of if, but when Web3 games will enter space in a way that drives mass adoption.
“It’s just a matter of time,” concluded Tucker.
Two days after Donald Trump became the first U.S. president to be charged with a federal crime, his NFT project, Trump Digital Collectible Cards, let people know that it was not letting his second arrest stop them from awarding prizes associated with the project.
After Pudgy Toys debuted on Amazon on May 18, the floor price of the cute NFT project shot up over 6 ETH. Now, with the launch of Pudgy World and the addition of the collection to the NFT lending platform Blend, it is continuing to build momentum.
On May 2 at 10 a.m. PT, the Ekos Genesis Art Collection will kick off a Dutch auction of 995 1/1 NFTs. The date holds special significance for Maisel, as it marks the 15th anniversary of the theatrical release of “Iron Man,” the movie that kicked off the Marvel Cinematic Universe. The Dutch auction will last 88 minutes and bidding will start at 10 ether (ETH), then drop by 0.5 ETH every four minutes until the price hits 0.5 ETH. Finally, it will drop to 0.2 ETH for the final eight minutes of the auction, provided the collection has not already sold out.
Level 1 will require 1,000-2,999 points and reward choices are a virtual coffee class, a Starbucks coffee passport or to make a charitable donation to Feeding America. For 3,000-5,999 points, members reach Level 2 and can name a coffee tree, attend a virtual tasting paired with a bag of coffee or receive a Starbucks cold cup. Level 3 is for members with 6,000 points or more and rewards to choose from are a customized MiiR 360 traveler, 30 days of free drinks or an experience at a Starbucks Reserve store.
Why the Smurfs? One of the draws of the intellectual property (IP) was their broad Web2 reach with “94% recognition globally.” They’re known not only in Belgium where the comics began, but also broadly across Europe, the U.S. and China, where the Smurfs are welcomed for their spirit of community and collaboration, co-founder and CMO Arthur Salkin told CoinDesk.
If you’ve been around Web3 at all, there’s been a long-standing theory that gaming will be the way to onboard the “next billion” users to crypto, or the metaverse or non-fungible tokens (NFT). Yet, despite hundreds of millions of dollars pouring into Web3 gaming and NFTs, there still hasn’t been a breakthrough moment. With the overall gaming industry hauling in over $184 billion in revenue in 2022 with 3.2 billion players, there’s a high incentive to tap into the huge revenue and audience around gaming.
There are a few roadblocks preventing the mainstream adoption of Web3 games to date: One is the high cost of entry for some games, which require NFTs to play. For example, play-to-earn game Axie Infinity required three “Axies” to begin, which at one point cost around $300. That’s a lot more than the $60 price tag for a hit AAA game like “The Last of Us.” And after Axie suffered a $625 million hack, people inside and outside crypto were rightly concerned about security in Web3 gaming.
Beyond the cost barrier, one of the most pressing obstacles Web3 gaming faces to onboarding those billion players is that it’s really hard to get started – and gaming is supposed to be fun.
There’s a high level of friction for Web3 gaming newbies. At the bare minimum, people currently need to set up a crypto wallet, but most likely also need to add funds in a specific cryptocurrency and/or buy non-fungible tokens (NFT) to play a Web3 game. And this process might need to be repeated for each and every Web3 game at the moment.
Realistically, as soon as someone sees they need to write down a 24-word seed phrase and keep it in a locked safe to proceed, the fun is gone and most likely, so are they. It’s game over. How can the metaverse make gaming onboarding less of a turnoff?
The solution: Immutable Passport
Enter a passport project from Immutable Labs, a crypto unicorn from Sydney, Australia founded by James Ferguson, Robbie Ferguson and Alex Connolly in 2018.
The Immutable Passport is aimed at solving Web3’s roadblocks for adoption by offering easy onboarding and interoperability. The developers describe the idea as similar to a single-sign-on (SSO) system like Google where you can use one account to sign in everywhere, seamlessly.
“Passport is a self-custodial wallet, where users can sign in with just an email and one-time password – it will be a game changer for players and radically reduce user acquisition costs.” Immutable’s President and co-founder Robbie Ferguson said in a press release announcing the product.
Smartly, the Immutable team is aiming Passport not only at users but at game developers so that projects are working within an interoperable gaming universe from the early stages of development and won’t need to retrofit the Passport into the code. Ultimately end users will benefit from the seamless integration.
But while the end goal is a smooth, invisible, multi-game product, there were some bumps in the road and some valuable lessons learned along the way.
Ownership of in-game objects for all
Alex Connolly, co-founder and chief financial officer of Immutable, told CoinDesk the company’s origins started during the early days of NFTs as the founders traded on black markets for character skins, which are digital wearables for in-game characters and items sometimes referred to as “cosmetics,” for games such as CounterStrike and RuneScape.
“We immediately saw that at the moment, these [Web3] games are really shallow, but it should be possible to build better games. And if you had better games, and the items were tradable as NFTs, that would be a way better experience than one that we were used to when we were playing those games.” Connolly said.
Connolly said the founders were trading those items on the internet with other players of popular games on non-official sites. Almost no major games allow players to easily exchange or sell these in-game items.
“We had that realization: People should own items in games,” he said. That set the trio off on a journey that eventually led to a billion-dollar business, he continued. “We built games and where we ran into problems, we built technology to solve the problems that those games had run into. And I think those problems have changed over time. And that’s been the journey of Immutable overall.”
One of the first games they built taught them the expensive lesson that gameplay should live off-chain, after realizing the first game they built fully on the Ethereum blockchain cost about $100 a play.
“It definitely wasn’t fun enough to justify $100 fees,” Connolly said.
They focused on fun, scalability and highlighting the “why” of NFTs with their highly successful game Gods Unchained, which is a card game similar to Magic the Gathering, where the mechanics of owning and trading cards to build a deck is part of the DNA of the gameplay. The ownership of the items is key and easily understandable to the community.
“We think that one amazing thing that gaming can do for crypto adoption generally, is actually giving people an incentive to use the technology. Like people who don’t even understand anything about crypto can usually understand, ‘I want to trade in-game items,’” Connolly said. But the founders also noted some things builders have gotten wrong. One that stood out was an ecosystem that was forcing users to get a new wallet for specific apps and games.
“In general, that’s deeply confusing.” Connelly said, comparing the friction to “the idea of spinning up a bank account every time you go to a different restaurant. It would be clearly absurd. And I think Passport is our latest offering on that front. which is that it is incredibly important for games that we can give users a smooth and seamless onboarding.”
The missing piece: The breakthrough Web3 game
One challenge the project faces is a resistance from some bigger players to allowing true interoperability, with big publishers such as Activision Blizzard, Riot Games and Epic Games resistant to letting their intellectual property (IP) exit their AAA game universes and operate in another, which may not maintain their standards of graphics or gaming. There has also been pushback from the gaming community itself, with a 2022 survey finding that most gamers had negative feelings towards crypto and NFTs.
There have been some positive signs from the big brands, with Sony recently filing a patent to allow for gaming NFTs to be transferred between games, hardware and even non-PlayStation consoles like the Xbox.
But Immutable isn’t waiting for the gaming industry to change. Rather than target the existing games, Immutable is focused on fostering the next generation of builders with a $500 million fund for game developers. In the end, for mainstream Web3 gaming to really take off, there has to be a game that everyone wants to play and that breakthrough hit just doesn’t exist yet.
“Some games are massive successes, some games won’t. Our goal is to make sure that all those games have access to the tools to give themselves the best possible chance of success,” Connolly said.
Immutable is fostering this next generation of games by not only supporting the ease of onboarding that Immutable Passport provides to users, but also making sure that developers feel supported through their builds, launches and beyond, stressing that Immutable is “making a commitment to a several year development cycle and then a several year maintenance cycle.”
By funding a rich pipeline of games and enabling developers to create scalable and seamless experiences, the Immutable Passport will not only help get people playing but allow them to continue to grow in Web3 experiences.
“I think sometimes people forget that the user’s experience doesn’t stop with onboarding,” Connolly noted.
In other words, it’s great to have an easy onboarding experience to one game with Immutable Passport, but the whole idea is that to be a real success, it has to be about more than one game and one experience. To create a successful Web3 gaming ecosystem that attracts millions and then billions of users, it can’t be a one-and-done but a vibrant and variety-filled world that has rich possibilities and growth.
Connolly and the Immutable team hope they can solve the issues that currently plague new players, where they put some money into one marketplace or cryptocurrency and then don’t understand where those funds of NFTs are in another wallet or game. The disjointed nature for a user is “absolutely crazy” right now.
The company’s recent partnership with Polygon is another step showing their commitment to building “an Ethereum-centric gaming ecosystem that is poised to take Web3 mainstream and bring digital ownership to millions of people around the world,” said Robbie Ferguson in a statement.
Connolly added that the partnership would allow “game developers to be comfortable that they’re building in the right place.”
Toby Leah Bochan is the Managing Editor of Web3 and Learn at CoinDesk. Toby holds BTC.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
Toby Leah Bochan is the Managing Editor of Web3 and Learn at CoinDesk. Toby holds BTC.
“We are excited to collaborate with IPX, who is a global leader in building innovative character IP brands beloved by millions of fans around the world,” Zagabond, the pseudonymous founder and CEO of Chiru Labs, said in a press release. “IP is evolving, and we see the web3 community as an integral part of this next wave. We can’t wait to bring the world of BEANZ together with LINE FRIENDS.”
Starbucks Odyssey, the coffee company’s Web3 loyalty program, today released its first limited edition non-fungible tokens (NFT), which it calls “Stamps.” The program, still in invitation-only beta, allows members to complete activities such as quizzes and in-store purchase to earn Stamps, which can be collected or resold on Nifty Gateway.
“I’m excited to begin my journey with Games for a living, leveraging new and emerging technologies to enhance performance and create exciting, immersive experiences for gamers,” Hawkins said in a press release. Hawkins added that he expects blockchain to be used more by content creators and that the company plans “to do it in a way that helps enhance game performance and value for players while keeping things fun.”
Related Posts ( 2 )
- 9 months, 1 week ago
- 9 months, 1 week ago
The pseudonymous figurehead shared in a Twitter thread why he decided it was time to doxx himself and share his identity publicly.