A Decentralized Layer for Web3 Gaming

Gaming has long helped to popularize innovative technologies. This holds true for blockchain, where games already span distinct sub-categories. The play-to-earn model is typified by Axie Infinity, in which players collect and battle little monsters represented by NFTs that can be transacted with other players. Other games include Decentraland, a metaverse game where players use a native token to purchase in-game items represented as NFTs. Such games have introduced hundreds of thousands of gamers to blockchain technology.

But this early growth has been constrained by the technical limitations of blockchain platforms to date. Most popular blockchain-based games — including Axie Infinity, Decentraland, and the Sandbox — run on Ethereum. With Ethereum still awaiting its transition to a proof-of-stake consensus mechanism, issues with speed and scalability continue to prevent blockchain-based gaming from truly taking off.

Ethereum currently maxes at about 19 transactions per second at peak times. Consider that the popular online survival game Fortnite has anywhere between 1 million and 3 million concurrent players. If even a fraction of them were to try interacting and transacting simultaneously on Ethereum, it would create serious congestion problems and rising transaction and storage fees. Because storing in-game data on Ethereum is prohibitively expensive, these games typically rely on a layer-two solution or centralized servers, with layer-two protocols lacking the security of the game’s underlying blockchain and centralized servers being single sources of failure.

Newer layer-one protocols are paving the way for blockchain-based games that can truly scale. Among the most intriguing is the Internet Computer, which supports end-to-end decentralized gaming experiences and is currently the focus of a tech demo being built by a major gaming studio.

A Decentralized Gaming Platform

“At best, classic blockchains such as Ethereum are settlement layers in the Web3 gaming ecosystem. High transactional (gas) fees and consensus latency make integration with games prohibitive,” explains Andrew Tang, a former executive of Unity Technologies who is now general manager of Web3 games at the DFINITY Foundation. “The Internet Computer was invented and built from the ground up to address the financial and technical challenges of integrating blockchain with the cloud-based tech stack, making it the only viable option for the possibility and scalability of true Web3 gaming.”

Tang is overseeing the development of a tech demo making the rounds on social media that is being developed in stealth by “one of the world’s top game studios.” Screenshots and video clips suggest an open-world metaverse game of some kind, although Tang is currently not at liberty to share further details.

“We are collaborating with an external studio that has been working on a new metaverse project called IC1101,” he offers. “The unannounced studio has agreed to build a tech demo on the Internet Computer as a proof of concept.”

The demo features the integration of a PokedStudio NFT, one of 10,000 unique bots designed by the digital artist Jonathan Ball and hosted on-chain, demonstrating the feasibility of such integrations. Tang also revealed that the tech demo plans to incorporate multi-chain NFT marketplaces that will support major NFT series, from Bored Ape Yacht Club to CryptoPunks. This will allow recognizable brands to include branded digital objects in games that can be owned as NFTs, as well as traded with other users and potentially transferred to other titles. Virtual land could also be owned by players, while the use of decentralized autonomous organizations (DAOs) could give gamers more influence over the development of the games they play than they’ve ever had.

The use of NFTs in Web3 games has generated much excitement and hype, largely because they promise to create an external, secondary market for items generated and used within the games. Some games are even positioning themselves to financialize video games and gamers, as indicated by the development of a sub-sector within blockchain gaming known as “GameFi,” in which gaming and DeFi combine to allow gamers to lend their NFTs.

The studio behind the IC1101 demo will emerge from stealth in the near future and offer more information on its project, Tang says, but meanwhile other projects are demonstrating the possibilities of Web3 gaming.

Mission Is Possible is a John Wick-inspired third-person shooter in which the user navigates a 3D world and avoids gunfire from anonymous agents. The game, which is still a demo, is built using Unity, a cross-platform game engine. The Internet Computer’s ability to integrate any pre-existing game engine is another factor that widens the scope of the gaming ecosystem that will run on the blockchain.

“Unity may be the preferred option for certain platforms such as mobile, while Unreal may be more suitable for PC,” explains Tang, referring to another major gaming engine. “Open-source engines such as O3DE and Godot are also viable options. The choice depends on the needs of the project and the available resources that can harness the power of modern game engines.”

There are basically two approaches to developing games on the Internet Computer. The first involves building and running both the frontend/user interface (HTML5) and the backend on the blockchain. The second involves developers building the frontend on custom hardware (e.g., PC, consoles) while running the backend on-chain.

“Deploying the entire stack fully on-chain is optimal from a security standpoint. However, this approach limits rendering capabilities (WebGL) compared to deploying the frontend on hardware with modern GPUs,”  Tang notes. “Hence we’re investing in R&D efforts on an IC-native game engine (codename Fahrenheit32) that implements the next-gen graphics APIs (i.e., WebGPU, Vulkan), intending to eliminate the tradeoff between performance and security for 100% on-chain deployment.”

Building and running everything on-chain opens up a number of exciting possibilities. “If the entire game stack can be built on the blockchain, then there would be no need to spend valuable resources to solve potential integration challenges and security problems (e.g., relying on third-party blockchain oracles) with the Web2 stack,” he explains.

The Internet Computer’s architecture organizes individual nodes running in independent data centers into subnetwork blockchains called subnets, which can communicate with one another. Nodes and subnets can be added to increase scalability. The subnets host smart contracts that do everything from computing simple transactions to running dapps and serving web content. They run in parallel, much like “shards” in other chains, and are responsible for processing their own sets of transactions and computations.

The blockchain’s protocol suite enables it to sign transactions using only a single public key, and its asynchronous consensus mechanism allows new blocks of transactions to be finalized within two seconds of being proposed. These features make it capable of 11,500 transactions per second for update calls that record data and of 250,000 per second for read-only query calls. A reverse-gas model also relieves end users of needing a crypto wallet or tokens to interact with the blockchain, making it easier to onboard new users.

“It is 100% possible now with the Internet Computer for blockchain-based gaming to reach full potential, as we have discovered that it has the same capabilities as any other configurable and customized centralized server,” says Omar Hernandez Salmeron, the founder and CEO of Cosmicrafts, a real-time space-themed strategy game in early development. “Low transaction costs, high scalability, high memory computing power, powerful, compatible variety of programming languages, and low latency along with reverse-gas fees are just exactly what was needed to achieve this.”

As with other examples of the blockchain gaming genre, Cosmicrafts makes extensive use of NFTs, allowing players to trade, stake, and farm them. Unlike many more established titles, its NFTs and tokens are hosted on-chain along with its website and interface.

This degree of decentralization signals the promise of taking power away from centralized providers such as Amazon Web Services and Google Cloud Platform. It also reduces single points of failure, something that continues to affect internet users even today.

“From single-player arcade games to MMOs, we will demonstrate to the developer community that 100% on-chain games are not only possible on the Internet Computer, but preferable over various attempts to integrate blockchains with cloud-based solutions,” says Tang.

One other important feature is that blockchain-based games, much like their traditional counterparts, will be able to be played by millions of gamers at the same time.

“It’s just a matter of time until the IC starts to add more and more subnets that will enable billions of users,” says Bartek Laskowski, the developer of Mission Is Possible. “The great thing is that developers don't have to care about scaling issues.”

Realizing this promise could deliver the de-facto universal layer for Web3 gaming — one  with the necessary speed and scalability to run blockchain-based games for millions of concurrent users, creating new use cases for in-game NFTs and cryptocurrencies. While it’s still only early days, developers are increasingly recognizing the potential of a thriving decentralized gaming ecosystem.