Web3 Gaming Isn’t for Gamers (Yet), Balancing Play-to-Earn With Pay-to-Win

• Web3 pay-to-win and pay-to-earn titles are criticized for catering to whales and using predatory monetization tactics.
• The potential of earning money for gaming is at odds with the concept of developing a fair, balanced, and fun video game.
• Web3 features as an add-on, not a requirement, may prove more popular amongst traditional gamers.

Web3 gaming isn’t taking off, and monetizing the gaming experience doesn’t seem to interest gamers at all.

There are plenty of incredible Web3 games out there, but there’s a sense that it’s more pay-to-win than play-to-earn (P2E). So what went wrong?

Web3 Gaming Struggles

At the peak of Web3 gaming’s peak, the buzz around P2E blockchain-based video games was palpable. The prospect of earning something while you sat and played a game couldn’t have been more appealing,

This hype faded rather quickly as disillusionment eventually settled in. The world of P2E, play-to-airdrop (P2A), and any other “x-to-earn” offering became viewed as a pay-to-play, pay-to-win market.

Where Web3 gaming has failed, however, there is talk of a Web2.5 gaming ecosystem, one where the monetization, blockchain, and digital asset add-ons are secondary to the game themselves.

Player Retention

Slava Mikhalkin, the Chief Executive Officer at Acid Rainbow, the studio behind the Web3 “shoot-to-earn” game BadMad Robots, spoke with CCN on the matter.

He explains that the first generation made the mistake of building their engagement with incentives instead of focusing on making a great game first:

“When you build an exciting game first and add Web3 mechanics later, you can ensure much higher retention as players will be actually immersed.”

This is perhaps the crux of the whole debate. Web3 games aren’t that fun, not right now, at least.

Games like Fortnite and GTA V have been keeping players pleased for years as they continue to update, change, and add new features to the game to keep things exciting.

But these games aren’t pay-to-win or pay-to-earn; they’re simply great games with tons of add-ons that don’t break that game if you have more expensive items. But they don’t quite reward your expenditure either.

Pay-to-Earn

Axie Infinity was the standout success of early Web3 gaming.

It combined non-fungible tokens (NFTs) with crypto assets to create a game akin to Pokemon on the blockchain. The competitive scene was bustling at its peak, and top performers with the best Axies were highly rewarded.

But in order to play the game, players had to purchase a group of these NFTs and some of the game’s native crypto to fund transaction fees for their numerous interactions.

That’s a lot of friction just to play a game, which, after all that spending, would begin to resemble more of an investment than anything. Mikhalkin notes:

“That gave them Ponzi-like qualities, as the game had to rely on a rising stream of new players, and as soon as it ended, the economy crashed.”

He compares it to BadMad Robots, a free-to-play multiplayer shooter that rewards players with points for every shot taken. It leverages Web3 mechanics to do so but prioritizes gameplay and fun over the promise of earning crypto.

“This idea came from our own disillusionment with the industry that prioritized the promise of earning crypto rather than genuine entertainment. We hope to make it appealing both to Web3 and traditional gamers alike.”

Echoing this, Ilman Shazhaev, the founder of Farcana, a 4v4 “Bitcoin shooter,” noted that whales can dominate Web3 gaming ecosystems, but their financial backing also contributes to growing the game and the community.

“In return, they do get certain advantages, but it’s important to remember that this also allows developers to keep creating content and refining the experience for all players.”

Striking the balance appears to be the key. But how can developers cater to their “most valuable” players while ensuring the smaller players don’t get pushed to the side?

According to Shazhaev, the balance is found by not eliminating competition but by designing systems where regular players can thrive without being overshadowed by wealthier ones.

Predatory Monetization?

Comparatively, there are extremely simple mobile-based tap-to-earn titles like Telegram’s Catizen game, which offer airdrop rewards to their “best players.”

To be a top-performing player and qualify—in time—paying for boosts and bonuses that increase the rate at which you earn points will give you an edge over other players.

There are plenty of instances where AAA games used similar tactics to gouge the players willing to spend the most.

Ubisoft’s Destiny 2 was derided by fans and critics alike for including systems that let users purchase better gear or craft better items than non-paying players at much faster rates.

In Web3 gaming, players will care a lot more about how fair the system is when real assets are on the line.

This fact alone will make it difficult for developers to cater to both paying and non-paying players. Speculatively, this could result in the Web3 gaming ecosystem itself being split.

Tokenizing Games

If anything, tokenizing games as an optional extra for players may be the way for Web3 games that don’t focus too much on monetization and rewarding players. But gamers are now weary of even a smidgen of Web3 tech in their titles.

Looking at the poorly received trend of mainstream behemoths such as Final Fantasy publisher Square Enix attempting to bring NFTs to their audience , gamers are somewhat repulsed by the tech.

As Mikhalkin explains, the gaming industry “burned” gamers with excessive monetization methods like lootboxes in the early 2010s. So gamers are likely to view NFT offerings with reasonable suspicion.

But if you look at skins and weapons in multiplayer shooters like Fortnite, Mikhalkin thinks these could clearly be tokenized:

“The best place to start is by tokenizing collectibles in the games. People really like Fortnite skins and want their characters to stand out. Players can have real ownership if you turn these skins into an NFT.”

Looking at games such as Counter-Strike, which has its very own—and rather lucrative—weapon skin marketplace, it’s not impossible to imagine such a system for Web2.5/Web3 games.

For Shazhaev, Web3 features will soon be common, such as downloadable content or in-game purchases. However, the key will be to ensure that these new features enhance gameplay and make the game more enjoyable “rather than turning it into a purely financial endeavor.”

Web3, Optional

Though often criticized for being a shameless cash grab, in-game cosmetics such as weapon and armor skins are harmless additions to the game.

They allow the player to customize their character without affecting gameplay.

Or, as seen with EVE Online, the more money you can throw at your fleet, the greater power you wield, but also increase your trading power, giving wealthier players dominion over the in-game economy. Therefore, this can also translate into real-world losses , as spaceships destroyed in the game represent dollars spent by players.

This doesn’t convert well to Web3 games, which are often built as P2E/airdrops, making them highly competitive. Players won’t want to purchase a simple cosmetic in a Web3 game as it will provide no meaningful return, further highlighting the risk of Web3 games being dominated by whales.

In many free-to-play (F2P) massively multiplayer online (MMO) games, whales always have the advantage in one way or another.

For example, they have access to exclusive in-game items, experience point boosts, and other perks that give them an edge over non-paying players.

Perhaps the biggest mistake Web3 gaming ever made was attempting to monetize the entire experience instead of just some parts.

If the aim is to build long-lasting, sustainable, and, most importantly, fun games, then it should be that Web3 monetization is an optional add-on, not a requirement.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

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