What are the main reasons people are currently giving up on Web3 gaming? How does the article compare the rise and fall of Web3 gaming to past technological shifts? What aspects of player ownership in Web3 gaming differentiate it from traditional gaming experiences? How has the evolution of virtual economies under Web3 gaming been illustrated by specific examples like Axie Infinity and Pixels? What challenges does Web3 gaming still face despite the progress mentioned in the article?
Right now, my X feed is full of people who are giving up on Web3 gaming. I get it. Over $12 billion of venture capital funding has gone into it since 2020 and they haven’t seen the sort of breakout success that many expected. Even the best games haven’t reached anything close to mainstream scale. Token prices are down. Studios are shutting down. And everyone is exhausted.
But measuring Web3 gaming by token prices alone is like calling the internet a failure because of the dot-com crash — it ignores how far the technology has come and where it’s headed. It’s missing the real story.
At its core, Web3 gaming is about giving players real ownership — not just of the in-game items that they buy and earn, but also their identities and achievements. In traditional games, players invest time, effort and money into digital assets that ultimately belong to the publisher. Web3 changes that. By putting assets on-chain, players can truly own what they earn—whether that’s tradable items like weapons or land, or non-transferable badges of reputation, guild history, or verifiable skill. It’s not just about buying and selling stuff — it’s about agency, persistence, and getting proper recognition for what you’ve built and what is really yours in the ecosystem.
The concept isn’t new. Players have wanted more control over their in-game assets for years. Look at the massive markets for CS:GO skins or World of Warcraft gold. But until now, those economies have been fragmented, restricted, or at risk of being shut down if a centralized publisher decides to shut it down or change the rules. Web3 makes these economies open, interoperable, player-owned, and player-driven.
Ownership has always been the foundation of Web3 gaming, and play-to-earn was an experimental model that showed the potential for open and permissionless virtual economies on blockchain. Now, the industry is evolving with a stronger focus on sustainable economies and better tokenomics, deeper gameplay, and long-term player engagement.
But if you’re comparing Web3 gaming to Web2 gaming, you’ll be disappointed. Traditional gaming has had decades to fine-tune game design, build massive player bases, and develop business models that work, while Web3 gaming is still in its experimental phase. Sure, billions of dollars of investment can speed things up, but throwing money at a brand new category doesn’t magically buy it a track record or instantly create new games that people love.
I’ve been making games for over 20 years and I have seen every major shift get dismissed before it took over. Nobody believed mobile gaming could compete with PCs or consoles until it became bigger than both. Free-to-play was called a scam until it made more money and reached more players than ever before. Esports was a joke until stadiums sold out and prize pools hit millions. Digital skins were “worthless” before they became a multi-billion dollar market.
And now, Web3 gaming is at that same inflection point.
When I first heard about blockchain in 2018, everyone I knew in FinTech was talking about it. So of course I thought it was boring and I ignored it. It wasn’t until I learned about CryptoKitties that I actually took notice. When I saw people collecting, trading, and actually owning these cute on-chain cats, that’s when I got excited because I knew they weren’t like other in-game assets. CryptoKitties were digital things that no one could take away from you. As someone who’s spent their life grinding in games and their career convincing others to grind the same — without really getting anything for it — that idea of digital ownership gave me a whole new way to think.
So I went all-in on blockchain games. But 2018 and 2019 were really tough times. Pretty much no one else cared back then. There was no support, no real funding, no clear idea of what these games could be beyond speculation, and (outside of a handful of believers) there was very little conviction. The market was in a deep bear cycle, and many teams either gave up or ran out of money before they could launch. Still, some of us kept building. We stayed lean, experimented, and learned everything the hard way. It feels similarly bad now, but not as bad as it was then. Looking back, I’m so glad we didn’t pack it in when success was just around the corner.
When Axie Infinity broke through in 2021, everything changed. Web3 founders like Jeffrey “Jihoz” Zirlin of Sky Mavis, Yat Siu of Animoca Brands, Sebastien Borget of The Sandbox, and I went from being called crazy to visionary overnight. Suddenly, we were speaking on the main stage at conferences where we used to watch in the audience. We made news headlines and “Most Influential” lists. Investors who ignored our emails were asking how much they could put in. My email inbox filled up with fundraising decks pitching the next YGG.
Then in 2022, the market crashed, and just as quickly, we went back to being crazy. But that never really bothered me because crazy people are the ones who make big things happen.
Now, everyone’s asking: When is the next big Web3 game? The answer is this: good games take time. And if you look past the red candles to take notice of what exists already today, you’ll see how much progress we’ve made since our industry was seeded in 2018:
In 2020, Axie Infinity had fewer than 500 daily players. Today, Ronin — the blockchain it built — has millions of active users, with 17 new games launched, and 134% growth in NFT trading volume in 2024 compared to 2023. It’s also gone permissionless, which means there will be more games, faster development, stronger network effects, and unpredictably big breakthroughs. Some of the biggest innovations in gaming like modding, free-to-play, and esports came from unexpected places. By lowering the barrier to entry, a permissionless Ronin invites the kind of experimentation that could lead to the next Axie-scale success.
Pixels, a farming game on Ronin, hit a peak of 1.3 million daily active users (DAUs) and is holding strong now with around 250,000 DAUs even with its token down 96%. Players are spending more than they cash out, buying land, upgrading assets, and actually putting money back into the game, fueling the economy instead of extracting from it. This is how virtual economies should work, with real demand and strong retention. Most importantly, it is an indication that the play-to-earn model can work if done right.
- Parallel, a trading card game (TCG) on Ethereum, just hosted a world championship in Las Vegas at the HyperX Arena — a venue that has hosted some of the biggest esports competitions from “League of Legends All-Stars” to “Street Fighter V’s Capcom Cup.” This was a prestigious event that saw some of the world’s best TCG players crossover from traditional titles like Hearthstone to become some of the first Web3 esports legends.
These are just a few examples, but they show the kind of traction we’re seeing: better infrastructure, growing communities, more sustainable virtual economies, and digital ownership.
Those who FUD Web3 gaming today don’t understand it. They missed CryptoKitties in 2018, Axie in 2020, YGG in 2021, and they’ll miss the next wave too because they’re measuring the wrong metrics. Web3 is growing and innovating faster than any other sector in gaming. It’s not time to quit. It’s time to double down. Let them call us whatever they want: crazy, delusional, visionary, pioneering. It doesn’t change what we do. We’ve been here before. Stay the path.
Now Is the Time to Rally to Web3 Gaming
The gaming industry is undergoing a seismic transformation, one that could redefine not just how we play games, but how we perceive ownership, community, and value in virtual spaces. This shift is driven by the emergence of Web3 gaming—a new paradigm built on decentralized technologies, primarily blockchain. If you haven’t jumped on board the Web3 train yet, now is the time to rally, because the wave of innovation that Web3 gaming represents is not merely a fleeting trend; it’s a movement poised to shape the future of entertainment and beyond.
Understanding Web3 Gaming
Web3 gaming refers to games that leverage blockchain technology, enabling players to have true ownership of in-game assets. Unlike traditional gaming environments where game developers maintain total control, Web3 allows players to buy, sell, and trade digital assets such as skins, characters, and weapons on decentralized platforms. Concepts such as play-to-earn (P2E), decentralized finance (DeFi), and non-fungible tokens (NFTs) have paved the way for a gaming ecosystem that empowers players.
The Shift from Ownership to Utility
In conventional gaming, players often invest substantial time and money in acquiring in-game items, but they are limited by the rules of the game and have little power over their investments. Web3 flips this model on its head. Players can trade their assets on open marketplaces, often making a profit from their time spent in the virtual world. Blockchain technology ensures that each asset is unique and irreplaceable, which enhances its value and meaning.
The shift from mere ownership to utility is a game-changer. In Web3 gaming, not only can players earn from their gameplay, but they can also utilize their digital assets across different games. Imagine earning a coveted sword in one game and then being able to use or sell it in another. This interconnectedness fosters a vibrant ecosystem where players can drive demand and creation.
Community-Driven Development
One of the unique aspects of Web3 gaming is the democratic approach to game development. Traditional gaming often places the decision-making power in the hands of a select few—game developers and executives. In contrast, Web3 projects frequently adopt a community-centered model where players can have a say in the game’s development. Through decentralized autonomous organizations (DAOs), gamers can vote on updates, features, and even governance issues, ensuring that the community’s interests are prioritized.
This level of engagement fosters loyalty and investment from players, turning them into stakeholders. They aren’t just passive consumers; they are co-creators. When players feel a sense of ownership, they are more likely to contribute positively, whether through feedback, bug reporting, or content creation.
Expanding the Player Base
As Web3 gaming gains traction, it is attracting an entirely new demographic of players who may not be traditional gamers. The appeal of earnable assets and the prospect of financial benefits have attracted millions, making gaming more inclusive. Economically, players from developing countries are now able to generate income through gaming, which was virtually impossible in the conventional setup.
Additionally, the cross-platform potential of Web3 gaming facilitates interaction between different gaming communities. Players from various backgrounds can unite over shared interests, further enhancing the gaming experience and driving the growth of Web3 ecosystems.
A Future with Endless Possibilities
The implications of Web3 gaming extend far beyond personal enjoyment. As the gaming industry continues to merge with finance, art, and social networking, the possibilities become boundless. Players can become investors, creators, and influencers, all within the digital sphere. This convergence allows for innovative experiences such as virtual concerts, merchandise sales, and interactive storytelling, which were previously unimaginable.
Moreover, as more industries begin to explore the potential of NFTs and blockchain technology, the skill sets gained in Web3 gaming can be transferable to numerous career paths, from game development to asset management and community building.
The Call to Action
Now is the time to embrace this paradigm shift. The infrastructure for Web3 gaming is rapidly evolving, with leading platforms like Ethereum, Solana, and Immutable X providing robust frameworks for game developers. Major companies and indie developers alike are exploring opportunities within this space, creating a plethora of new titles waiting to be discovered.
For players, engaging with Web3 games means not only experiencing cutting-edge technology but also gaining true ownership of their digital journeys. By participating in this movement, players can help shape the future of an industry that is becoming increasingly powerful and influential.
In conclusion, Web3 gaming is not merely a technological advancement; it’s a cultural revolution. It invites players to become active participants in the digital economy, pushing boundaries and redefining the roles we play in virtual communities. As we stand at the precipice of this exciting frontier, there has never been a better moment to rally to the cause. Embrace the power of Web3 gaming—your adventure awaits!
Web3 gaming represents a transformative shift in how we experience and engage with games, leveraging blockchain technology to enable player ownership, decentralized economies, and new creative opportunities. As the gaming industry continues to evolve, it’s crucial to understand the unique advantages that Web3 can provide.
One of the most significant benefits of Web3 gaming is the concept of true ownership. Players can truly own their in-game assets, allowing them to buy, sell, or trade items on decentralized marketplaces. This empowerment creates a more engaged player community and opens up new avenues for monetization that were previously unavailable in traditional gaming models.
Moreover, Web3 games often incorporate play-to-earn mechanics, offering players the chance to earn cryptocurrency or NFTs simply by playing. This economic model can provide financial benefits, creating opportunities for players around the world, particularly in regions where traditional job opportunities may be limited.
Interoperability is another key feature of Web3 gaming. Blockchain technology allows for assets to be utilized across different games and platforms, enhancing the user experience and creating a shared ecosystem. This could change how developers design games, incentivizing collaboration and cross-game interactions.
Despite the challenges, including regulatory concerns and scalability issues, the potential for innovation within Web3 gaming is immense. Developers and gamers alike need to rally around this new frontier, embracing the opportunities it presents to reshape the gaming landscape.
The future of gaming is at a pivotal moment. Engaging with Web3 technology can lead to a more decentralized, player-driven industry where creativity and innovation flourish. The call to action is clear: it’s time to explore the vast possibilities of Web3 gaming and contribute to shaping its future. Let’s seize this moment and push the boundaries of what gaming can be.