A new report from the Blockchain Game Alliance (BGA) reveals that play-to-earn games are cantering toward mainstream acceptance but the final push appears to be plagued by a streak of challenges.
The report, dubbed the State of the Industry, surveyed nearly 700 respondents from the play-to-earn space, a three-fold increase from 2023’s report. According to the 64-page report, blockchain-based games are approaching mainstream adoption levels for the first time in their five-year history. Citing impressive metrics, the BGA notes that the number of active monthly users for play-to-earn games has never been higher for the industry and shows no signs of slowing down.
Several reasons come into play for the industry’s newfound success, including a renewed focus on user experience. The report notes that onboarding friction rates have fallen to 53% from 79.5% in 2023, opening the floodgates for users.
Five years ago, play-to-earn games required a measure of technical expertise with gamers interacting with complex Web3 protocols. Aware of the complex nature, blockchain-based gaming firms began sinking significant resources to improve the user interface of their games while mirroring the simple plug-and-play strategy of traditional games.
“At the heart of this growth is the principle of player empowerment,” read the report. “Since the last market cycle, more efforts have been put into UX and UI, prioritizing a seamless experience similar to what players would expect from Web2 games.”
BGA President Sebastian Borget says the trend will roll into 2025, seeing more ecosystem players increase spending on UX and UI improvements.
Another reason for the metrics for play-to-earn gaming is the rising adoption rates from traditional game publishers. Sony (NASDAQ: SONY) and Square Enix (NASDAQ: SQNXF) are staking their claims in the emerging sector via layer 2 blockchain solutions, introducing play-to-earn gaming to a new pool of traditional gamers.
Respondents say the prospects of in-game asset ownership are a major driving force for the newfound allure of Web3 gaming. Others have their eyes firmly on the potential for reward and revenue from gaming.
A cross-section of respondents disclosed to the BGA that play-to-earn gaming still faces an uphill climb despite the impressive adoption figures. Most respondents point to onboarding challenges and clunky UX as the “industry’s biggest challenge,” while others say bots are the primary cons for the ecosystem.
After years of scams and rug pulls, 66.3% of game developers say they have difficulty onboarding new gamers over the misconception that their offerings are Ponzi schemes. In a more positive light, the report notes that play-to-earn gaming professionals come in from the traditional gaming sector rather than a Web3 background.
Japanese gaming behemoths join forces to advance play-to-earn games
A group of Japanese video game publishers have teamed up to improve the state of Web3 gaming in the country under the watchful eyes of the Japan Cryptocurrency Business Association (JCBA).
Per the report, industry behemoths Sega, Square Enix, and Konami (NASDAQ: KNAMF) are leading the vanguard for the new blockchain-focused alliance. The new play-to-earn gaming alliance sees Japanese-based virtual currency exchange Coincheck roped in as a principal player.
The alliance will have its ranks bolstered by out-and-out Web3 companies based in Japan. At the moment, COLOPL, Drecom, and BrilliantCrypto have already signaled an intention to join the new gaming alliance, contributing their expertise toward developing a thriving play-to-earn industry in Japan.
With technical expertise in the bag, the alliance has since received support from a duo of heavyweight law firms in Japan. International law firms Anderson Mori & Tomotsune and Mori Hamada & Matsumoto are expected to lead in the alliance, working on legal and regulatory edges.
The report notes that the law firms will be the primary drivers in addressing the accounting and taxation requirements issues of the Web3 gaming firms.
The new alliance is expected to operate under the JCBA as a subcommittee, with Coincheck’s CEO, Tomoyuki Isaka, tipped to run the affairs of the group. Keisuke Hata, Square Enix’s CEO, will operate as vice chair, while Drecom, Sega, and Konami executives will occupy other sub-committee roles.
The subcommittee is not shutting the doors for new members, with insiders noting that the membership may rise in the coming days. For now, the members are charting a new course for the integration of non-fungible tokens (NFTs) in gaming while exploring seamless blockchain solutions for game publishers.
Members of the subcommittee bring a wealth of experience, with principal members cutting their teeth in play-to-earn gaming.
Sega and Square Enix have previously dabbled with Web3 gaming, racking up lessons from failures and a streak of near successes, with Konami joining the fray.
Square Enix’s NFT-based game Symbiogenesis received criticism, with other mainstream firms scaling back their Web3 gaming investments.
Meanwhile, global interest in Web3 is at an all-time high, buoyed by improved user interfaces and the prospects of revenue for players.
Watch: PBW 2023: Putting gaming and election on blockchain
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