A Review and Reflection on the 2024 Hong Kong Web3 Carnival

Spent nearly a week at the 2024 Hong Kong Web3 Carnival, with a packed schedule and various meetings and face-to-face interactions coming one after another. It's impressive that some people can attend seven or eight events in a day, while I usually start experiencing facial recognition difficulties after three or four. Now sitting on the plane, I still feel a bit dizzy.

Flight mode is an excellent opportunity to organize thoughts. This time we held a special event for blockchain games, and I originally planned to say more in my own setting, but unexpectedly, as soon as I started speaking, I was reminded that I had already exceeded the time limit. Although I was unable to express all my ideas fully, fortunately, I can still supplement my unfinished thoughts through written output. Here are some of my thoughts on the Web3 gaming space for your reference.

Has the Web3 gaming track been disproven?

Although there have not yet been any phenomenon-level blockchain games like Axie and StepN in the current bull market, my stance remains firm: if you are optimistic about Web3, you should be firmly bullish on Web3 games. History has proven that games are an important cornerstone for emerging industries to enter the application layer (B-end).

Looking back at the development of the computer industry, the gaming industry has always been a key factor in driving chip upgrades. Fifty years ago, the popularity of Atari consoles and Pac-Man directly promoted the development of the chip industry. In recent years, NVIDIA has risen amidst the AI wave, but it originally focused on gaming graphics cards (GPUs), and it was the support of hardcore gamers worldwide that provided NVIDIA with early cash flow.

Games are an important medium for the general public to seek entertainment and excitement. To win the favor of end users, the gaming sector cannot be overlooked.

Why is the development of Web3 games currently slow?

The main reasons are the short development time and the deviation from the direction.

The true chain game cluster effect began with the popularity of Axie in early 2021, and it has only been a few years since then. We can look back at the two major transformations in video games:

1. First transformation (about 25 years ago): from hardware sales to software sales, the popularity of personal computers drove the rise of PC games.

2. Second transformation (about 15 years ago): The popularity of mobile devices, the rise of free-to-play games + pay-to-play model, and service-oriented games (Game-as-a-Service) became mainstream.

What might the third transformation in the future be? Some companies are betting on the metaverse, but this requires substantial financial investment and infrastructure upgrades. I believe that Web3 gaming, which is currently in its early stages, could become an important direction.

The biggest difference between Web3 games and traditional games lies in the convenience of payment and transactions. Whether it's in-game or out-of-game payments, smooth operations can be achieved without being affected by various distribution platforms and regional restrictions.

The current deviation in the development direction of Web3 games is mainly due to the first breakout blockchain game Axie adopting the Play to Earn model, which has led most projects to mimic this model. However, if the first breakout blockchain game had been a more casual competitive game focused on circulation and payment, the development of the Web3 game track might have been healthier.

Although the current development direction has deviated somewhat, this situation is better than a complete standstill. The beginning of a major trend is often accompanied by blatant profit motives, just like the start of the Age of Exploration. In the future, a greater wealth creation effect will guide more teams towards circulation and payment, so I firmly believe that the real Web3 gaming bull market has not yet arrived.

How to Embed Circulation and Payments in Web3 Games?

This issue involves the design of economic models, which is no less difficult than designing an economic system for a country. The economic model design of Web3 games is very different from traditional games, as it involves tokens that can be quickly liquidated, and imbalances in various parameter designs can easily lead to system collapse.

Here are some of my views on the economic model design of Web3 games:

1. Moderate centralization control is needed in the early stages. When the project first starts, the circulation of tokens should not be too liberal; it needs to be regulated in some way until the system matures.

2. The development model can be chosen according to the team's style. It can adopt a deeply involved economic cycle approach or choose a small government with a large market mechanism. The former may yield results in the short term, while the latter may be more sustainable. The ideal strategy is to first adopt the first model and then transition to the second model, but this requires overcoming internal resistance within the team.

3. If it can enter a stable development stage, the key lies in improving the convenience of circulation and payment. History shows that whoever can enhance the convenience of consumption will lead industry transformation. If Web3 games can lower the threshold for user consumption behavior compared to Web2, they may achieve breakthroughs.

To achieve stable development, Web3 games need to focus on three points: eliminate circulation and payment barriers, establish a decentralized contract mechanism to form consensus, and keep up with the technological advancements in the gaming industry (such as AI and VR).

Overall, new blockbuster Web3 games will eventually emerge, and we need to remain patient and hopeful.