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Why the Current Web3 Games Market is Set to Fail

We are halfway through 2022 and when asked what our thoughts are on the Web3 market and blockchain gaming, our answer is the same now as it was at the beginning of the year: generation 1 of the Web3 games market is not and will never be adopted by the mass market of gamers.

As it stands, the current Web3 market is set to fail (one might say it already has) for a number of reasons and if you take a look at most of the publicly announced Web3 games in production at the moment, their basis relies on a number of already obsolete assumptions that make up the profile of the Gen1 market. 

Here are a few reasons why Gen1 Web3 games are for the most part, games in the name only, and demonstrating a failing market. 

A Randomly Generated Mess 

Currently, the extreme visual randomisation of NFTs is leading to a mess of mass-generated static 2D graphics. Sure, the bored apes might’ve been amusing, but successes from the randomly generated blockchain art scene don’t necessarily translate to value in games. This feature of random characteristics and values are a good base for certain types of games, but it is being overused in Gen1 games and we can’t say we’re impressed. 

Jumping through Hoops for Little Reward

It would be reasonable to assume that with any new or emerging technology/service that there may be some kinks to work out when it comes to UX. That said, the prohibitively high barrier to entry for gamers is exasperating. Not only is it a tall order to expect gamers to go through the abysmal experience of creating a crypto wallet and other secondary services, but once the wallet is created, they are then paying hundreds or even thousands of dollars for a randomised mess of a game character to play a game that is sub-par in every respect compared to what they usually play. 

Granted, Crypto Gaming Guilds mitigate this problem somewhat, but their players are mainly from low-income households in developing countries whose only motivation to play your game is to extract the maximum amount of value out of the system. They do not actually care about or enjoy your game and why would they?

Not only this, but the protection for users is poor. If the password for an online banking account was hacked, then the account owner would be protected. However, if a crypto account was hacked, then currently, the user would simply have to accept the loss and move on. 

The Wild West of Web3

Speaking of being scammed… From a legislation and regulations point of view, Web3 is still a new technology and is currently super susceptible to people finding new ways to abuse the system. Legislation and regulations are either non-existent or vary wildly between countries. For example, even basic NFTs are currently not clearly covered in legislation of most European countries and many kinds of tokens can be viewed as securities which can put them at risk of actually breaking the law. 

So, What Next?

From the start, as a company, we decided that instead of rushing things to get a piece of the cake whilst there’s still time, we assessed what the future of Gen2 Web3 would be in a couple of years from now. Our opinion of the matter is that the market for player owned tradeable in-game items is what’s important. The thing is: You don’t necessarily need blockchain for that. The genie is now out of the bottle and there are several fiat (or as we say RFM, Real F**king Money) store fronts in the works that will enable any game to have their items traded freely.

Think of the Steam store and CS:GO skin trading but without walls. CS:GO skin trading alone is estimated to have an annual value of several hundreds of millions of dollars. Extrapolating from that; a universal real money store front for any game would add billions to the games industry revenue stream. That is what Gen2 Web3 is all about.

- Kim Soares, CEO