Welcome to the first installment of our three-part series aimed at game developers interested in diving into the world of Web3. As blockchain technology continues to disrupt various industries, the gaming sector is no exception. This series aims to provide a comprehensive guide to understanding, adopting, and excelling in Web3 gaming.

- Part 1: Introduction to Web3 Gaming Infrastructure (You're here)
- [Part 2: Tools for Web3 Game Development](https://www.openfort.xyz/blog/tools-for-web3-game-development)
- Part 3: Best Practices and Case Studies

Whether you're a seasoned game developer or a newcomer curious about blockchain, this series has something for everyone. Let's start by laying down the foundation in Part 1: Introduction to Web3 Gaming Infrastructure.

## Why Blockchain? Reasoning 101
As a game studio, the first question you must grapple with is, "Why blockchain?" The gaming industry is already a melting pot of various trends—be it the Creator Economy, cloud gaming, or user-generated content. So, diving into blockchain technology isn't a decision to be taken lightly; the stakes are high.

At its core, blockchain technology offers a unique set of advantages that are revolutionizing various sectors, gaming included. These advantages can be categorized into four main pillars: verifiable ownership, immutability, decentralization, and security. 

In the context of gaming, these pillars translate into tangible benefits like transparent game operations, ownership of digital assets, and immutable gaming records.

**- The Importance of Cooperation**
The essence of Community Economics is cooperation. Traditional gaming models are often one-sided and sometimes even exploitative. Blockchain gaming, on the other hand, thrives on mutual benefits. By fostering a cooperative environment, everyone in the ecosystem stands to gain, encapsulating the idea that "a rising tide lifts all boats."

**- The Role of Interoperability**
Interoperability is crucial for the long-term sustainability of Community Economics. It allows for seamless interactions between different blockchain platforms, thereby preventing the formation of isolated ecosystems. This is beneficial for both developers, who can tap into a broader market, and players, who enjoy greater freedom and liquidity for their digital assets.

**- The Power of Composability**
Another noteworthy feature of blockchain is composability, which allows developers to build upon existing applications or smart contracts and players to create traceble content. This accelerates the development process and opens up new possibilities, akin to how compound interest works in finance.

## Onchain vs Offchain
In the evolving domain of web3 gaming, developers face a pivotal decision: whether to build their games on-chain, off-chain, or a hybrid of both. On-chain gaming, leveraging blockchain technology, offers unparalleled digital ownership, transparency, new design opportunities, and innovative monetization models. In contrast, traditional off-chain games rely on centralized servers and databases, with game systems controlled solely by the developer or publisher.

## Key Game Design Elements
### On-Chain Components:

Tokenization: Introducing digital tokens for in-game items, characters, or collectibles, ensuring genuine ownership and facilitating player-led economies.
Decentralized Governance: Implementing DAOs for player involvement in game development decisions, promoting community engagement.
### Off-Chain Components:

Game Mechanics and UI: Maintaining intricate game interactions and user interfaces off-chain due to blockchain limitations in processing speed and scalability.
Gameplay Dynamics: Processing dynamic gameplay elements off-chain to ensure seamless player experiences.

## What Obstacles Players and Developers Face?
### For Players
**1. Complex Onboarding Experience:** Players must navigate through multiple steps including installing browser wallets, potential undergoing Know Your Customer (KYC) verifications, purchasing native tokens, approving obscure transaction requests, and covering gas fees.
**2. Security Risks in Self-Custody:** Players shoulder the burden of safely storing seed phrases, facing the possibility of irreversible loss or compromise.

### For Developers
**1. Navigating Unfamiliar Terrain:** Teams grapple with complex topics like limited computational resources, adversarial circumstances, and smart contract security, which divert their attention from core game development.
**2. Absence of Best Practices:** The fast-paced advancements in technology, frequent updates to protocols, and continuously emerging problem-solving methods result in a volatile landscape.
**3. Balancing Open Economies:** Teams must safeguard the sustainability of token economies without undermining the gaming experience, while also defending against bot activity.
**4. User Outreach and Sustained Engagement:** In a digital realm filled with bots and pseudonymous identities, executing effective cohort analyses and targeted user acquisition (UA) strategies presents a formidable challenge.
**5. Regulatory Conformance:** Adapting to an ever-shifting regulatory landscape poses its own unique set of difficulties.

# Gaming Infraestructure: The Good, The Bad and the Ugly
![Screenshot 2023-09-27 at 17.24.12-min.png](https://strapi-oube.onrender.com/uploads/Screenshot_2023_09_27_at_17_24_12_min_5fcbf519f3.png)

## The Good: Shared Building Blocks
In the realm of blockchain gaming, many of the foundational tools remain consistent with traditional Web2 gaming. Whether it's asset creation, real-time engines, or cloud back-ends, the same companies and tools are often in play. For instance, [Lost Dungeon](lostdungeon.openfort.xyz) utilizes [PlayFab](https://www.openfort.xyz/docs/guides/resources/playfab) and Azure functions on the backend to host the onboarding and game logic. 

These shared building blocks—creative software, scalable servers, and data-driven optimization—are as vital to blockchain games as they are to any Free-To-Play mobile game.

## The Bad: The Complexity of Blockchain Integration
The landscape changes dramatically when you delve into the blockchain-specific aspects of game development. Every feature or decision you make necessitates a uniquely blockchain-oriented piece of software. 

Although the barriers of entry and exiting are being reduced across chains, the first and most critical decision is selecting your first blockchain, which sets the stage for other functionalities like gas fees, dev tooling, and community. 

With time this implementations would be as easy as selecting your right gaming backend. The maturity of teh dev tooling is in progress.

## The Ugly: The Uncertain Coexistence of Web2 and Web3
While Web2 isn't going away anytime soon, its relationship with Web3 is still evolving. Companies like Epic Games are opening up to blockchain, contrasting sharply with Valve's decision to ban NFTs from Steam. This creates a fragmented landscape where Web2 and Web3 technologies coexist but under varying degrees of acceptance and integration. 

At Openfort, we're doing the conscious effort to build integrations with well-known gaming backend providers or identity platform to simply how developers can build backends with Openfort in a blink of an eye. Integration with PlayFab, Firebase or starting with Railway it's today, a reality. 

This article aims to shed light on the importance of Web3 infrastructure in gaming, the challenges faced by players and developers, and how Web3 tools can enhance the Customer Acquisition Cost to Lifetime Value (CAC:LTV) equation.

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What it Takes to Build a Game with Blockchain from 0 to 1: Introduction to Web3 Gaming Infrastructure (Part 1)

Welcome back to the second installment of our three-part series on Web3 gaming. In the first part, we laid the foundation by discussing what Web3 is and why it's a game-changer for the gaming industry. We also touched upon the challenges that come with this new paradigm. If you missed it, you can catch up here.

- [Part 1: Introduction to Web3 Gaming Infrastructure](https://www.openfort.xyz/blog/introduction-to-web3-gaming-infrastructure)
- Part 2: Tools for Web3 Game Development (You are here)
- Part 3: What we Learned and Examples

Building a Web3 game is not just about integrating a blockchain; it's about choosing the right tools and technologies that align with your game's vision. This article aims to guide you through the essential tools you'll need, from blockchains to wallets and beyond.

## Integration Considerations
- Audience Insight: Knowing your target audience is essential. Identify features that resonate with your players, such as seamless login, unique in-game items, or overall gameplay mechanics. Adapt your approach to integrate web3 elements in a way that enhances player experiences without alienating those unfamiliar with blockchain technology.

- Technical Evaluation: Consider the technical capabilities of your chosen blockchain, especially its transaction handling capacity and smart contract execution. Assess whether the blockchain can support the game’s expected transaction volume, and consider the impact of transaction costs on your game's monetization strategy. This assessment is crucial for games with frequent player interactions or those relying on microtransactions​​.

## Aligning Game Goals with Web3 Integration
Game developers should prioritize creating enjoyable and engaging gaming experiences. When integrating web3 elements, consider if each element enhances the game. For example, trading card games might benefit from tokenizing cards and collectibles, whereas complex genres like MMORPGs or FPS might not need every system on-chain.

The key is to strike a balance between leveraging the benefits of blockchain and maintaining the core gameplay experience.


# Choosing a Blockchain
## The Importance of Flexibility
The question of which blockchain to deploy your game on is a common one and largely hinges on your team's objectives. Given the ever-changing blockchain landscape, maintaining flexibility is often the wisest course of action, as it allows for greater adaptability down the line.

## The Tried-and-True: Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine (EVM) stands as the original smart contract platform and boasts widespread developer adoption. Due to its longevity and the Lindy Effect, it's often considered the most future-proof option.

## Emerging Contenders: Aptos, Solana and specialized platforms
However, newer ecosystems like Aptos, Solana and specialized blockchains like [Beam](https://www.openfort.xyz/blog/the-beam-subnet-merit-circle), Treasure or ImmutableX are also worth considering. The choice between these and more established options will depend on the specific needs of your game.

## Custom blockchains: App Chains/Rollups
If your game requires functionalities beyond asset ownership, you might consider launching on a dedicated blockchain, often referred to as an app chain. Options like Polygon Supernets, [Avalanche Subnets](https://www.openfort.xyz/blog/openfort-supports-avalanche-and-subnets), Cosmos, Arbitrum Orbit, and Rollup-as-a-Service platforms like Eclipse or the OP Stack provide the flexibility to tailor your infrastructure to specific needs, such as native tokens or ultrafast transaction finality.

## Financial Incentives: Grants and Support
Many blockchain platforms offer grants to incentivize development. While this can be appealing, it's crucial not to let short-term financial support overshadow long-term strategic considerations.

As the blockchain gaming space matures, we anticipate a trend toward consolidation and commodification. While the initial wave of Web3 games targeted crypto-native communities, the next phase will aim for broader appeal, necessitating platforms capable of serving mainstream audiences. 

EVM chains, with their extensive developer tools and liquidity, are well-positioned for this. However, it remains prudent to keep options open and only commit to a specific blockchain when absolutely necessary, keeping the developer experience as a key consideration.

## Onboarding Players to your Game

Onboarding is the first real test of your game's user experience. The process should be as frictionless as possible, accommodating both web3 enthusiasts and web2 newcomers. 

Consider using social logins for the latter, and ensure that the onboarding process educates new users about the blockchain elements they will encounter, such as gas fees and tokens. You can use existing providers like Firebase, Dynamic, [Web3auth](https://www.openfort.xyz/blog/openfort-and-web3auth-partnership), [Particle Network](https://www.openfort.xyz/blog/openfort-and-particle-network-partnership), build your own, or simply use Openfort's one. 

The important question here is: how is the newly created private key (pk) managed for non-crypto users? 
> Note: If the user come with their own wallet already (ie. Metamask, Dawn Wallets, Family, etc.) it's already self-custodial. 

- Non-custodial: Use an **MPC provider** to split the private key into parts (the key is shared and can only be executed with a majority), or store the pk on an **KMS** where only the user can control them. 
- Custodial: Storing the keys in your game's **KMS** or other external KMS providers.

### How to think about wallets
![Untitled-2023-09-01-1733.svg](https://strapi-oube.onrender.com/uploads/Untitled_2023_09_01_1733_2856ad9550.svg)

The wallet is the user's primary touchpoint with the blockchain and, unfortunately, the main source of friction. The ideal game wallet should be invisible to the user. 

It should handle onboarding smoothly and offer features like programmability for recovery and session keys, as well as gasless transactions and fiat onramps. The aim is to minimize friction while maximizing usability and security. 

Luckily, we're now deep into the UX concept of the blockchain, and with concepts like smart accounts (technically called account abstraction - erc4337, hello [Openfort](https://www.openfort.xyz/)!), we can finally hide this complexity from the end user. 

- Setting time-based spending limits
- Human-readable messages when requesting user signatures
- Defining access controls – whitelisting contract functions your account can call
- Creating session keys – removing the need for users to sign every transaction
- Gas abstraction – allowing users to pay gas in any token
- Gasless transactions – the studio or another entity, separate from the user, can subsidize gas fees
- Batching transactions to improve UX – e.g., rolling a uniswap approval and swap into a single transaction

> While the standard is a public good, the innovation happens at the implementation level. In here Openfort offers a server side solution that makes sure to manage nonces, optimize gas fees to ensure transactions reach the blockchain, prioritize transactions, handle retries, and more optimizations.

The best part is the diverse options when it comes to [smart wallets](https://www.openfort.xyz/docs/guides/smart-accounts/types). The type of smart account you can use range from Recoverable accounts, [Token Bound Accounts - erc6551](https://www.openfort.xyz/blog/technical-dive-combining-token-bound-account-tba-with-account-abstraction-aa), etc.)

### Improving the Gameplay Experience (GX)

![Untitled-2023-09-01-1733 (1).svg](https://strapi-oube.onrender.com/uploads/Untitled_2023_09_01_1733_1_3c335856d4.svg)

Once onboard, the player's experience should be seamless. This involves handling gas fees, transaction priorities, and even offering fiat onramps for purchasing in-game assets. The idea is to make the blockchain elements as unobtrusive as possible, allowing players to focus on the game.

Imagine building your own payment stack and making sure the user's purchase hits your bank account while also dealing with their credit cards. Well, that's what we do on the blockchain, and that's why a single API call makes it feel like magic. 

So before, we solved the seed phrase when onboarding the user, but now we solve the need for network tokens when interacting with the blockchain and the need to verify every single transaction we do onchain (because sometimes, not all transactions have a monetary value but rather we use them to build a gaming profile onchain). 

How do we solve them? Starting with [gas sponsorhip](https://www.openfort.xyz/blog/technical-dive-gas-sponsorship) and [session keys](https://www.openfort.xyz/blog/technical-dive-session-keys).

## Monetization: ARPU and LTV

crypto can not only increase ARPU Average Revenue Per Customer but preliminary data are already showing that it can increase loyalty and stickiness which means increasing retention to D30 and way way beyond. This means your average LTV will increase wit the right designs.


![RECOVERY1.svg](https://strapi-oube.onrender.com/uploads/RECOVERY_1_4b00af0f7d.svg)

## In-app purchases (IAP) and traditional payment railways
Purchases via stores like the Apple Store, Google Play, or other platforms like Steam, Epic Games, etc. are a traditional way to monetize the game. They have been the sole source of income for the most part. 

Many are looking at blockchain games differently and setting their TOS and policies in a friendly way for games to start incorporating blockchain technology into their gameplay while, of course, respecting the middleman fee.

### In-game shops to sell assets (NFTs)
The in-game shop is not just a revenue stream, but also a feature that can make or break the player experience. It should offer a smooth, intuitive interface for players to buy and own in-game assets, and it will be a main source of revenue for your in-game economy. 

## Gaming Marketplaces
When it comes to marketplaces, you have two main options: external marketplaces like OpenSea, which offer the advantage of network effects, and in-game marketplaces, which allow for more complex, game-specific integrations. 

The choice of having one or both will depend on your game's specific needs and the kind of player behavior you wish to encourage. But having an ingame marketplace has two major advantages: 1) Owning the player experience on your own platform; and 2) Forcing gaming royalties for the in-game assets.

PS. Are you thinking about making a casual web3 game? Then, we thought about how [ingame ads](https://www.openfort.xyz/blog/casual-gaming-in-the-context-of-web3) would look like in web3.

## Using Game Launchers/Aggregators
### The Rise of Web3-Native Launchers
With Valve's decision to ban NFTs and cryptocurrencies on Steam, Web3 game studios are exploring alternative platforms like Epic Games Store (EGS). While EGS provides access to a large traditional gamer base, it may lack specialized Web3 features. 

Launchers will be pivotal in shaping the Web3 gaming UX. Web3-native launchers like Elixir are a good way for games to reduce their CAC while increasing the optionality and network effects of getting new players to view and play their game.

### Tokenized Gaming Ecosystems
Gaming ecosystems like [Merit Circle](https://meritcircle.io/) or TreasureDAO are leveraging token economies to incentivize both studios and players. Tokenized ecosystems offer a unique, arcade-like digital experience that encourages cross-promotion and game discovery. 

## How to Think About (Web3) Player Acquisition
While the traditional gaming marketing playbook has been at large discussed during years (ie. perfomance marketing, etc.), in the Web3 gaming landscape where traditional metrics like LTV (Lifetime Value) and CAC (Customer Acquisition Cost) are still evolving, focusing on low-cost, crypto-native acquisition strategies is crucial. 

One effective starting point is your game's existing **community**. Thanks to crypto-economics, you can align incentives to transform early community members into your game's most passionate advocates and highest spenders, akin to the "golden cohorts" in traditional gaming.

The Web3 audience is often wary of conventional advertising due to the prevalence of scams in the space. **Partnerships** offer a more organic route to gain visibility. Guild collaborations, for instance, can assist in asset distribution, liquidity provision, marketing campaigns, esports events, and content creation. These partnerships not only expand your reach but also validate your game's credibility.

The rise of gaming and IP (**Intellectual Property**) collaborations in Web3 is noteworthy. Interoperability in Web3 allows game assets to be versatile across multiple projects. 

**Airdrops**, the distribution of free tokens to specific wallet addresses, may seem like a cost-effective strategy, but their actual impact is still up for debate. While the only immediate cost is the transaction fee, the long-term effectiveness of this method remains uncertain.

## Takeaways
The Web3 landscape is in constant flux, with new business models appearing and disappearing rapidly. It's vital for founders to remain flexible and aware of platform risks. As the Web3 infrastructure continues to evolve, so will the strategies for player acquisition. Being adaptable and staying updated on industry trends will be key to navigating this ever-changing environment.

This article aims to guide you through the essential tools you'll need, from blockchains to wallets and beyond.

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What it Takes to Build a Game with Blockchain from 0 to 1: Tools for Web3 Game Development (Part 2)

The gaming industry is diverse, ranging from AAA games to casual games. AAA games, known for their high development and marketing costs, have dominated the initial phase of web3 games. These games appeal to core PC and console gamers who are typically more tech-savvy and willing to spend more. 

However, the high cost and complexity of developing AAA games have led to a shift in focus towards casual games, which are cheaper to produce and have a broader, more diverse audience.

Could the blockchain gaming space take advantage of it?
## The Casual Game Market
Casual games are relatively inexpensive to create, can be distributed on any platform, and have a promising future with [$25B in revenue forecasted by 2027](https://www.statista.com/outlook/dmo/app/games/casual-games/worldwide). The average session length for casual games is 5-7 minutes, and the demographic skews older, with social casino games being primarily played by middle-aged women. 

Despite these advantages, casual games face challenges in monetization, with low ARPPUs and a conversion rate amongst the lowest of all game categories at ~1%. Web3 could increase the LTV for those that convert but there is still a 99% gamers who won't convert. 

That's mostly the reason why most casual and hyper casual games monetize via ads. 
## Setting the Foundation for Casual Web3 Gaming

![Custodianship.svg](https://blog-cms.openfort.xyz/uploads/Custodianship_35b2f716a8.svg)

### Onboarding
The onboarding process for web3 games has become significantly easier over time. Initially, the process was complex and time-consuming, requiring players to navigate through multiple steps to acquire crypto and buy items. This was particularly challenging for casual gamers, who typically have shorter gaming sessions and may not be as tech-savvy as core gamers.

However, with the advent of account abstraction and fiat on-ramps, the onboarding process has become much smoother. Players can now join and buy into web3 games as easily as connecting with a social login. This is crucial for casual games, as it allows users to get started quickly and easily.

Moreover, this smoother onboarding process opens up the potential for reaching crypto-naive players. These are players who have spent years spending in games without ever being able to earn back some of their losses. By offering these players the potential to earn back some of their money, web3 games could tap into a currently untapped audience.
### In-Game Ads
In-game advertising has traditionally been a challenge for game developers. Banner ads and interstitial ads were often seen as obtrusive and detracted from the gaming experience. However, the in-game ad tech world has changed considerably in recent years.

Brands have recognized the value of gaming's 3 billion players and have invested major ad dollars into the space. New companies have emerged to make the ad experience more native. For example, platforms like Anzu allow developers to build ad real estate into the game, such as corporate logos on racing cars or branded tattoos on avatars. This allows ads to be integrated seamlessly into the game without disrupting gameplay.

Casual games are particularly well-suited for in-game ads due to their short session lengths and the likelihood that they are played on devices with usable browsers. This makes it easier for users to follow an ad link and convert. In fact, data shows that gamers look at integrated game ads twice as long as they do other kinds of ads, leading to better engagement and ad revenue.

With the future of in-game advertising looking promising, estimated to reach [$20B by 2032](https://www.globenewswire.com/en/news-release/2023/05/17/2671210/0/en/In-Game-Advertising-Market-to-reach-USD-20-7-Billion-with-a-12-30-CAGR-by-2032-Report-by-Market-Research-Future-MRFR.html), it presents a significant opportunity for casual web3 games. By integrating seamless in-game ads, developers can enhance the gaming experience for players while also driving revenue.

If you have more questions/ideas/queries, join our [Developer Discord](https://discord.com/invite/t7x7hwkJF4) and let us know there. Furthermore, you can follow us on [Twitter](https://twitter.com/openfortxyz) for our updates as we keep shipping. 

The opportunity of casual and hyper casual web3 gaming sustainable in the future by exploring novel approaches to in-game ads monetization.

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Casual Gaming in the Context of Web3

As the co-founder of a platform deeply entrenched in blockchain technology and gaming, my recent trip to Asia for various conferences was nothing short of enlightening. The region is a hotbed for innovation in both sectors, and the insights gleaned from these events are invaluable. 

In this article, I'll share our key takeaways, focusing on why Asia is poised to lead in Web3 gaming, impressions from the conferences, and intriguing conversations around innovation and business models.

## Why Asia Will Solve Web3 Gaming First
**- Pragmatic Utility Over Ideology**
In Asia, the focus is on the practical applications of Web3 in gaming. Companies like Nexon and NetEase are more concerned with how Web3 can solve real-world problems, such as enhancing player engagement and creating new revenue streams, rather than getting entangled in ideological debates about decentralization.

**- Learning from the Past**
Asian companies have a history of adapting technology to tackle industry challenges. For instance, Nexon pioneered the Free to Play model as a strategic response to piracy. Today, companies like Gumi and LINE are embracing Web3 to tackle the gray market in digital assets.

**- Strength in Adaptability**
The rapid iteration and focus on economic design by Asian developers make them the frontrunners in the Web3 gaming landscape. For example, the success of games like "Genshin Impact" from miHoYo demonstrates how well Asian companies can adapt to new technologies and market demands.

![IMG_3982 1.svg](https://strapi-oube.onrender.com/uploads/IMG_3982_1_3ca73d6b1c.svg)

## Takeaways and Impressions Over the Conferences
**- Investor Caution**
The investment climate in Asia is marked by a cautious 'wait-and-see' approach. VentureCapital firms are carefully evaluating the macroeconomic landscape before making any significant moves.

**- Web3 Skepticism**
The initial fervor around Web3 technologies like blockchain and NFTs has cooled. Both developers and investors are adopting a more measured approach, as seen in the cautious optimism of companies like Animoca Brands.

**- AI Takes a Backseat**
Contrary to expectations, AI was not a hot topic at conferences like Korea Blockchain Week and GameStart Asia. This could signal a shift in focus within the gaming industry or perhaps a momentary pause to reassess its applications.

**- Genre Fusion**
One of the most exciting trends is the blending of game elements from different genres. Games like "PUBG Mobile" are incorporating elements of survival and battle royale, signaling creative innovation in the industry.

**- Narrative Importance**
There's a renewed focus on storytelling and world-building in game development. Companies like Square Enix are investing heavily in narrative-driven games, indicating a strong market demand for compelling stories.

## Conversation Topics Around Innovation and Business Models
**- Tech as a Catalyst**
Groundbreaking technologies act as the initial spark for industry evolution. Blockchain and AI are often cited as transformative technologies, but it's companies like Samsung and Sony that are turning these technologies into practical applications.

**- Revenue Reimagined**
Once the technology sets the stage, the next phase involves rethinking business models. Companies like DeNA and CyberAgent are pioneering new monetization strategies that align with these new technological capabilities.

**- Gameplay Evolution**
The final stage in this cycle is the birth of novel games that fully leverage these new business models. Games like "Mobile Legends" from Moonton and "Honor of Kings" from Tencent are prime examples of how the industry is transforming to offer players new experiences.

## Takeaways
Our journey through Asia has been an eye-opener, revealing the region's potential to lead in Web3 gaming and beyond. The conferences were a treasure trove of insights, and the conversations were deeply enriching. 

As we continue to navigate the ever-evolving landscapes of blockchain and gaming, these learnings will undoubtedly guide our way.


From investor caution to Web3 skepticism, find out what's shaping the future of gaming and blockchain technology in Asia. Our conference takeaways offer a glimpse into what's next.




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Unlocking Web3 Gaming: Lessons from Asia's Tech Hubs

There are many opportunities that new models like "free-to-own" and "play-to-earn" models can offer, but currently, most of the available projects simply don't live up to their legacy counterparts. This has led to many doubting that this new generation of games can penetrate mainstream interest. However, this may be short-sighted. It's not the first time that a new technology has been dismissed based on its earliest examples.

Web3 games incorporate blockchain elements, including smart contracts and non-fungible tokens (NFTs), to create virtual assets that can be verifiably owned and traded by players without the intervention of a third party. This innovation puts a high degree of power back into players' hands.

## Early productions don't define the future potential

While many Web3 titles have failed to galvanize their fanbase without their once-lucrative financial boons, this has led to many detractors of the blockchain gaming genre who assume that current offerings are the zenith of what's possible, with the sector dismissed as a fad. However, looking at the recent past -particularly the monolithic rise of mobile gaming- demonstrates that the earliest products should not define future potential.

The classic game Snake was among the most popular early mobile titles when Nokia ported it to its line of mobile phones, with millions playing worldwide. At that point in history, anybody using their phone for gaming could only be called a casual gamer, and a similar story emerged as what we are seeing today.

There are many parallels between the rise of mobile gaming and what we see now. What killer apps may break open the scene to a larger audience remains to be seen, but in 10 years, it's likely that these types of titles will simply exist alongside their home console and mobile brethren.

## How "Blockchain Gaming" got started

![Diagrams.png](https://blog-cms.openfort.xyz/uploads/Diagrams_fd6303fa69.png)

From Kryptokitties and their lack of user engagement (despite having breeding capacity) to P2E with Axie, onboarding thousands of new players to the upcoming third generation of games will start bringing in the larger mainstream gaming community as production value increasingly aligns with traditional AAA games (together with the economic incentives that come with play-to-earn).

The third generation of games is here with the next level free-to-own. Free-to-play started because of piracy. It was a first step to distribution, engagement, etc. then you start monetizing by buying upgrades and items, etc. and finally you are locked in the system with assets you don't really own. 

The next evolution, proposed by [Gabriel Leydon](https://twitter.com/gabrielleydon) is free-to-own, which is free with a step further. It's not only free to play, but you can also own items that have value even before playing the game. Essentially, this extracts the items that everyone is already paying for, with $120B of items sold every year on mobile phones alone. 

## Evolution beyond free-to-play and ownership of in-game items

Players are incentivized to own the item, so they now own the item and can develop further value to it. Essentially, this democratises the free-to-play economy and gives it out for free.

But why stop here? Because of the crypto programmability, you can do pretty much anything with payments, new token types, new timeframes, variables, etc. It's a mistake to look at today's state of crypto and think that's the only thing we'll be able to do. It's an imagination problem.

The world we're going to is not limited to digital land availability, but rather 3M NFTs given out for free to 3M different wallets. What will be the intrinsic value of these NFTs? Probably zero! (everyone is going to have one for free!), but the most successful ones will be the most desired ones despite the fact that there are millions of them.

Virtual items cost literally zero to create, why wouldn't you just give this for free? Attention is the ultimate currency! People expect they'll need some token to buy some stuff, but actually, they'll get something for free and eventually move to crypto. That's the most probable end-game.

If you have more questions/ideas/queries, join our [Developer Discord](https://discord.com/invite/t7x7hwkJF4) and let us know there. Furthermore, you can follow us on [Twitter](https://twitter.com/openfortxyz) for our updates as we keep shipping.

Explore the potential of Web3 games, which incorporate blockchain elements such as smart contracts and NFTs, to disrupt the traditional gaming industry. It challenges the assumption that current offerings are the zenith of what's possible, drawing parallels with the early days of mobile gaming.

Openfort blog

What it Takes to Build a Game with Blockchain from 0 to 1: Introduction to Web3 Gaming Infrastructure (Part 1)

What it Takes to Build a Game with Blockchain from 0 to 1: Introduction to Web3 Gaming Infrastructure (Part 1)

What it Takes to Build a Game with Blockchain from 0 to 1: Tools for Web3 Game Development (Part 2)

Casual Gaming in the Context of Web3

Unlocking Web3 Gaming: Lessons from Asia's Tech Hubs

Beyond the Early Game Examples and the Rise of New Categories