Blockchain and Web3 game developers are taking huge steps to revolutionize the video gaming industry with a lot of games being launched every day. Web3 gaming saw sufficient development from the U.S.-region and neighboring countries in the last two years. However, Asia takes the lead in the fast-expanding Web3 gaming market led by Asian Web3 Companies in the U.S. Why is that and what are the challenges? With time, web3 gaming has gained more popularity and passionate gamers in Asia as compared to the Western region.
Web3 Gaming in the U.S. in the Challenges
Some experts believe it's just a matter of time before the new gaming industry establishes itself in the United States. But changes will need to be made before games can be enjoyed by Americans. However, given the regulatory challenges, market barriers, poor quality games, rampant scams, rug pulls, and diminishing goodwill, the Web3 games have a lot of miles to cover to go mainstream in the US market.
According to Francesco Di Ianni, a gaming consultant at FTI Consulting, many existing Web3 games rely on an unsustainable business model that requires an influx of new users to generate value for existing customers. This model has similarities to a pyramid scheme, causing distrust in the gaming community and making it difficult for future games to build an audience.
To attract more gamers, Web3 games should focus on providing fun, engagement, and a community experience while minimizing the friction around buying cryptocurrency and NFTs. Di Ianni believes that consumers should not even be aware that they are playing a Web3 game and should focus on the gaming experience rather than the technology behind it. "When I'm playing Call of Duty, I'm not thinking about the game engine. I'm playing the game," he said.
We all are well aware that crypto and NFTs have a specific role along with the Web3 games. However, both of the assets suffered a massive loss as the marketplace tumbled. NFTs' actual trading volume has reduced by 97% in the last nine months. Cryptocurrencies Terra and Luna crashed in May, wiping out half a trillion dollars' worth of market capitalization.
Blockchain gaming has 1.47 billion gamers just from the Asian region, or over half of the world's video game players, while Western nations question the worth of Web3. Axie Infinity has approximately more than 260,000 active gamers to breed and fight digital pets. Sprinterlands is just another example of a notorious Web3 card trading game. It has around 250,000 active users daily.
Web3 Gaming in Asia
Yat Siu, co-founder of Animoca Brands, a Hong Kong-based software and venture capital company making investments in Web3 games, said: “All the big gaming companies (in Asia) are talking about Web3 and NFTs”.
In 2022, the Web3 marketplace witnessed the highest revenue ever generated from the North America area. However, According to a Grand View Research analysis, the Asia Pacific area is expected to develop at a record pace through 2030. The influence of Asia Pacific is already expanding to Web3 gaming, with Animoca Brands and Sky Mavis the producers of The Sandbox and Axie Infinity leading the way. In the Asian region, China has the largest gaming market, with 744 million users and $45.8 billion in in-game earnings in 2017. South Korea, Japan, and the U.S. are next to it. China alone has approximately 700 million gamers eager to explore blockchain-based games, putting Asia Pacific at the forefront.
Many Asian companies are looking into international markets to increase the worldwide adoption of Web3 gaming. Giant Network has been growing rapidly in Asian markets for nearly two decades.
Barriers to Adopting Web3 in the U.S.
According to Francesco Di Ianni, a gaming analyst at FTI Consulting, many current Web3 games depend on a steady stream of new players to produce value for their existing users, which does not seem like a feasible business model. He claimed that many of them use pyramid-scheme-like mechanics which has caused suspicion among gamers. He also claimed this makes it more difficult for upcoming games to create a fanbase in the U.S gaming diaspora.
Web3 Adoption Beyond Asia
In a bid to expand the popularity of Web3 gaming, many Asian companies are showing interest in foreign markets. ZTimes aims to build a new generation of video games by exploiting Web3 technology. Its mission is to investigate alternative business methods and create games with novel concepts while empowering players.
Tom Wijman, games analyst said:” Web3 gaming has largely been driven by a handful of investors and companies, not by consumer demand. The growth of Web3 gaming will need developers to focus more on gameplay.
Wijman also addressed the situations game developers face throughout the Web3 ecosystem. When they try to create enjoyable Web3 games, developers face a lot of challenges. Blockchain technology makes it more challenging to create complicated games, hence many Web3 games are relatively simplistic.
He claimed that Web3 games also struggle with user acquisition, in part due to the negative perception of earlier games. He claimed "companies who are flourishing are relying on organic traffic" from developing a decent game. Gamers would ultimately favor the brands and communities that they are familiar with.
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