Why is Web3 the greatest advancement in gaming since F2P?

When free-to-play (F2P) games first came to market, there was a volley of resistance from game studios making money from premium content. Yet the simple ability to be able to try a game before deciding whether or not to buy it was a welcome development for players.

Despite the grumblings from an established industry reluctant to change, once the exodus from paid games was undeniably underway, F2P quickly became the default business model, and in-app purchases and in-game advertising, in its various forms, became defacto revenue streams.

Similarly, there has been plenty of resistance to Web3, partly because it is new and misunderstood, but also because of its unfortunate association with unregulated and speculative crypto and NFT markets. That said, F2P also met plenty of headwinds, yet still thrives today as a primary income source for millions of games.

A dip into the data

According to research from Business of Apps, 55.6 billion mobile games were downloaded in 2022. Almost all were F2P with 80% of these games reliant on in-app purchases as a core revenue stream for developers. More strikingly, just 5% of players made regular in-app purchases, highlighting the importance of user volume — something only F2P can achieve today.

Currently, Web3 games (or games that support Web3 capabilities) are a long way from getting anywhere near these numbers. A recent report from DappRadar earlier in the year highlighted that almost half of all activity on the blockchain was attributable to gaming, with the number of unique and active wallets sitting at 840,000.

While this figure is miniscule compared to the billions of mobile games downloaded in 2022, it’s worth noting that on July 14, 2008, there were just 800 apps in total on the App Store with just 10M downloads. Today, across iOS and Android platforms, there are more than 7M apps with more than 140B downloads.

The point is, what begins as a barely perceptible blip on the radar can, with a growing number of grassroots supporters, communities, and developers behind it, soon become ripe for mass adoption. Web3 has all of these things and more.

Spinning a Web3 of wonder

The fact is that Web3 opens up a world of new possibilities for games. One of the more interesting anecdotal points is that rather than designing entire games around Web3, developers are now exploring lightweight integrations of decentralized elements. If this trend continues, the Web2 versus Web3 argument will become redundant as the creation of a seamless blend of traditional gaming experiences, combined with the advantages Web3 technology provides, gets underway.

BlockGames CEO, Benas Baltramiejunas, said: “Web3 has the potential to bring new, previously unviable dimensions to gameplay. What we’re seeing are new capabilities and opportunities to advance the gameplay experience and deliver, not just digital collectible ownership to players, but communal ownership of entire ecosystems that support multiple games.

He added, “Those who bring games to an ecosystem like BlockGames, and those who play games within it are stakeholders, meaning they have the power to get rewards, own assets, and decide through voting mechanisms on future developments.

“It’s a reimagining of the traditional games industry in which players are aggressively acquired and monetized before they lose interest. For believers in Web3’s potential, the ultimate outcome will be to increase community involvement through fun, making connections, exploration, adventure, collecting meaningful rewards with real value, and building communities that stick together.”

The Web3 mobile gaming value proposition

From asset and ecosystem ownership, based on contributions, to social capital and microeconomics, Web3 gaming has many advantages over traditional gaming models. Here is an outline of what currently sets Web3 gaming apart and makes it different:

1. Provable in-game asset ownership and efficient secondary markets

Web3 technology enables provable ownership of in-game assets by storing digital collectible and asset data as immutable code on the blockchain. This means that players can buy, sell, and trade their assets in secondary marketplaces without fear of loss or theft. Being able to monetize digital possessions this way creates added layers of value and new value-exchange mechanisms within gaming communities that will help propel adoption.

2. Verifiable social capital and differentiated value flows

Web3 introduces the concept of on-chain social reputation across games, providing players with genuine social capital that is immutable and that can be leveraged across games as Web3 capabilities continue to evolve. For players, being able to wear their proof-of-play reputation as a badge of honor, based on their contributions and commitments, is an area of growing focus for developers. Often referred to as ‘soul-bound’, this approach could provide a new edge bringing added incentives that enmesh identity, effort, knowledge, skill, and rewards into gameplay. Furthermore, Web3 facilitates differentiated value flows beyond monetary transactions. It recognizes and rewards various forms of contributions, such as user-generated content (UGC), which incentivizes community involvement and enriches the overall gaming experience.

3. Micro-economies and enhanced community engagement

Web3 gaming incentivizes community involvement through the creation of micro-economies. Players are motivated to actively participate in the gaming ecosystem by contributing to the development of user-generated content, such as modifications (mods), custom skins, or even entire game levels. These contributions not only enhance the core games but also empower players to generate value and influence the gaming community. Additionally, Web3 can foster the formation of rich secondary effects, such as guilds or clans, that provide players with social connections, collaboration opportunities, and a sense of belonging within larger gaming communities

F2P to Web3 wrap-up!

F2P was a game-changer that met with considerable resistance until such resistance became futile. Similarly, Web3 technology is the sleeping giant that has arguably even greater potential to deliver exciting new models for both players and developers, while delivering additional revenue streams that help attract greater investment and growing interest from big brands.

For these things to happen, however, the user experience needs to become completely frictionless, and the opportunities need to be sufficiently attractive to draw more people to the gameplay in search of meaningful, ownable rewards with real-world value.

Web3 already promises much that traditional gaming can’t, namely and aforementioned: provable ownership; efficient secondary markets; verifiable social capital; differentiated value flows; micro-economies; and enhanced community engagement. Above all, though, Web3 has to potential to galvanize vibrant economies around digital possessions, while recognizing the diverse contributions made by players through truly decentralized, community-owned ecosystems. If the future isn’t yet here, rest assured, it is just around the corner!