Everything in Web3 Gaming is Great, Except the Tech
And Maybe the Games; But in Either Case We’re Far From the Potentials
I’ve been on record that I’m cynical (albeit, in good faith) around much of the current state of Web3 and metaverse. The onslaught of cynics who are “all-talky-no-buildy” is understandably frustrating for those who are genuinely trying to create within these industries, but many of us are continuing to turn towards the topics not because we want to but because we have to. Much (if not all) of the popular discourse around metaverse is actually concerned with gaming, and the broader world of gaming was seen as ripe for disruption by blockchain hopefuls. Loosely paraphrasing Aaron Leive: You came for us, man. I can’t speak to anyone these days about the gaming ecosystem without a well-formed opinion around these topics, lest the conversation spiral towards some ill-defined and potentially treacherous direction for partners.
On the topics of metaverse and Web3, between which I’ll continue to argue for a firewall, my cynicism has been significantly heavier on the latter…with cause. Much of the world of Web3 gaming to date has been poor at best, damaging at worst. A lot of unearned arrogance and blithe ignorance led to a speedrun of words like “NFT” and “blockchain” being featured prominently within investor statements by major developers to dirty words in the broader gaming community.
That said, things have become much quieter since late 2021, as we’ve now reached an interesting juncture for the intersection of gaming and Web3. The initial roar of hand-wavey prolimations have given way to a somewhat more subdued period where those that included the exceedingly simple task of making a game as part of their “project” roadmap need to actually get to work (i.e. the “find out” portion of the “fuck around” continuum). The reality is that the vast majority will be dead before they see the light of day. This isn’t a negative prognosis on Web3 enthusiasm per se, but a reflection of the reality of game development more generally - the ratio of “launched” to “killed” games is heavy on the “killed” side. Even then, of those that launch very few will be successful by most objective measures.
And yet, some will launch, and some will meet some standard of success. For all of my cynicism, I believe we’re probably within 12-18 months from a game leveraging some form of Web3 technology which a lot of people will want to play. While we’ll debate what “a lot” of people means (and whether it’s fair to compare to user numbers in more traditional games), or what a “successful” launch looks like, it is nearly an inevitability. The sheer number of at-bats Web3 gaming has due to a massive influx of funding from VCs, tokens, or otherwise virtually ensures a single or two.
I do not, however, believe success will be doled out evenly. The developers that will win are those which are led in totality or in part by old hands from gaming development. Whether it’s the unflappable confidence of Gabe Leydon, Mythical Games (helmed by game industry vets) breaking into the Epic Games store, still emerging entrants such as DIG, or even Dr. Disrespect if we’re feeling generous, experience matters. The unifying trait across these veterans, gleaned from either direct conversations or interviews, is pretty similar: Many were part of the mobile/F2P revolution, which up-ended the broader gaming world just a decade or so ago with a new monetization and design philosophy, and believe that blockchain affords an opportunity to capture lightning in a bottle the same way.
I’m not quite as convinced. “Casual” games (an already complicated/nuanced category) became a dominant force due to a combination of factors: Easy access (through prolific technology like smartphones and/or the removal of upfront pay barriers) and gameplay designed for everyone (simple controls and gameplay experiences that allow players to weave in-and-out without penalty). While I do not have an exhaustive view of the current or future Web3 gaming landscape, few are terribly easy to access (inclusive of the potential for additional barriers, such as requiring crypto wallets) nor are many looking to be designed for folks who generally don’t play games. Casual gaming increased the tent of potential players by appealing to folks who otherwise weren’t playing video games all that much: That was a big well to tap, but one which might be pretty dry at this point.
The opportunity space (or to use the tired start-up phrase: product market fit) for Web3 gaming therefore gets pretty complicated. On the one hand, you can attempt to convert folks who are already playing games - a big audience to be sure, but one where a lot of goodwill has already been burned (in the case of more “traditional” console/PC game players) or the technical barriers might prove too high for more “casually” oriented players. On the other hand, there is a potential white space for folks who aren’t otherwise already gaming but might be motivated to do so by extrinsic rewards (e.g. money) - this would be another case of the overall tent of gaming becoming that much larger, but I’ve not seen much in the way of evidence as to whether a critical mass of folks who needed a cash reward to play a game exist (aside from outright gambling, but then we’re potentially getting to a thin line where Web3 games end and good ol’ fashioned gambling begins).
Like so many things, the truth of the matter is probably going to be a little bit of both, but in either case the necessity of actually having a decent game at the core of the proposition is probably essential (aside from edge-cases within the extrinsic reward group, but Axie Infinity demonstrated pretty conclusively that there are immense problems with that direction). I’ll say it plainly: To be successful, the games by Web3 hopefuls will have to be as good, if not better, than those made by traditional development. This is a difficult task even without the desire to potentially shoe-horn additional tech into the game. The difference being that a good game gives reason for repeated engagement, whereas vehicles designed to exclusively push a token, blockchain technology, and/or cryptocurrencies more generally do not. The perverse incentives around a potentially lucrative token leads to fundamentally flawed (and even harmful) products.
On the whole, it’s a steep hill in front of Web3, which is a shame in some respects. It’s pretty easy to get onboard with the general ideals surrounding Web3 gaming - durable digital ownership, a more equitable relationship between developers and players, etc., etc. It’s not entirely similar to my conundrum around Web3 more generally - for the most part, I’m generally onboard with the ideals:
An internet unburdened by centralized platforms and questionable decisions walled-garden business models elicit? Yes, please.
An emphasis on community and community-built endeavors? Sounds terrific.
Advancing the utility of open source software? Awesome.
Durable ownership of digital property? I love owning stuff!
The return of anonymity to the digital traces we leave behind on the internet? What a relief!
New forms of funding outside of the strained VC model, inclusive of opportunities for underrepresented founders and builders? It is about damn time.
All good stuff! The problem, not entirely unlike Web3 gaming, comes from an all too common obsession with technology (and notably, a myopic blockchain technology as the end-all solution for decentralization) and profiteering based upon the inherently finanicalied nature of the tech. Much of the discussion around Web3 has the classic “when you have a hammer everything looks like a nail” problem: In the case of Web3, the hammer is blockchain and the nail is seemingly every facet of modern interconnected computing. The reliance on blockchain as the presiding mechanism for decentralization is in part due to how tightly knit modern blockchain development is with cryptocurrencies, as it provides a template for yielding value from digital scarcity via tokenization. The Web3 hammer has thus become one that stamps a token with every metaphorical strike.
The result is a Web3 in danger of having an end goal being less about decentralization and more about providing utility to token-based financial speculation. A recent article in The Atlantic (which I would advocate as a “must read” for anyone interested in Web3) highlights this tension in the broader world of decentralization. The principles of a decentralized web (DWeb) and the years of work that have gone into it (including particularly crusty technologist who will argue that Web3 is rip-off of Web 3.0 explorations around P2P tech which predate the current blockchain gold-rush) have been almost completely overridden by a fervor around positioning blockchain technology as the basis of a decentralized web, with much of the desire driven by the fact that there is a lot of money to be made in this arrangement. We’re becoming much more interested in how to get rich off digital scarcity in this new internet before there is much of a reason for it, and the more problematic portions of the Web3 gaming landscape are a direct reflection of this issue.
Whether one buys into the concept of decentralization (be in gaming or otherwise) as an earnest philosophical/technical belief vs. a desire to pump bags is not entirely dissimilar to a dichotomy underlying bullishness in cryptocurrencies: Are adherents merely looking to remake investment banking with the fun feature of having themselves at the helm (I trust the Winkelvi and Armstrong about as much as any given banking CEO, which is to say “not at all”) vs. anti-statist/techno-anarchist (hey, let your freak-flag fly)? I thus find myself having to go through a fairly intensive internal calculus whenever I meet someone who is really into Web3: Where do they fall on a cartesian plane where the Y-axis is the continuum of “idealist” vs. “profiteer” and the X-axis is “naive” vs. “knowledgeable” (the bar for “knowledgeable” being just a hair higher than “doing your own research” via YouTube and some white papers)?
I’m painting in deliberately broad and wholley unflattering strokes because the predominant feeling I have is one of frustration. The broader world of decentralization, be it towards gaming or otherwise, is not living up to potentials. While I’m confident we’re on the cusp of Web3 gaming reaching a wider audience, I believe we are much further from the fundamental reorganization of the gaming business that Web3 gaming promises. The ideals of decentralization lead to something valuable for the consumers playing the games, which could truly disrupt the gaming ecosystem, the question is whether we can burn-away the perverse incentives blocking progress in this direction…and in doing so whether there needs to be a more earnest dialogue around the technology solutions we’re leveraging.
If not yielding a solution, cynicism can at least put a bullseye on the problem.
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