At this moment, my social media feed is filled with voices expressing their disillusionment with Web3 gaming. I understand why. Since 2020, more than $12 billion in venture capital has flowed into this sector, yet the anticipated breakout successes have remained elusive. Even the standout titles fail to achieve the mainstream reach that was expected. Token valuations have plummeted, studios are folding, and the overall sentiment is one of fatigue.
However, evaluating Web3 gaming solely through the lens of token valuations is akin to declaring the internet a failure because of the dot-com bubble burst — it completely overlooks the advancements in technology and the future prospects. It misses the broader narrative.
At its essence, Web3 gaming focuses on providing players with genuine ownership — not just of the in-game assets they purchase or earn, but also of their identities and accomplishments. In conventional gaming models, players dedicate time, effort, and money to assets that ultimately belong to the publisher. Web3 shifts this paradigm. By leveraging on-chain assets, players can truly possess what they earn — whether those are items like weapons or land that can be traded, or unique badges of reputation, guild history, or verifiable skills. It’s not merely about transactions; it’s about empowerment, longevity, and receiving legitimate recognition for what you’ve created and genuinely own within the ecosystem.
This notion isn’t unprecedented. Players have yearned for greater control over their virtual assets for years. Consider the expansive markets revolving around CS:GO skins or gold in World of Warcraft. For a long time, such economies have been obstinately segregated, constrained, or vulnerable to shutdowns at the behest of centralized entities. Web3 transforms these economies into open, interoperable, player-centric, and community-driven ecosystems.
Ownership is the cornerstone of Web3 gaming, and play-to-earn was an experimental framework that illustrated the promise of open, permissionless digital economies through blockchain. Presently, the industry is progressing with enhanced emphasis on sustainable models, improved tokenomics, richer gameplay experiences, and enduring player engagement.
However, if you are comparing Web3 gaming to Web2 gaming, you might be left feeling disillusioned. Traditional gaming has benefitted from decades of refinement in game design, established vast player communities, and devised successful business models, while Web3 gaming is still experimenting with its foundational concepts. Sure, billions in investments can accelerate developments, but throwing capital at an emerging field doesn’t guarantee a solid track record or instant hits that resonate with gamers.
Having been in game development for over two decades, I’ve witnessed many significant transitions dismissed before they ultimately flourished. People were skeptical that mobile gaming could rival PCs or consoles until it surpassed both. Free-to-play was initially derided until it generated unprecedented revenue and a larger player base. Esports was viewed as trivial until it filled stadiums and prize pools soared into the millions. Digital items were once dismissed as “worthless,” now they’ve transformed into a multi-billion dollar industry.
Now, Web3 gaming finds itself at a similar tipping point.
When I first encountered blockchain technology in 2018, it was a hot topic among my peers in FinTech, so naturally, I found it uninteresting and ignored it. It wasn’t until I came across CryptoKitties that my perspective shifted. The idea of individuals collecting, trading, and truly owning these delightful on-chain cats sparked my excitement, as I recognized that they differed from traditional in-game assets. CryptoKitties represented digital items that were untouchable once owned. Having dedicated my life to grinding in games, and my career persuading others to do the same — without any tangible rewards — the notion of genuine digital ownership revolutionized my outlook.
This realization prompted me to fully immerse myself in blockchain games. Yet, the years 2018 and 2019 were fraught with challenges. Interest was minimal, support was lacking, funding was scarce, and there was no clear vision for what these games could potentially evolve into beyond hazy speculation. During a prolonged market downturn, many teams either threw in the towel or depleted their resources before launching. Nevertheless, some of us persevered. We maintained lean operations, experimented, and learned through trial and error. Though the current situation feels tough, it doesn’t compare to the hardships of that era. Reflecting back, I’m grateful we persevered when success was just around the corner.
Everything shifted when Axie Infinity emerged prominently in 2021. Suddenly, founders in the Web3 space like Jeffrey “Jihoz” Zirlin from Sky Mavis, Yat Siu from Animoca Brands, Sebastien Borget from The Sandbox, and myself transitioned overnight from being labeled as crazy to visionary. We went from sitting in audience chairs at conferences to taking center stage. We began making headlines and featuring in “Most Influential” lists. Investors who previously overlooked our outreach were now inquiring about investment opportunities. My inbox became inundated with pitches for the next potential YGG.
The market then plummeted in 2022, and in an instant, we were branded as crazy once more. However, that didn’t dishearten me, as it is often the “crazy” individuals who propel significant change.
Today, the pressing question is: When will the next major Web3 game emerge? The reality is that developing quality games takes time. However, if you look beyond the glaring price drops and recognize what already exists today, you will witness how much progress we’ve achieved since our industry gained momentum in 2018:
- In 2020, Axie Infinity recorded under 500 daily players. Fast forward to now, and Ronin — the blockchain established by Axie — boasts millions of active users, has launched 17 new games, and seen an impressive 134% growth in NFT trading volume in 2024 compared to the previous year. It has also gone permissionless, paving the way for faster game development, increased network effects, and potentially explosive breakthroughs. Historically, innovations in gaming like modding, free-to-play, and esports have emerged from the most unlikely sources. A permissionless Ronin invites experimentation that could lead to the next monumental success like Axie.
- Pixels, a farming title on Ronin, achieved a peak of 1.3 million daily active users (DAUs) and currently maintains around 250,000 DAUs despite its token being down 96%. Players are spending more than they withdraw, engaging in purchases of land, upgrading their assets, and reinvesting in the game, thereby invigorating the economy instead of depleting it. This reflects how virtual economies should function, demonstrating actual demand and strong player retention. Most crucially, it illustrates that the play-to-earn model can succeed if executed properly.
- Parallel, a trading card game on Ethereum, recently hosted a world championship in Las Vegas at the renowned HyperX Arena, which has previously hosted prominent esports events like “League of Legends All-Stars” and “Street Fighter V’s Capcom Cup.” This prestigious championship showcased some of the top TCG players transitioning from traditional games like Hearthstone to become pioneers in Web3 esports.
These examples highlight the momentum we are experiencing: improved infrastructure, expanding communities, more sustainable virtual economies, and genuine digital ownership.
Those spreading negativity about Web3 gaming today simply do not grasp its potential. They overlooked CryptoKitties in 2018, Axie in 2020, YGG in 2021, and they will likely miss the next wave because they are focusing on the wrong indicators. Web3 is advancing and innovating at a pace outstripping all other sectors in gaming. It isn’t time to give up; it’s time to invest further. Let critics label us whatever they wish: crazy, delusional, visionary, or pioneering. It doesn’t alter our purpose. We’ve faced such skepticism before. Let’s remain resolute on our journey.