Just about a year and a half ago, people from all around the crypto world had their interests piqued by the advent of blockchain gaming. It’s a crossover that made sense.
Both industries are Internet native, there’s a lot of overlap with crypto users being avid gamers, and the basic value proposition of Web3 gaming is something that made sense to a lot of people.
Initially, things were great. There was innovation and experimentation, people were constantly releasing new products and new mechanisms, and people were pushing boundaries.
But as is common in crypto, the cool new ideas quickly spiral into an uncontrollable mercenary ponzi game. The core values of what made blockchains valuable to gaming were thrown out of the window, and every game became an obfuscated yield farm where people would rinse one game and move to another.
The result was pretty much what most people expected, the unsustainable rewards were indeed unsustainable, and the amount of money people could extract from these games continued to dwindle until interest in the sector dissipated altogether.
Just because interest has dissipated doesn’t mean that people stopped building cool things behind the scenes. Even though people ponzified gaming, the use cases of blockchain gaming are still very real, there just needs to be the correct infrastructure in place to highlight that.
So what are these value propositions that I keep talking about?
Why put games on a blockchain?
Most of you who have been around for a while probably already know what I’m about to say, but hey, a little refresh never hurts.
In general, everything comes back to the core values of what makes blockchains themselves useful. That is self-custody, permissionless transacting, and trustlessness.
Gaming as an industry is huge, it’s estimated to be around a $240B business as of 2023. The issue is that it is a very concentrated industry. There are 4-5 big players that dominate this industry from a game development standpoint while the smaller indie developers struggle to make any meaningful inroads.
This concentration rears the ugly head of centralization. Since these few companies have so much control, the players end up holding the short end of the stick.
Players do not have control or ownership over their assets. So you could put hundreds or thousands of hours into a game and have nothing to show for it. An example to better illustrate what I’m saying is suppose you’re a streamer and the publisher is unhappy with a post you made on social media, at a moment’s notice they could freeze your in-game assets and that’s that. There’s nothing you can do about it. Even if you simply bought items from the in-game store, this risk is still pertinent.
This becomes much more important when you take into account secondary markets. You have CS:GO skins selling for hundreds of thousands of dollars, but if you don’t truly own the asset, then there’s a good chance you may not see the monetary gain from your ‘work’.
Even outside of ownership, building games on-chain unlocks a bunch of new possibilities. It becomes easier to achieve interoperability between gaming worlds, it reduces developer costs by a significant amount, and having sandbox games where user-generated content is king becomes much easier and much more engaging.
These are just a few of the value propositions for why blockchains are good for gaming, but if all of these are true, why hasn’t gaming taken off as yet?
Web3 gaming issues
We can start with the most glaringly obvious one – user experience.
For all the great things that blockchains enable, they have a lot of drawbacks. For starters, they are slow and expensive. The exact opposite of what you need for running a game. Transaction approvals take time, and since games often have multiple transactions within a short period, it makes for a choppy gaming experience.
Add to this the fact that blockchains are expensive. Gas fees often go to extreme heights and even on cheaper chains, during high congestion periods, fees are still very high. Now imagine a player who has to approve multiple transactions while playing. Not only is it slow, but prohibitively expensive.
This is where traditional gaming wins. They give users an unparalleled user experience. Convenience > decentralization.
Furthermore, getting funds to use these games in itself is an issue. For us crypto natives who spend 14 hours a day behind a screen, it’s trivially easy to get funds onto a different chain and play a game.
However, for the average normie, getting money onto a CEX is enough of a struggle, never mind expecting them to transfer funds on-chain and then from there bridging to another chain and so on. It’s simply too difficult for them. It’s even more problematic seeing that they are a major part of the target audience for Web3 gaming.
A bad user experience is simply one side of the coin, the other side is a poor developer experience. If there are no developers, then there are no games to begin with, so they need their problems fixed first.
First off, most traditional gaming devs often have no idea how Web3 works. So developing and implementing the game logic becomes an entirely new skillset that they have to acquire. Although there are crossovers of crypto native devs helping these traditional gaming devs, there needs to be some automated measures in place so everyone can code freely.
In relation to this, traditional devs not being aware of how Web3 works also affects their costs. All Web3 games use NFTs for in-game characters and items. Minting these NFTs does have a certain cost attached to it, and most of the time the devs are often unaware of this cost. Add to this the fact that some of the smart contracts may be poorly coded leaving them open to exploits, it presents a huge problem from a development standpoint.
While user experience & developer experience present the more important issues with Web3 gaming, there are other smaller issues which still play a major role in the gaming experience.
One such thing is liquidity fragmentation. With so many different projects making their own marketplaces for their coins and NFTs, it creates a very fragmented ecosystem of liquidity, so for users to move assets somewhere else to try out a new game, it becomes a tedious process.
The list goes on… stats tracking
Another issue, albeit a minor one, is stats tracking.
If you’re a gamer then you understand this feeling. You’ve put in so many hours into so many different games that at the end of the day it’s satisfying to look at your catalogue of items, your achievements, and your hours put in. Currently, Web3 gaming has a severe lack of this sort of advanced analytics for gamers.
Okay, I know what you must be thinking. So many problems, it’s going to be years till we solve all of them, right?
EH-UH, you’re wrong.
The solution to all these problems already exists. It’s Immutable.
Since crypto moves at the speed of light, so does Immutable. Today, we will present to you why the Immutable ecosystem, a unique protocol and product suite provides the perfect foundation for the Web3 Gaming resurgence.
Before diving in, please check out the complete guide to Immutable that we already did here so you have some context to the features we talk about below.
The Immutable bull case
Let’s start with the developer experience since that’s the first and most important step for building out a strong gaming ecosystem.
At the face of improving the developer experience is the Immutable SDKs. An SDK is a software development kit – it’s essentially a collection of development tools put into one package to make the job of a dev easier.
Immutable has 5 SDKs at the moment and they are:
- Typescript SDK – Allows devs to integrate their game with key blockchain functionality
- Unity SDK – Allows the game to be integrated with Immutable Passport
- Unreal SDK – This also helps integrate with the Immuatble Passport
- Core SDK – Provides access to Immutable’s APIs to allow for the creation of better games and marketplaces
- Wallet SDK – Allows for easy connection of user wallets and managing user sessions.
By providing these tools, Immutable significantly reduces the learning curve for talented game developers who are unfamiliar with Web3. By providing these tools, more devs will be incentivized to create their games on Immutable because they get unparalleled flexibility and convenience.
However, technical know-how is not the only issue for developers. The unknown costs in Web3 are also an issue.
In terms of cost, they’re already low for developers since they don’t have to worry about the backend. But Immutable makes it significantly cheaper.
But how are Immutable making it better?
The backbone of Immutable’s infrastructural offering is the layer 2 rollup solutions, of which there are two. The first one built was Immutable X in partnership with StarkWare, and the most recent one is Immutable Zk-EVM made in partnership with Polygon.
The purpose of having their own layer 2 focused on gaming is that it solves all the problems Ethereum couldn’t while still using Ethereum for security. With their own rollup, Immutable can offer near-instant transaction execution paired with zero or very low gas fees.
However, improving scalability is not sufficient to foster a vibrant gaming ecosystem. It’s important to have a smooth user and developer experience and Ethereum was simply not well-suited for that. Immutable’s rollup was developed with specifically this in mind making it 100x easier for prospective devs.
However there was one issue with Immutable X, it was a zk-rollup. While zk-rollups themselves are revolutionary and extremely important, they are not EVM-compatible. It requires a whole new set of expertise which simply isn’t there right now. The majority of the developer mindshare and general liquidity is on EVM chains.
Therefore, to seamlessly bring in developers and liquidity, Immutable partnered with Polygon to develop their own zk-EVM. Now it becomes significantly easier to port over existing apps and smart contracts in the highly scalable zk-rollup environment. With this move, Immutable is set to see a huge surge in platform usage thereby sparking the next run for Web3 gaming.
On top of this, the minting cost is significantly reduced.
Why minting costs matter
For those who don’t know, minting costs refer to the gas fees the contract creator pays when creating their NFTs. With games, the NFTs are often in-game assets that are assigned to the players.
On Ethereum, these minting costs can often be very high, especially for large collections such as the ones you see in games. With Immutable’s zk-EVM these costs come down to negligible amounts coupled with the fact that the Immutable SDKs make it trivially easy for devs to create their ERC-721 contracts.
Side note: For any devs looking to start their Immutable journey, go here
Solving the UX headache
Okay, so that’s one aspect out of the way. Immutable has fixed the developer experience. But you can’t only have developers make games and no players to play them. So what are the improvements to the user experience?
For starters, Immutable offers a direct on & off ramp to users. One of the biggest reasons non-crypto native users don’t come on-chain is that they find the onboarding process difficult and daunting. But Immutable’s partnerships with Moonpay and Layerswap make it extremely easy for users to directly on-ramp or off-ramp using their bank account.
On top of this, Immutable is a layer 2, which means quick transactions but most importantly cheap transactions. I think any normie would get a heart attack after seeing ETH gas fees, so this quicker and cheaper environment is something they’ll be much more familiar and comfortable with.
But all of this is just the surface-level stuff. Something that will be a bigger differentiator for Immutable is its protocol-level orderbook.
Taking it to a new level
Remember how we spoke about ownership being one of the most important aspects of Web3 Gaming? Well with that ownership comes the monetary benefit you can gain from the assets you own. For that, you have secondary marketplaces. The issue is that games keep making their own marketplaces which significantly fragments liquidity.
Immutable instead offers a unified protocol-level orderbook that aggregates all the different partnered marketplaces through one venue. Now buying & selling your in-game NFTs has become faster, easier, and much more efficient.
But the cherry on top is the Immutable Passport.
The Passport is simply the wallet and identity system that each user gets which gives them easy access to everything under the Immutable Umbrella.
Typically, users would need different wallets for different games and within these games, they would have to deal with constant pop-ups to sign and approve transactions. The Passport is your one-stop shop for everything Immutable.
Users can be onboarded in one click and don’t have to worry about seed phrases and pop-ups. It’s a user experience that is very familiar to Web2 players and is something that crypto natives will grasp very easily.
In addition, all your NFTs from the different games will be stored in one place making it easy for you to keep track of things. Lastly, it’s also a great way to track your general performance in Web3 Gaming, and who doesn’t like some performance stats, ey?
So we showed you how Immutable fixed the developer experience and the user experience, but there’s another cool feature that we haven’t touched upon as yet, and that’s the ‘checkout’ function.
What is the Immutable checkout function?
Immutable analyzed the different types of actions a typical user would do. They include things like on-ramping, bridging, or swapping. For the untrained user, all these actions could be problematic. They could click a wrong link and get phished or sign a faulty contract and get drained or use the wrong bridge and never receive funds.
So Immutable decided to simply introduce a checkout feature which automates all these processes for a user under one roof. If you’re on the correct chain with the wrong currency, then swap through checkout. If you have the correct currency but are on the wrong chain, bridge it. Immutable simplifies all of this for the end user.
But this benefits developers as much as it benefits the users. For one, they save development time by using Immutable’s pre-built checkout function, and secondly, they can drive more revenue as conversions drastically improve.
Everyone loves a win-win. Or in this case a win-win-win.
As we know, people have been working on Web3 gaming for well over a year and a half now. So, to better understand what makes Immutable stand out, let’s quickly compare them to a couple of the existing players in the field.
Side note: We will only be looking at other chains that are focused on building Web3 Gaming ecosystems.
Worldwide Asset eXchange, better known as WAX, is a player that has been in this field for a long time. It started as a simple protocol on Ethereum in 2018 later pivoting to other chains such as EOS, to now spinning off and building their gaming-focused layer 1 blockchain.
Just like Immutable, the team at WAX recognized the multi-billion dollar market opportunity for Web3 gaming and decided the best way to capture a portion of this upside is through their own Blockchain.
Currently, They have 20+ games with Alien Worlds & Blockchain Brawlers being the most popular.
There are 4 key aspects to WAX:
- WAX Blockchain
- NFT Marketplace
- Virtual Item trading & generation
All of this is tied together with the WAX token which completes the suite of products on offer by WAX.
Although WAX is a formidable competitor and has done well in terms of creating a good user experience, Immutable offers the same products while providing a superior developer experience.
Immutable’s SDKs are top-tier and allow Web3 native & non-native devs to create intricate games and game economies. Combine this with the network effects of unified liquidity across Immutable and they prove to be a tough challenger to beat.
The Flow Blockchain is one of the more popular chains, primarily due to the mega-hit NBA Topshots NFTs.
Much like WAX, Flow is its own layer 1 blockchain and offers a host of unique features such as:
- Multi-role architecture – Unique node architecture
- Smart contracts written in Cadence
- Developer Ergonomics – Upgradeable smart contracts & built-in logging support to the Flow emulator to maximize developer productivity
- Direct on-ramps
All of this has proved to work well for Flow, but Immutable still inches ahead with its additional product offerings.
For starters, Flow does not have something like the Immutable Passport giving users a seamless experience to everything within the ecosystem. Immutable also has superior liquidity with their unified orderbook allowing multiple projects to flourish under one roof.
Lastly, Immutable is also an L2 which means it still leverages the security of Ethereum, something that isolated layer 1 blockchains cannot do.
Ronin is a chain launched by Sky Mavis, the creator of Axie Infinity, for the sole purpose of being able to scale the Axie Infinity game. It offers near-instant transaction finality and negligibly cheap gas fees which allowed Axie to grow to the heights that it did.
Over $1.3B in revenue has been generated here with over $4B in NFT transaction volume being processed since its launch.
While Ronin provided a great blueprint for what the future of Web3 Gaming could look like, it is still lacking in some departments.
For starters, it doesn’t have an entire ecosystem of 200+ games like Immutable does, targeting different markets across the globe. Secondly, it does not provide as much of an infrastructure as Immutable does.
Immutable offers the SDKs, the passport, the protocol level orderbook, direct on/off-ramp, and the checkout feature to create the most holistic Web 3 gaming infrastructural offering out there in the market.
So while many competitors are good at a few things, Immutable has delivered an end-to-end solution and housed it under one roof to be your one-stop shop for Web3 Gaming.
I know the name of Web3 gaming is slightly tarnished in the eyes of many given what’s happened in the past, and I can’t blame them.
However, this is crypto, things move at lightning speed and new things are being built every day. Just because some people ruined a perfectly good idea for a quick cash grab doesn’t negate the fact that the idea is still good.
What was lacking thus far was an infrastructure layer built specifically for gaming. A layer that connects developers and users by making the experience smooth for both parties.
Immutable has done exactly that with its infrastructure layer and given its efficiency in developing these products I do not doubt that we’re going to see a lot more cool features coming from their camp soon.
As gaming takes off, it’s almost a no-brainer that Immutable will be the foundational layer of the success of this industry. Keep your eyes peeled anon, you won’t want to fade this.