Creating Sustainable Web3 Games: Existing Challenges and Potential Solutions

The vast majority of developers and investors involved in Web3 agree that GameFi offers the most promising entry point to the space – while players can benefit from decentralization, interoperability, and true ownership of their in-game assets, developers can extract value from fundamentally new business models tied to secondary markets and build engaged and dynamic communities.

But the majority of play-to-earn games that came out throughout 2021 and 2022 in actuality have turned out to be more akin to dead ends than avenues of sustainable growth. Despite the fact that they provided us with numerous promising DeFi mechanics, they also highlighted a handful of problems that are significantly impeding the growth of the Web3 gaming industry.

One of them is the poor sustainability of P2E projects, which is the result of giving precedence to short-term financial gains. But today this paradigm is gradually giving way to one built upon better fundamentals.

In this article, we’ll look at the obstacles currently standing in the way of sustainability in Web3 gaming and the solutions that can drive the next wave of game development in GameFi.

Challenge #1 – Game economies are volatile

Unfortunately, the point of most Web3 games is to capitalize on players’ desires to earn money. That’s why gameplay tends to be rather primitive and games are designed to cater to the interests of crypto-savvy users who are after high returns on their early investments. The “cashing in and getting out” practice has made the GameFi sector quite volatile since players tend to skim the cream as soon as possible and quit once they have made the profit they are after. Most P2E games keep this cycle going on and on, while the projects that actually try to build sustainable economies, like Axie Infinity, have had to face financial ruin, losing both active users and revenue streams.

What to do? Don’t focus on crypto gamers only. In fact, very few potential players are exclusively profit seekers. For Web3 games, the target audience should be categorized depending upon the potential impact they may have on the game economy and include free-to-play fans from Web2, as well as players willing to pay and whales. Developers should create fun and engaging gameplay experiences that can satisfy the needs of all of them to ensure there’s more value coming in.

• Typical free-to-play players prioritize entertainment and emotions over earning opportunities and have a neutral effect on game economy. Ask yourself whether your game will still be enjoyable if players don’t make profits while playing;

  
  

• Paying players and whales are the major drivers of value and have a deflationary impact on game economy. Their motivation is often tied to reputation and you can keep them engaged by offering premium content;

  
  

• Crypto gamers a.k.a money makers are primarily focused on farming in-game assets to further trade them on secondary markets, which has an inflationary impact on game economy. Their role could be to provide in-game services which would be relevant for other types of players, for example, crafting and selling the items that affect gameplay (weapons, armor, etc.).

Challenge #2 – Player onboarding is hard

Web3 games are very complex for traditional gamers. Even if some projects seem quite appealing to them, when newcomers run into unfamiliar terms like crypto wallets, seed phrases, or non-fungible tokens, things get pretty complicated. And the fear of not being able to contact someone if they should lose or forget mnemonics really terrifies players, who care more about game UI/UX than security.

One more issue here is the high entry threshold. Today’s Web3 games, for the most part, require players to purchase NFTs to get started. Competitive game characters or unique items can cost thousands of dollars if the game is popular. For many potential players, such sums serve as a repelling factor. Even though this doesn’t mean that the free-to-play model is always a good alternative, the higher the entry fee for players, the harder it will be to democratize blockchain games.

What to do? Pay special attention to first-time user experience. When it comes to attracting new players from Web2, neither free-to-play fans, nor investors should come face to face with the technical, blockchain side of a game. A good starting point can be abandoning technical language and, for example, replacing the term “non-fungible token” with “digital collectible,'’ which is familiar to most gamers. This kind of approach allowed Reddit to attract 3 million users to interact with the platform’s NFTs, thus outperforming Opensea, the largest NFT marketplace.

Then make sure that your gameplay allows a free player to turn into a paying one or a crypto gamer in a frictionless way. A great example of how it can be done can be seen in the NFT-based, free-to-play Blankos Block Party game. Here, players can easily create their own rules by designing and building various objects. At the same time, they can always purchase some extra in-game items, and all actions related to ownership or finance are performed on chain.

Finally, in order to eliminate entry fee barriers, try adopting the “take-now-pay-later” experience of GameFi guilds called crypto scholarships. In a similar way, developers can lease in-game items, resources, or tokens to beginner players in exchange for a portion of their future earnings.

Challenge #3 – Prioritizing financial incentives encourages poor game design

Originally, the Web3 gaming ecosystem consisted mainly of MMO, RPG, card, and strategy games with pretty straightforward gameplay and 2D visual effects. So it comes as no surprise that true gamers who are already used to exciting and powerful AAA-quality graphics aren’t impressed with Web3 games with poor visuals and graphics. The quality of graphics and animations, as well as how captivating a storyline is are among the key factors that determine the long-term potential of Web3 games.

What to do? Experiment with more graphic-heavy and complex game mechanics — Solana-based Star Atlas, for instance, did a really good job in this regard as its Unreal Engine 5 graphics look epic — and empower them with user-generated content. Providing a much richer experience will not only make your game more appealing to traditional Web2 gamers but will also improve your retention rate since the opportunity to co-create a game’s ecosystem hand-in-hand with developers is a killer feature of GameFi.

A good example of this can be found in Goal Revolution, which enables users to generate value on NFTs by training and upgrading game characters. This model ensures that users always stay incentivized to play in order to maintain and even multiply their investments. Or how about The Sandbox? Not only is it a recognizable and user-friendly platform, but it also fuels player creativity, opening up the possibility for them to create NFTs and immersive 3D experiences with no technical background needed. This approach has made The Sandbox universe truly scalable and engaging.

Challenge #4 – Bots damage player trust

According to a recent survey, bots make up 40% of Web3 gaming traffic. This is alarming as rampant bot activity destroys game economies. How? Bot makers farm in-game tokens with inflationary models and unlimited emissions to further dump them into the market, thus causing an oversupply of these assets and sending their prices crashing down. You may have heard of how the Polygon-powered P2E game Sunflower Farmer got taken over by bots in January 2021. As a result, its in-game SFF token plunged from its ATH at above $5 to almost $0.

Bots also deter normal players from trying out Web3 games by making the playing field uneven, conducting Sybil attacks, and propagating malicious airdrops that drain liquidity pools and marketing budgets. Apart from that, bots deprive users of what they come for – live communication based on shared interests. In place of that, bots spam incessantly and make the gaming experience remarkably unpleasant.

What to do? The bot issue can be resolved with a few methods: you can increase the complexity of your gameplay to make it impenetrable by bots (similar to how CAPTCHAs work), build your game fully on-chain, integrate the Proof-of-Humanity (PoH) verification protocol or have human verification options like mandatory selfies to confirm that all players are actual people. Implementing KYC protocols is quite common practice too. However, you should note that all these methods can decrease user adoption because they can jeopardize privacy and comfort.

In this context, a solution that has recently appeared and aims to ensure a frictionless user experience is detecting bots by analyzing blockchain and off-chain data. To date, the only recognizable anti-bot software provider that offers such an approach is Jig Analytics. But given the urgency of the bot issue, there are bound to be other platforms offering similar products.

Jig finds all the wallets that belong to one person and blocks whole botnets without making normal users verify their identities. Since the check is instant and invisible, the technology behind the service can potentially replace the aforementioned solutions that can be overly complex and taxing on users. Even if banned bots try to evade their bans and return to the game, Jig can spot it in real-time and prevent another wave of fraudulent traffic with natively integrated custom mechanics. Using their technology, the company helped remove over 300 bots from Mines of Dalarnia and secure $60,000 worth of tokens per month.

Challenge #5 – The common perception of Web3 games is negative

At the present moment, blockchain games remain a very specific, niche product. The overwhelming majority of traditional gamers prefer to stay away from P2E projects because they think (and not without reason, since many Web3 games eventually slide towards the pay-to-win model) that they are scammy. For Web2 audiences, a lack of information as to the benefits of blockchain gaming and true ownership of digital property has aggravated the situation.

What to do? What’s far more important for true gamers is not financial but emotional rewards, like the sense of belonging they get when meeting other players. Ideologically, Web3 is all about communities, and these communities don’t consist of users in the traditional Web2 understanding of the term. They are a dozen times more engaged which makes their behavior similar to that of an outsourcing or support team.

Developers should focus on community building because having a strong cohort of players who are loyal to your project may create a primary layer of trust and bring the network effect which is much more impactful than any other Web2 tool aimed at attracting new users. Once you get a solid community, you need to properly harness its power by, for example, introducing mechanics that can increase the utility your game can get from users. This can be done by performing actions and providing services beyond the game interface, onboarding new players, and content creation on social media, like live streams on YouTube, Twitch, or Discord.

Be shovel sellers, not gold seekers

To sum up, in order for Web3 games to achieve sustainability, developers will have to be able to combine:

• high-quality and entertaining gameplay that fits different types of potential players;
• a solid business model that fuels the increase of token value over time;
• opportunities for players to help create and modify the gaming experience and participate in the project;
• ease of entrance;
• a bot-free environment.

However, we’re just at the beginning of the sustainability revolution in Web3 gaming. The GameFi market is still immature, which means that now is the time for experimenting and searching for ideal business models. We need more really skilled designers from the traditional gaming industry who can literally ‘feel” the nature of games. There’s no better moment to step up, especially since the niche is still quite empty (which is very sad) and hundreds of thousands of dollars keep flowing to GameFi from large investors.

Of course, the aforementioned solutions to the most common problems that now exist in the sector are not a panacea. As the Web3 gaming industry evolves and scales, new challenges to game sustainability will emerge. But the point is that developers should go into it looking to create sustainable game economies for farming assets and getting high ROIs, but instead should aim to create game worlds where people can stay for years. Innovative projects that improve infrastructure and benefit the industry will be able to find their way and usher in a new era of Web3 gaming – after all, it’s not those seeking gold who benefit most during the gold rush, but rather shovel sellers.