Web3, digital assets, and the future of video games

Video games move fast. And we’re not talking about a blue hedgehog collecting coins at breakneck speed – we’re referring to the industry as a whole, constantly evolving as new technologies, platforms, and business models appear.

In a recent whitepaper, The Future of Payments: Trends Report, I offered my thoughts on the trends driving the industry forward, and how payments will play a crucial role in delivering the best experience possible to players.

Here, I share some key takeaways on the future of video games.

Catalysts for change in gaming: Web3, digital assets and more

First, we must tackle arguably two of the biggest catalysts for change: the use of Web3 and crypto in gaming.

The flowering of these technologies is creating new opportunities for players, developers, and publishers.

Digital assets and Web3 are allowing new types of digital ownership, monetization, and governance in gaming. In addition, they’re empowering developers and publishers to deliver new genres and experiences, and bring in new audiences and investors.

And while these technologies present challenges and risks, including technical difficulty, scalability, regulation, and security, their potential to drive positive change in video games is huge.

But what does this change look like?

Digital assets and the future of video game payments

Web3 and blockchain technologies are creating new types of digital ownership and value generation. They let players own, exchange, and earn money from their in-game assets, such as skins, characters, and land, as non-fungible tokens (NFTs) – unique, verifiable digital tokens that represent a specific asset.

NFTs can also be used to make digital art, collectibles, and memorabilia related to gaming, and are already driving interesting changes in the way video game payments are made.

Take Axie Infinity, for example – a popular blockchain-based game that lets players breed, fight, and trade their own digital pets, called Axies, which are NFTs that can be bought for real money.

For developers and publishers looking to tap into this burgeoning opportunity, it’s essential to have a payments platform that can facilitate transactions of all kinds, wherever players are in the world, using any method they choose – from digital wallets, to eCash.

How is Web3 changing video games?

It’s not only video game payments that are evolving thanks to blockchain and Web3 – it’s the games themselves.

Now, new kinds of games and mechanics are being developed that use the characteristics of blockchain, such as decentralisation, immutability, and programmability.

For example, decentralised autonomous organizations (DAOs) are a form of Web3 governance that let users cooperatively manage and fund projects or communities through smart contracts – self-enforcing contracts that run on blockchain.

DAOs can be applied to create and operate games that are owned and controlled by the players, such as Decentraland, a virtual world where users can make, discover, and trade their own digital land and content.

And these technologies are growing the gaming market, bringing in new users and investors who are curious about the possibilities of blockchain and digital assets, and the fresh new experiences they can provide.

Innovation must be nurtured

So, if a growing number of gamers see digital assets and Web3 as a way to improve their experience, have more agency and ownership, and get rewards, how can this bright future become a reality?

It’s crucial that Web3 and digital assets in the UK are given a regulatory framework that encourages innovation, rather than hinders it.

With this in place, these technologies can flourish. And video games – along with other industries – can usher in a new era of consumer experience.  

To learn more about the trends driving change in video games, consumer experience and more, download The Future of Payments: Trends Report.