5 Emerging Trends That Point to 2024 As a Turning Point
Inquiring about gamers’ opinions on blockchain gaming, metaverse, and NFTs typically elicits a scoffing response. The terms have acquired a negative connotation in various gaming circles, and it’s understandable – blockchain gaming seems to have strayed from the fundamental purpose of gaming, which is to provide enjoyment.
Despite boasting promising features that could enhance the gaming life cycle, such as scalability, ownership, and interoperability, web3 seems to have faltered. Over the last five years, reports indicate that a staggering 75.5% of web3 games have ended in failure. Numerous factors have contributed to this downfall, including subpar user experience and design, gameplay models that often resembled thinly veiled financial schemes, and the collapse of the NFT market, negatively impacting the more nuanced applications of NFTs, including gaming. The recent Gamesbeat Awards highlighted a prevailing theme – the acknowledgment that “blockchain needs to be fun.” This crucial aspect may have been overshadowed by the “play to earn” (P2E) frenzy, driven by individuals seeking quick financial gains.
Interestingly, despite the prevalent skepticism surrounding blockchain gaming, metaverse, and NFTs, the year 2024 is unveiling a distinct narrative. Increased investments, a revitalized sense of excitement, technological breakthroughs, and various other factors are reshaping the trajectory of the gaming sector.
Five promising developments are currently unfolding, poised to elevate web3 gaming to unprecedented levels of popularity and, significantly, inject a new dimension of entertainment. This shift marks a departure from the previous challenges and failures, offering a glimpse into a more promising future for blockchain-based gaming experiences. As the industry evolves, these developments aim to bridge the gap between the potential advantages of web3, such as scalability, ownership, and interoperability, and the core essence of gaming – the pursuit of fun.
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Table of Content
- 1. Returns from Investments in Web3 Gaming Begin to Materialize
- 2. “GameFi” Revolutionizes In-Game Economics with a Much-Needed Upgrade
- 3. The NFT Ecosystem Has Evolved Beyond Its Initial Stages
- 4. Unforeseen Success: Just Like Candy Crush, Could Pixels Have Been Predicted?
- 5. The Ecosystem Has Discovered and Constructed the “Unfilled Components” of Web3 Gaming
1. Returns from Investments in Web3 Gaming Begin to Materialize
In 2023, invested into blockchain gaming projects attracted a substantial investment of $2.3 billion USD, with a noteworthy $600 million USD pouring in during the third quarter alone. Prominent players in the ecosystem, including Anomica Brands, have steadily investing in various aspects of the web3 gaming landscape. This year’s significant capital influx, occurring amidst a relatively range-bound sentiment in the broader crypto market, underscores a deep-seated commitment to the enduring potential of web3 gaming.
Although the impact of these investments may not manifest immediately, it is cumulative and profound. The gaming development cycle typically spans several years, averaging between three to seven years, even without considering the integration of novel technologies like blockchain and NFTs. The cumulative effect of investments made over the past couple of years is anticipated to materialize, with the expectation that more intricate, well-thought-out, and entertaining web3 games will surface in 2024, rivaling the appeal of traditional counterparts.
2. “GameFi” Revolutionizes In-Game Economics with a Much-Needed Upgrade
Initially, some of the earliest web3 games were marketed as “Play-to-Earn” (P2E) games. These applications, while resembling traditional games, operated as thinly veiled token farming endeavors, fraught with risks such as rug pulls, and proved challenging to explain to those outside the crypto community. P2E inadvertently highlighted the difficulties in blending crypto with gaming, exposing the tendency to financialize everything—a case of ‘missing the forest for the trees.’ The realization surfaced that games should primarily be fun and not solely focused on financial productivity.
Nevertheless, this doesn’t mean games are devoid of financial incentives. The traditional gaming ecosystem boasts robust, complex, and deeply integrated in-game economics. A reevaluation of these game economies is imperative, acknowledging that the initial foray of the crypto ecosystem into this realm faced significant challenges. Intriguingly, 80% of blockchain gamers have indicated an interest in utilizing their crypto assets for in-game transactions. This signals a potential shift towards a more balanced and engaging approach to merging gaming with the crypto world.
3. The NFT Ecosystem Has Evolved Beyond Its Initial Stages
In 2021, Steam, the predominant PC gaming marketplace, prohibited any games developed on the blockchain or featuring NFT utilities, putting a damper on the nascent ‘web3 gaming revolution.’ Whether this move was motivated by concerns over consumer safety related to unregistered securities or a return to the core principle that gamers primarily seek enjoyment, many gatekeepers in the gaming industry halted the progress of web3 by singling out NFTs.
However, significant shifts occurred during the bear market of 2023 concerning NFTs. Rather than occupying the central stage, NFTs have transformed into tools that enhance the gaming experience. Players now enjoy a heightened sense of control over their gameplay, with the ability to own, sell, or trade in-game assets. Notably, platforms like Roblox have reported that its from their Gen Z audience, who purchased 1.6 billion digital fashion items and accessories in the first three quarters of 2023, marking a 38% year-over-year increase. This underscores the growing significance of digital identity and expression among the younger gaming demographic.
4. Unforeseen Success: Just Like Candy Crush, Could Pixels Have Been Predicted?
In the current year, Pixels, a farming game, has achieved the distinction of becoming the first web3 game, following in the footsteps of Axie Infinity, to surpass 100,000 daily active users. Notably, it has garnered significant attention in countries like the Philippines. This nation, alongside others such as Nigeria, Pakistan, Singapore, Vietnam, South Korea, Hong Kong, China, and the UAE, consistently ranked among the top 15 countries with the highest interest in web3 gaming-related search terms according to Google Analytics data. This trend persisted for three consecutive years, spanning from 2021 to 2023.
This phenomenon suggests the potential for a massive global reach for web3 gaming. Countries in the Asia-Pacific (APAC) region have demonstrated an increasing interest in blockchain games, particularly in the realm of mobile gaming. Moreover, North America held the highest market size for blockchain gamers, exceeding $30 billion in market size in 2022. Just as Candy Crush wasn’t initially anticipated to capture the attention of women over 30, the unpredictable nature of game releases prompts the question: Do we ever truly know what to expect from these games?
5. The Ecosystem Has Discovered and Constructed the “Unfilled Components” of Web3 Gaming
The recently revealed game from Pudgy Penguins, Pudgy World, serves as an excellent illustration of how gaming can seamlessly integrate blockchain elements while attracting attention from individuals not originally immersed in the crypto space.
Pudgy World Alpha, powered by @zksync, releasing Q1 of 2024.
The beginning of a new era of blockchain-backed experiences, with the goal of onboarding millions, brought to you by Pudgy Penguins. pic.twitter.com/ZvCRRGSUSH
— Pudgy Penguins (@pudgypenguins) December 10, 2023
According to a report by the Blockchain Game Alliance, 51% of users identify player onboarding as the most significant obstacle. Pudgy World, described as an open-world, immersive multiplayer experience, breaks down barriers by allowing Pudgy holders and even owners of Pudgy Toys to easily start playing—simply by scanning a QR code to create an account, reminiscent of the simplicity seen in Webkinz. The removal of web3 impediments represents a substantial leap forward in this new gaming era.
Communication is a crucial element in gaming, whether it involves player-to-player interactions, interactions with non-player characters (NPCs), or communication between the game and the player. In web3 games, a scalable and user-friendly decentralized communication solution has been lacking—until now. In 2023, several companies now offer affordable, rapid, private, and secure decentralized communication options. The introduction of these technologies signifies that the blockchain ecosystem is now equipped with the essential tools to develop engaging games.
While the integration of blockchain technology, NFTs, and cryptocurrency introduces innovative monetization and ownership possibilities, the true essence of any game lies in its entertainment value. In the current year, gamers have successfully voiced their concerns about the challenges in existing blockchain gaming, and the industry has listened attentively. The evident growth suggests a transformative shift. The next generation of games built on blockchain is expected to deliver not only novel economic models but also a genuinely enjoyable and immersive gaming experience. This fulfills the promise of blockchain technology in revolutionizing the gaming sector. Perhaps, it’s time to move away from labeling it as blockchain or web3 gaming and simply embrace it as gaming!
Author Background
Harsh Rajat serves as the founder and project lead at Push Protocol, a prominent web3 communication network specializing in cross-chain notifications and messaging. Boasting over 12 years of extensive expertise across mobile apps, gaming, ecommerce, fintech, and blockchain, Harsh commenced his career in 2009 by contributing to the development of mobile apps and games, including the widely popular “360 Browser” app. In 2018, he entered the blockchain realm as a Chief Technology Officer (CTO) and subsequently established Push Protocol to address the absence of a decentralized notification protocol for web 2.0 services. Harsh has actively participated as a speaker and judge at numerous tech conferences and hackathons, including Messari Mainnet, ETHCC, ETHDenver, and NFT NYC.
About Push Protocol
Push stands as the cornerstone communication protocol within the web3 ecosystem. It facilitates cross-chain notifications and messaging for decentralized applications (dApps), wallets, and services associated with wallet addresses, all in an open, gasless, and platform-agnostic manner. This open communication layer grants seamless access to the network, enabling any cryptocurrency wallet or frontend to effortlessly connect and communicate within the system.
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5 Emerging Trends That Point to 2024 As a Turning Point
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