State of Web3 Gaming in 2023

A new report by game seven finds that more than 81 new Blockchain networks targeted gaming this year while nearly 50 Blockchain games were halted. Joining us now to discuss is game seven core contributor George Iso. But before we get into the segment, I should disclose that. I am also a contributor to the Game Seven. Do welcome to the show, George. Good morning. Pleasure to be here. Pleasure to have you here. Wonderful to see you. Let's chat about this report now. So you looked at almost 2000 Blockchain games across 100 and 70 different ecosystems. Anything surprised you when you're putting this research together? Oh yeah, absolutely. I mean, since you, you just mentioned about it, so many uh Blockchain ecosystems, so many Blockchain games, it's been six years. I mean, we tend to say Blockchain is new, we're still early. But uh this can also be true while we have already six years behind us of uh watching gaming innovation. So let's talk about this funding all this like, like like who, who's putting money into Blockchain uh uh uh projects, what kind of, what kind of projects are, are also getting funded Yeah, that's a tricky question because uh 2023 has been harder if you want to fundraise regardless if you are AAA or uh just a guy starting a new Indie project. Um The report does not necessarily address the who and what kind of project exactly are getting funded. But it's clear that despite the tough market conditions that we can all see through various metrics, um important projects, key projects, especially the ones that come with some previous gaming gaming background, they uh managed to still uh get uh funded again despite the very tough market conditions. Now, in the introduction there, I mentioned almost 50 games were halted this year. The the report also says that 100 and 57 were halted in 2022. What were some of the reasons for uh these games stopping production? Um Yeah, the data are quite clear in this case, the lack of access to fundraising um were the primary reason for this change secondary, the lack of product market feed or game developers not finding traction among their user base uh as well as in the same time with the rise of of generative A I, many game developers thought that OK, I may have a shot in a different uh a big upcoming trend. But yeah, in the vast majority of cases, lack of of funding uh was the key driver for this development. George. Tell me, when are we gonna see a web? Three game that people actually want to play any indication when you were doing this research. Yeah. Uh, I think that's a, that's a very bad question. I don't think we're far from it. We have great teams with great background, with sufficient funding with already 12, maybe three years of, of uh, of experience building on specific titles. So on paper, we're not far from it. I would argue that though, that it's not just about having a fun game. I think the ecosystem is looking on one hand for a great game, a great gaming experience regardless if you call it trouble triple or single A. But on the other hand, we are also looking for the moment, we are looking for a combination of gameplay experience of community of Blockchain innovation that would say to the whole world. Oh Wow, that's what, that's what Blockchain could do. Um You, you brought up this great chart, which is one of my favorite, favorite parts of the, of the report. I don't think necessarily we need to have a triple, we need to wait for many AAA games to, to exist and being super successful to find good blocking games. So yeah. Um the, the, the, the tough part is that is a combination of gameplay mechanics of community involvement and the use of blocking technology in inside the titles. II I kind of find it, it, it, you know, with that argument, this is the problem we have, of course, is that I think people really like the technology without understanding what the experience is. It goes to our previous discussion about CBD CS. What you're describing is that well, it doesn't matter if the game is really cool, it just matters that the technology behind it is cool. And I'll tell you this, I don't see kids wanting to play games that suck and I don't think anybody wants to play games that are not fun or not interesting. So if we could build these things on, on, on web three and we build these, these things on a decentralized version, that's great. But if you don't have users, then what does matter? Yeah, absolutely. I mean, it's clear from our data that we need more mainstream gaming. IP similar to the one that has been successful to millions of gamers. But when looking for again, the ai moment, the combination of a very fun and enjoyable gaming experience and a reason for Blockchain to really exist. Um You need both, you need both um based on, on our data, it's clear that web three gaming does not have enough on paper AAA gaming content. And I want to clarify what does this mean? I mean, I do understand um why every new entrant in the c ecosystem would like to say I'm building a AAA gaming studio. But if you, if you ask a traditional uh gaming audience and OK, please define me AAA, they would say you can be AAA unless you have already built AAA. Um Others might say you need to have raised at least 50 million, you need to have a big publisher support. So I don't think we should look for the term AAA because AAA is hard and AAA requires resources of that in, in this current condition. Might not be easy to, to get anyways. Well, hold on. So, so why haven't the big, the big uh uh companies that are in this space gone out and done it? I think we, we, we are observing this phenomenon when trying to understand why this hasn't happened. Um uh sooner. I think it's important to make a distinction between different geographies. So when looking about us based uh uh publishers and game developers, arguably the macro environment regulation might have been uh might have been a key driver. Uh There is no point, even if Blockchain promises a lot, there's no point of destroying an existing business just to go for emotion. Um But um I'm fairly optimistic. I mean, we, I know that the vast majority of, of the big players of the mainstream gaming space, they have that and experience with Blockchain at different levels, but they are all trying to be involved, they are all trying to have internal capabilities and they all try to do experiments. The key question is when they would start seeing Blockchain as one of their key growth pillars and not just as an R and D experiment. All right, George. And just before we wrap this, you brought it back to Infinity. And that was the first web three game that really kind of hit the mainstream, of course, uh their business model played to earn. We later found out that there were some flaws with that. What business models are web three game developers looking at right now? And are they sustainable? Yeah. Uh That's, that's a very tough question. Uh because different game developers will come with different levels of others. They will say that I can fix a, I can let's do exactly the same, just like a minor tweak. Others are super scared and they will say I, I'm gonna barely use Blockchain. I will use the hype about NFTS and technology and just try to hide Blockchain behind the scenes. Um Arguably the vast majority of game developers, they, they have shifted from putting Blockchain as the key selling point to Blockchain being an enabler of a new experience. So we should expect games that will be light on how they advertise and how they, I mean, what is the value that they offer to the game when it comes to? Why Blockchain? So I think after Axio, we will see a new wave of games that they will use Blockchain but in a more mainstream, friendly uh and background kind of way. And if this works, we should expect that uh even the AAA s of this world will be uh more than happy to, to dive deeper and use blogs in more creative ways. Yeah, I, I mean, has North Korea gotten involved in game, in, in game building because they, they seem to have been heavily involved in a infinity based on their database. I can't, I can't say that. No.