3 Opportunities NFT Games Should Seize to Achieve Mass Adoption

It’s hard to say that we’ve reached the tipping point in Web3 gaming: there are still fewer active wallets (and even fewer real human players) than a modest mobile game; no new title has bested the earnings of early play-to-earn (P2E) experiments; and funding is down so dramatically that it looks like a rounding error next to the AI hype train.

And yet I’m more excited than ever. Not gm-frens-wen-moon-excited, but excited in the sense that Web3 gaming is maintaining and even gaining momentum despite all the dourness. It mirrors similar seismic shifts that I witnessed from the inside of the biz, like digital gaming and free-to-play.

While virtual reality and cloud gaming have yet to take off, never having enjoyed major commitments from major companies during their troughs, Web3 gaming has backing from big names in the space.

In recent months we’ve seen high-profile announcements from AAA publishers like Square Enix, Nexon and Ubisoft. There have been under-the-radar investments from folks like Take-Two. And existing and new studios have launched Web3 initiatives, staffed with a who’s who of uber-experienced developers —like CCP, the geniuses behind the in-game economy of EVE Online. Google Play just published clear guidelines for apps using NFTs. Even EA has allowed itself to be associated with Web3 through a planned partnership with Nike’s dotSwoosh (which may not be explicitly Web3 in execution like Fortnite x Nike, but is still an acknowledgement that the space is brand-safe enough to tango with).

So, hey, good news! Positive signals that folks should stick around and keep building. Even though no one has hit on the best practices in the sense that there’s a major, successful game to point to and mimic, there are enough better practices that give developers directionality. That’s a good thing. In an industry with more failures than successes (over 10,000 games launched on Steam last year alone), we need as many things in our favor as possible.

But time and again, I see developers make the same missteps and ignore opportunities that are unique to Web3. If you’re a dev, here are three things I think are vital to consider.

1.Build for the wider gaming audience

So much friction comes from developers who forget basic player segmentation. The fact that, for any free-to-play game, you need to assume that over 90% of your audience will never spend in your game. They don’t need to own a single gwei or have a single NFT. Would it be great if they did? Yes! But too many developers are designing with the expectation that gamers need to show up flush with crypto and NFTs up to their eyes, and in doing that they’re creating barriers to entry that will kill their game.

It might sound like old news given how small—and unlikely to grow—the true “degen” crowd is, but here’s another way to reframe this that I think blows many Web3 developer’s minds: stop building with the expectation of onboarding all your players.

More than 90% will never spend, and of the less than 10% that do, it’s safe to say that consumer segmentation indicates only about 2-5% will care that their game items are on-chain. All grand plans of secondary market trading, interoperability, and all other Web3 shenanigans you create are going to be loved by 2% of your audience. They’re the vital part, as are the spenders, but games need to begin with a view of the 100%, spenders and non-spenders. If you design with that in mind, you’ll be much better set up for success.

2.Not everything needs to be an AAA game

The average AAA game costs $80M to develop, whereas a Flappy Bird can be made by a single developer in three days. Unless you’ve got that cash on hand (and double that to spend on marketing) we can squash your hopes and dreams of competing with Hearthstone, Call of Duty, and Zelda right now and avoid a lot of frustration.

The focus on AAA gamers made a lot of sense when onboarding was super difficult: you wanted that tech-savvy and high-value crowd to jump through all the expensive hoops to finally reach your game. But now that wallets can be gotten with an email and NFTs purchased with a credit card, casual games unlock a massive addressable audience, are faster to get to market, can be distributed on any platform, and reach users who are more apt to jump from title to title than a kid with 450 hours in Fortnite. 

Obviously I’m not dismissing quality, polished games with hardcore mechanics. They’re great, they’re needed, and they’re coming. But the average dev would be wise to seize the white space that new, seamless tech has unlocked and aim to be the Candy Crush of Web3 rather than the Splatoon clone that no one needed.

3.Build new mechanics using Web3’s unique properties

A lot of breath has been wasted on expounding on how Web3 “fixes all the problems” of Web2 gaming. Banned CS:GO accounts holding millions in skins. EA Sports games where you have to buy the same players Every. Single. Year. But there’s nothing a gamer hates more than someone telling them that the fun they’re having is “wrong” and making them feel like an idiot for repeating the same mistakes.

So, why are we forgetting that Web3 allows for amazing new mechanics?  There’s not enough focus on the net-new positives. Don’t fix issues I don’t readily see, but give me a new way of gaming I’ve never had before.

Somewhere between the it’s-not-really-a-game-ness of the degen P2E offerings and the AAA Web2-to-Web3 ports that are de rigueur, we forgot that on-chain capabilities make for fun new game design possibilities that few are exploring. These mechanics have the potential to kickstart virality and create the first Web3 gaming “killer app.”

I recently wrote about a few untapped things that developers could use to make something that can only be done with Web3.

How about a game built entirely around things happening elsewhere on-chain? Like a Mafia Wars where the street price of goods is pegged to the value of Eth or the number of Reddit NFTs traded in a week. Maybe “taking out a hit” requires a kill in another game.

Or using dynamic NFTs to degrade items with in-game implications. Perhaps the more a skin is traded, the dirtier it looks. Exactly the kinds of rags you’d need for the best camo.

Some of these are experimental ideas and won’t necessarily be accessible to the casual games audience, which is a slight to Tip #2. These mechanics might also only appeal to a subset of your spending players, a nod to keep Tip #1 in mind. But we know that core players are already willing to go the extra mile for something that is new and fun, and game play is ripe for innovation right now.

For the detractors who think the space is over and done with, a little reminder: some of the first free to play games launched in 1999. For years, developers dismissed them, players thought they were cash grabs and scams. Governments aimed to regulate them. It all began a full 18 years before Fortnite debuted.

Other fads in gaming have come and gone, but Web3 represents one that I believe will underpin some of the greatest games of our future. The promise is there, we just need to execute it well, and I think we’re beginning to see some themes where developers can focus and unlock the next generation of gaming.