Web3 is going to be gamers' favorite technology as it will revolutionize the gaming industry

Web3, otherwise referred to as the decentralized web, is currently one of the most discussed topics within tech circles. To put it simply, Web3 introduces a transparent internet ecosystem built on three main fundamentals: the blockchain that hosts all data on asset ownership and historical transactions, smart contracts which act as the middleman through pre-coded application logic and digital assets that can represent on-chain or off-chain value. Web3 is going to be gamers' favorite technology to work upon.

Although still in its early stages, innovation in Web3 is happening at a faster rate compared to other technological niches. First was the crypto mania that saw leading coins like Bitcoin and Ethereum gain massive popularity. Then came Decentralized Finance (DeFi), a relatively new niche designed to decentralize financial services. Currently, over $42 billion is locked in various DeFi protocols.

Blockchain entertainment firm Coda Labs commissioned a survey targeting game developers to have a peek into their thoughts on Web3. The researchers found that a majority of the respondents believe Web3 gaming is on its way to their firms, with 75% expecting to work on Web3 projects in the future.

Apart from this, more than half of the survey participants believe Web3 will revolutionize the gaming industry. Forty percent anticipate that implementing Web3 will bring more new users, while 36% believe that Web3 integration will enable games to retain users better.

Sekip Can Gökalp, founder and CEO of Coda Labs, commented on the survey results, noting that while the potential of Web3 games is being debated, the upside for developers is obvious. He explained:

"This survey shows that a majority of developers have already dipped their toes into Web3 game development, driven by benefits such as additional funding, new revenue streams, and player retention."

Changing the Dynamics of the Gaming Industry

And now to the fundamental impact, Web3 as an upcoming space has generally changed the nature of gaming infrastructures to a big extent. Gone are the days when gaming publishers pocketed all the profits; in Web3 gaming, even the players are incentivized through ecosystem rewards that can be monetized through NFT marketplaces.

So, how exactly does it work? Let's take the example of Axie Infinity, a Web3 game that rose to popularity at the height of the covid pandemic. The gameplay simply involves purchasing cute NFT monsters and pitting them against each other, players who win earn Smooth Love Portion (SLP) tokens that can be traded for money on various exchanges.

While the returns from SLP tokens have since diminished given the tough market conditions, Axie Infinity has become a source of livelihood for gamers in developing countries such as The Philippines. What's more interesting is that the Web3 gaming ecosystem is now much bigger, featuring popular card games like Splinterlands and Sorare.

As for the intersection between traditional games and Web3, there has been a growing interest from traditional gaming publishers, including those that were initially reluctant to accommodate Web3 infrastructures. For instance, Epic games stores recently stated it would allow other producers to deploy NFT games provided they are regulatory compliant.