Massively popular web2 games like Minecraft and Epic Games are getting a web3 facelift. These are some of the updates of 2022, so the seismic shift is occurring as we speak.
Massively popular web2 games like Minecraft and Epic Games are getting a web3 facelift. These are some of the updates of 2022, so the seismic shift is occurring as we speak. Minecraft recently offered its third-party servers to a crypto-gaming project called NFT Worlds to build a metaverse-like game on top of the Polygon chain. In other news, Epic Games has received $2 billion in funding that will go in creating a metaverse “where players can have fun with friends, brands can build creative and immersive experiences and creators can build a community and thrive.”
Major players in gaming who have made their names in web2 are now embracing web3 technologies since web3 is the imminent future of the internet.
One might say it’s too soon to call web3 the future of the internet. Nonetheless the promise of Web3 is too extensive and advantageous for people to ignore. Its promise is to distribute all the resources of the internet among its users, a factor currently missing in web2 because the resources of web2 are concentrated within the “tech giants”. Who can deny such a proposition? The current is flowing in the direction of web3 and people can’t get enough of the benefits that web3 projects are creating for them.
One of the biggest capital-creators of web3 are play-to-earn games. It’s normal for humans to be more inclined to something with potential incentives than to spend time and energy on something that has none. This explains the success of blockchain games and in order to stay relevant major players in gaming are shifting focus from web2 to web3.
Shurick Agapitov, founder of the renowned Web2 video game company Xsolla, is stepping down as is CEO, to start a new venture in the web3 space called X.LA. As an entrepreneur he sees a lot of opportunities for creators and consumers in web3. To have these opportunities translated into reality, the world will need the right tools. These are what X.LA focuses on creating. It has started its journey with revenue sharing smart contracts that will form the bedrock of web3 economy that includes the financial system of a plethora of game metaverses.
Microtransactions in legacy games profit only game publishers. With cryptocurrency and blockchain, the economic dynamics between the game and its users shifted for the first time. Players of play-to-earn games can now earn from not only the ongoing schematics of the game, but also by trading in-game items with other players in and outside the gameverse. They can own these game assets and translate them into real-world currencies. The question then is, is creating an incentive model for gamers a sustainable business venture for games, especially since most play-to-earn games are not free to play and demand an upfront investment?
According to blockchain developer James Bachini, the native tokens associated with the play-to-earn games are the ones that facilitate in-game purchases and trading among players. The fact that these tokens are more than mere tokens and work as assets that people can digitally own provide players enough reason to funnel money into the game and continue playing. Imagine these tokens or NFTs as investment assets that come with a high and multi-dimensional ROI.
Major players see web3 gaming as a sustainable model because it creates the financial symbiosis between games and their supporters, a factor overlooked until now. Game developers depend on gamers to make an investment in game-specific tokens or NFTs. Gamers then use these NFTs to create value for themselves by trading them at an appreciated price or unlocking better earning opportunities within the game. The continued trade of these items loop in new users.
The success of games in web3 will be determined by a few factors:
We have already mentioned that web3 is going to be about the community, and game metaverses need to loop in the community from the very beginning in order to create a long-term sustainability plan. To create a metaverse game, project owners need a diverse set of talent to come together including software developers, 3D artists, UI designers, script writers, sound artists, tokenomics experts and so on. The commitment of these people will lead to the success of the game. To make it happen we need a revenue sharing model that continues to create value for these contributors perpetually rather than cutting them short or limiting their attributes through a one-time payment model. A profit-sharing model with game contributors can have many layers and levels of complexities, which is what X.LA’s revenue share smart contracts intends to simplify and make these services available to the non-technical people. For more information, read X.LA’s Whitepaper.
The core belief of web3 is that the people who are participating in it should also enjoy the upside. Web3 projects, including games, must distribute values and revenues and create a business model on the ethics of decentralization rather than monopolization. Does a business model work on such standards? Existing prototypes and arguments have shown that it can. What this new version of the internet and all its stakeholders need are tools to have the vision materialize. This is where projects like X.LA Foundation find their relevance.