There is perhaps one word that sums up the seismic digital change that has taken place in the Web3 space in recent months: sobriety. Cryptocurrencies have declined, non-fungible tokens (NFTs) have slowed, and there is, as McKinsey puts it, a significant amount of “digital junk.” However, the company also points out that bad actors and bad use cases do not cause this technology to fail. The opposite is actually the reality. While there are risks to NFTs, crypto gaming and cryptocurrencies, there are also opportunities – the technologies underlying the innovations are proving their value across numerous sectors, applications and industries.
Web3 gaming projects have made significant progress over traditional cryptocurrencies such as Bitcoin. For example, Bitcoin rose from 20,000 to 68,000 last year, while the Web3 game Star Atlas rose 19465% (from $0.00138 to $0.27) over the same period. Most of these gains have now been erased, highlighting the risk-reward trade-off in this emerging sector compared to “blue-chip” cryptocurrencies such as Bitcoin and Ethereum. Ultimately, there is much more room for profit on projects that can survive and iterate.
So as the market sobers up and starts to think clearly, the key trends for the future of Web3 gaming are slowly emerging, and they bring with them the interesting, the simplified and the extraordinary.
What awaits you in this article:
Trend 01: A year of sobriety and reliability
Like most hyped technologies, Web3 gaming has been done a disservice by the greedy and unethical players who have jumped on the digital bandwagon, but it will likely continue its steady trend toward sobriety with lower valuations but with improvements in delivery Services and functionality continue. Companies that have invested in this space and have a clear vision of the long-term value they provide are digging deeper into the fundamentals of the platforms and technologies to make them less complex and more reliable.
“Cash grabs will decline as those in it for the long term move on to solving the big problems facing this space,” said Timothy McCann, fund manager at Metavest Capital. “There is still a lot of work to be done, especially when it comes to reducing the pain points of a first-time user. As a result, the next two years will see much greater adoption of games that integrate elements of blockchain, while simultaneously increasing the number of 10 million wallets active today.”
This view is reinforced by a recent analysis of the Web3 gaming market in VentureBeat, which highlights that the high barrier to entry for Web3 gaming – isolated economies and experiences – will inhibit player adoption because, as the publication points out, “high Friction equals less ‘fun’.
Trend 02: Investment in potential
Despite limitations and perceptions that currently hinder the market’s full growth potential, it remains one of the fastest growing sectors in investment today. In 2022, investments in blockchain gaming reached the $5 billion mark and market analysts and investors are still paying attention to the potential that lies in its digital hands.
“Selecting investments involves a mix of objectivity and subjectivity,” says McCann. “Objectively speaking, does the company have a team that has demonstrated that it can deliver this project? Does the company have enough startup capabilities to enter the market? Subjectively, is the game fun? This is a trickier question because often the five-person indie studio produces better games than the billion-dollar studio, but here it is important to rely on gaming analysts to provide their opinions to ensure viability.”
The next 12 to 24 months will see impressive offerings from Web3 gaming coming to market that will capture the attention of the global gaming audience and serve as a catalyst for traditional gaming studios and publishers to seriously invest and engage with to evolve over time. The quality of games produced in Web3 gaming has already increased, led by a crossover of Web2 gaming specialists in this area.
Trend 03: Welcome to hybrids and interesting publishing platforms
By the end of 2023, there will be signs of a full hybrid mix between Web2 and Web3 gaming. This will be the point at which gaming has bridged the divide between the two, leaving only one gaming industry behind – one where gaming studios, publishers, gamers and guilds interact to produce community-driven products , but are still fairly centralized . The games will leverage blockchain, NFTs, cryptocurrency and other innovations that are easier to use and have gone from complicated concepts to an accepted part of daily life.
“This blend of the two worlds, let’s call it Web2.5, will be the point at which the gaming industry evolves to absorb the technologies and innovations that make sense and the rest of the crypto noise into the crypts of history to banish,” says McCann. “There will also be a transition from the established gaming landscape to one where immersive and interconnected landscapes are enabled by new underlying technology.” Where the AAA gaming studio has blockbuster titles with crossovers and a similar one Publishers in Web3 that connect titles to real-world economies and markets for in-game assets via a metaverse.”
This publishing model theoretically lends itself to a more immersive experience and has yet to fully realize that potential, but it does offer game developers the opportunity to really delve deeply into a title and increase its chances of success. Game studios are great at developing games, but they often lack distribution skills. That’s why Web3 gaming is a good way for established publishers to collaborate or collaborate with Web3 companies that have a smaller footprint and less experience, so that both can bring high-quality titles to the market.
The future is also likely to see notable innovations in gaming infrastructure, open source platforms, free-to-play models, and how AAA interacts with Web3 gaming. The market is moving away from instability, cash crabs and over-the-top ideas towards a new era in gaming. An era defined by collaborative engagement, innovative experiences, digital ownership and the intelligent use of technology to anchor security, trust and transparency.
About Metavest Capital
Metavest Capital is a specialist Web3 gaming research and analysis unit based in South Africa. Metavest Capital is an advisory firm specializing in Metaverse and NFT gaming, born out of a strong belief in the power of blockchain. Our team’s unique combination of blockchain, gaming and financial expertise creates an unfair advantage when it comes to creating value for our partners.
As a blockchain VC company focused on Metaverse and NFT gaming projects, Metavest Capital’s core investments include play-and-earn games, digital tokens and in-game assets. It provides capital, strategy and advice for a variety of exciting new projects within this growing ecosystem.