The web3 gaming market is expanding rapidly, and traditional web2 studios are taking notice. According to a report by Coingecko, 29 of the world's 40 largest gaming companies are investing in web3, whether by developing their own blockchain games, investing in web3 gaming projects, or hiring blockchain experts.

This article examines the potential impact of web3 on gaming ecosystems, the challenges it may encounter, and the transformative opportunities it offers to gamers, developers, and the industry at large. We will also cover some of the key reasons why top gaming studios are capitalizing on blockchain gaming.

Why Top Studios Are Embracing Web3 Gaming

Is Web3 The Future of Gaming?

In recent years, the convergence of blockchain technology and gaming has generated significant discussion and speculation about the gaming industry's future. With the rise of web3, a decentralized internet infrastructure founded on blockchain principles, enthusiasts and industry experts are exploring whether this paradigm shift could transform gaming experiences.

Blockchain gaming (also called crypto or web3 gaming) promises a decentralized, transparent, and immersive gaming environment, enabling players to own in-game assets, experience true digital scarcity, and enjoy unparalleled security. As blockchain technology evolves and gains momentum, the pivotal question is: Is web3 the future of gaming?

Over 70% of Top Web2 Studios are Involved in Web3

A recent analysis by Coingecko reveals that 29 of the world's 40 largest gaming companies are actively exploring web3 technologies. This includes seven studios developing web3 games in-house, while others are investing in web3 gaming projects, blockchain game development, or hiring for blockchain-related positions.

Notable companies involved in this shift include Take-Two Interactive (Sugartown), Nexon (Maplestory), Bandai Namco (RYUZO), Konami (Project Zircon), Krafton (Migaloo), Square Enix (Symbiogenesis), Ubisoft (Champions Tactics), SEGA (Battle of Three Kingdoms), and CCP Games (Project Awakening). Other prominent names in the space include Sony Playstation, The Pokémon Company, Epic Games, and more.

Top Web2 Gaming Companies Making Blockchain Games

As leading game studios embrace web3 gaming, the industry is making significant progress by focusing on substance over fleeting trends. This approach is leading to enhanced gaming experiences that emphasize core gameplay mechanics.

With platforms like Immutable simplifying the development, distribution, and monetization processes, studios can focus on creating high-quality games. Here are three key reasons why top gaming studios are capitalizing on blockchain gaming.

Top Game Companies with Web3 Presence

Massive Market Opportunity

Game studios recognize the enormous potential of the web3 gaming market. Projections estimate growth from $4.6 billion in 2022 to $65.7 billion by 2027. Robbie Ferguson, co-founder and President of Immutable emphasized at the Token2049 conference that the industry is underestimating web3 gaming's potential. "Everyone is still massively underestimating how big web3 gaming is going to be."

Immutable's collaboration with King River Capital and Polygon Labs to launch a $100 million web3 gaming fund illustrates this optimism. The fund aims to support developers and studios in transitioning to web3 gaming, with over 330 games currently building on Immutable and nearly 40% set to launch in 2024. In the past four years, almost $20 billion has been invested in games and gaming platforms, reflecting a significant shift in the industry. The growing player base further underscores this market's promise.

9x Growth in Q1 of 2024 for IMX

Digital Ownership, Distribution, and Monetization Models

Web3 gaming aligns the incentives of players and publishers better than traditional gaming models, which often burden players with unfavorable monetization schemes. Robbie Ferguson points out that web3 gaming offers true digital asset ownership, allowing players to benefit from their investments.

"Everyone hated free-to-play when it first came out. They revolted against any new form of modernization, and quite frankly, why shouldn't they because it's often been at their [the gamer's] expense." 

Immutable Passport and Marketplace

For instance, traditional games like Magic: The Gathering miss out on secondary market profits. Web3 gaming enables developers to earn a percentage of every transaction, introducing new monetization mechanisms through secondary marketplaces and royalties. Blockchain and NFT technology facilitate this, potentially expanding the gaming industry's value from $150 billion to trillions.

However, developing web3 games can be complex and expensive. Immutable simplifies this process with powerful tools, features, and a robust ecosystem for building and launching high-quality web3 games efficiently. Its end-to-end solution, including APIs and SDKs, lets developers focus on creating engaging gameplay without needing extensive blockchain expertise.

Immutable zkEVM Growth: Monthy Active Users

Increased Player Retention and Engagement

Retaining players is crucial for gaming success, and web3 gaming provides more tools to ensure players remain engaged. Immutable’s flagship games, Gods Unchained and Guild of Guardians, demonstrate this. Traditional games consider a monthly average revenue per user (ARPU) of $20-30 high, while new titles might reach $80-120 post-release. In contrast, Immutable's data from Gods Unchained shows web3 gamers transact over $130 monthly, sustained over the years, with 24% more daily playtime than top mobile games.

Immutable Data from Gods Unchained 

Overcoming Challenges and Barriers to Entry

Onboarding has been a significant barrier to mass web3 gaming adoption. However, Immutable Passport, an authentication solution, simplifies onboarding, offering players a secure digital wallet, fraud protection, and seamless authentication across web3 games and marketplaces. This ease of use is driving growth and proving attractive to game studios.

Robbie predicts that over 10 million gamers will be in web3 games by the end of this year. However, despite this growth trajectory, there are notable barriers to achieving mainstream adoption. Robbie highlights two primary challenges that have impeded the progress of web3 gaming:

"The main blockers to web3 gaming adoption have been infrastructure readiness (wallet creation) and content readiness (game development time). However, with the launch of products like Immutable Passport, onboarding players is becoming much easier. Additionally, the funding that went into web3 gaming over the past few years is starting to pay off, with high-quality games getting published."

Over 1 Million Immutble Passport Signups

Immutable is actively addressing these obstacles with solutions such as Immutable Passport, which has garnered over 1 million signups, facilitating seamless player onboarding. "To be clear, web3 isn't a genre. It's not a vertical, it's a horizontal. Every multiplayer game should become web3 over time. Hyper casual games have flocked to web3 because the monetization structure is better."

Final Thoughts

Web3 gaming is set to disrupt the $200 billion-plus gaming industry, offering significant market opportunities. These findings underscore the transformative potential of blockchain gaming. The innovative digital ownership, and monetization models, coupled with enhanced player retention and engagement, highlight why blockchain technology is becoming integral to the gaming industry's evolution.

By aligning the interests of players and developers and simplifying the development process, platforms like Immutable are paving the way for widespread adoption of web3 gaming. This paradigm shift not only promises substantial financial growth but also revolutionizes how games are developed, distributed, and experienced, making blockchain gaming particularly relevant and impactful in the current gaming landscape. This article was inspired by an original blog post, you can read the original write-up here for more information.