Web 3 Gaming: What it is and Why it Matters

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Web3 Gaming refers to the integration of blockchain technology in game development, allowing for decentralized identity, decentralized finance, and new economic models for games. It enables game developers to create games that are not dependent on centralized platforms for creation, distribution, discoverability, and monetization.

Web3 offers game developers the ability to create more sustainable business models by reducing reliance on centralized platforms. This decentralization allows developers to innovate with new economic systems, control their own monetization processes, and engage communities in co-creating game experiences.

The key technologies that defined Web2 are social networks (e.g., Facebook), mobile technology (e.g., smartphones), and advertising. These technologies decentralized and democratized game development initially, but eventually led to centralization of power among major companies like Facebook, Apple, Microsoft, Google, and Amazon.

In Web2, user identity and accounts are tied to centralized platforms like Facebook and Google. In Web3, user identity is decentralized and managed through Web3 wallets, which use private keys and public addresses. This eliminates the need for centralized servers to manage user accounts.

Web3 wallets are crucial for managing decentralized identity in Web3. They use private keys and public addresses to control accounts and facilitate transactions without the need for centralized servers. This decentralization reduces platform lock-in and allows users to move across different blockchain networks.

Smart contracts are self-executing contracts with the terms directly written into code on the blockchain. They allow developers to define and automate transactions and interactions within a game. This capability enables the creation of decentralized finance (DeFi) and other innovative economic models in Web3 games.

Decentralization in Web3 reduces the dependency on centralized platforms for various stages of game development, including creation, distribution, discoverability, and monetization. It allows developers to retain more control over their games and explore new economic models that can be more sustainable and innovative.

Some successful Web3 games and projects include Axie Infinity, CryptoKitties, Skyweaver, BoardApe.club, and the Loot Project. These projects demonstrate various aspects of Web3 gaming, such as play-to-earn models, decentralized identity, and collaborative world-building.

The three Cs of Web3 gaming are composability, currency, and community. Composability refers to building games that can be enhanced and modified by others. Currency involves creating new economic models and financial primitives. Community emphasizes engaging players and developers in co-creating and improving games.

Game developers can get started with Web3 by learning from successful Web3 games and projects, understanding the Web3 technology stack, and connecting with other builders through hackathons and social platforms like Twitter. Using tools like Scaffold Eth can also help developers build Web3 games more easily.

Paul Gadi
Paul Gadi
36 min
08 Apr, 2022

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Video Summary and Transcription

Web3 gaming enables decentralized identity and finance, allowing game developers to bypass centralized platforms. It is driven by wallets, ERC20 tokens, and NFTs. Web3 games focus on collaborative world-building, ownership, and open-source collaboration. The challenge is achieving decentralization while addressing economic and technological limitations. Web3 aims to redefine the gaming industry by using economic tools and exploring new genres like RPG and RTS games.

1. Introduction to Web3 Gaming

Short description:

Today we'll be talking about Web3 Gaming, what it is and why it matters. I'm Paul, the CTO and Co-Founder of OP Games, helping game developers find more success in Web3. We have the tools to find new economic systems to create these new kinds of games. The talk will cover what Web2 is, what Web3 is and why we should build on it, and how to get started in making Web3 games. I'm also part of the Kernel Gaming Guild, a group of Web3 fellows exploring building in Web3. Web2 started in the early 2000s and enabled richer web pages. Social, mobile, and advertising technologies decentralized and democratized game development. Power is now centralized around Web2 companies.

Hello, and good morning and good evening, everyone. Today we'll be talking about Web3 Gaming, what it is and why it matters.

I guess a bit of a background on me. I think it's better for us to start before talking about what it is and why it matters, it's who I am and what I'll be talking about. So my name is Paul. I'm currently the CTO and Co-Founder of OP Games, which is a company which tries to help game developers find more success in Web3. What that means is we want to be able to help game developers find more sustainable business models, because us ourselves have been game developers. We've seen the challenges of making games both in Web2 and Web3, and we now have the tools to kind of find new economic systems to create these new kinds of games.

So we're really looking forward to this talk and also telling everyone about the things that we're doing. So the gist of the talk, I'll start with what Web2 is, sort of as a reference point for all of us, and then the majority will be around what Web3 is and why we should be building on it. And then the last part would be how we get started in making Web3 games. And yeah, so and other one other thing to mention is I'm also part of the Kernel Gaming Guild, which is a group of Web3 fellows who explore what it means to build here in Web3. So just something to take a look at as well. So I have my Twitter profile up there and just follow the links. Cool.

And yeah, and so I guess I wanted to start with what Web2 is. And I come at it from a background of a game developer. Web2 started out right around the time of, I would say, around the early 2000s to currently what we have now. It's mostly been about what has been enabled by the newer, richer web pages that we now have. Web2 was like the static web pages, HTML. And then Web2 came about, and it was brought about by all of these new modern web technologies. And I would say also that there are three kind of major technologies that also are important during this movement. And these were social, which is exemplified by Facebook, all of these social networks. Mobile, which is, of course, the devices that we all now use to browse the web. And then advertising. So I would say these three technologies and movements, they decentralized and kind of democratized game development at the start. We've seen a lot of great games start out because of these. A lot of the games you play now were born out of the technologies that Web2 has provided. But as we kind of go into a more mature space, a more technology cycle. We kind of see power centralized around these Web2 companies.

2. Web3 Gaming and Decentralized Identity

Short description:

In the current Web2 system, value is centralized around the attention economy, with big companies determining the success of games. The power dynamic hasn't changed, leading us to Web3. Web3 is being pulled in different directions and is tied to the Web3 wallet, which decentralizes identity. This allows game developers to bypass centralized platforms and extractive processes.

So we hear a lot about the FAMGA, right? The Facebook, Apple, Microsoft, Google, Amazon. So in the current Web2 system, a lot of value has centralized around the attention economy. And what that means is it's mostly these big companies who are able to determine which games succeed. A lot of the times that the best games that succeed are mostly the ones that have the capability to buy a lot of ads, who are able to get into the app stores to be discovered, and to really just know how to play the game, honestly.

So I shared these two charts. And one thing worth noting is the games that have been the top in the app stores have mostly been the same games since I would say more than five years. So that power dynamic hasn't really changed. And that's largely born out of the current attention economy, wherein the these big companies are, I would say, the kingmakers in this space, which leads us to Web3. I would say that, like, similar to Web2 at that time, right, Web2 wasn't really defined. We kind of see it now in hindsight, and Web3 is in the same space. Web3 is being pulled and pushed and pulled in every direction, I would say. It's being put into the same buckets of nobulous terms such as the metaverse. So it's kind of tough to talk about it. But I think one thing that we can do to kind of simplify it a bit for now is when you think of a Web3 app and think of making a Web3 game, an analogy is just, in Web2, a lot of the initial entry points was the social network accounts or the accounts that we used to log into the app. So we have login with Facebook, with Google, all of these other buttons that allow you to get your identity tied to the game. In Web3, though, the main thing to be able to associate these accounts is the Web3 wallet and what the Web3 wallet is, essentially, is actually just a private key and a public address. So a private key is a mnemonic, a 12 word mnemonic, which is similar to these ones, which as long as you know this mnemonic, you have control of your account. And tied to that private key is a public address. So anyone who knows your public address is able to interact with your account. And most of the time, the transactions are done via wallets and signatures. So something very different here is, of course, we don't need a centralized server now to be able to have access of our accounts. We only need this private key, which is very different. We don't need to be able to, for example, go to Facebook or go to Amazon or Google to be able to build a service. And this is very important because this decentralizes identity. And currently identity is how Web 2 platforms actually consolidate power and extract value from the current services that are out there.

So imagine your journey as a game developer for each step of making a game from creation to distribution, discoverability and monetization. Most of the time you have to go through a Web 2 centralized platform from creation to distribution. You'll need the server from Amazon, discoverability, you'll have to go through the app stores, you'll need to find the, you'll need to go through an ad network and to monetize, you'll have to go through the app stores again. So at every step of the process, it's always been an extractive process for game developers. And that kind of has defined the kind of games that we're making.

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