A 6 Step Guide To Understanding The Web3 Gaming Ecosystem
Introduction
Web3 gaming is the future but finding projects to invest in is difficult with most of the being all hype and nothing to show for it.
On top of that, there are a lot of projects out there that look amazing but end up being rug pulls which can set you back significantly depending on how much you invested.
Almost everyone who’s investing in Web3 gaming wants to be a part of something that’s bigger than themselves.
We have the opportunity to adopt and invest in technology that can and most likely will change the future of gaming and the rest of the internet as we know it.
Being a part of Web3 gaming means that we gut to work together to build a future where players have true ownership of their digital items while making money from something that we all love.
The Ecosystem
Listed below are the 6 categories that make up the Web3 gaming ecosystem and what you should look out for in each category so that you can narrow down the projects you look at to avoid potential rug pulls.
Blockchains
Blockchains are either 1 of 4 different layers that work together to make up the blockchain ecosystem and include:
Layer 0
L0s are crucial for games that are built on multiple blockchains and are essential for moving in-game assets and other digital collectables between different players across multiple blockchains so that players can easily trade them with each other.
Layer 1
L1s is what comes to mind when most people mention the blockchain. These are used to record all the transactions that take place within the games and prove ownership of the different items in the games.
Layer 2
L2s are amazing because they are built on top of L1s but have made improvements like lowering transaction fees, and making transactions faster, as well as more secure. These 3 elements are essential to Web3 games for players to have the most convenient experience possible.
Layer 3
L3s can be looked on as the apps/games built on top of the previous layers but a better way to look at it is as blockchains built for specific games as more Web3 game companies are now building their own personal layer for their games in order to create the best experience possible.
Dev Tools
Dev tools for Web3 gaming can be any tools that are used to integrate Web3 tech into games and these tools consist of:
Wallets & Identity
Wallets & Identity are a necessity for Web3 games if players are going to store their in-game items and other digital collectables. Instead of creating an account players can sign in to games with their wallets and have an identity that allows them to use their items across multiple games.
Marketplaces
Marketplaces allow players to buy and sell their assets across multiple blockchains at once without having to trust people that they don’t know, with most marketplaces showing you what wallet/person owns the items as well as the previous owners and the prices they paid.
Payments
Payments in Web3 games can be done with crypto so that transactions can be done quickly and securely across the world. The tech that can enable in-game crypto payments for items and allow players to convert their crypto into cash is essential for all Web3 games.
Analytics
Analytics tools are essential for any Web3 game because transparency is a key part of what Web3 is about, so anyone should be able to see what transactions have taken place on the blockchain. Game devs can also use these tools to get a better idea of what items are most popular with players in their games.
Token Issuance
Token Issuance tools are a core part of what Web3 gaming is about. developers can use these tools to give players true ownership of their in-game items as well as make it possible for the item to be used in other games that the company/developer has partnered with.
In-Game DeFi
GameFi tools will make up a big part of Web3 gaming because it’s what’s going to give the players control over their in-game items so that they can do things like lending them out to other players or using them to farm in-game resources.
Game Assets
In general, any microtransactions that take place in most Web2 games can be done in Web3 games in the form of NFTs. Some of the most popular ones are:
Avatars
Avatars are the main items that are bought and sold within games so they’re the most obvious choice when it comes to buying gaming NFTs and are usually either a character that you can play as or a skin to customize your character.
Items
Items can be any in-game item that you use but are mostly items like clothing and accessories that can be used to personalize the look of your character or items that have a specific use like weapons and armour.
Land
The land is somewhat unique to Web3 games because with NFTs players can now own plots of land through the game’s world and receive a percentage of the resources collected on the plot.
Loot Boxes
Loot boxes in Web2 are generally hated by gamers but as an NFT it can be a lot more friendly to the player because as they get opened the ones that remain sealed can go up in value, which gives the player a choice on whether or not they open it.
Season Passes
Season Passes as an NFT can be a great way to provide long-time players with value by providing them extra in-game benefits for every pass that the player owns from the previous seasons.
Game Studios
Game Studios can be a great way to invest in Web3 gaming in a diversified way because studios like to build multiple projects so you can invest in all of them at once.
Games
Games built by Web3 game studios often use their own crypto across all their games, making it quite convenient to invest your money across all of them at once.
Blockchains
Blockchains built by game studios are often built to support the games that they develop so they are generally built quite well. You could buy crypto associated with the blockchain by itself but a large portion of it is owned by the studio anyways, so if you invest in a studio with its own blockchain then you’re indirectly investing in it as well.
Tools
Most of the game studios that are building in Web3 are generally building their own tools/infrastructure as well. These are generally marketplaces but can include wallets and other DeFi software too.
Launchpads
Studios often like to invest in other Web3 gaming companies which sometimes include other game studios as well but can also be guilds, other games and even gaming software companies.
Launchpads
Launchpads allow anyone with enough tokens to have access to projects before they’re released to the public, similar to what a venture capital fund would do, but are open to everyone instead of a select few investors.
ICO
ICOs are when a project creates its own crypto which often represents a stake in the business itself. These usually allow you to invest in the business/studio behind the game and can get you access to other tools that the business might create.
INO
INOs are mostly assets which can be used inside of the game that you’ve invested into but can also be other items like loot boxes or season passes. These NFTs can also be limited edition and give the owners more perks than other players.IGOs are when a company releases a token for their games and is mostly used as a currency within the game itself. This can be treated as an investment into the game itself because players can get the game’s tokens at a cheaper price before anyone else can buy them.
IGO
IGOs are when a company releases a token for their games and is mostly used as a currency within the game itself. This can be treated as an investment into the game itself because players can get the game’s tokens at a cheaper price before anyone else can buy them.
Gaming Guilds
Gaming guilds have existed for a long time, but guilds that are being created around Web3 games are a lot more sophisticated and fall under 4 different categories:
Yield Maximizing Guilds
Yield Maximizing Guilds focus on getting a return on their assets and investing in NFTs so they can rent them out to other players with the end of generating a long-term yield.
Investment Fund Guilds
Investment Fund Guilds mainly focus on investing in games and other Web3 gaming-related projects with the goal of getting a return on their investment over a longer period of time, similar to traditional investment firms.
Value-added Guilds
Value-added Guilds can be any guild that tries to create mutually beneficial scenarios with games by doing scholarships and making investments but also focuses on adding value outside the game as well.
Service Guilds
Service Guilds focus on creating tools and building other layers of infrastructure related to Web3 gaming. This could be services that revolve around asset lending, scholar management tools and other DeFi/GameFi-related software.
Summary
To recap everything written here, there are 6 major parts to the Web3 gaming ecosystem. These consist of Blockchains, Dev Tools, Game Assets, Game Studios, Gaming Guilds and Launchpads. Each of these parts has its own pros and cons when it comes to investing and you should always do your own research when investing in any one of these projects because there are money scams out there.