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In the HTML5 game space, there’s no solid pathway to distribution, especially compared to mobile games. You have to work tirelessly to push your game to virality, says Chase Freo, CEO at OP Games. Many HTML5 developers say they just do it for fun.
“But if you think about it, can there be a reality where they can both do it for fun, for passion, and at the same time, earn something with it?” he said at the recent GamesBeat Summit Next panel, “Moving From Web 2 to Web 3 Games. “We’re pushing for that inclusivity, specifically in the HTML5 game space, where that pathway to monetization which favors only a few people, only those who go viral and get really lucky, doesn’t exist.”
For a web game developer struggling to make a living out of making a deal with publishers, up to 90% of revenue usually ends up being publishers adding advertisements to the games, said Andrzej Mazur, founder, Enclave Games.
“Web3 introduces so much potential, so many other options to try and see what happens,” he said. “Maybe we can explore that and see if there are other ways than just sticking with the biggest publishers, because even if the games are published on those portals, right now there are so many web games, so many HTML5 games, that it’s hard to get noticed.”
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Given their years, or even decades, of experience building games, more and more Web2 developers are starting to explore new possibilities and see what they can build using these new Web 3 technologies.
“There’s an essential shift in the approach of designing games in the Web2 fashion versus the Web3 fashion,” said Sebastian Borget, CEO and co-founder, The Sandbox. “That shift is to go player first, community first. You want to design the game to create economic opportunities for your players to own assets, to be engaged with the overall development, and have a feeling of ownership. More than a feeling, actually, but an actual ownership that can be translated into participating in the governance of how the game is run, how it’s operated, and many other aspects of it.”
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Most games are being developed as closed economic systems with the game developer as dictator at the top who sets up everything that happens, Borget explained. Players have little say in how those games should continue to be run, how they should operate, whether the balancing is fun, and other aspects.
“If the only option for monetizing a game is to put ads on it, it means that users are being monetized as the product,” Borget said. “They give up their privacy to be targeted by those ads. Not only are they annoyed, but at the same time, they’re becoming the product themselves for other companies like Facebook, which is creating a vicious cycle where we as users are being progressively deprived of some key elements of our identity and ownership of assets.”
For the past three years, blockchain-based games have showcased the healthiness of the community-driven approach which creates new economic opportunities in many countries, even new jobs, he said.
“They’re games that create more engagement, more attention, and more monetization, where everyone is winning,” he added.
Lars Doucet, co-founder of Level Up Labs, disagreed.
“All this hype about true ownership is BS, unless your app is either open source or you have real, legal, contractual rights that you give to your players,” he said. “Honestly, you can wipe your butt with your governance tokens. If it’s just attached to some smart contract — if there aren’t legal rights that are backing things up, then there are no rights. Why should other people be incentivized to create value in my ecosystem?”
Pure transparency makes ownership sustainable because it allows developers and owners to enforce their rights to an NFT, Freo said. Establishing a decentralized autonomous organization (DAO) to make decisions, versus the owner of the overall space, is another step in the right direction, and is OP’s ultimate goal. To that end, everything the company creates is open source, even the PFP project they released recently. The project raised millions of dollars, he said, and they’re putting it back into the community.
“We’re giving that away to game developers and to open source game engines, because we want them to also explore this space and really figure out exactly how they can make contributions to the things we’re trying to accomplish here,” Freo said. “A lot of the things that we have right now, they may not be perfect, but a lot of it stems from really good intentions, people trying to implement something that is enforceable in terms of ownership.”
Yung points out that possession is nine-tenths of the law — and the the idea behind peer-to-peer transactions originally was that it’s actually all about possession.
“You’re exchanging possession in lieu of ownership, and you can argue over the legal definition of those two, but you are getting possession of another token that’s being sent to you,” he said. “In my mind, that actually puts the onus on the seller or the person who originates the transaction, that they actually have the right to be able to pass that on to you in exchange for what you’re giving them.”
Blockchain brings transparency that no one can contest, unlike private databases that companies operate, Borget said, and the industry is mature enough that ownership of assets is no longer just a nice theory.
“A large number of games with large numbers of users have been proving that the ownership of assets, or at least the belief in the ownership of assets, is working,” Borget said. “It’s working at scale and it’s working globally. It’s offering a real disruption in what those incentives create. Not just economically…but more in the sense of how it’s empowering creativity, community.”
And simply put, neither consumers nor developers should be content with a gaming industry economy where private databases can be hacked, data can be stolen or misused.
He added, “I do think that an economy that doesn’t equally benefit the world, and the game developer as well, without pointing a finger at any particular company — I wonder if we cannot do better in 2021 and in the future of what could be the digital economy and digital entertainment in general.”
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