How Will Web3 Reshape Gaming And Propel Us Into The Metaverse?
Increasing the financial, social and emotional stakes in gaming, Web3’s player-owned-economy creates a truly immersive experience. David Lim, co-founder of Tatsu.gg, one of the companies that pioneered the gamification of Discord and Web3 gaming tells us why this is a major game-changer.
Many are sceptical of Web3 gaming, cryptocurrency and NFTs. What led you to take the plunge?
Players have been trading our in-game virtual items for real-life money or fiat outside our game for a while now. As a gaming company, this was against our terms of service, and there was also no way for us to police these transactions outside of our ecosystem. One of the pitfalls is that there is no system to guarantee that “sellers” would actually send the virtual item after receiving the money. Some people ended up losing money from transactions and this created a negative user experience. We thought of using blockchain to resolve this issue by allowing the in-game assets to be converted into NFTs (Non-fungible Tokens) which would then be traded on marketplaces. This would help bring some structure and security for any transaction of our assets between players.
Could you share how Web3 gaming works?
Players transit from a pay-to-play system to a play-to-own system in which they have true ownership of their virtual items or digital goods.
Players transit from a pay-to-play system to a play-to-own system in which they have true ownership of their virtual items or digital goods. Since all items are NFTs, players can trade amongst themselves with cryptocurrency. Whereas previously, people viewed virtual items as intangible and worthless game items, now they have value just like their real-life counterparts.
How does this benefit gamers?
they would be able to sell it to someone else and recover their initial cost outlay or even make a profit.
Gamers are currently already spending thousands of dollars on video game items such as skins, player cards or even gacha characters. However, most of these in-game assets are unsellable and lose their value once the player decides to quit the game. If that system were to be shifted to the Web3 ecosystem, if they quit, they would be able to sell it to someone else and recover their initial cost outlay or even make a profit.
How are the prices of virtual items determined in Web3?
Web3 has the potential to create extremely dynamic in-game economies in games such as in EVE Online (a space-based, multiplayer online role-playing game). These economies are completely player-controlled, shaped by market forces in the games, and affected by things that happen within the ecosystem. Virtual items that are rarer are perceived to be cooler and people will want to show them off to their friends. It can be something of a Web3 status symbol – sort of like buying a Rolex watch or luxury car.
How has this changed the gaming experience?
This makes gameplay a lot more interesting and unpredictable. For instance, in EVE Online, where 2,000 people might go to war against 2,000 people, do you commit to battle and risk losing a lot of your ships to reap the rewards? With a perceived monetary value now attached to the in-game assets, players would be more cautious and strategic when deploying their assets for fear of losing the money.
With a perceived monetary value now attached to the in-game assets, players would be more cautious and strategic when deploying their assets for fear of losing the money.
Does this create a more immersive experience?
Yes. When you have a virtual currency that is worth nothing, you won’t think twice about using it. But if the virtual currency has real-life value, gameplay becomes more emotional because of the higher stakes. People have a greater attachment to what they have within the game and will be more involved in the ecosystem. In some games that are player-versus-environment, it can also create a more community-focused experience and bring a strong social aspect to the game.
How will Web3 create better games?
With play-to-own, the developer no longer sells anything to the players. They focus on building content and provide everything for free.
When investors invest in a gaming company, they expect returns. Passionate developers want to keep building a better product. Players want the best gameplay experience. For traditional free-to-play or subscription-based games, these three stakeholders aren’t aligned. Developers have to keep selling micro-transactions or subscriptions to pull in revenue, keep the game running and satisfy investors. Players may feel like they are always being sold something and the overall gameplay experience suffers.
With play-to-own, the developer no longer sells anything to the players. They focus on building content and provide everything for free. They become like the central bank or government and earn revenue by taking a percentage cut from the marketplace where players transact. This incentivises developers to make the game as fun as possible so people will keep playing the game and transacting with one another.
With the use of Web3 in creating games, the investors, developers and players are finally aligned. In fact, we are still in the early infancy of Web3 gaming and we haven’t seen the full potential of how games can harness the Web3 technology.
What are the biggest misconceptions about Web3 gaming?
Many people still think that cryptocurrency and NFTs are scams or are purely speculative, so there is a lot of push back. The media also tends to portray Web3 in a very bad light, running stories on $800 million-dollar hacks and various scams which further pushes the notion.
What are some other major challenges?
Many have pointed out that Ethereum will burn the environment, so shifting away from rainforest-burning technologies like proof of work into new technologies like proof-of-stake is going to be a major challenge. There are also regulatory challenges as most nations don’t know what to do about cryptocurrency so the laws are always flip-flopping. These need to be addressed before Web3 moves into the mainstream. The last problem is the lack of experienced blockchain engineers as this is still a relatively new industry.
Why should more consider a career in Web3 gaming?
With Web3, being able to align players, investors and developers means funds can finally be aligned to support better game development.
A lot of people go into games development wanting to build good games, but the reality is, money is a key factor – if you have more revenue, you can build higher quality games. The current monetisation models such as subscription or micro-transactions aren’t very predictable and cause friction with the players. With Web3, being able to align players, investors and developers means funds can finally be aligned to support better game development.
Speaking of new games, could you share the inspiration behind your latest MMORPG (massively multiplayer online role-playing game) Tatsumeeko?
Our vision is to help Discord communities grow so we build games such as Tatsumeeko with a very heavy social element. After all, Discord is where most people within the crypto and gaming space hang out. So rather than creating a whole new metaverse, we wanted to bring virtual worlds and virtual spaces directly into Discord where people already are.
How will Web3 gaming shape the metaverse?
If metaverses are meant to be digital versions of society, cryptocurrency and NFTs will definitely take them further because people can hang out and transact online much more easily.
Metaverses have already existed in MMORPGs even before Mark Zuckerberg named his company Meta. In Final Fantasy XIV, there are people who log in just to hang out with their friends or do things together. Isn’t that the metaverse? The play-to-own system accelerates the transition into the metaverse because economy is one of the key pillars of society. If metaverses are meant to be digital versions of society, cryptocurrency and NFTs will definitely take them further because people can hang out and transact online much more easily. It advances the fact that society is no longer just in the physical space.