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How the actor model could enable better blockchain gaming apps

Can developments in computing help fix blockchain gaming’s quality problem?

Decentralized applications (DApps), including apps for gaming, have gained traction for their transparency, security and user asset ownership. However, delivering high-quality AAA gaming experiences through DApps presents challenges.

Existing 2D gaming DApps operate on blockchain networks using smart contracts for asset management. While they’re favored for their simple mechanics and resource efficiency, their limitations become evident as the complexity of the gaming experience increases.

Scalability is a primary hurdle for traditional blockchains like Ethereum, impacting real-time interactive gaming due to constraints surrounding transaction throughput and latency.

Performance is also an issue. AAA games require high-performance computing and superior graphics rendering. Yet, existing DApps struggle to meet these demands, resulting in subpar visual experiences.

Moreover, developing AAA gaming DApps is costly due to resource-intensive tasks and blockchain execution fees. Balancing immersive experiences with user-friendly expenses complicates the use of traditional DApp frameworks for AAA games.

What is the actor model?

The “actor model” is a communication model that enables parallel computing and asynchronous messaging within a blockchain protocol, making it possible for developers to build complex DApps with less difficulty.

The actor model is used within the Gear Protocol, and development was led by Nikolay Volf, founder of the Gear Protocol and Vara and one of the key developers of Polkadot and the Substrate framework.

Within the model are actors — programs or users that send messages to other programs in the protocol. Each actor has a mailbox and a private state that cannot be changed directly by another actor, rather they can only change states by receiving a message from another actor.

Messages between actors are taken from the mailboxes and processed in cycles. Once an actor has received and processed a message, they can either send a message to another actor, create an actor or change its state.

How is this beneficial for DApp development?

Asynchronous message handling in blockchain programming offers several significant benefits that contribute to the overall efficiency, scalability and reliability of DApps.

Firstly, asynchronous message handling allows for non-blocking processing of transactions and smart contracts.

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Unlike synchronous processing, where each transaction must be executed sequentially, asynchronous messaging enables concurrent execution of multiple tasks.

This parallel processing capability enhances the performance of the blockchain network, as it can handle a larger number of transactions and computations simultaneously, resulting in reduced transaction processing times and improved overall throughput.

Jack Platts, co-founder of Hypersphere — a crypto venture capital fund that has invested in gaming projects — told Cointelegraph, “In traditional synchronous systems, multiple tasks often have to wait for each other, leading to a slowdown when processing a high volume of transactions.”

Platts continued, “In the context of blockchain networks, this parallel processing capability becomes vital for maintaining high transaction throughput. As more transactions are initiated by users, the system can handle them concurrently, ensuring faster confirmation times and overall improved network performance. This is particularly crucial for blockchain gaming, where real-time interactions and quick processing are essential for providing a smooth and enjoyable gaming experience.”

Some blockchain games, such as Ember Sword, have already integrated parallel processing into their development processes. Mark Laursen, co-founder and CEO of game development company Bright Star Studios, told Cointelegraph, “In the development of Ember Sword, we employ parallel processing utilizing our ECS [entity component system] solution. Typically, there would be a necessity to manually integrate multithreading and make intricate decisions on a system-by-system basis.”

Laursen continued, “However, in our scenario, the requirements for reads, writes and ordering dependencies are specified, allowing our engine to discern the most efficient method to schedule and parallelize those systems.”

Let’s say a player of a blockchain game wants to transfer an in-game item in the form of a nonfungible token, like moving a legendary sword from their chest (wallet for long-term storage) to their inventory (wallet used for gaming).

The transfer process can happen instantly with low or near-zero fees, the same way a player can simply click and drag a sword from their inventory and move it to a merchant or chest in a traditional game.

Additionally, with asynchronous messaging, blockchain developers can design DApps that are more resilient to fluctuations in network conditions and temporary failures.

Pavel Salas, chief growth officer at Gear Foundation — the organization behind the Gear Protocol — told Cointelegraph, “The actor model actually boosts the dependability of applications that run on blockchain,” adding:

“Since actors process messages independently, failure or issues with one actor do not affect others, preventing cascading failures and improving the overall robustness of the system. And suppose there are disruptions or network trouble, the actor model allows the system to recover quickly and continue functioning seamlessly.”

This can be beneficial for blockchain gaming DApps if there is a network outage, allowing the game to continue running despite any issues on its blockchain.

Moreover, asynchronous message handling enhances the scalability of blockchain networks. Traditional synchronous approaches may lead to bottlenecks and performance degradation as the number of users and transactions increases.

In contrast, asynchronous messaging allows for the distribution of tasks across multiple nodes, enabling the system to scale more efficiently and handle higher transaction volumes without sacrificing performance.

Salas said, “As the user base and activity within the DApp grow, the system can easily manage increased message traffic without causing bottlenecks or slowdowns. Even if a single application grows, it will still manage messages sequentially.”

This scalability is crucial as blockchain networks aim to support a growing user base and accommodate diverse use cases.

Salas continued to explain how the process works: “Through the actor model, individual actor-programs act as shards, ensuring that the system can be shared by design as the number of programs grows. [...] Vara processes all transactions without sharding across bunches of nodes; each node handles everything. However, within Vara, each program operates independently, containing its own state, processing and sending messages according to its specific logic.”

“In blockchain gaming, where real-time interactions and quick processing are crucial, the actor model’s sharding capability ensures fast processing of game-related actions and events, supporting a seamless gameplay experience.”

“As the number of actor-programs increases, the system shards and distributes the workload, effectively accommodating the growing user base and maintaining a responsive and efficient network.”

Another benefit of asynchronous message handling is its support for event-driven architectures in DApps. Instead of continuously polling for updates, DApps can subscribe to specific events or messages, allowing them to respond promptly and efficiently to changes on the blockchain.

This event-driven model reduces unnecessary computational overhead and conserves network resources, leading to more efficient and responsive applications.

Moreover, implementing actor messaging capabilities can significantly enhance the overall user experience by mitigating extended waiting periods for transaction validation. Adopting asynchronous processing allows the actor to receive a message acknowledgment of their transaction along with a pending transaction ID.

Subsequently, any computational tasks or external data dependencies can be managed by the same or alternate actor in a subsequent block, ensuring efficient processing without compromising the responsiveness of the blockchain network.

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This real-time feedback is especially crucial for applications requiring quick confirmations.

As the blockchain ecosystem continues to grow and diversify, leveraging asynchronous message handling becomes essential for creating powerful, AAA-style gaming DApps that can cater to the demands of an expanding user base and meet various use cases across industries.

By adopting this methodology, developers have the opportunity to expand the limits of decentralized gaming and potentially realize the complete capabilities of blockchain technology within the gaming sector.

Intelligent Web: Role of AI in Powering Beldex DApps and Sidechain

AI a powerful tool for devs to change gaming, says former Google gaming head

Ryan Wyatt deciphers the the possibilities for AI to help gamers and game developers achieve.

The world embraced artificial Intelligence (AI), hoping to see it transform complex and day-to-day processes. While generative AI models won millions of users, discussions around the transformative potential of AI in all walks of life became mainstream. 

Today, AI is being tested across all business verticals as entrepreneurs challenge the status quo, streamlining and automating processes in varying industries. This drive also resurrects ecosystems that have lost their vigor over years of trial and error.

In the quest to find the true potential of this technology, humanity continues to infuse AI elements into existing systems in the hopes of outperforming current limitations.

The gaming ecosystem sees AI as a means to supersede incremental upgrades. From reutilizing seasoned hardware to squeezing out the price-performance ratio from the latest graphics processing units (GPUs), the gaming industry sees AI’s potential to redefine how gamers of the future will consume their products.

“AI will be one of the most important tools for game developers to improve their work output and production, and unlock rich and new experiences for gamers,” said Ryan Wyatt, the former global head of gaming partnerships at Google and former head of gaming at YouTube.

Wyatt’s exposure to gaming — on both professional and personal fronts — allowed him a special viewpoint at the intersection of a gamer’s wishful thinking and an entrepreneur’s reality check.

Wyatt garnered over two decades of gaming experience before entering crypto as the CEO of Polygon Labs, eventually retiring as the president to take up an advisory role for the blockchain company.

Speaking to Cointelegraph, Wyatt reveals how AI could potentially transform the gaming ecosystem and what it could mean for the future of blockchain gaming.

Cointelegraph: What is the role of AI in the gaming ecosystem?

Ryan Wyatt: The term “AI in gaming” has been overused to the point of exhaustion. In my opinion, it is simply another powerful tool in the developer’s toolkit, which is already extensive and continues to grow. This expansion of toolsets — AI being one of them — will enable a variety of new gaming experiences that we have never seen before and allow game developers to do more. We often talk about AI as a replacement for the work being done in gaming, but I strongly disagree. I see it as a powerful tool that will allow game teams, both small and large, to do more than they ever could before, which may require human resources to be leveraged differently but not minimize or diminish the importance of the many roles required to make a game. And in return, gamers will get to experience games that were never deemed possible before.

CT: Can AI potentially take up the heavy computational tasks that currently rely solely on GPUs? Do you think AI could allow us to repurpose legacy systems that contribute to e-waste, or is it just wishful thinking?

RW: This is a tough one. I do think it is wishful thinking to assume that AI can repurpose all these legacy systems and reduce e-waste. Based on the track record of how hardware has grown and advanced so much over the last two decades, there’s no indication to believe we’re moving in the right direction here, as we’ve continued to increase e-waste over the last 10 years. From a technology standpoint, we’re constantly evolving, and the necessity and demand to expand on hardware, specifically with the GPU, continues to increase significantly. I believe there will be a number of optimizations that AI can introduce to the problem: offloading more resources to the CPU, optimizing for legacy systems, etc., but I think it’s wishful thinking to assume we can reduce e-waste as we continue to push the limits of technology and hardware to create things that were never imaginable before. This seems like a problem that isn’t going to be meaningfully resolved over the next decade, and, in fact, I anticipate it to get worse before it gets better, with AI exacerbating the issue in a 5–10 year time horizon. 

CT: If AI could be used for graphics optimization, unlimited (free world) map rendering or a storyline that never ends, but you could choose only one, which one would you choose as a gamer, and why?

RW: This is a matter of personal preference, but I hope we see both. I believe that storylines and NPCs [non-player characters] could evolve greatly from where they are today. We have seen amazing and beautiful open worlds expand in parallel with computational and hardware improvements. While not unlimited, expanding worlds have played a meaningful role in games over the last decade.

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To me, one area that needs to evolve is how we engage with NPCs in games. This has been rather archaic for quite some time and has largely relied on linear lines of pre-programmed communication and dialogue. This is already changing with companies like Inworld AI and the work they are doing; their tech helps a game developer craft unique and memorable AI NPCs with its fully integrated character engine.

Their engine goes beyond large language models (LLMs) by adding configurable safety, knowledge, memory and other controls in place. The characters then have distinct personalities and contextual awareness, which is insane to see from a gamer’s perspective.

We haven’t had these kinds of dialogue interactions inside of games before, so it’s hard to wrap your head around how it will change the industry because it’s just something that was once unfathomable. Once these developer tools are seamlessly integrated into proprietary engines of large AAA publishers, you’ll see a new era of immersive game experiences. I also believe you’ll see a huge burden lift on the game development cycle that will allow for expansive worlds by not just large studios with companies like Kaedim; you effectively reduce all of the hours lost in modeling by simply generating stunning 3D art with nothing more than an image. These are the types of tools that are going to advance and multiply game development and usher us into a new era of gaming.

The interesting thing is the collision of both of these topics over the next decade!

CT: What are your thoughts on blockchain gaming? How did you find it different from traditional/mainstream titles?

Blockchain gaming is another tool in the toolbelt for game developers and gamers to change the way we interact with games. By storing assets and information on a blockchain, which is not owned by any intermediary, we can expand upon value exchange between game developers, users and gamers (peer-to-peer). This is done inefficiently today, and although some examples come close, such as CS:GO, it is still far from perfect.

The entire crypto space is going through a much-needed reset, washing away bad actors, and from the dust, you will see true, well-intended pioneers and innovators emerge. The unfortunate abuse of the financial aspects of crypto has made many game developers, especially in the West, apprehensive about incorporating blockchain technology into their gaming infrastructure stack, which I believe is temporary.

However, in the East, we are seeing top gaming developers (e.g., Square Enix and Nexon) fully commit to blockchain gaming due to the new game mechanics and relationships that can be created between gamers and developers. I fully expect the re-emergence of blockchain conversations being driven by the application layer in 2024 to 2025, which will do a better job of illustrating the power of launching games on blockchain infrastructure stacks, even if only certain aspects of games are built on them. The last three years of crypto have been dominated in conversation at the infrastructure (blockchain) layer and finance (decentralized finance (DeFi) sector, and ironically, the abuse has come from bad actors of centralized platforms (such as FTX) that don’t even embrace the core values of decentralization.

CT: From a gamer’s perspective, what do you think AI can do to help the widespread adoption of blockchain gaming?

RW: I’m not sure if blockchain gaming will become widely adopted anytime soon; we’re still years out from this, and there are great companies that are pushing the envelope here, like Immutable, but I do think that as AI becomes materially indistinguishable from reality, there is value in blockchains holding accountability over the advancement of AI. This is because blockchains are transparent and immutable, meaning that they can be used to track and verify the provenance of AI-generated content. This is important because it will help to ensure that AI is used ethically and responsibly and that it does not create harmful or misleading content.

I am certain that we will see blockchains in the future host authentic and verifiable information in a world where things coming from AI become indistinguishable from reality. This is because blockchains provide a secure and tamper-proof way to store data, which is essential for ensuring the authenticity and reliability of AI-generated content.

CT: Despite the involvement of the people behind mainstream titles, the blockchain gaming industry has not taken off, unlike other crypto sub-ecosystems. What could have been done differently?

RW: I think this is largely misguided due to timing expectations and the underwhelming first iteration of blockchain games. Game development cycles are so long, and the first batch of blockchain games were either rudimentary, rushed to market, had the wrong incentive mechanisms, were not highly produced or had other issues. There also have been blockchain infrastructure woes that have needed time to overcome, [such as] gas costs, difficult user journeys to navigate and other infrastructure challenges that are just now starting to be resolved by layer-1 and layer-2 protocols.

However, I’ve seen a lot of amazing blockchain games in development that will be released in 2024 to 2025. These games will truly explore the uniqueness that blockchain games have to offer. Games are such a monumental lift to create, and the ones that go deep with either small or large teams will ultimately need more time to show their work. There has been an outsized amount of capital deployed into blockchain games, in the several billions of dollars, and we’ve only seen a single-digit percentage of releases from that cohort of investment.

CT: What went wrong with blockchain gaming? Why don’t gamers buy into the idea of play-to-earn?

Play-to-earn as a philosophy isn’t that crazy. Game developers are always looking to reward gamers for spending more time in their game because longer session times equate to more value, which is captured by the game developer. So, conceptually, this idea of putting time into a game and being rewarded for it isn’t a new game mechanic.

Play-to-earn in blockchain games tries to expand upon this concept of value exchange from developer to player.

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However, the economies are really difficult to balance when you don’t have the autonomy over every aspect of them due to the nature of them being decentralized. Ultimately, this has either led to pure abuse of the category, unfortunate attempts to do right and fail or will need more tinkering to ultimately find the right token and economic strategy.

CT: Speaking from a different angle, what benefit could AI and blockchain bring to mainstream gaming? What could compel developers to adopt and infuse the tech into their existing gameplay?

RW: There is certainly a chicken-and-egg issue here. Game developers need to push the limits of what these technologies can do, learn from it, iterate on it and then showcase it to gamers to see if this is what they truly want. But at the end of the day, the large games continue to dominate viewership on YouTube and Twitch.

Steam’s top games, such as DotA and CS, have remained juggernauts, and breakout hits like Minecraft and Roblox are generational unicorns. Both of these games took over a decade to materialize into what we know them to be today. In order to achieve mass adoption, you will need to see these games permeated with the technology. I believe that both of these technologies — AI and blockchain — will have breakout moments from native app developers and indie game devs. However, for true mass adoption, larger players will inevitably need to incorporate the technology.

Disclaimer: Wyatt is an angel investor in many AI, Gaming and blockchain companies, including Immutable and Kaedim, both of which are mentioned in his responses.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Intelligent Web: Role of AI in Powering Beldex DApps and Sidechain

Shrapnel Web3 shooter won’t let US users cash out, thanks to Gensler

As soon as a gamer cashes out an in-game asset, they realize monetary value, which is where the problem with the SEC comes in, a Shrapnel executive told Cointelegraph.

The creators of blockchain game Shrapnel — an upcoming AAA first-person extraction shooter — will be cutting a part of its game for United States-based players, in order to avoid the potential ire of the country’s securities regulator.

The game, which is due to launch in early access in December, will be unrestricted for players from Europe and Asia but gamers from the U.S. will not be able to cash out at all, says Shrapnel Head of Economy Francis Brankin in a Sept. 13 interview with Cointelegraph at Token 2049.

“They [U.S. users] can do everything every other player can do, but they can't cash out. Because that's what makes it a security to the U.S. player, as soon as they can realize monetary value, that’s where the problem comes in.”

He hopes the issue will be temporary and that Neon — the team behind Shrapnel — will soon enable U.S. users to bridge capital accrued from Shrapnel to their bank accounts.

Shrapnel is a first-person extraction shooter set on 2038 Earth, where players scavenge for loot and attempt to extract their winnings — all the while being hunted by enemies and other players.

The game also allows gamers to build open economies and possess the intellectual property rights over in-game assets as opposed to merely creating value from the game itself, Brankin explained.

This was one of the main reasons why the firm’s CEO, Mark Long decided to go down the blockchain route. Users can build a brand, create and then sell in-game assets from the ground up.

“User generated content is clearly a big thing,” Brankin explained, pointing to Roblox and Minecraft as textbook examples.

Brankin said Neon chose Avalanche because of its scaling capabilities.

Shrapnel can currently process 2 million transactions per hour (555 TPS) which is sufficient for the time being but over time it’ll be easier to scale up on Avalanche, Brankin explained.

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Neon will launch an early access version of the game in December to paid users before it evolves into a free-to-play game.

While the limitations imposed on U.S. users serves as a roadblock for Shrapnel’s upcoming launch, the co-founder of Sandbox told Cointelegraph the metaverse (and gaming generally) is dying in the U.S. but thriving in Asia — particularly Hong Kong, South Korea and Japan.

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Intelligent Web: Role of AI in Powering Beldex DApps and Sidechain

Animoca plans to develop digital IDs and point system for Web3

Animoca Brands closed a funding round supporting the acceleration of the Mocaverse to create digital IDs and point system for Web3 culture, gaming and entertainment.

The gaming and Web3 company Animoca Brands announced on Sept. 11 the closing of a funding round to accelerate the development of its Mocaverse platform. 

Animoca raised $20 million in an effort to push forward its goal of building out the “Mocaverse” project to be the identity and point system for Web3 gaming, culture and entertainment.

Yat Siu, the co-founder and CEO of Animoca Brands said the DAO-based approach of the project put community first to allow collaboration across the entire Animoca ecosystem.

He highlighted that it will also serve as “the digital identity, reputation and loyalty system for other decentralized organizations.”

Moca ID, which will take the form of a non-transferable nonfungible token (NFT) collection will allow users to create a digital identity, “accrue reputation, earn and spend loyalty points.”

The funding round was led by CMCC Global, one of Asia’s first and primary VC investors in the blockchain space, along with the founder of Sky Mavis Aleksander Larsen and the founder of Yield Guild Games Gabby Dizon, among others.

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The ID will also be used to access the larger ecosystem which makes up over 450 companies in Animoca’s portfolio. According to the announcement, this would be access to a network of over 700 million user addresses.

Martin Baumann, the co-found of CMCC Global said:

“​​The project will unify the unique portfolio of companies within the Animoca Brands umbrella… [becoming] a portal for hundreds of millions of new users to access Web3 and metaverse ecosystems.”

Cointelegraph reached out to Animoca Brands for additional information on its plans to develop digital IDs for Web3.

This development comes after a period of decreased attention to the metaverse. With a huge hype in 2022, the following year the metaverse lost the limelight to emerging technologies like artificial intelligence (AI). 

Nonetheless, it continues to hold opportunities for connection in the digital realm. Wikileaks founder Julian Assange held a political rally in the metaverse against his extradition on Aug. 26.

Back in July the British Museum and the Sandbox partnered to bring the museum into the digital realm.

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Intelligent Web: Role of AI in Powering Beldex DApps and Sidechain

Saudi Arabia looks to blockchain gaming and Web3 to diversify economy

The kingdom is currently diversifying its economy away from oil and turning to new opportunities, such as gaming and Web3.

Saudi Arabia has ramped up its economic diversification efforts driven by its ambitious Vision 2030. 

In a bid to diversify its economy away from a dependence on oil, the kingdom has embraced emerging technologies, such as blockchain and artificial intelligence (AI), and tapped into booming markets like gaming.

But while the country has yet to leave a significant mark in the global game and AI development, the ripples of its investments in the gaming sector could extend far beyond — at least, that’s what Web3 experts say.

“Based on our work and communications that we have, Saudi [Arabia] is very, very interested in Web3,” Animoca Brands co-founder Yat Siu told Cointelegraph.

Given the kingdom’s partnerships with entities such as The Sandbox and even Animoca, Siu sees that there’s an effort from Saudi to venture into the new iteration of the internet. The executive said:

“I think Saudi [Arabia] understands the principle that Web3 gaming or blockchain gaming — the one that we actually prove the owner assets — is going to be the future of gaming.”

Thanks to the interest of its young, tech-savvy population, Saudi Arabia, along with the United Arab Emirates, is driving the growth of the Middle East’s gaming market. According to a Boston Consulting Group report, the kingdom represents 45% of the sector in the region, with a value of more than $1.8 billion. It also boasts one of the largest game revenues in the area, according to game content studio Allcorrect.

In 2017, the kingdom established the Saudi Esports Federation to regulate and develop the country’s gaming industry.

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Bloomberg reported in April that Saudi Arabia, through its Public Investment Fund, invested $38 billion in the sector as it looks to become a global gaming hub.

Although the Saudi government understands the “high-level concept” of Web3, its potential, and how it can align with esports — where teams can own stakes in games they play — Siu said it remains unclear what its integrations to gaming would be due to the absence of clear rules on cryptocurrency and other virtual assets:

“Cryptocurrency is something that is still to be explored. It’s being investigated. I think [Saudi Arabia is] quite forward about how to deal with it. But they haven’t come up with anything yet.” 

“In places like Hong Kong, Japan and the UAE, there’s much more clarity as to what you can do with crypto and Web3. You can map out a strategy,” Siu added.

While it remains to be seen what Saudi Arabia’s Web3 gaming applications would look like, Siu noted that the kingdom is looking at other markets and learning.

“That’s why they’re talking to us. Because they want to know what the best practices are and how they can learn,” the executive explained. “There are very few places in the world that we’ve seen such a hunger and desire to sort of be at the cutting edge.”

“You can feel sort of the desire to have progress and to lead in Saudi Arabia. I think that’s kind of unique,” Siu added.

How gaming can spur Web3 adoption

While pushback from the traditional gaming community and developers persists, Siu claims a successful conversion of users into Web3, whether it’s in gaming or not, should come with financial literacy.

“You can’t really be a true Web3 user if you don’t have at least a certain level of financial literacy that goes above and beyond having a bank account,” Siu said.

Gamers in Saudi Arabia. Source: Allcorrect game content studio

The Animoca co-founder claimed that most Web2 users are not capital investors because they’re mostly labor people compared to Web3 people who understand investing.

“What we found is that the path to Web3 mass adoption isn’t giving [Web2 users] just a wallet. That’s actually the easiest part. The harder part is how to make them aware that what they now have is an asset that has potential value, and it could do things and has different network effects that need to be maintained as real value.”

Meanwhile, Mythical Games CEO John Linden told Cointelegraph that he already sees Web3 adoption in the gaming sector, albeit at a slower pace.

“I think we’re seeing some [adoption] already. We’re seeing people that they’re introducing the [Web3] concept. They do understand the concept of buying and selling assets,” Linden said.

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The gaming industry veteran pointed out that Web3 should enhance user experience and not just give them the means to generate income:

“[Web3 gaming developers] have to focus on new game models. When you start doing that, it introduces creator economy, digital supply chain, ownership of guilds and the ability to come up with your own theory within the game itself.”

“Those are principles I think gamers will attach to,” Linden added.

The Mythical Games CEO projects that the Web3 gaming segment could onboard 50 to 100 million players in the next two years, with their own titles targeting 10 million by the end of 2023.

Intelligent Web: Role of AI in Powering Beldex DApps and Sidechain

Illuvium’s collapsing token represents the problems with GameFi

GameFi developers have been focused on raking in money — and they've forgotten that they need to make games fun in order to win over players.

Blockchain games began as a means to effectively test technology’s true potential. However, making sure they reach that potential remains a challenge. While Illuvium was one of the most highly anticipated crypto game releases in history, the price of its ILV token has fallen significantly since 2021 — to the tune of 97%.

The project’s developers have not released anything substantial for quite some time. The immersive gameplay and impressive graphics are not enough to stop the game’s token from plummeting. The same can be said of most GameFi tokens.

Blockchain games have been largely underwhelming to date because they do not focus enough on ensuring a quality user experience. Ultimately, the task of creating these games is underestimated. When GameFi emerged, it had a lot of potential, but it has been largely underwhelming. It’s not an easy task to build quality AAA games (those released by top publishers). It is a complex, expensive process with intense competition.

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Developers and publishers are now also engaging in many tired tropes and poor practices. Many games have been rushed or poorly designed. Some have featured no meaningful entertainment value, and the earning potential is the only reason people play them. This is usually due to a lack of budget or rushing out unfinished games. Additionally, some companies have released games that do not match the gameplay in the trailer, causing players to lose trust in the industry.

With all this in mind, it’s fair to say that many of these games may not prioritize their players. Audiences wait months for the arrival of new games — only to find that they are low quality, poorly designed and lacking in entertainment.

Illuvium raised funds by issuing its ILV token and selling land nonfungible tokens (NFTs) for $72 million before the game’s launch. Despite this, the public beta launch is being delayed. This highlights one major disadvantage of AAA games: Focusing on earning can potentially take the enjoyment out of the game. The very same issues occurring with Illuvium are happening with other AAA blockchain game projects.

Pixelmon stands out when discussing AAA blockchain game projects that did not meet the mark. The play-to-earn game inspired by Minecraft, Fortnite and Pokemon sold a collection of 10,000 NFTs in 2022, earning approximately $70 million simply from hype — but then the game’s launch failed all expectations from players. Some characters were standard Unity models, and one user got an invisible character. This was not the sort of project that was worth $70 million.

Players weren't impressed by Pixelmon's $70 million valuation. Source: Twitter

Developers could prioritize unsustainable economic models over implementing features to create a more exciting experience for players. This has been a trend in the GameFi market, neglecting engaging gameplay.

In Illuvium’s tokenomics, 45% is set aside for the team and investors. Just 10% is assigned to game rewards, a minuscule figure compared with the investors’ share. All of the token investors’ allocations will be available and can be sold before the game’s launch, meaning the Illuvium team and investors have the benefit of an early exit.

With these kinds of games, there is a massive risk of losing money. Users might have to spend long periods in the game before they receive any significant monetary return. It should also be noted that token prices fluctuate rapidly.

Related: GameFi developers could be facing big fines and hard time

With blockchain gaming, there is also a high cost of entry — greatly hindering the mainstream adoption of GameFi. There must be additional value added other than a monetary return that takes significant time to build up. The user experience needs to be rectified. This factor not only turns off players but also investors. The ultimate purpose of token issuance is to increase its value with the team, investors and players.

However, with Illuvium, there is a risk for retail investors and players, given that 45% of the tokens could face selling pressure before the game even launches. Token investors have an incentive to sell when the demand for ILV rises, but this is at odds with game players, who are hoping for a decent return on investment from playing the game.

So far, Illuvium is profiting from the buzz generated by tokens and NFTs — and retail players and investors bought the excitement — but it has not yet shown real value. The game’s “token first, make the allocations available, and game later” strategy creates a situation where investors and players have diverging interests. The game was primarily made for investors rather than gamers.

While it has some impressive designs and ideas, the game is still missing a lot of features, and there is significant room for improvement.

Investors represent too many of the game’s users, making its success a product more of marketing than the quality of the game. Illuvium’s current nature is akin to an initial coin offering project, hyping the creation of an AAA blockchain title that hasn’t been delivered. Even if a $100 million title is successfully produced, the question remains: Are there enough blockchain gamers to support it?

Takuya Tsuji is the founder of Eureka Entertainment Ltd, a gaming company set to release an upcoming blockchain game, Coin Musme. He previously founded Techcross Inc, a company he established in 2009 as a student at the University of Tokyo and grew to $70 million in annual sales. He also worked as a top developer on DMM Games, a gaming platform in Japan, and has been involved in the development of more than 50 game titles.

The opinions expressed are the author’s alone and do not necessarily reflect the views of Cointelegraph. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.

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Gaming gear maker Razer hacked, user data, encryption keys for sale online: Report

The Singapore-U.S. gaming company has responded to reports of 404,000 emails, keys, logins and other info for sale; it hasn’t finished dealing with a 2020 leak yet.

A post appeared on a hackers’ forum on July 8 offering information allegedly hacked from gaming hardware maker Razer. 

“I have stolen the source code, encryption keys, database, backend access logins etc,” the hacker declared. The Straits Times said it saw a sample of users’ email addresses on offer that the hacker claimed was from a list that contained a total of 404,000 entries.

The hacker said they “will be selling this one time” and set a price of $100,000 in privacy coin Monero (XRM), although they would consider lower offers.

Razer said in a tweet July 9 that it is investigating the potential breach. Website BleepingComputer claimed to have confirmed the validity of the email addresses exposed. It added that Razer has reset all user accounts and asked them to change passwords.

Razer did not respond immediately to an enquiry from Cointelegraph.

The news of the hack came as Razer continued to deal with the consequences of a data leak that took place in 2020. A Singaporean court heard an appeal July 10 by IT vendor Capgemini of an award of $6.5 million granted to Razer in December.

Related: Razer gaming incubator zVentures issues call for Web3 submissions

As a result of the 2020 leak, personal details of around 100,000 users were exposed after a Capgemini programmer allegedly compromised a line of code, leaving the data vulnerable between June and September 2020. The leak was discovered in September 2020 by a security consultant.

Razer was founded in 2005 and has offices in Singapore and the United States. It launched virtual currencies for rewards and credits in 2017 and revamped the offering the following year, adding mining capabilities. Some of the data allegedly stolen in the July 8 hack reportedly related to the old version of the system.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine: Why join a blockchain gaming guild? Fun, profit and create better games

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HyperPlay raises $12M in Series A funding round

Griffin Gaming Partners and Bitkraft co-lead investors in a $12 million Series A funding round for MetaMask and Game7’s HyperPlay.

On June 8, HyperPlay — a Web3-native game launcher — said it closed its Series A funding round after raising $12 million from investors, including co-leaders Griffin Gaming Partners and Bitkraft Ventures. 

Other investors include MetaMask’s parent company ConsenSys, Ethereal Ventures, Delphi, Game7, Mirana Ventures and Monoceros Ventures.

HyperPlay, which was established in November 2022 by MetaMask and Game7 DAO, says its platform tackles the Web3 gaming interoperability challenge “head-on,” providing interoperability for Web3 gaming, and allowing developers to work without being bound by centralized entities like Apple, Google and Steam.

The platform says it aims to enable interoperability across all Web3 games through a wallet overlay on top of games that allows players to carry their MetaMask wallet inside native or browser-based games. HyperPlay’s game store currently offers over 33 Web3 titles, the company said.

“Since announcing HyperPlay in November of last year, we’ve been focused on building a platform that empowers both developers and users to effortlessly navigate the Web3 gaming realm,” said JacobC.eth, founder of HyperPlay.

The platform touts itself as serving both developers and users alike, and says its “developer loyal” focus means it “charges no taxes on in-game economies, instead monetizing optional features like on-ramping or token swaps.”

For users, HyperPlay says it supports all Ethereum Virtual Machine-compatible chains, enabling players to bring their wallets, tokens and nonfungible tokens (NFTs) into every native or browser game. HyperPlay’s launcher integrates an in-game wallet overlay, so users don’t need to leave the game and use a separate website for NFT transactions, the company said.

Web3 gaming, or blockchain gaming, uses distributed ledger technology to offer greater transparency, security, democratization and user control over in-game assets.

Unique active blockchain wallets per activity. Source: DappRadar

According to a report from DappRadar, Web3 gaming accounted for almost half of all blockchain transactions in 2022. This positions gaming as the fastest-growing sector in the blockchain space, well ahead of decentralized finance (DeFi) and NFTs.

That momentum has continued into 2023, with the sector experiencing consistent growth in the first quarter of 2023, according to another DappRadar report. Blockchain games and metaverse projects received $739 million of funding in the period.

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Metaverse investments: Opportunities and risks of the trillion-dollar VR market

What are the best metaverse projects that investors should keep on their radar? Cointelegraph Research Metaverse Ranking Awards the top projects

The metaverse continues to expand, with industry giants and upcoming players racing to seize a slice of the potentially trillion-dollar pie. Close to $2 billion was invested in blockchain-based metaverse deals in 2022, according to Cointelegraph Research’s VC database

A 2022 report by McKinsey estimated the metaverse industry to potentially generate up to $5 trillion in revenue by 2030, an estimate overtaken by Citi's forecast of $8 to $13 trillion. These estimations reflect significant growth from the global metaverse market of $65.5 billion recorded in 2022. To realize these optimistic forecasts, the metaverse industry would need to sustain an impressive 85% compound average growth rate.

VC metaverse funding in 2022. Source: Source: Cointelegraph Research.

Investors will never guess which metaverse won Cointelegraph’s 2023 Ranking of Metaverses. This blockchain-based metaverse has over $61 million in value locked in its smart contracts and over 8,000 monthly users. To learn more about the project that enables true ownership of in-game assets and has a deflationary token model, read the report now. 

Download the report on the Cointelegraph Research Terminal.

Stronger than ever

Yet, the metaverse landscape is not without its difficulties. Market cap losses have plagued industry leaders, with Meta, formerly known as Facebook, losing 77% of its market cap equivalent to $800 billion between late 2021 and 2022. As a result, Meta’s CEO, Mark Zuckerberg, plans to eliminate 21,000 jobs in 2023.

Despite setbacks, industry titans like Microsoft, Apple, Nvidia, and Qualcomm are all developing their metaverse strategies. Apple's entry into the metaverse is highly anticipated with its AR/VR headset launch slated for June 2023. Similarly, gaming firms like Epic and Roblox utilized the pandemic lockdown to their advantage, successfully launching metaverse concerts that reached millions worldwide.

In 2022, mergers, acquisitions, and financing in the metaverse realm rose from $13 billion in 2021 to over $120 billion, bolstered by Microsoft's $69 billion acquisition of Activision. This deal had a 7.6x EV/Sales multiple and a 20.2x EV/EBITDA multiple. Although valuation multiples are expected to decrease in line with higher interest rates, investment activities remain robust.

Metaverse marketing efforts. Source: Cointelegraph Research.

Top blockchain metaverse projects are also attracting significant capital. Leading blockchain metaverses measured by market cap include The Sandbox ($1.02 billion), Decentraland ($905 million), and Axie Infinity ($830 million). Year to date (YTD) performance of The Sandbox is 44%. Decentraland’s YTD is 62%. Neither of them surpasses Bitcoin’s YTD retu of 68%.

For investors seeking exposure to the metaverse, ETFs like the Fidelity Metaverse ETF (FMET) and Roundhill Ball Metaverse ETF (METV) offer viable options. However, the new Cointelegraph Research study reveals that a majority of token transactions in metaverse projects result from speculation rather than actual in-metaverse usage, a trend that calls for cautious investment.

The Cointelegraph Research team

Cointelegraph’s Research department comprises some of the best talents in the blockchain industry. The research team comprises subject matter experts from across the fields of finance, economics and technology to bring the premier source for industry reports and insightful analysis to the market. The team utilizes APIs from a variety of sources in order to provide accurate, useful information and analyses.

The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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