Can web3 emulate the success of the $350bn traditional gaming market?
In Web3 gaming, players can earn cryptocurrency as they play as well as accumulate digital property that can serve as collateral for decentralised finance loans, according to an industry leader.
On this week's episode of The Crypto Mile, Yahoo Finance UK asks CEO of Animoca Brands Robby Yung if Web3 gaming could emulate the success of the mainstream gaming industry.
Traditional gaming, exemplified by titles such as Call of Duty and Grand Theft Auto, is expected to reach a market size of $490bn by the end of 2023, according to Statista. The web3 gaming market is projected to reach $3bn in the same time frame.
Yung thinks web3 gaming stands on the cusp of revolutionising the traditional gaming space, with the potential to propel digital ownership into the mainstream. Animoca Brands is known for its web3 investment portfolio, including The Sandbox metaverse, NFT marketplace Opensea, NFT-based online video game Axie Infinity, and 3D virtual world platform Decentraland.
Yung said the web3 sector is shaping a creator economy centred on virtual property rights.
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"Once you start to build stuff on blockchain infrastructure, then you can connect these seemingly disparate things," he said.
"If I sell somebody an in-game item, like a virtual car, there's no reason that they can't take that car to a decentralised finance lending protocol and put it up as collateral for a loan."
Users currently have the option to secure decentralised finance loans using digital assets found within Animoca Brands-backed virtual environments, according to Yung.
Web3 aims to revolutionise digital property rights
Yung said the free-to-play model that has dominated the gaming industry for the past two decades enabled gamers to enhance their experience through in-game purchases.
Players can access and play a game for free, with the option to make in-game purchases or microtransactions for various virtual items, cosmetics, or gameplay enhancements. For example, Fortnite offers cosmetic items and battle passes for purchase and League of Legends is known for selling in-game skins and champions.
However, "what users are purchasing, they do not truly own", Yung said.
He added that this is true of many kinds of digital content purchased through web2 platforms. "If you buy an album on iTunes, you don't actually own it. You just own the right to use it. And if Apple (AAPL) loses the license for that IP, they take it away from your library even though you bought it. So you don't actually have digital ownership," he said.
Distributing royalties and tracking copyright
Yung said: "What we're advocating in web3 is largely an open-source movement. It's the idea that we can all progress the industry much faster by sharing and by taking advantage of the shared network effects."
Gamers and game developers can also share assets across different games, allowing them to appreciate in value and benefit multiple stakeholders.
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"In web3 we can track royalties on any trades that happen on digital items, not just on the primary sale, but secondary, tertiary sales," Yung said.
Moreover, he stressed the importance of digital ownership in an increasingly online world. "You can own and monetise your digital creations if you want to be a professional builder and build them for other people, or you can just build them for fun and play."
Sub-sectors of web3 gaming
Within the web3 gaming sector, there's a sub-sector emerging from the memecoin ecosystem.
For example, the dogebonk memecoin community has introduced the Dogebonk Dating Simulator. This game draws inspiration from classic Newgrounds flash games and visual novels like Doki Doki Literature Club and Pigeon Dating SIM. It caters to memecoin enthusiasts, expanding upon the lore that has developed around the dogebonk memecoin.
Last month, the dogebonk memecoin relaunched on the Ethereum network, after interest in memecoins increased following the launch of shiba inu's (SHIB-USD) Shibarium mainnet and the HPOS10I token ascending into the memecoin market cap top 10.
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Tamadoge is another web3 memecoin game supported by an enthusiastic community that is incentivised by ownership of the project's native token.
The Tamadoge game introduces pet-NFTs, where players engage in activities like tracking their pet's growth, participating in battles, and earning TAMA tokens.
Tamadoge merges the play-to-earn and NFT concepts. TAMA (TAMA-USD) serves as the official token within the Tamaverse, enabling players to make purchases within in-game marketplaces.
Former Tamadoge head of growth Carl Dawkins said: "With all the poor play-to-earn projects we saw released in the last few years, it’s left a base template of what not to do, but also what people want to see."
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