NFTs
Blockchain Gaming Moves From NFTs and P2E to Become a Driver of Web3 Adoption in 2024
Blockchain gaming was the biggest driver of Web3 adoption in Q1 2024, commanding a 30% market share and attracting over 2.1 million unique active wallets daily.
Additionally, as Drake Star Partners’ last report Highlights: Private investment in gaming projects surged in Q1 2024, totaling $2.4 billion across 188+ deals. Early-stage blockchain gaming companies secured over 40% of these placements from VCs such as BITKRAFT, Andreessen Horowitz, Griffin Gaming, Play Ventures, and Vgames. Notably, the funding surge came at a time when layoffs in finance and technology have hit 10 month highs with more than 39,000 people losing their jobs Black stone, Fidelityand even Polygon Labs.
Capital inflows continued in Q3 2024, with VCs and institutions investing more 988 million dollars in Web3 gaming projects in April. This was a record number since January 2021. Notably, a16z invested $600 million in this initiative, taking the organization’s dedicated support for gaming ventures to $1.2 billion.
These numbers reveal how gaming has become a key sector for Web3, providing employment and driving adoption. It is an engine for economic recovery and resilience in the face of market-led adversity, earning investor confidence, enabling new revenue streams and strengthening communities.
According to Playbux CEO, Sarun Vichayabhai, said: “Overcoming its hyper-fixation on NFTs, P2E, and other unsustainable economic models is a key reason for the recent performance and growth of Web3 gaming. There is an increasing focus on creating demand and supply. So new-age projects are developing real revenue streams and prioritizing utility in sectors such as next-generation entertainment platforms.”
Meanwhile, projects like Decentralized gaming income (DGI) aims to democratize game development using cutting-edge AI innovations. They in partnership with an AI engine to create a ChatGPT-style launchpad where anyone can create an interactive game by describing assets, interactions, and behaviors through natural language prompts.
All of this is happening alongside a steady expansion of the commercial gaming space around the world. Analysts and researchers from PlayUSA.com are discussing the responsible development and use of gaming algorithms, while major providers such as IGT, Aristocrat, White Hat Studiosetc. are expanding into online gaming. This signals solid macro trends in favor of digital gaming and the blockchain gaming space is much more likely to benefit from this scenario.
Additionally, new revenue streams and passive income channels are also being created to help grassroots users capitalize on the industry’s growth with minimal volatility and other market-driven risks. Improving core aspects like performance or user experience allows blockchain games to better compete with popular legacy titles, while also shaping the future of decentralized entertainment.
The rise of dedicated hardware
Although a future of digital-only games seems inevitable, there is no denying how crucial hardware innovations have been to the mass adoption of video games, which are expected to generate more than US$282 billion in 2024. From development scope to performance, accessibility and overall user experience, hardware is a key enabler for digital gaming. Therefore, it commands a market size of US$161 billion in 2024 and is expected to reach $241 billion by 2029.
Platforms like PlayStation or Xbox have transformed gaming from a niche passion into a mainstream phenomenon. Following Moore’s LawGaming hardware has become smaller and more powerful over time, putting exciting games into people’s pockets and getting them hooked. More importantly, the emergence of dedicated hardware optimized for gaming tasks, high-fidelity graphics rendering, etc. has dramatically expanded the scope of what is possible for game creators, and set new standards for game development.
Web3 games will reap similar benefits from dedicated hardware, as they are currently at a stage where traditional games were in the late 90s and early 2000s. z3rdCEO and co-founder of Ordz Gamesnotes, “Dedicated hardware is crucial because it will allow Web3 game developers to tweak parameters like consensus mechanisms or governance models and integrate new features in a controlled environment. Additionally, innovations like Ordinals and Runes have made it possible for off-chain gaming hardware to securely interact with on-chain structures and metadata, opening up an avenue to combine the best of both worlds.”
Additionally, controllers and other hardware designed specifically for Web3 gaming will enable immersive experiences and intuitive interactions. This, in turn, will help attract a wider audience, including both hardcore gamers and institutions waiting on the sidelines.
Community-led gaming ecosystems
Gaming is generally more fun with other people than alone, such as popular MMORPGs and factions or guilds in titles like World of Warcraft illustrate. Players collaborate, strategize, and grow their in-game tribes, forming a connected social layer across fragmented worlds.
However, centralized legacy game architectures do not support meaningful community formation, much less allow grassroots users to control game logic. Given their pull-pull models, it is not in their economic or commercial interests to do so. On the contrary, community orientation and empowerment are part of the ethos of Web3 games, which is becoming more entrenched and prominent as the industry matures.
As digital games are among the main targets For DDoS attacks in Q1 2024, aware gamers are expected to prioritize security, privacy, transparency, and, above all, community support. Robust blockchain security architectures can help meet this demand, while also fostering collaborative, fair, and safe gaming environments.
In Websea COO Herbert Sim says, “Web3 gaming projects should build holistic ecosystems rather than standalone products. This will increase accessibility, engagement, and grassroots retention, driving mass adoption. New revenue streams and sustainable incentive mechanisms to empower every member of the gaming community, from developers to creators, players, and passive investors.”
Furthermore, NFTs and collectibles are no longer the only thing Web3 gaming has to offer. Projects like DEAR DEAR, Inc. are pioneering new forms of interaction by transforming blockchain constraints into storytelling and gameplay elements that emphasize emotional connections and collaborative competition. DEAR uses tokens not just as financial assets, but as representations of emotions and relationships, expanding the scope of what Web3 games can offer. This approach not only enriches the player experience, but also opens up new avenues for incentivization and value creation within the gaming community.
Web3 Growth Specialist, Bilal bin Saqib MBE says, “The early years in new industries are always about trial and error. History tells us that gamification has always accelerated adoption and web3 games will tell a similar story. Concepts like P2E, Move-to-Earn and Social Gaming are attracting web2 gamers to the web3 ecosystem and this is just the beginning. With improved user experience and rewards systems and an increasingly community-led approach, the sky is the limit for the gaming space.”
Freedom and inclusion are essential in today’s world. Web3 has played a role in promising and delivering in these areas, especially in the last two years. As one of the fastest-growing, utility-driven sectors in the blockchain space, it will be critical to an equitable, community-led future.