What is a web3 game?

Web3 gaming is transforming the gaming industry landscape, unlocking new opportunities for players and developers through decentralized economies. But what exactly is web3 gaming, and how does it compare to traditional web2 games? As blockchain technology continues to evolve, game developers are beginning to explore its potential to enable true asset ownership, more dynamic economic interactions, and increased competition across decentralized platforms.

In this article, we’ll explore how web3 gaming opens the door for creativity, monetization, user engagement, and decentralized economic structures that were previously complex, or completely impossible, in web2 gaming. 

By the end of this piece, you'll have a clearer understanding of how blockchain is reshaping the gaming ecosystem, from ownership of digital assets to thriving player-driven economies.

Key takeaways

• True asset ownership: Web3 gaming leverages blockchain technology to give players genuine ownership of in-game assets such as non-fungible tokens (NFTs), as if they were physical goods.

• Decentralized economies: Unlike developer-controlled markets in web2 games, web3 games feature decentralized economies that foster competition, leading to better services and lower fees for players.

• Enhanced creativity and engagement: Players can actively participate in creating and maintaining economic structures within web3 games, boosting creativity and user engagement.

• Industry transformation: Despite challenges like scalability and regulatory concerns, web3 gaming represents a fundamental shift toward open, decentralized platforms benefiting both players and developers.

Web2 gaming: An overview

Web2 gaming refers to the traditional model where game developers create closed ecosystems, typically limiting player interactions to in-game environments. Games like Fortnite, Call of Duty, or League of Legends are prime examples of web2 games. Players can purchase skins, items, and other virtual assets, but these items remain confined to the game, with no utility or transferability outside the developer-controlled ecosystem.

Fortnite cosmetics showcase

In web2, the in-game economies are often restricted, and trading is usually facilitated by the developers themselves. Players are limited to the options provided within the game’s ecosystem, and there are few, if any, external interactions beyond what the developers allow.

What makes web3 games special

Web3 gaming leverages blockchain technology to enable decentralized economies where players have true ownership of their in-game assets. These assets are often represented as NFTs (non-fungible tokens), which can be freely traded on decentralized marketplaces, independent of the game’s internal system. Many web3 games also have their own token, which players can use for in-game purchases, voting, covering transaction fees, and more.

Captain Laserhawk NFT drop by Ubisoft and Sequence

What truly sets web3 games apart from traditional gaming models are the new possibilities they unlock for players and developers alike. From true asset ownership to decentralized governance and interoperability, web3 gaming introduces a range of features that redefine how we interact with virtual worlds. Let’s take a closer look at the core elements that define web3 games.

True asset ownership

Web3 gaming empowers players with true ownership of their in-game assets. Unlike web2 games, where virtual items are controlled by the game’s developer and locked to the game’s platform, web3 games give players full control over their items. These assets are stored as NFTs on the blockchain, meaning they belong solely to the player, not the developer.

With true asset ownership, players can trade, sell, or transfer their items outside the game’s internal economy, adding real-world value to their in-game achievements. Whether it’s a rare skin, a powerful weapon, or virtual land, players maintain complete control of these assets, even if the game shuts down or the developers move on. This shift to player-owned economies marks a major departure from the way traditional game economies are managed.

Game item interoperability

In web3 gaming, items can be made interoperable, meaning that in-game assets such as skins, weapons, or characters can move freely between different games and platforms. This stands in stark contrast to traditional web2 games, where items are locked within the specific game ecosystem.

For example, a character skin earned in one web3 game could potentially be used in another, or an item from one game might be traded and used on a different platform. This interoperability offers players a new level of freedom and customization, as their investments in one game are not tied to that game alone. It also allows developers to collaborate, creating shared ecosystems that enhance player engagement across a broader network of games.

Decentralized governance

Another defining aspect of web3 gaming is decentralized governance, which gives players more influence over the development and management of the games they play. In web3 games, governance can be shared with the player community through mechanisms like decentralized autonomous organizations (DAOs), where governance tokens give players voting rights on important decisions.

This player-driven model allows for greater involvement in shaping game updates, economic changes, and new features. Instead of developers making all the decisions behind closed doors, players have a say in the future of the game, helping to steer the direction based on community feedback and preferences. This fosters a deeper sense of involvement and ownership, as players are no longer passive participants but active stakeholders in the game's evolution.

Transparency and security

Transparency and security are core components of the web3 gaming experience, driven by the underlying blockchain technology. In web3 games, all in-game transactions, ownership records, and item histories are stored on a transparent, immutable ledger, which players can access and verify at any time. This ensures that the game’s economy is tamper-proof, reducing the risk of fraud or manipulation.

Etherscan homepage

For players, this provides a level of trust and assurance that is often lacking in web2 games, where developers have control over in-game economies and assets that can be subject to unauthorized changes. Additionally, assets in web3 games are stored securely in players' digital wallets, meaning they are safe from centralized server hacks or shutdowns. The security and transparency inherent in blockchain technology make web3 games more resilient and player-friendly compared to traditional games.

Play-to-Earn vs. Play-to-Own

Web3 gaming introduces new economic models like play-to-earn and play-to-own, which redefine how players interact with and value in-game assets. In the play-to-earn (P2E) model, players can earn tokens or in-game assets as they play, which can then be traded or sold on decentralized marketplaces. This model allows players to gain rewards for their time and effort, turning gaming into a potential income stream.

However, as the web3 space evolves, there is a shift toward the play-to-own (P2O) model, which focuses more on long-term ownership rather than short-term profit. In play-to-own games, players collect and own unique digital assets that may have value beyond just monetary gain. These assets can be appreciated as part of a collection or for their functionality across multiple games, offering a more personalized and lasting connection with the game.

For developers, the distinction between play-to-earn and play-to-own is crucial when designing game economies. While play-to-earn drives short-term engagement, play-to-own fosters deeper relationships between players and their digital assets, ensuring more sustainable community growth.

Why web3 gaming matters

Web3 gaming represents a fundamental shift in how games are designed, played, and monetized. It breaks away from the closed, developer-controlled systems of web2 gaming by enabling players to truly own, transfer, and even co-create in-game assets. The most significant aspects of this shift—true asset ownership, interoperability, decentralized governance, and player-driven economies—give players unprecedented control over their gaming experience.

Sunflower Land web3 marketplace

For developers, web3 introduces new possibilities for creating engaging, community-driven ecosystems. By integrating decentralized technologies, game developers can build worlds where players are not just consumers but contributors who can actively shape the game’s evolution. This model helps foster more immersive communities and creates new opportunities for collaboration between developers and players.

Additionally, the competitive nature of decentralized economies means that innovation is constant. Multiple marketplaces and services will compete to provide the best experiences for players, driving the industry toward better services, lower fees, and more transparent transactions. These shifts create healthier gaming ecosystems that are more responsive to player needs and preferences, setting the stage for a new era of gaming.

Challenges and the road ahead for web3 gaming

Despite the excitement around web3 gaming, several challenges remain:

• Scalability: Blockchain technology still struggles to handle the volume of transactions required for mainstream games, though solutions such as Layer 2 scaling and side chains are being developed to address this.

• Regulatory uncertainty: The legal landscape surrounding NFTs and cryptocurrencies in gaming is still evolving, which creates challenges for developers who want to ensure compliance.

• Onboarding complexity: For many players unfamiliar with blockchain technology, web3 games can present a steep learning curve in terms of setting up wallets, trading NFTs, or understanding tokenomics.

However, as technology evolves, these hurdles are likely to diminish, making web3 gaming more accessible to the broader gaming audience. Sequence built a web3 development platform with all the tools one needs to build a web3 game that is both scalable and has seamless onboarding for all types of players.

Conclusion

Web3 gaming is more than just a technological upgrade—it’s a fundamental shift in how games operate, fostering creativity, competition, and decentralized economies. By allowing players to own, trade, and exchange in-game assets, web3 games are reshaping the gaming landscape. Decentralized economies drive competition among marketplaces, leading to better services for players and new opportunities for developers to engage their communities.

How to get started with web3 gaming

Looking to integrate decentralized economies into your next game?

Explore Sequence’s web3 game development tools to seamlessly integrate blockchain technology and create a thriving marketplace. Sequence supports web3 games in providing players with secure, scalable platforms to trade and own assets. 

Want to see it in action? Check out some of the innovative games powered by Sequence — reach out to us for recommendations tailored to your next project!