Blockchain gaming has some Roadblocks on its way

Business Technology

The industry has a long way to go to reach mainstream adoption despite enormous growth, a survey shows.

The number of investments and  users in the blockchain gaming industry over the past few years have surged with higher expectations from it.  To meet those expectations, experts believe that the industry has to work on the flaws in its user experience.

A recent survey report by Blockchain Gaming Alliance (BGA), a blockchain gaming organization that surveyed a total of 347 professionals representing 252 different projects and companies in the blockchain sector showed that challenges in onboarding and accessing the games were the main issues that pull the industry down. Poor gameplay and lack of understanding of the gaming concepts are additional problems.

One of the problems is that of very specific tokens. Nitesh Mishra, a blockchain expert and founder of Bramble, a network-agnostic blockchain that aims to develop an ecosystem for the web 3.0 gaming industry said that as a player downloads a wallet to play these games, they are forced to purchase tokens.  Many do not want to buy them because they have limited interoperability and cannot be used outside that ecosystem.

“The tokens do not have much interoperability, so gamers will not be able to cash them. And, the market value of the tokens has gone down so much that they have lost their value completely,” he said.

What are Blockchain Games?

Blockchain games, commonly referred to as web 3.0 games are  video games that incorporate blockchain technology. They use a decentralized model that allows players to earn and store assets and tokens like Non-Fungible Tokens (NFTs) which can be used in other such games. An industry report by Dappradar, a decentralised applications store shows that blockchain games in 2022 account for 49 percent of all decentralised applications activity with an average of  1.15 million daily unique active wallets (dUAWs) and a transaction count of 7.4 billion.

Challenges indicated by the respondents of the survey.

In 2021, blockchain games had an average of 6.2 lakh dUAWs. In 2022, this grew by 85 percent reaching 11.5 lakh dUAWs on average. Games like Alien Worlds and Splinterlands are the leaders of this segment.

Mirko Basil Doelger, co-founder and chief executive officer (CEO) of Unix Gaming said in the BGA report, “Blockchain gaming, for all its innovation, has made on-boarding unintuitive and obtrusive. Blockchain game developers should understand that games need to work for the players. We need to go through the hoops necessary to attract players, rather than demand the player jump through hoops to play the game. The fact is, if your blockchain game can’t provide a comparable or superior experience, you’re out.”

What do game developers have to say?

Thirty-seven percent of the respondents  said that poor gameplay is another challenge that the industry faces.

Chinmay Gawande, a game developer and co-founder of Parody gaming studio said that the gameplay and graphics need to be bettered in the blockchain gaming segment. The technology hasn’t kept up with the hype that blockchain gaming is getting. “In the new era, you are not just a game developer; you have to be a crypto expert, a marketing expert, and a good tokenomist.”

Nitesh added, “Earlier game developers were concerned about the quality of the game and tried to create a memorable game. But now people create fancy avatars which look  bad and the gameplay becomes worse.”

Government regulations affecting rewards

The government of India on April 1, 2022 introduced a 30 percent tax on the transfer of virtual digital assets (VDAs). As  cryptocurrencies are classified as VDAs, they incur the tax on crypto income, and moreover, the newly-introduced law impacts in-app purchases and reward points offered by crypto gaming apps.

Naga Chaitanya, a blockchain gamer and a post graduate student in blockchain development said that onboarding and accessibility are a little bit challenging because there are multiple things involved here including crypto wallets, and nodes, and it would take more time for someone to make it handy. “Also, I think the technology is still developing.”

Another European gamer, BOKUNOGATARI, said in the BGA survey report that the digital assets may have zero value down the line or may later become unusable, but no company or organization can erase what he has earned and that sense of ownership from playing made him stay with web 3.0 games.

As more traditional games are incorporating web 3 attributes, experts suggest the upcoming years are essential for the blockchain gaming industry.

(A video has been added to this article later.)