Sandbox co-founder foresees AAA game studios embracing web3

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In summary, Web3 gaming is expected to grow and intersect with AAA gaming in the coming years, creating an economy that empowers both players and developers. The use of blockchain technology and NFTs can lead to innovative gameplay experiences, player engagement, and new revenue models. However, there are still technological hurdles to overcome, such as distribution and access to players, and onboarding education is necessary for attracting traditional gamers. Innovative ways that these technologies have been applied in gaming include the use of decentralized finance mechanics, rewarding players with free assets or airdrops of tokens, and providing access to content through staking tokens. The future of Web3 gaming could see larger AAA gaming publishers entering the space and creating an economy where players own their digital assets and can trade them, moving from a renting model to an ownership model.

In an interview with crypto.news, Sebastien Borget, the co-founder and COO of The Sandbox, shared his perspectives on the challenges preventing web3 gaming from achieving wider acceptance in the mainstream.

As a crypto investor, I’m excited about the revolution Web3 is bringing to the gaming industry. Instead of relying on centralized servers and companies controlling the game, web3 games offer me a more immersive experience. These games allow me to connect with the platform and other players in decentralized ways, giving me greater control and ownership over my virtual assets and actions. It’s a new era where players are no longer just consumers but active participants in the gaming world.

In these games, players are granted greater autonomy and management over the virtual goods they acquire, including items, personas, and funds. They have the ability to exchange, dispose, or even manufacture new assets themselves.

Leading video game publishers, including Ubisoft, recognized for producing successful franchises such as Assassin’s Creed and Far Cry, have been experimenting with new technologies to elevate player experiences. Ubisoft, in particular, introduced Non-Fungible Tokens (NFTs) into its hit game Ghost Recon: Breakpoint.

As a researcher studying the intersection of blockchain technology and gaming, I’ve come across an intriguing discrepancy between the aspirations of web3 games and the current reception from the broader gaming community. Despite promises of empowerment and ownership for players, many gamers remain unimpressed, continuing to gravitate towards traditional web2 games.

Major players in the gaming industry such as Ubisoft and Sega have recently taken a pause in their production of new web3 games, seeking a solution to boost mass adoption following data from CoinGecko’s 2023 end-of-year report that over 75% of web3 games launched within the past five years have failed.

Despite encountering some challenges, I believe the blockchain gaming sector will experience substantial growth in the future. Some predictions even suggest that this industry could reach a value of $30 billion by the year 2030. Borget, who holds the position of president at the Blockchain Game Alliance, has provided valuable insights on this topic.

Based on previous discussions, it seems that larger game development companies like AAA may hold back from diving into web3 gaming until smaller studios have paved the way with innovations. Considering the ongoing advancements in web3 gaming infrastructure, how do you think this trend of adoption will unfold?

In every industry, it’s common for the larger companies, who have built substantial wealth based on their current business models, to be hesitant towards adopting new innovations. They may find it difficult to pivot and explore new revenue streams due to their size and established success. On the other hand, smaller and more agile studios are better positioned to seize new opportunities. Their cultural readiness and eagerness to experiment make them ideal candidates for exploring untapped markets and rapidly iterating through ideas. Historically, it’s been these smaller teams that have embraced a testing and learning mindset, which often involves quick failure and swift recovery, leading to significant advancements in their respective industries.

What about the big players?

As a researcher studying the challenges faced by large corporations in implementing new technologies like web3 and Blockchain Gaming, I’ve observed that these companies encounter significant process overheads that can impede their agility. However, an intriguing trend has emerged at the Blockchain Game Alliance with major players such as Nexon, Come2uS, Ubisoft, Atari, and G2A making their foray into this space. To navigate the constraints of their larger organizations, these companies are establishing separate teams, which allows them to operate more autonomously and innovate at a faster pace.

As a seasoned crypto investor, I’ve noticed that the development and adoption of web3 games face several significant challenges.

As an analyst, I’ve identified two primary hurdles in the Web3 gaming space. The first issue is the under-appreciation of enjoyment and entertainment value, with a focus instead on optimizing gameplay mechanics. This is a well-known concern within the industry, and ongoing initiatives aim to enhance player experience in Web3 games to rival that of their web2 counterparts. Furthermore, emerging technologies like blockchain, NFTs, and cryptocurrencies can contribute significantly to enriching the gaming experience and making it more enticing for users.

Why is that?

The process of bringing users onto a Web3 platform remains a multi-step endeavor, including creating digital wallets, which can be quite time-consuming. Although opening a new bank account or mobile operator plan shares this requirement, the experience in Web3 is often seen as more intricate due to the current lack of centralized app stores like the App Store and Google Play. However, similar to how early iPhone models lacked advanced features that are now commonplace, the user experience in Web3 has shown significant progress over the last four years, and there’s a sense of hope that it will continue to advance positively.

As a game industry analyst, I’ve been closely following the integration of blockchain technology into popular gaming engines such as Unity and Unreal. This is an exciting development that has the potential to revolutionize the way we create and play web3 games. However, despite these advancements, there are still technological challenges that need to be addressed for web3 games to effectively compete with their web2 counterparts.

As a game industry analyst, I’m excited to note that two of the most widely-used game engines, Unity and Unreal, offer direct integrations enabling users to engage with digital wallets and web3 technologies. However, there are challenges left to address in terms of player distribution and access. On the development front, though, progress is being made as tools like Stardust simplify the complexities inherent in blockchain for creators.

What approach should game developers take?

As a researcher studying game development, I strongly advocate for creating engaging and enjoyable games as the primary goal. Integrating advanced technologies such as blockchain adds complexity to the project, necessitating specialized developers, architects, security audits, and competencies that are not customary within game teams. Thus, having access to middleware solutions and tools that alleviate the need for specific resources becomes a valuable asset.

As a researcher studying the intersection of traditional gaming and web3 technology, I believe one effective strategy would be to introduce newcomers to web3 gaming gradually, focusing on the benefits they are already familiar with in traditional gaming.

As an analyst, I strongly believe that captivating traditional gamers is crucial for the success of blockchain gaming. The foundation lies in delivering enjoyable gameplay and unique experiences that cannot be found elsewhere. Subsequently, onboarding education plays a significant role. Guilds and other communities can offer valuable assistance in this regard. Moreover, I think it would be advantageous if larger platforms join the industry and make Web 3 games accessible to users without the need for extensive blockchain knowledge. They could accomplish this through user-friendly wallets or authorized stores. Companies like Google Play and the Epic Store have already started taking steps in this direction. Consequently, I am optimistic about the future of blockchain gaming due to our collective dedication, hard work, and focus on the right priorities.

I’d be happy to delve into the significance of Non-Fungible Tokens (NFTs) and token economics when it comes to improving user experience and boosting player engagement within Web3 games.

When someone gets involved in the game, be it as a content creator or an asset owner, they develop a vested interest in the game’s prosperity and forge connections with other players and communities within it. In effect, they transition from being mere consumers to active contributors. Players derive personal gains not only financially but also through enjoyment, attracting new members, and contributing to the game’s value creation process – all of which significantly boost engagement.

What are some innovative ways you’ve seen these technologies applied in gaming?

Intriguingly, we’ve observed that the realm of Web3 is currently undergoing groundbreaking developments, marked by an abundance of experimentation. Instead of purchasing content, users are increasingly employing decentralized finance mechanisms to gain access to it. By staking tokens, for instance, one can unlock content, experiences, and more. Furthermore, owning a Non-Fungible Token (NFT) grants additional perks such as whitelist access or extra content. Users can even ascend leaderboards or amass rewards by engaging in these platforms. Rather than selling content to captivate users, creators now extend invitations, offering glimpses of the experience, and then entice them with the excitement of active participation. The budding landscape of Web3 holds immense potential for further advancements.

I, as an industry analyst, believe that it’s reasonable to anticipate significant actions from prominent AAA gaming publishers in the near future. With companies like SquareEnix and Sega having previously delved into this domain, the competition could be motivated to follow suit and explore new opportunities.

As a researcher studying the intersection of gaming and blockchain technology, I can confirm that Square Enix, Ubisoft, and Atari are among the major players who have entered this field. They have either announced plans or already published games incorporating blockchain and non-fungible tokens (NFTs). The traditional business model of free-to-play and premium is being disrupted, making it likely for more AAA gaming publishers to explore this space. Furthermore, new companies are emerging and gaining traction, positioning themselves as pioneers and early adopters with a higher chance of capitalizing on opportunities in the sector. The blockchain gaming industry might follow a trend similar to consolidation we’ve seen in other industries.

As a researcher exploring the future of interactive entertainment, I ponder over the intriguing possibility of how the synergy between high-end AAA gaming and web3 technologies could give rise to a dynamic economy. This economy would not only foster growth for developers but also bestow unprecedented opportunities upon players.

Certainly, I’m convinced that the intersection between AAA gaming and Web3 creators leading to an economy is not just a possibility, but an inevitable trend. In fact, this dynamic is already manifesting itself in various ways. For instance, consider Nintendo’s Animal Crossing game. Players would collect resources and attempt to sell them to one another, only for Nintendo to put a stop to it. This desire for players to trade assets among themselves is a natural progression, and blockchain technology plays a crucial role in facilitating this exchange. By giving users back control over their data and the money they spend to acquire content, blockchain enables a shift from a rental economy to one of ownership.

And how would that be possible? 

In my opinion, this phenomenon is poised to expand significantly within larger-scale games. As these games draw in bigger player communities, the concept of digital assets being personally owned, tradable, and valuable is increasingly becoming the norm for Gen Z gamers. This approach not only returns value to players but also presents an innovative model for developers to adopt.

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2024-05-07 15:09