The gaming industry is a prime candidate for spurring Web3 mass adoption, according to experts. Alex Connolly, co-founder and CTO at Immutable, said, “Gaming is the perfect candidate for spurring Web3 mass adoption simply because there are so many gamers in the world who are already used to trading digital items and buying digital things.” Yat Siu, co-founder and CEO of Web3 giant Animoca Labs, agrees that gaming provides a robust framework for transitioning users from Web2 into Web3. “Gaming is basically a cultural and entertainment phenomenon that is bigger than movies and music,” he said. “And gamers and people who play games already have a relationship with virtual assets and items.”
In April 2023, a digital item with distinct, rare traits was sold to a gamer for $400,000 reportedly paid for in cryptocurrency. This sale of a skin in Counter-Strike: Global Offensive (CS:GO) highlights the appetite for in-game items on secondary marketplaces, and the understanding gamers have of the value of these items. Digital currency is also very much part of Web2 games like Fortnite and Roblox, which have over 66 million daily active users (DAUs) and made $7 million a day in 2022.
Web3 gaming presents a unique opportunity for gamers to truly own their in-game assets, thanks to blockchain technology, which allows in-game items like “skins” to exist as non-fungible tokens (NFTs). This allows for direct peer-to-peer transfers, and eliminates the need to trust third parties with your assets, money, or access to your accounts.
User-generated content (UGC) is also a great way to decentralize the content mill and expand a user base. Minecraft’s passionate community has created a network effect that has led to its long-term success, and Roblox’s breakthrough success is due to its UGC. Spencer Tucker, chief gaming officer at Yuga Labs, said, “Imagine that UGC happening in your own ecosystem, and the opportunity for somebody who creates there can have financial upside.”
In order to create a winning economic formula, there needs to be both consumer demand as well as an opportunity for profit for the people feeding the supply. Urvit Goel, vice president and head of global business development at Polygon Labs, said, “The biggest barrier of entry isn’t cost, it’s actually the friction around the technology, like wallet creation.”
Ultimately, the most important factor for mass adoption is that the game is fun. Yat Siu said, “If the game is not fun, then no one will play it.” According to a 2022 report on U.S. gamers, most people play video games because it brings joy, provides mental stimulation, and helps them relax.