Sarun Vichayabhai is the founder and CEO of Playbux.

Gaming is deemed one of the strongest adoption drivers for blockchain tech and web3. It’s reported to have about 3 million daily active users with annual investment in the sector during 2024 of around $750 million.

Thanks to such growth and attention, the sector is ripe with innovation as well. Some projects are building the so-called ‘Steam of web3 gaming’ while others focus on dedicated hardware solutions. Their common goal — achieving mass adoption. 

But this frenzy of getting more users no matter what is dangerous. Because projects are losing sight of the core promise of web3 games, i.e. making gamers active contributors, not passive consumers. While many titles are being launched to encash the hype, most of them inherit the top-down model of legacy games. 

Integrating AI-powered blockchain game engines can resolve this issue. Web3 games can utilize data from user interactions to actively shape in-game experiences, giving users actual control over the lore. They can become truly user-centric and community-driven in this way.

Top-down web3 games are worthless

Yes, titles like Axie Infinity have enabled new income opportunities for Fillipinos and other communities in relatively weaker economies. Especially during the global COVID-19 crisis. 

But that’s merely the tip of the iceberg, given blockchain’s immense potential in transforming gaming as we know it. Helping people earn a few extra bucks through games is where it begins – not the endgame (no pun intended). 

Blockchain gaming is great because it can unleash bottom-up game development. It is about liberating gamers from extractive business models and the rampant strong-arming of legacy corporations and big studios. 

Currently, however, most web3 games only use blockchain to facilitate ownership and transfer of in-game assets. And as Galaxy Digital had shown in the context of NFT licensing, that too is highly dubious given the technical structure of on-chain provenance.

Source: Galaxy Digital

It’s unfortunate that there hasn’t been much progress in this regard since the report’s publication in 2022. Which means gamers often don’t even truly own the in-game items. 

If so, how are existing web3 games any different from their web2 counterparts? Except having an inferior UX and overall capability/function set. 

Besides ensuring actual on-chain provenance and ownership, it’s also high time web3 game developers start using blockchain tech for on-chain computations, not merely asset management. 

That is to say, they must put in the hard work and build fully onchain games. That’s the only way to fulfill web3’s promise in the context of gaming, as it is in other sectors. 

Unless blockchain games can offer something truly different, more efficient, and better aligned with their interests, gamers will inevitably abandon them once the initial hype subsides. Buzzwords and marketing cheat-sheets won’t take this ship far. 

Making web3 games for users, by users

Unlike other sectors where more apps are necessary to drive adoption, web3 gaming still needs some critical infrastructure. The most crucial of these being frameworks and tools to efficiently utilize in-game data for lore building. 

To become user-driven in any meaningful way, web3 games need tools like advanced AI engines that can enable dynamic gameplays based on user interactions. 

The essence of a bottom-up game world is that it evolves and grows in sync with the gamer’s journey. For example, the sights and sounds that in-game character experience align with the gamer’s preferences or, even, change as their real-life behaviors change in some way. 

While this might seem too far-fetched and futuristic for the uninitiated, such levels of personalization are indeed possible. Both AI and blockchain have already reached the capability levels necessary for these. 

If someone doesn’t see it, that’s because they’re either focused solely on surface-level innovations or is unaware of the current state of these industries.

Web3 game devs must buckle up (or catch up) and make user-centricity their top priority. The question of offering an improved UX is not simply about speed or a brighter gamut of colors. While these are no doubt important aspects, the narrative has moved on beyond this point. Or at least it should, sooner than later. AI is already gaining an edge in the dapp industry and increasingly coming at par with gaming. According to DappRadar’s data, the sector had a 28% dominance in July 2024, with ~4 million daily active users. 

Source: DappRadar’s Dapp Industry Report for July 2024

While this can be seen as cut-throat competition, it also presents an opportunity for both sectors, given their mutual compatibility. Gaming can use AI for experience-enhancing tools and AI can tap into more web3-native use cases via gaming.

And for this to play out, builders in both domains must set their minds to serving the users’ needs above all. That’s the only way to achieve long-term adoption, rather than short-term gains that come and go with every market cycle. The choice is between moving in circles or reaching the prized destination, i.e. mass adoption.