Web3 Gaming is Undergoing Paradigm Shift in Digital Ownership

Web3 Gaming is Undergoing Paradigm Shift in Digital Ownership

Web3 gaming will transfer digital ownership because of its significant social benefits

Robbie Ferguson spent many hours playing his favorite games as a child and became an ardent gamer. His experiences in Runescape, particularly with the in-game economy involving RuneScape gold, started a chain of events that would forever alter his perspective on digital ownership and the Web3 gaming industry. The concept of RuneScape gold as a virtual currency opened his eyes to the possibilities of digital assets in gaming. The value of experience cannot be replaced. Even when something negative happens, such as when your brother's Runescape account is banned. Ferguson, a software developer who got interested in the blockchain industry after learning about Bitcoin in 2014, was affected by the incident. 2015 saw the introduction of Ethereum and the possibilities of the ecosystem, which greatly increased his interest.

Ferguson's Runescape banning incident served as the catalyst for his transition into blockchain gaming development. Ferguson had grown unhappy with what he called the "arbitrary impunity" with which mainstream businesses managed gaming economies and assets. In September 2022, Ferguson detailed how, following their initial failures to create a decentralized game, he, his brother James, and Alex Connolly went on to co-found the blockchain technology business Immutable in 2018.

The three learned by creating Ether Bots, their initial try at an Ethereum-powered game, what should be on-chain versus off-chain and created the groundwork for what would eventually become an infrastructure platform for creating Web3-based games and nonfungible token (NFT) features. Ferguson also wanted to change the way in which in-game assets are owned digitally. We began with games because, in his words, "they're by far the most fascinating use case for NFTs. Spending $110 billion annually on digital property that no one has any rights to is a total swindle.

The successful release of the blockchain-powered play-to-earn tactical card game Gods Unchained helped establish Immutable, a platform for blockchain development companies to create Web3 games with NFT integration, drawing on lessons learned from their first excursion. In the first week after Gods Unchained's release, 50 million NFTs were created, which caused a price spike because of the Ethereum ecosystem's high gas costs. Ferguson said that in order to make a Web3 NFT-packed game financially feasible for any corporation, there is a critical requirement to scale and lower minting costs.

Immutable is made up of two distinct but connected parts. Immutable Studios is the company's division dedicated to the development of games, while ImmutableX is its Ethereum layer-2 NFT scaling platform. According to Ferguson, ImmutableX, the Ethereum-based layer-2 solution NFT platform, learned a great deal from the creation of Gods Unchained, which helped to design the functionality of the foundation upon which additional blockchain games are currently being developed. ImmutableX is committed to enabling cheap band trading for common in-game items. Again citing Gods Unchained as an example, Ferguson stated that individuals trade cards "to use in the game, not because the price of Ethereum is $1,200 or $4,000," explaining why trading card prices have only fallen by about 10% from market highs.

Ferguson argues that accessibility should be the driving force for in-game economics, even though high-value NFTs will always be a component of an in-game economy. This raises the issue of profitability and the ability of Immutable to provide the free minting of NFTs that is promoted on its website. Immutable makes this possible by employing zk-Rollups to cover all the expenses associated with NFT minting, creating economies of scale that allow trillions of transactions to be bundled for a "fair cost." Immutable owes a debt of gratitude to Starkware, the Ethereum layer-2 platform that invented zk-STARK technology, for helping to solve the scalability of NFT minting to power blockchain-based games. Ferguson boasts about Immutable's ability to mint 600,000 NFTs in a single proof, which allows the company to claim that it is carbon neutral.

Ferguson cites the more than $9 billion in investments made into Web3 gaming over the previous 18 months as evidence that the sector's success is already manifesting itself. This will consequently lead to a change in equity sharing. Web3 may give consumers ownership, but that does not mean that established AAA corporations are not monitoring the developing market. If Web3 games become a new standard that is in demand, as Ferguson indicated, these businesses will try to position themselves ahead of the disruptive technology.

Immutable, meanwhile, keeps expanding. More than 300 employees work for the Australian firm developing blockchain technology, which has garnered more than $300 million from backers such as Coinbase, Tencent, Galaxy Digital, and Animoca Brands

Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.

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