2024 Web3 Gaming Predictions
2024 Web3 Gaming Predictions
UGC Driven, AI Gaming, Luxury IP & Korea Leading the Charge
2024 promises to be an unprecedented year for the entire crypto industry. Ahead of the Bitcoin halving and the official start to the longest anticipated bull market in this industries history, MINDS AT PLAY outlines the key trends that will dominate 2024. With a new bull-run, comes new moods, aesthetics and pioneers. From user-generated content fueling creativity to luxury brands leveraging Web3 gaming for retail opportunities, and the ascent of AI gaming alongside the growing influence of Asian and African markets, here are the trends to know.
CRYPTO REVIVAL
The resurgence of interest in Web3 gaming comes on the heels of a decline during the recent crypto winter. Currently valued at $250 billion, the gaming industry is poised to experience massive growth, projected to reach $390 billion in the next five years, and Web3 gaming giants are expected to account for a large share of the expected total market cap. In their '2024 Crypto Market Outlook’, Coinbase highlights the potential of Web3 architecture to enhance user acquisition and retention, though it acknowledges that this remains an unproven thesis. As numerous projects that were founded after the initial wave of mass founding in 2021 approach the 2-3 year mark in their development cycle, the expected release of Web3 games in 2024 is anticipated to provide the industry with the much needed statistics and data to back up this thesis. In other words, this year is huge for the future of Web3 gaming.
While it may sound like a cliché by now, it's crucial to grasp that we are still very early. According to Joseph A.C. Lloyd's report 'The Year Ahead for Gaming 2024' from Delphi Digital, the total market cap of 183 gaming projects has seen an 86% decrease from its all-time high in 2022, and it’s currently ranging between $4 billion and $7 billion. Delphi Digital also notes that in 2023, blockchain gaming generated 23 times more on-chain transactions than DeFi protocols. These facts speak to the growing significance of Web3 games as key economic drivers for the entire crypto-landscape and hint that gaming-specific networks, subnets, and blockchains will take center stage in 2024.
USER GENERATED CONTENT
The Web3 gaming revival is not just about price action – there is something of a creative renaissance unfolding. Back in the peak of the former bull market in 2021, we witnessed a surge in NFT art and overnight successes, and initially, it seemed like this creative boom had dwindled or lain dormant. According to Karma Gora, Head of Marketing and Community at ZTX, the blockchain initiative fueled by ZEPETO's technology and IP – Asia's largest metaverse with 430 million lifetime users – “Crypto's resurgence isn't just about currency; it's a creative uprising.”
Karma is highlighting a greater trend that is permeating all of crypto, not just Web3 gaming, and that is the dawn of the creator-economy. “ZEPETO, with its creator-centric ethos, has redefined the digital landscape in the Web2 world, giving users unprecedented control over the creative process. Over 90% of daily in-app transactions involve user-generated content (UGC) items, showcasing the increasing importance of community-driven content,” Karma states.
This aligns with the growing demands of creators and communities, a shift that ZTX aims to address on a larger and more decentralized scale. Gamers are wanting more than just to be passive contributors to games, they want to be active creators and owners of games. This is why we see prioritizing and fairly rewarding UGC through blockchain-enabled consensus and primitives as a major trend that will not only take off but will also set Web3 gaming apart from the rest of the gaming industry in 2024.
In their joint article titled “The Creator Economy In Gaming” for the Decentralised.Co Joel John and Siddharth state:
UGC is a powerful lever for new games and serves two core functions. Firstly, they extend the time a userbase can be engaged with a game. Linear games with progressive storylines are interesting until the story is played out, after which gamers don’t have much reason to continue gaming. Secondly, it allows the most active contributors to the game to stay invested. Building unique levels and worlds within a digital realm creates an emotional attachment to the game. The feedback gamers receive from other players serves as validation for their effort as games turn to outlets for creative expression. In essence, UGC helps a portion of a game’s user base go from passive participants to active creators.
”NFTs and crypto assets allow digital creators to build brands and communities online and monetize their creative output. ZTX is building a platform that will empower this big migration from the physical to the virtual,” echoed Karma.
GLOBAL MARKET POTENTIAL
The Philippines has been a key player in demonstrating the impact of market forces in Web3 gaming, as most clearly evidenced in being the market that almost singlehandedly made Axie Infinity the largest Web3 game in history. In 2024, heightened activity in Asia is expected, particularly in Korea, where 9 out of 13 major publishers are actively involved in Web3. Nexon, Netmarble, Wemade and Neowiz being among some of the key Korean publishers building and investing in Web3 gaming. Not to mention, the aforementioned ZTX which as we stated earlier is the brainchild of South Korean gaming giant ZEPETO.
However, ZTX and other up and coming Web3 gaming studios are not building solely for one singular market but they are building, rather, to have global appeal and permeance. Karma noted: “While ZTX may initially seem to draw attention primarily from the Asia-Pacific (APAC) region, courtesy of its connections to ZEPETO, it is, in fact, positioned to emerge as a truly global platform. Beyond its apparent stronghold in APAC, owed to increased web3 literacy there, ZTX is poised to become a significant player on the global gaming stage, offering a diverse and inclusive gaming experience that extends far beyond its regional roots.”
According to Delphi Digital, Nigeria is positioned to emerge as the second-largest Web3 gaming market globally, just behind the Philippines. This is a significant shift, considering that Nigeria doesn't even rank in the top 5 for Web2 gaming markets. Additionally, Delphi Digital identifies Pakistan as a breakout market for 2024. Both countries are expected to prioritize mobile gaming, with only 11% and 26% of Nigerians and Pakistanis using desktops. What this tells us is that Web3 gaming could be a catalyst for emerging markets to participate in gaming history and set micro-trends that overtime will shape Web3 gaming to be an inclusive, player-driven and wholly unique industry. In 2024, you can expect to see continued growth in the Asian market, especially in Korea, and breakouts like Nigeria and Pakistan finding their footing in the international gaming ecosystem.
NEW LUXURY RETAIL EXPERIENCES
In 2024, the ongoing trend of gaming destinations transforming into pivotal spaces for legacy brands will persist, as they strategically target the attention and purchasing power of Gen Z and Gen Alpha. Nike's "Airphoria" Metaverse experience in Fortnite serves as a prime example, showcasing major apparel and fashion houses' endeavors to connect with a younger audience.
Anticipating the continued evolution, we expect fashion houses and entertainment brands adept in the metaverse to capitalize on the crypto market upturn. This will involve introducing in-game e-commerce experiences using blockchain technology, and lending legacy IP for Web3 gamers to showcase elevated status in the metaverse. This will effectively allow brands to track loyalty and reward consumer engagement, and this give Web3 games a solution to the user-acquisition problem that confronts many game developers. This innovative approach not only caters to the tech-savvy gaming community but also opens new avenues for Web3 gamers, especially Gen-Z gamers, to better express themselves and flaunt in-game status.
Given that Web2 gamers have already embraced similar features in games like Fortnite and Roblox, we expect a comparable reception for Web3 gamers. As market sentiment improves and token prices surge, we predict a seamless transition of luxury brands that have established partnerships with gaming giants, like Fortnite, into the realm of Web3 gaming. This transition is especially anticipated for brands such as Nike, L’Oréal, LVMH, and Prada, which have already immersed themselves in the Web3 space
Furthermore, the gaming industry is witnessing notable collaborations, such as Oh Baby Games partnership with Spongebob, announced ahead of their 2024 release. We expect many more brands to partner with Web3 games for new, immersive in-game experiences for players.
In addition, AI-driven "generative agents" are expected to revolutionize player experiences (as per Delphi Digital) and create novel retail opportunities for media and IP giants entering the Web3 space. Web3 gaming projects like AI Arena, with a mission to foster AI intuition and literacy through a gaming experience, may become strategic partners for legacy IP looking to establish a presence at the intersection of AI and Web3 gaming. This convergence marks an exciting era for the industry, blending traditional and cutting-edge elements to redefine the gaming landscape.
WATCH: What is AI Arena
In one word, our 2024 Web3 Gaming Predictions can be summarized as 'revival.' This year will witness a creative renaissance centered around user-generated content, global market potential in Asia, and the seamless integration of luxury brands into Web3 x AI-powered gaming.
A special thank you to our MINDS AT PLAY audience for your continued readership and enthusiasm. Additionally, immense gratitude to our exceptional contributors and researchers whose dedication made this article possible. Your support propels us forward, and we're excited to bring you more insights into the ever-evolving world of technology and gaming.
Thank you for being a part of MINDS AT PLAY!
— Cynthia (@cynbahati) ౨ৎ ⊹ ‧ ♱˚
“Crypto's resurgence isn't just about currency; it's a creative uprising.”
- Karma Gora
References:
The Year Ahead for Gaming 2024, Delphi Digital
Smashing article 🙌
Nice one Cynthia 👍