Navigating Web3: What does it mean for Game Developers?

If you read tech news, you’ve probably stumbled on the term Web3. And you might be wondering what it means and how it could affect gaming. So let’s explore Web3 and the surrounding opinions.

What is Web3?

It’s all about ownership. The web has been going through gradual changes, ever since it launched. Web1 was where people uploaded websites with static pages and information. You simply read Web1. The next step was Web2, where users create their own content.

Web3 is a prediction that users will begin to own digital content and have control over how they use it. But it’s also about decentralizing that ownership: making sure it’s not tied to any particular platform. (You don’t just own a movie on one platform, you own the right to watch it anywhere, for example.)

“I was lucky enough to be a part of the generation of Web2, building a company like Reddit, that proved and just showed a model for the world of read and write,” Alexis Ohanian, co-founder of Reddit explained in a talk with Bloomberg. “Now what we’re seeing, this whole Web3 jargon, is really just about a third component, which is the ownership part. And we’re just starting to see that, whether it’s with gaming or NFTs or this infrastructure that now exists that let you benefit from a sense of ownership.”

Theoretically, it doesn’t matter how users gain ownership over their digital content. But most experts agree that the blockchain (and specifically NFTs) are the first signs that it’s coming. (Have a look at how Axie Infinity have been using Blockchain for their game.)

So what do blockchain and NFT mean?

It needs to be secure if we see any level of control or ownership. That’s where blockchains (and the NFTs build on that technology) could come in.

• Blockchains can be seen as public databases. Every blockchain has a ‘ledger,’ and they record every transaction. This ledger is shared on everyone’s machines, so it can’t be faked. There are other technical reasons that make blockchain secure, but we won’t get into them here. (This is how cryptocurrencies work.)
• NFTs are the ‘deeds’ to a digital thing. It stands for ‘non-fungible token.’ Which just means a token that’s completely unique. And it’s technically proof that you own a thing. NFTs run on the blockchain, so you always know who owns which NFT.

How might this work in gaming?

It’s impossible to tell exactly how gaming will change. But, theoretically, the blockchain could give players ownership over many different assets. Players could own the game itself, items within the game, or currencies in the game.

It’s the decentralization that matters here, though. It’s not just about owning a cosmetic skin in a single game, it’s about being able to trade that skin like a real commodity. Or even use that skin in another game. (Though, that would need a level of cooperation between developers that’s highly unlikely.)

But Twitter’s founder and CEO, Jack Dorsey, doesn’t believe that Web3 gives as much control as you might think. “You don’t own ‘web3,’” Dorsey tweeted. “The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.”

It won’t all be sunshine and rainbows

There’s a big difference between what could happen and what will happen. Sure, the idea is to have one central place with all your digital assets, from music to individual game items. And that you’d be able to use them in any game. From a player’s perspective, that’s very exciting.

But practically, it’ll likely be more fragmented than that. Companies will still need to cooperate to make it work. For example, a game developer could theoretically allow a player access to any ‘meta skin.’ Or perhaps allow you to use in-game currencies from another game. But how many developers will support that?

If it’s going to happen, the industry will need to release a lot of standards to make it easy for developers to incorporate their player’s digital assets into their games. It’s theoretically possible to add a setting to your game where players could play the soundtrack from another game, for example. But would you want to? Would you want them using currency they earnt from a competitor?

We’ve seen this before, and it failed

Back in 2012, there was a cloud-based service called Ultraviolet. The idea was to be a single locker that housed your digital right to watch a movie. Quite a few studios agreed to honor the system so that users could buy a movie once and be able to claim the right to watch it on any device.

But the service died out in 2019. Who knows whether it was a problem in their marketing, resistance from some of the leading movie giants, or just bad luck. Perhaps it was just too early. But, either way, it meant that users lost those rights. And that they never truly own anything.

There are interesting trends in gaming, though

While there have been failures in the past, it seems that the gaming industry is beginning to dabble and dip their toes in web3-Esque concepts:

• Midnight Society. The famous influencer, Dr. Disrespect, has created a new game studio. One aspect is that people who buy a ‘Founders Pass’ will get what appears to be a custom avatar that “can be traded and collected on open marketplaces.”

• Gods Unchained. This title comes from the former game director of Magic: The Gathering Arena. In it, you can earn cards as you play and then sell them on the marketplace for cryptocurrency.
• Steam. Not quite there, but it already has the Community Market. You can sell items from different games there. However, this isn’t quite web3 yet: you can’t withdraw those funds. But it could be a start.
• Lost Lore Studio. Full disclosure, these guys have been using our technology to track in-game events for a while now. But they’re worth mentioning. Their game, Bearverse, shows what could happen as it lets players earn NFTs and trade them for cryptocurrency.

The game still needs to be good

While these examples seem to show the beginnings of Web3-like games and show us what the future could look like, there are words of warning worth bearing in mind.

“Too many times, our ecosystem has tried to build out NFT-enable games, but forgotten the first step, which is to build a great game,” Sam Bankman Fried, CEO of FTX, tweeted. “And just as importantly, web3 should make a game better, not neutral or worse. If integrating crypto hurts a game, we don’t want to do it.”

We can still help you track events

If you’re interested in trying out Web3 concepts for your game, you can still use our analytics to track how it’s going. We exist to help you make better games and monetize them efficiently. Blockchain shows some promise in monetizing your game, so if you need to track the progress, we’ll be here to help.