Blockchain technology has received disruptive notoriety within traditional finance (TradFi). It started with Bitcoin, who's early adopters began championing the inherent attributes of blockchain technology as a robust distributed ledger system. Then smart contract blockchains came along like Ethereum and Cardano. This introduced the creation of programmable decentralized applications (dApps) that facilitated the development of financial products and services for a rapidly growing decentralized finance (DeFi) ecosystem. However, the highly regulated financial sector and institutional incumbents have targeted many crypto projects in DeFi, impeding mass blockchain and crypto adoption.
But their is an another sector more conducive to blockchain and crypto adoption. The growing online gaming sector and Web3 gaming blockchain projects. They believe the integration of the technology will revolutionise how players interact and form online trading markets within games.
The global gaming market was forecasted to generate $184 billion in 2022 according to data by Newzoo. With an estimated 3.2 billion gamers worldwide, aided by recent pandemic restrictions, this sector is likely where blockchain technology projects will be heavily utilised as the underlying infrastructure. Ryan Wyatt, the President of Polygon Labs believes blockchain will offer a new business model to games as players will have more and more ownership of in-game assets, potentially creating new trading markets among network participants.
The rising internet connectivity, increasing adoption of smartphones, and the introduction of high-bandwidth network connectivity, such as 5G, have further increased demand. Cloud gaming services that leverage cloud technology are likely to drive the demand for multiplayer games and boost market growth. Large established online gaming networks will allow blockchain based Web3 and metaverse games to infiltrate the highly profitable market, offering novel digital ownership of many in-game attributes and 'play to earn' opportunities. There are still many adoption challenges however, a main one being the level of sophistication and player satisfaction that the current level of Web3 gaming offers. Both the blockchain sector and traditional gaming sector continue to work towards integration to evolve popular gaming models.
A16z’s (2023) report on the ‘State of Crypto’ touches on the growing Web3 gaming projects. 717 new web3 games were launched in 2022 and there were more than 23x on-chain transaction compared to DeFi. According to market research by Mordor Intelligence, between 2018-2028 the gaming market is expecting a compound annual growth rate (CAGR) of 8.94%. Currently, the largest gaming market is Asia - Pacific and the fastest growing market is the Middle East and Africa. Play-to-earn games in these regions will also have far reaching social implications, opening up access to DeFi and even TradFi services (depending on jurisdictional regulations)
Popular Web3 Games on Ethereum: