decrypt.co
Many crypto builders see video games as the killer app for Web3, citing perceived benefits like ownership of in-game items as NFTs, possible interoperability between games, and the potential to profit from rising token and NFT values. But by and large, gamers aren’t buying it.
Prominent NFT gaming efforts by firms like Ubisoft, Square Enix, and GSC Game World have faced backlash from outspoken video game fans. Critics point to shallow gameplay for early NFT games, crypto industry scams, and falling asset prices, plus a belief that game publishers will use NFTs to extract more cash from players.
Ryan Wyatt, President of Polygon Labs, transitioned into the crypto industry in early 2022 after a notable career in esports and video games, including as head of YouTube Gaming. On a recent episode of Decrypt’s gm podcast, Wyatt made the case for why gamers will help lead the charge for Web3 adoption.
“It’s a matter of time,” said Wyatt, who leads the business team at Polygon, an Ethereum sidechain network. “By the time we see mass adoption of Web3 games, really, out in a couple years, the friction that you see today I think will largely be gone. Not entirely, but gamers are the most savvy tech group—so they'll be the earliest adopters.”
Gamers already understand digital ownership and the idea that virtual items can have value and personal meaning. Granted, in Web2 gaming models, there are limits to ownership: Fortnite sells an array of character “skins” and items, but they can’t be resold or used in other games. And if Epic Games eventually shuts Fortnite down, they’ll potentially be useless.
By contrast, an NFT representing a unique character or item could be freely sold or traded, and composability of blockchain assets means that they could be used in other games and metaverse worlds to some degree. But Wyatt said that there need to be stronger Web3 games to justify the attention and investment of players.
“You’ve just got to give them a reason to go play a game,” he said, but surmised that “it’s not there right now.”
Play-to-earn games surged in value and attention in 2021, led by Axie Infinity with over $4 billion worth of NFT trading volume, but such games were derided as shallow and simplistic—or scammy and economically flawed. Wyatt expects developers to make strides in terms of developing compelling Web3 experiences ahead.
“We're going to learn a lot over the next year or two on how you start to make really interesting blockchain-based games,” he said.
He envisions a world in which a smash hit free-to-play shooter like Call of Duty: Warzone can feature blockchain assets, with users buying and trading NFT guns and cosmetics, and artists able to create and sell their own supported items. The game publisher could then offer tokens in place of in-game currency, and provide accessible on-ramps into crypto.
In that evolution, Web3 games may abstract away the complexities of using crypto wallets and handling NFT assets, and hide the tech to some extent. They may also hide the terminology, adopting “digital collectibles” and other phrases that Web2 brands have used for NFTs—just like Reddit has done with its avatars.
“We kind of always joke about it, but we really mean it: success at Polygon is [that] no one talks about Polygon,” Wyatt said. “When you go to play Call of Duty, for example, you're not like, ‘Hey, is Call of Duty: Warzone on Google Cloud or AWS? Because if it's on Cloud, I'm not playing Warzone.’ You know? Like, that's not gonna happen.”