Can Web3 and Dynamic NFTs Unlock Sustainable Gaming Monetization?
The endless conversation about monetization has heated up in the Web3 world, where many games focus their core mechanics on speculation, artificial scarcity, and collecting. At GamesBeat Summit Next, Alun Evans, CEO and co-founder of Freeverse, talked about the three problems that Web3 actually solves — but only if tokens can evolve and change based on what the user does with them.
“We think the digital economy should also be much bigger than just collectibles,” Evans said. “There’s a whole iceberg there waiting to be unveiled, and I think we’re doing it with live assets, with dynamic NFTs.”
From speculation, scarcity and collectibles, the focus should be turned to utility and earned value, where the value of the token is based on what the user does with it, and how the user engages with the ecosystem, he argued. Fundraising and speculation are not sustainable, and boom and bust only damage the reputation of the blockchain gaming industry and the wallets of developers.
“There will never be this permanent influx of more new users that will drive the economy, and so the consequence of that is, why bother with Web3? What problem is it really solving here?” said Evans. “We can reward players for their time by allowing NFTs to level up. That drives retention. We can allow users to create user-generated content, which can be sold on secondary markets. It not only increases retention, but also the revenue generation.”
For example, Goal Revolution, on Freeverse’s platform, allows users to train characters to upgrade their stats, generating value on that token. Any profit made when they sell it is based on their investment, rather than scarcity. Players are also encouraged to maintain the asset’s value to themselves both in-game and out-of-game – a character that loses its skills if not trained consistently, and the asset loses its monetary value. And these mechanics proved successful enough to attract the interest of a worldwide soccer IP, which will launch next year.
User-generated content, which increases engagement by giving players permission to customize their experience, shouldn’t be immutable either, Evans argues. If a player has customized something—perhaps even paying the developer money for the raw ingredients—being able to sell it on a secondary market keeps the player in the game’s ecosystem, and allows the game developer to claim a commission on that sale as well.
“It’s also a bit fairer for the player,” he added. “If I make something, why shouldn’t I be able to make money from it?”
Finally, there is an opportunity to blend the worlds of Web2 and Web3 to help build a community and spread a message, which not only increases retention, but also drives player acquisition. During MetaBeat, held in San Francisco earlier this month, Freeverse released free MetaBeat NFTs, which were also worthless. To up the ante, users could engage with social media in a variety of ways – retweeting conference hashtags, collecting likes on their tweets, presenting proof of ownership at the conference door, and so on.
“Brands engage with their users on social media and reward them for that engagement in the Web3 world with tokens that can be upgraded and can unlock rewards, features, prizes and so on, whether virtual or real,” he explained.
Done right, allowing users to extract value from the economy will generate more value for the economy in the long run, which is a very powerful tool to use. So what’s stopping developers from using earned value in the Web3 world?
“NFTs are seen by most people as these immutable collectibles. What we’re trying to do in Freeverse is move that discussion forward,” Evans said. “We’re trying to create dynamic NFTs — we call them living assets — where the user actions affects the NFT properties and therefore affects the market value. What it does is change the discussion. We are moving away from this passive activity of collecting to an active engagement with tokens and with the underlying game. There is a huge opportunity there for the gaming industry, the metaverse and brands in general.”
