Blockchain Gaming 2.0: A New Approach Promises to Chart a Sustainable Future

The blockchain gaming industry exploded into life a little over three years ago, as the wider crypto market embarked on one of its strongest-ever bull runs

The blockchain gaming industry experienced a surge in popularity three years ago, largely driven by the broader crypto market bull run, fueled by DeFi protocols and NFTs.

During this period, blockchain games emerged as a major growth driver, attracting more than $4 billion in investment in 2021. Games like Axie Infinity gained global attention, with players reportedly earning hundreds to thousands of dollars per month. Notably, the value of Axie NFTs, required to play the game, skyrocketed, with some selling for over a million dollars.

However, blockchain gaming quickly lost momentum as crypto winter hit in early 2022, and news of a major hack on Axie Infinity’s servers emerged. This nascent Web3 industry segment encountered significant challenges. NFT prices plummeted, and players left the games en masse, raising questions about the long-term viability of “play-to-earn” gaming.

Traditional gamers expressed widespread disapproval of blockchain games, with one survey by Coda Labs of over 7,000 regular video game players highlighting an overwhelmingly negative perception.

The challenges in blockchain gaming were multifaceted. A major problem was the lack of quality gameplay experiences. Most blockchain games developers were primarily concerned with monetization and token prices rather than the actual quality of the games they made. There were also barriers to adoption for traditional gamers, who needed to create digital wallets and a crypto exchange account to trade the tokens they earned.

Moreover, many blockchain games suffered from poorly conceived tokenomics models, often dubbed “Ponzinomics,” which relied heavily on new users joining to keep pumping more money into the game. As is well-known, Ponzi schemes are unsustainable in the long term, and any game basing its tokenomics design on such a model is ultimately destined to fail.

A New Approach

Despite the collapse of the blockchain gaming sector, the movement didn't fade away as many had predicted. The concept of play-to-earn is alive and well, and attracting renewed interest from investors. A report by DappRadar shows that blockchain games were able to raise a combined $988 million in venture capital in the first three months of 2024, breathing new life into the sector.

Does this mean blockchain game developers are finally taking on more established and traditional AAA games such as GTA, Call of Duty, Ghost Recon and Fortnite?

Not exactly, but they are making better games than they did before. The vast majority of blockchain games developers tend to be indie studios that lack the funding of mainstream games developers like Rockstar Games and Epic Games. They don’t have the budget to create titles that can compete with the most popular video games franchises in the world today, but they don’t have to either.

Rather, what they have done is focus on building more enjoyable games that resonate with specific niche audiences in the gaming community. For instance, The Six Dragons is a play-to-earn game that has gone down very well with the fantasy world RPG community, even if it doesn’t quite match the likes of Starfield, Final Fantasy VII Rebirth and The Legend of Zelda.

What the new breed of blockchain games have done is to shift left and focus on the mainstream appeal of their games, such as the storyline, gameplay, graphics and user interface. By improving the storytelling narrative and the visuals, blockchain games are now much more able to attract the interest of the world’s 3.1 billion-strong gaming community. The tokenomics of modern blockchain games is now more of an afterthought, and many new titles don’t even require players to own an NFT to access the basic version of their game.

Doing this means putting things like the game’s token launch on the backburner. Developers now understand that they shouldn’t even start thinking about the actual token of their game until they’re sure that the gameplay itself is enough to attract and retain players. They’re building communities first and ensuring they have enough players to support an in-game economy prior to the actual token launch.

Transparency Garners Confidence

Blockchain games are also making progress by building more sustainable models and by offering greater transparency into their plans to show what they’re doing has legs, and is not just an alternative Ponzi scheme.

The roadmap has become a key element for every successful crypto project, laying out its developmental journey and future plans, charting key phases and detailing forthcoming updates that will bring it closer to its publicly stated goals.

Roadmaps can go some way towards convincing games that they’re backing a serious project. Most blockchain game roadmaps offer some kind of timeline that highlights key upcoming milestones, such as the launch of their testnet and mainnet, and the roll out of new features, game modes, tokens and so on. They tend to delve deeper into the project’s short-term aspirations, and provide clues about its target audience and where the game developers see it going in the longer-term.

A roadmap, also called a cryptocurrency project roadmap, is a high level document of

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