Existing gaming platforms have played an essential role in the popularization of gaming, evolving to optimize the unique experiences of each category and balance the supply and demand of different games.
In the same vein, the role of Web3 gaming platforms will be crucial in the process of Web3 gaming adoption, which are highly anticipated to expand the horizon of the existing gaming industry.
However, most current Web3 games (or platforms) still fail to lower high entry barriers and target the appropriate ecosystems, thus struggling to initiate a virtuous cycle for mainstream adoption.
Building on this awareness, Iskra has announced partnerships with Base and LayerZero and introduced a new vision called the "Omni-Chain Gaming Hub," aiming to become a leading platform for the mainstream adoption of Web3 games.
“Do anything, but let it produce joy” — Walt Whitman
When we describe a specific experience to someone, we often talk about ‘how much fun’ it was. In this way, fun provides a powerful motivation for many of our daily activities.
In particular, Advances in digital technology and hardware have significantly broadened the dimensions of fun and actively encouraged people to seek new forms of enjoyment. As accessibility to novel interactions and experiences increased, people began to embrace the pursuit of fun as a part of their daily lives, and this pure and intense desire for fun among many led to the rapid growth of the gaming industry - the old concept of "play," which began purely for short-term enjoyment, has finally evolved into the independent "gaming industry" thanks to technological advancements.
As we observe how gaming naturally integrates with emerging technologies like consoles, PCs, mobile, and cloud, transforming our lives and expanding the industry's scale, we can't help but imagine how future IT advancements will also be incorporated into the gaming industry. In the same context, it is intriguing to consider how Web3 games, leveraging the unique features of blockchain, can differentiate themselves from traditional games and further expand the realm of the gaming industry.
In this article, we briefly discuss the history of various gaming platform categories that have driven the success of the gaming industry, along with the current adoption status of the Web3 gaming market. Furthermore, we explore the approach signified by the new manifesto of Iskra, a platform that has been taking numerous initiatives to popularize Web3 gaming especially among various Web3 gaming platforms.
According to statistics, it is estimated that by 2024, there will be over 3 billion gamers worldwide, each enjoying various genres of games for their own reasons. However, among these numerous gamers, it is rare for someone to be constantly engrossed in a single game.
Every year, countless diverse games are consistently released and consumed for various reasons from both the consumer (i.e., gamer) and game developer perspectives. First off for gamers, the type and depth of enjoyment they experience in each individual game are all different. Therefore, if a gamer continuously plays one game but reaches a point where the game's marginal utility diminishes due to a lack of ongoing improvements, they naturally start exploring and playing other games. Conversely, for game developers, there is a limit to the gameplay they can improve relative to the effort put into a single game, and thus, releasing multiple new games often yields higher revenue than continuously refining one game. In other words, both gamers and developers find it rational to maximize their utility or profits through new games at certain points.
As the cycle of demand and supply for new games repeats like this, developers need more efficient pipelines to distribute various games, and gamers seek curation that helps them discover new games that guarantee a certain level of fun.
Source: visualcapitalist
Gaming platforms have played a pivotal role in connecting gamers and developers and providing environments for various games to run, driving the growth of the gaming industry. Therefore, by examining the history of gaming platforms, we can gain significant insights into what experiences gamers valued at different time frames when seeking fun through various games.
2.2.1 ‘Arcade & Console Platforms’ Leading the Popularization of Home Games
The first example demonstrating the commercial potential of video games was the release of "Pong" by Atari in 1972. Pong, a simple table tennis game for two players, achieved significant success and introduced the public to a new form of entertainment: video games. The popularity of arcade games peaked in the 1980s, with titles like "Space Invaders," "Pac-Man," and "Donkey Kong" becoming global icons and creating numerous gaming enthusiasts and communities.
The success of arcade games led to the development of home game consoles. In the early 1970s, Ralph Baer's 'Magnavox Odyssey' was the first series to allow video games to be enjoyed at home. After the sensational popularity of arcade games, consoles like the Atari 2600 and Nintendo Entertainment System (NES) were released, marking the beginning of the console gaming era. These early console games maintained the arcade style while offering the comfort of home gaming. This consequently paved the way for the expansion of gaming content, with titles like 'Super Mario Bros.' and 'The Legend of Zelda' achieving cross-generational success and establishing games as a cultural industry beyond mere pastime.
Today's console games have evolved alongside technological advancements. High-definition graphics, complex game mechanics, and online multiplayer features have increased the level of immersion in gaming. Platforms like PlayStation, Xbox, and Nintendo Switch offer a variety of genres and are loved by millions of gamers worldwide, and now, the concept of console-based home games is expanding further with new technologies such as virtual reality (VR) and augmented reality (AR).
2.2.2 ‘PC Platforms’ Advancing Multiplayer Games and Communities
As mentioned earlier, interest in video games surged in the 1980s, leading to fierce competition in the console market. However, due to market saturation and declining game quality, the market temporarily collapsed in 1983. At this point, personal computers like Commodore 64, Apple II, and IBM series emerged as new options for home gaming platforms, thanks to their powerful processing capabilities and affordability.
Early PC games were limited to creating more complex games than those on consoles or expanding the gaming experience by connecting to consoles. However, since the mid-1990s, advancements in computer hardware and the proliferation of LAN networks and the internet have popularized multiplayer games. Games like 'King’s Quest' and 'Doom' significantly expanded the possibilities of game design using PCs, while games like 'Warcraft' enhanced the social aspect of gaming by enabling real-time competition with players worldwide through internet-based multiplayer functionality.
Since the mid-2000s, the emergence of digital game distribution platforms like Steam has brought another revolution to the PC gaming industry. These platforms have made purchasing and updating games easier while serving as central hubs connecting gamers and developers worldwide. Especially by enhancing community features, they have enabled gamers to provide feedback, share experiences, and collaborate with one another. In essence, PC platforms have not only laid the foundation for large-scale multimedia games but also played a crucial role in transforming games from mere entertainment into venues for social interaction.
2.2.3 ‘Mobile Platforms’ for Context-Based Experiences With Ubiquity
The history of the mobile gaming market, which today holds the largest market share among gaming platforms, dates back to the late 1990s. At that time, the implementation level of mobile games was not on par with PC games, so simple puzzles and basic arcade games built into mobile phones were predominant. One of the most iconic games from that era is Nokia's 'Snake,' which gained worldwide popularity and showcased the potential of mobile gaming. Despite the performance limitations and design constraints of the devices, mobile games offered a new experience by allowing users to enjoy games anytime and anywhere.
With the widespread adoption of Wi-Fi and mobile data networks in the 2000s, the mobile gaming market steadily grew, enabling gamers to enjoy real-time online games and interact with other players through mobile platforms. However, the market's rapid growth truly began in the late 2000s with the popularization of smartphones.
The advent of smartphones and other smart mobile devices has revolutionized the mobile gaming industry. These devices offer powerful computing capabilities, portability, high-resolution screens, and touch interfaces. Additionally, they can provide game developers with various data about gamers, such as location, activity, preferences, and social graphs. Social-based casual games like 'Angry Birds' and 'Candy Crush,' as well as 'Pokemon Go,' which integrates location-based context and AR technology, connect the features of mobile devices with gamers' daily data. This has delivered unique gaming experiences to many gamers and propelled mobile gaming into mainstream pop culture.
In short, mobile games can be closely connected to an individual's daily life, offering a different experience from PC games. Gamers can play games anytime and anywhere through their smart devices, which has become one of the main drivers of the modern gaming industry, pursuing both personalization and socialization of gameplay. Consequently, leading mobile gaming platforms like Google Play (Android) and the App Store (iOS) have grown rapidly, providing developers with various tools to efficiently develop and distribute mobile games.
2.2.4 ‘Cloud Platforms’ Aiming to Overcome Hardware Constraints Based on High-Speed Internet
In addition to the platforms mentioned above, there are also growing cloud gaming service platforms with a relatively small market share. Cloud gaming is a service that streams games over the internet, allowing gamers to enjoy high-performance games without owning high-end hardware.
The first commercial cloud gaming service was launched in 2010 by a company called OnLive. OnLive operated by processing game data on remote servers and transmitting the results as real-time video streams to gamers. Although several companies entered the cloud gaming market after seeing the potential, they initially faced challenges due to technical limitations - high operating costs, and slow internet speeds for users. However, as broadband internet and fast communication technologies like 5G became more widespread, cloud gaming began to gain popularity.
Since the mid-2010s, major IT companies have also entered the cloud gaming service market in earnest. Google Stadia, Microsoft's Xbox Cloud Gaming (formerly Project xCloud), and NVIDIA's GeForce Now all use their robust cloud infrastructures to provide cloud-based game streaming services, eliminating the need for gamers to purchase or download individual games.
2.2.5 Further Sophistication of Gaming Platforms Towards New Dimensions of Experience
In summary, existing gaming platforms have developed optimized forms to match the physical environments where games are played - arcade/console games brought gaming into homes, PC games connected players worldwide, and mobile games enabled gameplay within daily life.
Another interesting point to note, as shown in Figure 2.2, is that the emergence of new platforms does not always abruptly replace existing trends. For example, although the market size of the arcade and handheld sectors has gradually diminished with the rise of the mobile sector, it has not significantly impacted the market size of PC or console sectors that emphasize different experiences - instead, mobile games have significantly contributed to expanding the potential customer base. This indicates that each platform offers unique value to gamers and will likely continue to evolve in distinct ways according to their physical environments.
Simultaneously, streaming platforms represented by cloud services are opening new pathways for gaming experiences not dependent on hardware. Although not deeply discussed, VR and AR are also pioneering new experiential spaces within the gaming industry by enhancing the gaming experiences of existing platforms. The active interest shown by major IT companies in these new areas suggests that the dynamics of the gaming platform market will evolve by integrating technologies that offer new value and experiences rather than solely leveraging physical environments.
Web3 games, based on a variety of features not observed in the traditional gaming industry, also propose a paradigm shift towards new gaming experiences.
Firstly, Web3 games can ensure that ownership of in-game assets belongs to the gamers. This directly links the value of in-game assets to economic value, serving as a powerful motivational tool that enhances immersion on games. Additionally, the interoperability of blockchain networks allows for the transfer and use of assets across different games, thereby enhancing interactive experiences and enabling more scalable game world design. Furthermore, the adoption of decentralized governance structures, where gamers can directly participate in decision-making, promotes engagement in game development and operations, fostering a sense of ownership and providing a richer experience.
Based on these diverse possibilities shown by Web3 games, many stakeholders have already bet on their success - according to Blockchaingamer, despite the sharp decline in interest in the crypto market since 2022, approximately $2.1 billion has been invested in the Web3 gaming sector. Additionally, about 70% of major game studios have initiatives in Web3 gaming, indicating sustained strong interest in Web3 games.
Moreover, approximately 3,000 Web3 games released so far have been distributed not only through blockchain protocols directly and Web3 platforms but also via various traditional Web2 platforms, broadening their reach to diverse user bases - notably, Epic Games, a major gaming platform, is highly proactive in onboarding Web3 games, with over 127 Web3 games currently available on its platform. This suggests that the evolution of gaming platforms could extend to Web3 gaming spaces as well.
However, no matter how much investors and gaming companies dive into Web3 gaming sectors, the industry cannot sustain itself if consumers remain uninterested. According to Footprint Analytics, most Web3 games distributed across various platforms do not maintain a significant number of gamers.
One primary reason for this is the high user experience entry barriers for enjoying Web3 games. To fully enjoy a Web3 game, gamers must go through a series of steps for each blockchain network the game is on, including creating wallets, paying gas fees, swapping tokens, and etc. This requires a high level of learning of Web3 knowledge for regular gamers. Moreover, having to remember which blockchain their game and assets are on significantly detracts from the user experience.
Secondly, the ecosystem in which game developers distribute their games may not be very friendly to gaming content. Web3 games are just another genre of games, so the typical Web3 gamer persona needs to be 1) familiar with various activities in the Web3 space* (as mentioned above), and 2) someone who fundamentally enjoys playing games. However, if the ecosystem of the protocol or platform where the game is distributed is made up of users who are not particularly interested in consuming gaming content, it becomes difficult to effectively bootstrap a virtuous cycle where various games continuously emerge and are explored by a diverse range of users**.
Ultimately, to accurately determine whether Web3 games can establish themselves as a new vertical in the gaming industry, environmental solutions are needed to address these inefficiencies, allowing Web3 games to focus entirely on experimenting with Web3 elements.
*Of course, this could be mitigated as the entry barriers to Web3 are lowered.
**In this context, Epic Games' proactive onboarding of Web3 games, given its substantial existing user base of gamers, is particularly noteworthy.
Based on an understanding of these challenges, Iskra has been leading various initiatives to popularize Web3 games since 2022. In May 2024, Iskra announced a community proposal named "ISKRA 2.0." According to this proposal, Iskra proposes two main strategic directions for platform development under the vision of leading the era of popularization of Web3 games by lowering the barrier to entry from a gamer's perspective.
1. Creating a space where users who resonate with Web3 values can more easily access Web3 games.
Migration to Consumer-Enriched BASE Chain (Completed)
LayerZero-Powered Omni-Chain Gaming Hub (Planned)
2. Strengthening the incentive system to encourage more gamers to participate and continuously accumulate value on the platform.
ActFi Incentive System (Planned)
Firstly, under the direction of improving accessibility to Web3 games, Iskra migrated its mainnet from Klaytn to the BASE Chain in May 2024 as its first initiative. According to Iskra, this decision was based on BASE's vision of onboarding Web2 and Web3 users around the strong foothold of Coinbase, which aligned with Iskra's direction.
BASE is an L2 blockchain built using Optimism's OP Stack, characterized by scalability and low fees. It follows the philosophy of Coinbase, which emphasizes "services that real people use," and is launching various initiatives to enhance accessibility for builders and creators (e.g., Grant Program, Base Bootcamp, Developer Kit, etc.).
Indeed, a closer look at the BASE ecosystem reveals numerous "consumer applications" that integrate with everyday life or focus on user interaction, which are rarely found in other protocol ecosystems - notable examples include Friend.Tech, which allows purchasing influencers' keys for exclusive community features; Farcaster, a social graph project enabling users to freely assemble various modules to create their own client apps; Live on Unlonely, an on-chain music streaming service; Nextme, a social layer project for creators with communication and content support features; Talent Protocol, an on-chain resume protocol; and Bracket Game, a fan community platform.
Additionally, with the continuous onboarding of various consumer applications into the Base ecosystem and Coinbase's numerous initiatives to promote on-chain experiences for the public, the Base ecosystem is expected to position itself uniquely as a hub of practical Web3 services, distinct from other protocol ecosystems.
In this context, Iskra's migration to the BASE Chain can not only attract a broad, consumer-centric user community that is actively engaged in consuming various Web3 applications into the Iskra ecosystem, but also create a pipeline for regular gamers who are not familiar with Web3 and blockchain technology to naturally join Iskra's gaming ecosystem through the well-known Coinbase brand.
As its second initiative, Iskra is preparing to evolve into an Omni-Chain Gaming Hub through a partnership with LayerZero - the Omni-Chain Gaming Hub aims to provide a user experience where multiple blockchains can be used as if they were a single chain, addressing the issue of fragmented gaming experiences.
Source: Explaining the OFT Standard
LayerZero utilizes the "Burn and Mint" method and its unique "Omni-Chain Fungible Token (OFT)" standard, instead of the more commonly used methods of "Lock and Mint"* or "Liquidity Network"** for asset transfers in traditional bridge solutions.
Therefore, when transferring or exchanging assets implemented with OFT, there is no need to worry about liquidity shortages or fragmentation between the two chains, nor the risk of hacking associated with locked tokens. On the contrary, this approach offers the clear advantage of maintaining a consistent token supply.
*Locks native assets on one chain and issues corresponding new voucher assets on another.
**Pre-establishes liquidity pools on both chains, adjusting these pools during asset bridging.
Source: Explaining the OFT Standard
This mechanism can also be applied to already deployed ERC-20 token standards - an OFT-Adaptor contract mints new OFT-standard assets paired with the source chain's assets instead of locking them, and transfers these assets to other chains using the Burn and Mint method.
Iskra plans to leverage LayerZero's standardized interoperability solutions to build an Omni-Chain Gaming ecosystem for various game titles deployed across multiple chains, and as a central Hub for all interactions, Iskra will introduce a wallet service that allows gamers to explore the entire ecosystem through a unified UI - in other words, by deploying OFT and OFT-Adaptor on hub chain (e.g., Iskra on BASE) and individual game chains, gamers will be able to natively utilize assets across various game chains simply by interacting with the hub chain through the upcoming Omni-Chain wallet.
Given that each Web3 game has different preferences for blockchain ecosystems and implementation methods, Iskra's approach alleviates the burden on individual game studios to establish asset standards and ensure interoperability. This allows them to freely build their ecosystems without worrying about infrastructural constraints. Additionally, gamers can explore a wider variety of game ecosystems seamlessly through a natively implemented wallet on the chain, without having to worry about which chain each game title is built on. This is undoubtedly one of the key competitive advantages Iskra can offer as a gaming platform.
However, simply improving accessibility will not guarantee that gamers flock to the platform and continue to enjoy the games. In other words, to attract gamers and encourage them to explore various games continuously, there must be clear reasons for them to stay in the platform.
From the perspective of traditional Web2 games, gamers are generally drawn to platforms based on the presence of engaging game IPs or the platform's reputation. However, the Web3 game perspective includes a much more significant factor: economic incentives. As its third initiative, Iskra introduces an incentive system called ActFi (Activity Finance) to engage gamers.
Although many details have not yet been disclosed, ActFi is an evolved concept from the existing CP (Contribution Point) system, which mainly focused on financial contributions. The core idea of ActFi is to introduce a comprehensive contribution evaluation system that encompasses all activities within the platform and provides rewards accordingly - Iskra has allocated 17.5% of the total token issuance to ActFi through a governance vote and plans to enhance the diversity of rewards through partnerships with other companies.
Of course, the ActFi initiative might seem similar to existing quest platforms like Galxe or DegenScore, which provide rewards based on users’ specific on-chain activities. However, while those platforms target general Web3 users, ActFi differentiates itself by offering a fair reward system optimized for the interests and behaviors of users who are particularly passionate about the Iskra gaming ecosystem. It also classifies these users into various groups based on detailed criteria, where this classification allows Iskra and other game studios within the ecosystem to conduct more effective and flexible retargeting marketing activities.
In summary, the success of ActFi hinges on balancing two key aspects: attracting gamers through generous rewards and retaining them through meticulous design. In other words, the ultimate goal of ActFi is to establish a virtuous cycle by drawing gamers to the platform with attractive incentives while using detailed data analysis and incentive structures to keep them engaged and foster their long-term participation on the platform.
Game studios must consistently release new titles to meet the ever-changing market demands, adopt new technologies, enhance brand value, and optimize revenue. And for these new releases to be efficiently tested by the public, the role of gaming publishers/platforms is crucial. Indeed, as we have seen, the evolution of gaming platforms has always been at the heart of widespread adoption in the history of gaming - adoption here means not just a single title receiving temporary attention to explore the industry's small potential, but the industry as a whole continually garnering sustained interest from the public.
The history of Web3 gaming platforms will likely follow a similar trajectory. Assuming the widespread adoption of Web3 games, platforms will undoubtedly be at the core of this shift. These platforms will 1) efficiently distribute various Web3 games that offer new experiences, and 2) provide a space where gamers can easily explore different games and maximize their enjoyment.
The manifesto of Iskra 2.0, with its Omni-Chain Hub initiative, aptly reflects the future of Web3 gaming platforms being adopted by the masses. Through the initiatives presented by Iskra, game studios can freely choose the technology stack that suits them best, allowing them to develop their experimental games freely. Moreover, they can seek collaborations with games from other ecosystems or expand their game worlds to maximize each title's gameplay and asset utility. These games can then be evaluated and improved by the community within the BASE Ecosystem, which is rich with applications for the general public, creating a virtuous cycle of development.
Of course, there are several other platforms besides Iskra that aim to popularize Web3 games. For example, Web3 gaming platforms such as Fenix Games, Fractal, Hyerplay, and Elixir Gaming are experimenting with the adoption potential of Web3 games by rapidly integrating the latest Web3 technologies (e.g., Account Abstraction, Token-Bound Accounts, etc.) or providing various developer tools. Additionally, as previously mentioned, Epic Games' approach of gradually introducing Web3 initiatives to its large existing Web2 gamer base is noteworthy for it allows for measuring Web2 gamers' sentiment to Web3 games.
However, to more accurately assess whether Web3 games can establish themselves as a significant vertical in the gaming industry, it is crucial to first create a Web3 platform foundation that fundamentally removes entry barriers caused by technical inefficiencies. In this regard, Iskra's unique positioning with its Omni-Chain Hub approach is an initiative worth tracking in relation to the development and adoption of Web3 games.
Thanks to Kate for designing the graphics for this article.
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