# Building the on-chain game itself Web3 gaming represents an obvious direction for a potential gaming renaissance. It’s a new digital and network technology. It’s global and cross-platform, and it prides itself on removing the shackles of gatekeepers. It can empower users to become stakeholders directly, and provide developers with new ways to raise capital. In theory at least, this prospect seems to fit the current situation. Games have long played a pivotal role in the blockchain industry, and it’s only just beginning to heat up. Cryptokitties, launched in 2017, was one of the first mainstream games in the cryptocurrency space. While it’s best known for nearly paralyzing the Ethereum blockchain, it can also be seen as a forerunner of the importance of blockchain scaling solutions. In a way, the entire blockchain industry can thank Cryptokitties for greatly expanding people’s awareness of the potential of dapps and making people more serious about solving scaling problems. On-chain games have achieved similar successes in the following years, such as Axie Infinity, STEPN, Parallel, and Pixels. Despite criticism that on-chain gaming has yet to make a significant global impact, interest in it remains high, with numerous platforms, investors, game types, and game models being deployed every quarter. In the past four years, Web3 gaming has completed more than 900 transactions with a total investment of more than $11 billion. Of this, more than $1.5 billion of investment occurred in 2023, and in 2024, Web3 gaming investment was about $900 million. The Web3 Games Tracker lists nearly 1,000 games that have been launched in recent years across multiple different ecosystems. Many games have conducted in-depth experiments covering digital asset integration, encouraging on-chain fun, and self-funding models. Many games combine off-chain and on-chain components and are labeled as Web2.5 or low-profile Web3. Looking across the industry, even if there has not yet been a breakthrough game, many innovations suggest that on-chain gaming has the potential to usher in a new era. The continued investment is to be welcomed. Long before blockchain became a buzzword, games have played an important role in spawning new digital technologies. For decades, games have proven to be particularly effective in stimulating the potential of new technologies for entertainment, immersion, and play. For those who have experienced gaming, it’s hard to imagine the early computer era without Atari and Oregon Trail. Early Windows users loved Minesweeper, just as the earliest mobile phone users—using gray bricks before smartphones—loved Snake. Importantly, as mentioned above, these technological changes have simultaneously expanded the global gaming community, even as games themselves have driven the adoption of new platforms.
### Onchain does not mean Open In summary, off-chain gaming has much to gain from new digital media, especially one that prides itself on permissionless innovation, removes barriers, has tools for innovative funding models, and ultimately hopes to ease some of the existing tensions in the industry. In turn, on-chain gaming, especially after the emergence of visionary, risk-taking pioneers, can benefit from more attention and talent from the traditional gaming industry. And for the broader on-chain space, gaming can play a similar role in popularizing other technologies. However, realizing this potential requires overcoming some significant challenges, all of which point to our quest to take on-chain gaming, and the industry as a whole, to the next level.

Source：InvestGame Weekly News Digest#35：Web3 Gaming Investments in 2020-2024

**De-financialization and diversification** \ Early on-chain games explored only a fraction of what was possible. The on-chain gaming model was limited by immature infrastructure and overly focused on speculation and financialization. This is not unheard of in off-chain games: the huge appeal of in-game loot boxes, a thriving black market for game upgrades, and in-game resource farming, which existed as early as the mid-2000s, all indicate that this intersection is neither new in gaming nor likely to go away. But today, this financial focus hangs over the entire on-chain gaming industry. In some ways, “playing games to make money” is an unpalatable confession, as if it were unthinkable that these games could be played purely for fun. This has brought a stigma to the industry that marginalizes potential players and developers. The “gamefi” industry has a clear place in global gaming, but it has undoubtedly created only a small fraction of what is possible in on-chain gaming. The industry needs to move beyond these approaches and win on metrics that matter to real users and reflect the broader reality of gaming today. **Universal Accessibility** \ Building on-chain games can also be complex. Frequently playing games is equally complex, further compounding the difficulty for game developers. Some of these challenges are common to all DApps, but they are particularly prominent for an industry where off-chain game pioneers are committed to maximizing ease of use, engaging operations, and engaging content. These challenges include: Players often need a crypto wallet to play games. This means a seed phrase, which can be scary for players who are used to passwords and password resets. This means identifying the ideal wallet, many wallets are indistinguishable from each other, and features such as native staking support don’t mean much to players. Players often need to bridge assets between different blockchains. A game on Solana and a game on Ethereum may involve two different wallets, and the mechanism for transferring funds between them is complex and costly. The cumbersome steps and transactions, the time to wait for final confirmation on the blockchain and the bridge, and the handling fees hinder the use of most dapps, including games. Players usually need to pay for gas themselves, sometimes using a custom gas token. The actual experience may sound a little counterintuitive, such as the need to exchange currency for each city, and sometimes a new currency for specific stores within each city. The challenges above limit developers, impact games, cause user churn, raise barriers to entry for creative studios, and often take away the magic of gaming. **Ecosystem Fragmentation and Non-Interoperability** \ Most worryingly, the Web3 gaming ecosystem appears to be slowly reproducing some of the most worrying aspects of traditional gaming. In order to increase transaction fee revenue and focus on the price of their own tokens, major blockchains are strongly incentivized to try to become their own publishers and “walled gardens”. This also often forces game developers to choose a specific blockchain for release, and each blockchain has technical trade-offs, developers have to choose one of them, or even choose to launch their own blockchain. To date, more than 40 independent blockchains have or are hosting on-chain games. These incentives are contrary to the open ethos of blockchain and smart contract platforms. While this contradiction is not unique to the gaming industry, it is a worrying mentality for a genre that is so focused on attracting non-crypto users, non-whale users, and people outside the narrow stereotypes of the cryptocurrency space. The industry should be looking to grow its collective footprint and player base to expand the overall space, rather than focusing on perceived zero-sum competition and short-term impacts on any individual token price. On a development level, what we need now is collaboration, not pvp. ### Next Steps The saddest consequence is a recurrence of some of the challenges that traditional gaming currently faces. Disgruntled players worry about over-exploitation of resources. A small number of gatekeeper entities have huge influence over which games and game modes make it to the top, effectively blocking innovation. Sadly, these situations sound a little familiar. On-chain environments and Web3 gaming ecosystems do have the opportunity to recreate the core ideas of the early internet and early gaming communities, a permissionless environment that allows anyone, anywhere to connect and distribute code. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://penny-whale-world.gitbook.io/penny-whale-world/market-analysis/publish-your-docs-2.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. 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