“We think gaming is a big enough category and will be the biggest of the Web3 categories,” Ryan, who previously worked at Facebook and Sega, told Decrypt. “Historically, gamers want to go hang out with other gamers. And they want to have a site or service that speaks to them in a way that isn't just about price.”
Embedded economies
Beyond its overall gaming-centric platform, Aqua is also creating embedded marketplaces for Web3 game developers, with its team working hand-in-hand with game studios to determine the best approach and ultimately produce a functional in-game $NFT shop.
“In Web3, the [game projects] have to build the marketplaces themselves, and they’re just not good at it,” Ryan said. “It’s not their expertise.”
“What we found over the past six to nine months, talking to 50 to 75 developers, is that they would like someone to take care of the marketplace for them,” Aqua’s CEO added. “They’d like someone to do it in an embedded fashion that is within Unreal [Engine] or Unity that is much more seamless than the way you see in Web2.”
Any external marketplace—where gamers have to “tab-out” of their game or otherwise minimize the application to make a purchase—leads to player dropoff, Joglekar explained.
“The fact that you actually push people outside of the game client is probably the biggest rule-break in terms of game studios,” Joglekar said. “The number one thing you want is retention.”
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But how does a third-party platform such as Aqua—which has also started developing and releasing its own games—create in-game marketplaces that feel organic to the games themselves?
The answer is actually quite simple: Aqua's team plays its clients’ games.
“The thing that gamers care about the most is progression, right? We play games to have fun, not to make money,” said Joglekar, who previously worked at powerhouse League of Legends publisher Riot Games.
“What we have to show them is if you buy this asset, you can then progress, and you'll get better,” Joglekar said of Aqua’s approach to Web3 gaming. “Our entire belief is if you trade smarter, you play better.”
The future of games
But is Web3 gaming all about trading? It depends on the game, but developer sentiment has changed dramatically since Axie Infinity’s economy collapsed in early 2022 following a boom that yielded billions of dollars’ worth of $NFT trades. And then Axie’s Ronin sidechain was exploited in a massive $622 million hack in March 2022, adding insult to injury.
Axie Infinity popularized the idea of play-to-earn gaming and earning token rewards through gameplay, but the game’s economy wasn’t strong enough to sustain the interest. Ryan believes those days of overtly financialized game designs are over, and such models won’t become popular again anytime soon.
“The early parts of Web3 gaming were, frankly, people who didn't even play the game—they just bought assets and sold assets. They were degens,” Ryan said. “That wasn't that interesting, and those games collapsed, like Axie Infinity.”
“Our belief is that first the games will get better,” he added, “because the first games were not very good.”
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