Since the 2022 bear market, the Web3 gaming industry has faced many major challenges such as maintaining player engagement, ineffective funding models, and competition from new technology such as AI-powered dApps control. Addressing these challenges by 2025 will be key to the sustainable development of the industry.
Game industry leaders said project builders need to change their thinking, focusing on games instead of complex blockchain and tokenomics technology.
Blockchain Game Status
According to the latest ranking list from DappRadar, Befriend AI by Xterio, OasChoice, LOL and MEET48 leads the figures for the most popular blockchain games over the past 30 days.
While innovative developments in the industry create confidence in the long-term potential of blockchain gaming, the industry is also facing challenges such as hindered user interfaces, poor experiences, infrastructure complexity and increased competition from AI-powered dApps.
Onboarding Obstacles and Poor User Experience
According to one report Based on 623 responses, 53.9% of respondents said onboarding and poor user experience (UX) remain the top challenges in blockchain gaming.
This is the third consecutive year that these two issues have been considered key concerns for the industry.
According to Sam Patton, COO of Drift Zone, this lack of outreach highlights the industry’s flawed approach to blockchain gaming.
“It’s important to remember that most players don’t come to blockchain games because they’re interested in blockchain – they come to have fun. The game has to be fun first, with the benefits of blockchain as an add-on rather than the main attraction,” he said.
Instead of trying to convert traditional gamers into blockchain users, developers may find it more profitable to make the blockchain aspect of the game opaque, to the point where players don’t realize the additional value. benefits that blockchain technology brings.
Complexity of the Blockchain game
A comparison between blockchain games and traditional game studios shows established methods to attract and excite players.
The decentralized nature of Web3 requires users to interact with various elements, including cryptocurrency wallets, tokens, and concepts such as decentralized governance. These complications may make returning players hesitant, as they are used to an easier and friendlier experience on Web2 gaming platforms.
According to the BGA report, 36.3% of respondents cited onboarding and ease of use as key factors for the industry’s growth, reflecting a significant increase in perceived importance compared to other last year.
Some in the industry have addressed the onboarding barrier by using social media to maintain engagement.
“Players stay when they are happy, when they are part of a community, and when their investment of time creates long-term value. We’ve seen this with TikTok integration, where social engagement amplifies game engagement,” said Chris Zhu, CEO and Co-Founder of Sonic SVM.
Some other gaming platforms still compete by releasing products on social applications like Telegram to introduce Web2 users to blockchain concepts in a familiar social environment.
Accessibility for gamers Web2
Designing a good blockchain-integrated game involves meeting players where they are. Improved user experience is needed to close the gap between Web2 and Web3 gaming.
“The future of blockchain gaming is an experience no different from today’s traditional gaming,” said Kadan Stadelmann, Chief Technical Officer of Komodo Platform.
According to Patton, making blockchain technology the main attraction of Web3 games often does more harm than good.
“The overall view of Web2 gamers is negative towards Web3 games, mainly due to the industry’s focus on Tokens and technology instead of creating fun experiences,” he said.
To solve these problems, developing a user-friendly interface and creating simpler wallets can help newcomers transition into the blockchain integration game smoothly.
“Creating and managing a cryptocurrency wallet, understanding private keys, and self-custodianship are complex concepts for new users. There are also difficulties in purchasing game tokens, which often require creating an account on an exchange, depositing funds with fiat currency, navigating the cryptocurrency market, and facing limited payment options. That is too much for someone who just wants to play the game,” Patton told TinTucBitcoin.
Some game projects have introduced free-to-play and gasless trading options to reduce onboarding barriers. This type of transaction does not require users to pay network fees, simplifying user interaction with blockchain-based games.
“I see a future where players can participate in games without worrying about wallets, gas fees or exchanges. They should be able to start playing right away, just like any Web2 game,” said Patton.
Ultimately, the success of blockchain games depends on creating a harmonious and simple user experience.
The rise of AI-driven dApps
While blockchain gaming continues to play an important role in the Web3 ecosystem, the AI-driven dApps sector is challenging its dominance.
According to DappRadar, AI dApps accounted for 28% of industry activity in Q3 2024. These dApps surpass blockchain gaming with a 25% market share, threatening its long-term dominance.
The increased use of AI in dApps reflects a broader social trend toward automation and data-driven decisions. As people become increasingly dependent on digital systems, the need for smart and user-friendly technology increases significantly.
However, some industry experts see AI as a tool rather than a threat.
“AI-driven apps do not harm blockchain games, as blockchain game developers use AI to design better apps,” Mr. Stadelmann said.
In this way, AI can be used to maintain the competitive edge of blockchain games.
Use AI to solve existing problems in Blockchain games
Roman Cyganov, founder & CEO of Antix, says that AI can specifically be used to overcome onboarding barriers. By integrating agent AI into the game infrastructure, developers can provide educational resources for users to better understand and interact with Web3 games.
“By using advanced technologies like digital humans, developers can create interactive tutorials and personalized support, guiding players every step of the way. Using cutting-edge solutions like this will stimulate trust, minimize confusion, and make adoption into the blockchain ecosystem easier,” Cyganov told TinTucBitcoin.
For Zhu, AI-driven dApps raise the bar for all blockchain game projects.
“We see AI enabling truly dynamic game experiences, where NPCs evolve, storylines adapt, and content generates itself. This has changed the competition from who can create the most content to who can create the most engaging AI-driven experiences. The intersection of AI and blockchain is especially powerful because blockchain provides the infrastructure for AI agents to have persistent identities, own assets, and participate in game economies,” he said.
Developers can complement the integration of AI into their projects with other emerging technology to drive innovative engagement among users.
“Augmented and virtual reality, decentralized identity protocols, and zero-knowledge certification are poised to drive the next wave of blockchain gaming innovation. These solutions can make gameplay more inclusive, safe, and accessible. Combining them with AI can create specific characters and game worlds that open up personalized experiences, bridging the real world and virtual reality,” Cyganov added.
The intersection of these emerging technologies creates new opportunities for game developers, giving them new tools to create more personalized and dynamic experiences.
The decline of traditional investment channels
Blockchain games have experimented with many different funding models in recent years. Venture capital investments have played a key role in driving growth in 2021 and 2022. However, the 2023 bear market has seen a deceleration in investment activity.
According to data from DappRadar, in the second quarter of 2024, gaming investments skyrocketed to $1.1 billion, up 314% from the previous quarter. However, this trend changed significantly in the following quarter, when investment fell to $110 million, a decrease of 90%.
This shift reflects a broader market trend characterized by increased investor caution rather than a decline in founders’ interest in pursuing innovative projects. . As a result, funding channels for game builders have changed dramatically.
“The current funding landscape for blockchain gaming is challenging, with investments down significantly compared to previous years. This environment requires a more strategic approach to both development and fundraising,” said Patton.
The significant decline in funding underscores the need to adapt, especially during times of volatile market conditions.
New perspectives on funding
For some industry leaders, this changing sector presents a unique opportunity for developers to reinvent their approach to financial sustainability.
“The decline in traditional gaming investment has really created opportunities for projects with real traction and clear value propositions,” Zhu told TinTucBitcoin.
To ensure that, Patton added:
“Many projects fail because they focus on token price appreciation instead of building sustainable revenue models. Games need clear paths to revenue generation at launch, not theoretical tokenomics that only work in bull markets. Development efficiency is important. Game development is inherently expensive, but teams need to be strategic in allocating resources in this funding environment – focusing on core gameplay mechanics rather than cutting-edge graphics or launching with a new product. Minimum viable product to scale based on player feedback and revenue.”
Besides traditional investment options, alternative sources of funding exist, such as strategic partnerships with blockchain platforms, crowdfunding through early access programs, and grants from blockchain funds.
“Crowdfunding platforms, community-led token sales, and strategic partnerships with traditional gaming companies provide new capital channels. If developers can build strong and compelling stories around their projects, they will succeed in engaging stakeholders to value transparent communication and user-centered design. use,” Cyganov said.
Adapting to changing funding opportunities by exploring alternative models and prioritizing engaging player experiences will help blockchain game developers continue to innovate successfully.