The blockchain ecosystem was in a euphoric state in 2021, as it met its highest market capitalization of $3 trillion and had the value of Bitcoin going off the roof, reaching its all-time high of at the later end of the year. Crypto assets like NFTs were the next big thing and were thought to be a revolution in how art is perceived. $67,567 Crypto enthusiasts expected a similar run of form in 2022, as . However, since then, it has been a very different tale entirely. The year 2022 marked the beginning of a new “crypto winter” as token values were driven to the ground. Currently, in 2023, still struggling to shake out the whole shenanigans that 2022 brought. experts predicted Bitcoin hitting new highs and a few lows Bitcoin is at $22,889 After one year, a few hacks, and a couple of failed projects, there is a different outlook for the blockchain ecosystem as it faces uncertainty and skepticism. Once touted as a way to reinvent the financial industry, i amid the atrocities that some key players brought. t is struggling to save face Former FTX CEO Sam Bankman-Fried and Terra Luna’s CEO Do Kwon both combined brought a contagion and a domino effect that saw a from the crypto market. In addition, they did not go down alone, as they — companies like BlockFi, Genesis, and Voyager are going down the path of bankruptcy. sum of $1.4 trillion wiped out took some enterprises with them It looks bleak if you look from afar, but is quite a different story when you peek under the hood as the web3 gaming sector has attracted billions of dollars from investors. According to Metaverse Post’s year-end , the web3 space was able to raise $7.1 billion in funding throughout 2022. The gaming sector, by all odds, was above other categories as it attracted $4.49 billion, which accounts for 62.5% of the total amount invested in web3. report Despite token prices nose-diving, non-fungible token (NFT) trading volume going down by 94%, bad blood between consumers and crypto exchanges, and a drop in players' enthusiasm about web3 gaming, venture capitalists are still going all out and betting heavily on the future of blockchain gaming. Why Investors are Investing in Web3 Gaming Before blockchain-powered games, players lose ownership of in-game assets when the console is changed or switched. For example, you can carry your Midas character in Fortnite and switch it up with Lance in Grand Theft Auto (GTA). Web3 gaming allows for self-sovereignty, something gamers have always pined for, which means players can have more control over their in-game assets and can own them outright. This creates room for an equitable and fair gaming experience. Experts believe it’s the future of gaming, as it takes power from the traditional gaming company and bestows it on players. Web3-enabled games will have blockchain voting on game features and even on the story itself, says Garrett Dailey, the founder of Aion Enterprises, a design agency in the web3 gaming space. “Fanfiction, something that does not make anyone money, will start to become a capturable revenue stream as novel approaches to IP licensing on the blockchain allow studios to capture the energy and time investment of their players. Imagine entire games with player-driven narratives, user-created assets, and games modes” he iterated. According to Valerio Puggioini, content lead at Yeeha Games, investors know the potential blockchain gaming possesses, and it is just wise they invest now. “We're incredibly early, and the traditional gaming industry is massive, having reached $187 billion in revenue just last year, according to . Compare this with web3 gaming, which isn't even a fraction of that. We're in a bear market, the fundamentals behind the blockchain thesis haven't changed whatsoever, and builders are still building. Markets occur in cycles, and if that's anything to go by when we're at the bottom, that's the best time to place your bets.” Kearney Puggioini says his main way of looking at it is this: “After all, everything's on a firesale.” Surprisingly, gaming tokens have held up surprisingly well in the bear, and work is being done to continue identifying key areas of friction to improve upon. “I believe blockchain gaming will get adopted in a major way. It won't happen on a linear scale. Nothing like this ever does. That's why I don't mind that things appear bleak now. It takes only the right domino to fall into place to get the whole thing running.” What are investors Looking At The question has always been whether gamers will allow the paradigm shift. Web3 hasn’t had the unprecedented welcome it had hoped for in 2022, as cold hands of market turbulence have dealt with player fervor and complaints about how gaming studios have placed monetization over fun. No wonder why a recently conducted Blockchain Gaming Alliance (BGA) revealed that 56% of game developers working in blockchain have taken “improving gameplay” as their top priority. survey Web3 fell short of predictions as it has been unable to attract gamers, most gamers have complained that the essence of the game isn't found in web3 — fun. The games are becoming solely centered on rewards, not on improving the gaming environment, which is not the goal of gaming. “These can cause problems as they’re still subject to the current difficulties facing web3. The experience tends to be discontinuous, graphical interfaces aren’t great, and speculation/greed corrupts the good-natured intent of developers’ attempts to iterate over utility models” says Sebastien Davies, Principal of Aquanow. forms of entertainment-that-pays-you Davies said creating economies is complicated. Something like a grassroots project may fix this, but most gamers are drawn to the space because of smooth and realistic graphics. The largest studios have an edge because they employ teams of experienced professionals who know what it takes to build an interface so well that people pay to use it. You might be tempted to take the same position as many digital asset detractors and conclude that because of these early shortcomings, the entire GameFi concept is doomed to fail. I tend to be more optimistic, so my impression is that the combination of a dynamic developer ecosystem, open-source code, and continued investment have the potential to drive innovations and uncover models that do indeed work, he continued. In a report published by DappRaddar, it was found that 33.5% of the money for web3 gaming went toward web3 infrastructure. Web3 infrastructure is the foundation of web3 gaming because it enables developers to produce more dependable, transparent, and immutable games. The cost of creating web3 games can be decreased with the use of reliable web3 infrastructure, making them more accessible. In a , CEO of Mirai Labs Corey Wilton claimed that investors were taking a different approach this year and were betting on experience rather than speculation. He said, "One noteworthy element throughout the raises that have taken place in recent months is that the majority of studios that have received funding are not conducting seed or pre-seed rounds. They're clutching Series As. He thinks that investors are playing the long game. Cointelegraph article Axie Infinity is the web3 game with the most users, but it is currently not on mobile, which seems like a problem as mobile gaming accounted for 50% of the generated $184.4 billion year on year, outpacing both PC and consoles, according to . DappRadar reported that hyper-casual mobile blockchain games brought more than 1.7 million users from web3 into web3 gaming in a single week in September. Newzoo It is imperative to approach the widespread adoption of Web3 with a strong focus on mobile gaming, which is what investors and developers appear to be moving towards.
