Ex-First Vice President at King Manel Sort: Web3 games can’t focus on economic incentives only
Crypto markets have gone through severe downturns in terms of price in the recent past, especially since Axie’s $625 Million drainage hack from North Korean hacker organisation Lazarus Group in March 2022.
Many thought leaders, VCs, and stakeholders within the Web3 community constantly emphasise the potential of video games as one of the most compelling use cases of blockchain technology. Some of the most successful games we’ve seen recently, such as Axie Infinity, StepN and more, are and have been part of the infamous “play-to-earn” model: a pivotal catalyst to attracting millions of people to Web3. But with the current market conditions and industry forecasts, what lies in the future of play-to-earn and gamefi models?
G4AL’s CEO Manel Sort, ex-First Vice President at King, has thoughts about what it will take for Web3 and GameFi to live up to its proclaimed hype. Manel says with over 3 billion Web2 gamers active, Web3 has a long way to go. With 25 years of experience in the video game industry and more than 60 titles developed and published in a wide array of platforms, many to critical acclaim, Manel’s theory about gaming remains strong.
Manel sees this market as an opportunity for Web3 games to potentially revolutionize how Web3 gaming and gaming studios operate.
“Free-to-play models with in-game transactions have generated greater revenue and work for wider audiences better than pay-to-play models ever have and play-to-earn models ever will”, Manel said.
Web3 gaming as an ecosystem was built in response to many games such as Fortnite and PUBG, which allowed users to host micro-transactions in-game from buying custom outfits, skins, weapons and more. The idea of taking that vision further was titillating, enabling interoperability across games, digital asset ownership, and ultimately creating an immersive ecosystem. Manel has 25 years of experience as a developer, producer, studio manager and CEO - delivering 60+ games and over $1 Billion in revenue. With his learnings from Web2 gamers as an audience for mass adoption of Web3, he admits that games as a service model (such as Fortnite, Pokemon Go, PUBG and more) of recurring revenue have outperformed all other models, including conventional AAA games such as Grand Theft Auto franchise, Halo and more.
“Blockchain and Web3 are gaining a lot of momentum from people around the world relating it to openness and decentralisation. But while we work towards interoperability within games, digital ownership and bettering issues within the current Web3 gaming space, it is also important to understand the platforms, the target markets and their needs”, says Adria Mir, blockchain and gaming expert at G4AL. Whilst the vision of interoperability still needs to be recognised by traditional gaming outlets and media, the concept of bundling NFTs and games with monetary incentives remains a topic of argument.
Statistics from the Web2 gaming space showcase how valuable digital assets are for gamers - even without the speculative monetary value and even if no one is making any money from it. Several examples of in-game purchases within famous titles such as FIFA and CS:GO report sales of over $150,000 for “skins”. Minecraft recently took a stance on NFTs with a ‘no-go’; however, despite that line, the game still makes revenue off micro-transactions within its marketplace, allowing Minecraft-based NFT play-to-earn games and developers to use its open source code. That raises the question if blockchain and web3 gaming is just a more economically immersive experience of the current in-game marketplaces?
“We do not think that gamers will flock into blockchain gaming just to make money because the whole idea of gaming is to have fun. And that’s why we’re creating Elemental Raiders with a free-to-play version, where people can go and have fun!” continues Adria from G4AL; the studio behind Elemental Raiders.
Play-to-earn model has not been sustainable, which is why it is essential to understand that the growth in Web3 gaming should be encouraged through devs building models and ecosystems that are fun rather than on an economic incentive under the P2E paradigm.
“We’re focused on creating a game where some people can come to play, and some can earn from it as a benefit to being really good at the game. The underlying equation is to not lure people in based on the fact that they can make money but on the fact that they can have fun! For this market to be big, it will require Web2, aka normal gamers, to be on it. Normal gamers don’t play games to make money; they play games to have fun. That doesn’t exist yet on Web3, and that’s why most of the players on Web3 are crypto-native, and that’s what we’re trying to change with Elemental Raiders and our studio at G4AL.”