The Crypto Crash Shows The Unearned Confidence In Web3, NFT And Blockchain Gaming

It is impossible to ignore the absolute carnage going on in the crypto market between crashing prices of Bitcoin, Ethereum and most other coins, the shutdowns of exchanges due to volatility with no regulatory bodies to soothe the panic, and now fresh layoffs at crypto staples like Coinbase.

While I do not like seeing anyone suffer the loss of a job or income, this is turning into quite a large “we told you so” moment from the gaming community especially. For the better part of a year now, we’ve been assailed on all sides from evangelists saying that web3, blockchain-based games and NFT-driven economies were the future of the industry.

Now, what’s happening with the larger crypto industry should shatter any real argument that these dime-a-dozen projects are in any position to significantly influence the course of the industry in any way. If they seemed sketchy before, despite allegedly high market caps and big potential returns, what’s become clear is that those can evaporate in an instant, and many of them already have.

There are a few different concepts of web3 gaming that have been pushed the last year or so:

• The “play-to-earn” concept in which game economies are set up to get players to grind to earn coins with a tangible value. The prime example of this was Axie Infinity, but even before this current crypto crash, the feudalism-style economy of that game all but completely collapsed.

• Then there’s the web3 metaverse, the thing that lands about 200 PR pitches in my inbox every single day. This is based on shared virtual spaces like Decentraland which made headlines because they were selling millions in virtual “metaverse” real estate, and yet again, these are games with concurrent playercounts outside the top 300 games on Steam (1,200 people are currently in Decentraland as I write this), and you’re not hearing tales of nearly as many high profile purchases now.

• Then, there was the concept of NFTs infecting more mainstream games, something that only really Ubisoft tried, and only in a tiny capacity in a game that’s already stopped post-launch support, Ghost Recon Breakpoint. Other companies who previously voiced confidence in web3 and NFTs like EA and Square Enix have already partially or fully walked back those ideas, and in every “future of gaming” showcase in Summer Games Fest, the E3 substitute going on now, you hear nothing, absolutely nothing, about crypto, web3, the blockchain or NFTs.

All of these concepts share the same core problem:

Web3 gaming kept pitching this idea that they could create sustainable economies involving currency, digital items ore virtual real estate which would be a value-added proposition to the concepts of games inherently. But what the larger market has shown is that even the most established forms of crypto, the heavy hitters like Bitcoin and Ethereum and the exchanges that support them, are still the wild west and can fluctuate wildly, if not collapse completely. If we can’t trust the relative stability of Bitcoin with these massive crashes, why then should we believe in Axie’s “Smooth Love Potion” or the land value of virtual real estate in Decentraland. You shouldn’t. You never should have. And most core gamers never did.

I cannot imagine a web3 gaming project in the next few years that would project any amount of trust that it’s not going to go belly up within months. And even if the play-to-earn and moneymaking elements are downplayed, as they already are starting to be, then you’re simply left with…games that are nowhere near as fun as the NFT/blockchain-free offerings of the rest of the industry. This was always how this was going to end.

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