Dawn of Web3 And NFT Gaming, The Challenges And How Businesses Work Towards Solving Them

The gaming industry as a whole is expected to generate $203 billion in revenue this year and $260 billion by 2025. In the third quarter of 2021, NFT games alone produced $2.32 billion in sales. According to DappRadar, blockchain games and associated infrastructure raised $4 billion in 2021, with blockchain games alone raising $2.5 billion in Q1 2022. Yet another interesting and more relevant statistic is activity on all blockchains. 51% of all activity across all blockchains was attributed to gaming, and the remaining sectors, including DeFi, collectively used the remaining 49%.

The problem with blockchain gaming in the current environment is that it is rife with projects without long-term, sustainable business strategies. Play-to-earn (P2E) games, more often than not, carry with them the promise of significant sums of passive cash. As that bubble pops, the crypto and NFT bear market have forced blockchain companies to have viable business models.

Microsoft's $70 billion acquisition of Activision Blizzard, creators of Call of Duty and Warcraft, allows the multi-national corporation to secure its potential spot in the Metaverse. Phil Spencer, CEO of Microsoft Gaming, said, about the acquisition, "together we will build a future where people can play the games they want, virtually anywhere they want." Although Microsoft banned the use of NFT within Minecraft and does not believe Non-Fungible Tokens (NFT) have any place in gaming, Activision Blizzard is heavily involved in the Web3 and NFT gaming space.

NFT Gaming Today

The issue with NFT games is that the assets held today may have less or no value in the future after the hype dies down. Compared to standard PC and mobile games that are accessible, more engaging, and mostly free to play, NFT gaming has a long way to go. In terms of gameplay and entertainment, traditional gamers like deeply engaging games, and the quality of graphics games like Fortnite and Apex Legends now have. And over 2.5 million games are already available for casual gamers and pro gamers to access.

Current NFT games are dry and not engaging to play. Axie Infinity, an NFT game whose gameplay is as boring as clicking a few buttons, earned multi-million dollars in NFT sales. But after the hype died, holders found that their initial investments had sunk to the ocean's deepest depths. "Community co-creation is a guiding north star of the Axie Infinity ecosystem and will be a fundamental driver of scaled-value generation over time," said Philip La, game product lead at Axie Infinity. It's evident that Web3 and NFT games have to offer their players more value.

Xiroverse, a Web3 firm located in London, United Kingdom, is a start-up reducing the barriers to entry and making web3 gaming and the Metaverse more accessible and engaging for their users. With nearly 175,000 early signups to download their Xiro App, Xiroverse intends to create a platform in which people can play the games they already love playing. Xiroverse will allow many more gaming studios and companies to access their technology and infrastructure to generate income streams that were previously inaccessible.

The Next Generation of Blockchain Gaming

Xiroverse wants to take the Web3 and NFT gaming industry head-on and mainstream it by making it accessible to everyone. NFT games like Diablo Immortals, a game published by Microsoft-owned Activision Blizzard, require gamers to spend up to $150,000 and beyond to fully kit up their NFT characters. Obscene prices keep gamers from adopting blockchain games. Xiroverse claims to disrupt the industry by making it free to access and enabling seamless user onboarding. Roshan George, Founder of Xiroverse, said, "For the vast majority of the mainstream gamers, there is no concept of Web2 or Web3 or NFT gaming. There is just gaming. How can companies in the web3 space compete and onboard new gamers with exorbitant costs, complex user onboarding journeys, and low-quality games? This can be achieved only by removing all barriers, providing entertaining and engaging games, and partnering with studios that already make great games."

It's only time until we see regular mobile apps incorporate blockchain technology. Platforms Apps like the "Xiro App" by Xiroverse will make Web3 onboarding and access as easy as clicking download from the Apple AppStore and Google PlayStore. To get started with Web3, users won't have to pay anything in gas fees (transaction fee), open a centralised exchange account on Coinbase or Binance, buy cryptocurrencies like Ethereum or Solana, set up a cryptocurrency wallet, transfer tokens, and so on. If the industry plans on onboarding the next billion users to Web3, simplicity and value will pave the road to mass adoption.

We are on the cusp of a new era as GameFi moves beyond the P2E business model and focuses on offering high-quality gaming experiences that include enhanced gameplay, visuals, and social interaction. Businesses like Illuvium, Star Atlas, Decentraland, Bored Ape Yacht Club, and Xiroverse work on vastly different and often contrasting business models to achieve the goal, but 3 billion gamers globally will have the final word on the future of Web3 and NFT gaming.