In the last decade, mobile games have become a fundamental pillar of the interactive entertainment market. Thanks to the access to smartphones, users all over the world have entered the realm of hardcore gamers. Now the advent of blockchain technology is creating a paradigm shift, offering gamers the ability to truly own the assets they earn or purchase in-game and the ability to generate tangible value from their game time.
There are many opportunities this new model can offer, but today most of the projects available are simply not up to the task of their legacy counterparts. This has led many to doubt that this new generation of games can penetrate the general interest. However, this can be myopic. In fact, it is not the first time that a new technology has been dismissed based on its first examples.
The growth problems of blockchain games
Web3 games incorporate decentralized elements of the blockchain, including smart contracts and NFTs, to create virtual assets that can be verifiably owned and traded by players without third-party intervention. This innovation returns a high degree of power to players. That being said, the cryptocurrency gaming space is still nascent, and many early offerings have been described as overly simplistic and derivative, failing to offer new or engaging gaming experiences.
As a result, many self-proclaimed gamers want nothing to do with NFT games, perceiving a lack of depth and an overemphasis on financial gain. Called “play-to-earn,” or P2E, these products offer players the chance to earn real value in the form of cryptocurrency and NFTs, which can then be sold for fiat currency. One of the most prominent examples of a P2E game is Axie Infinity, which made headlines when it became a major source of income for many people around the world during the COVID-19 pandemic, only to become unprofitable when bear market conditions kicked in and profit potential narrowed.
Unfortunately, this is the case with many similar Web3 games. Not built to withstand the test of time – or major economic crises – many Web3 titles have failed to galvanize their fans without their once lucrative financial backing. This has caused many detractors of the blockchain gaming genre to assume that current offerings are the zenith of what is possible, and the industry is consequently dismissed as a fad. However, a look at the recent past – particularly the monolithic rise of mobile gaming – shows that first products should not define future potential.
The parallelism of mobile games
If we were to look at games on mobile devices around 2005, the situation would be just as dire. The titles were too plain, often unwieldy, and lackluster in the graphics department. The classic game Snake was one of the most popular early mobile titles when Nokia ported it to its line of mobile phones, with millions of players around the world. At that point in history, anyone who used their phone to play games could only be called a casual gamer, and a story similar to the one we’re seeing today emerged.
Many viewed mobile gaming as a novelty for casual gamers that could never compete with the offerings available on consoles and desktops. Fast forward to today, titles like Fortnite and Arena of Valor have become immensely popular among the most hardcore gamers and have even influenced the gaming industry in general. Today, no one would argue that mobile gaming doesn’t measure up to traditional offerings, as technology has evolved to make the differences more superficial.
In fact, from 2022, 60% of the gaming market will be dominated by mobile. Now it is the largest branch of gaming in the whole world. While traditional gaming platforms are still around and working well, mobile has shown how new technology can change the narrative of an entire industry when it comes of age. And just to be clear, Snake didn’t define what mobile would become.
The future of cryptocurrency-based gaming
Regardless of what you think about the focus and success of P2E gaming, it is clear that this metric should not be used to judge the future viability of Web3 gaming. New generations of games are already in the works that will take on legacy titles. Some of these games still have P2E elements, and others implement NFTs; but more importantly, the industry is learning that games have to go beyond financial compensation and introduce truly engaging gameplay to attract and retain players.
While Web3, P2E, and blockchain games are used interchangeably by many today, they are not all exactly the same. In the coming years, these branches could become even more differentiated from each other and even give rise to new subcategories of how this technology is implemented. Assuming that all future offerings will be largely similar belies the diversity that has emerged in the mobile market.
Only time will tell what happens with Web3, but those who bet against it should think twice. There are many parallels between the rise of mobile gaming and what we see now. It remains to be seen which killer apps can open up the landscape to a wider audience, but 10 years from now, these types of titles will likely simply exist alongside their console and mobile brethren.
justin hlog is the director of the studio Immutable Games Studio. Previously, he worked for Riot Games on hit titles like Valorant, Wild Rift, and League of Legends. Justin received a degree in comparative literature from Columbia University.
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