'Web3 Gaming Offers a Pathway to a More Inclusive and Vibrant Gaming Ecosystem' — Weiwei Geng

The Blockchain Can Revolutionize the Gaming Landscape

According to Geng, the mismatch between what players seek and the ‘pay-to-win’ games that are being produced is fueling an undercurrent of conflict among large developers, small developers, and players. The CEO of Taki Games also attributes what he perceives as the traditional gaming industry’s “unmistakable” slowdown to this conflict.

However, in his written responses provided to Bitcoin.com News, Geng, a seasoned professional in the gaming industry, identifies blockchain technology and crypto-economic principles as the likely tools to align the interests of developers and players. The CEO added that such a shift to blockchain-based or Web3 games could “revolutionize the gaming landscape.”

Geng, meanwhile, rejected the notion that the play-to-earn (P2E) model of the Web3 gaming industry has failed to attract a large audience. He cited the industry’s billions in revenue and the billions of players as evidence to support his argument. In his responses delivered via Telegram, Geng also shared his perspectives on the funding prospects of the Web3 gaming industry and the advantages and disadvantages of inflationary versus deflationary reward mechanisms.

Below are Geng‘s answers to all the questions sent.

Bitcoin.com News (BCN): The traditional gaming industry is reportedly worth around $250 billion and is projected to grow to $682 billion by 2030. The industry’s growth has primarily been underpinned by a free-to-play model that’s accessible to the masses. It has worked pretty well. So, why in your view would the masses be drawn to Web3 gaming?

Weiwei Geng (WG): I spent years as an early executive at Kabam, which was one of the pioneers and largest successes in social and mobile gaming. While we built an enormously successful business, we could also see that the industry was headed in a dangerous direction, and would need to reinvent itself.

The core problem with the free-to-play model is that it encourages fierce competition, which leads to building “pay-to-win” games that optimize for addiction and profit maximisation – meanwhile, the current generation of players increasingly looking for innovative entertainment and the opportunity to join communities built around those experiences. This created an undercurrent of conflict between large devs, small devs, and players, and the resulting slowdown has been unmistakable.

As an industry insider, the potential for Web3 gaming was immediately clear to me. Blockchain technology and crypto-economic principles were the most compelling tools for realigning interests between developers and players by facilitating direct interactions and transactions. This approach not only maintains free access but also promotes equitable value distribution and asset interoperability, addressing the traditional model’s flaws.

Consequently, Web3 gaming is poised to offer a pathway to a more inclusive and vibrant gaming ecosystem. This strategic shift towards a cooperative, transparent model could revolutionize the gaming landscape, heralding a new era focused on community-driven engagement and player-friendly economic practices.

BCN: Not too long ago, the play-to-earn model was expected to help Web3 gaming go mainstream. However, it hasn’t lived up to expectations. Do you believe that P2E gaming is broken and what model could work where P2E failed?

WG: This is a question of where the industry is today, and where it will be ten years from now.

An industry generating hundreds of billions of dollars in revenue from billions of players does not send a strong signal that something is broken. But consecutive years of rapid growth followed by a recent, material dip across nearly all measures tells me that a meaningful – and likely fast-growing – segment of players aren’t happy with how things are going.

If I had the choice between playing two identical games where one gives me ownership and decision-making power, and the other doesn’t… in what world would any player choose the old way of doing things?

To me, the answer is that today’s world includes a lot more players who prefer the new way of doing things than even a few years ago. Since the beginning of the last bull market, hundreds of millions of people have been exposed to the potential of crypto, and have become increasingly excited by its potential to offer better experiences.

At the same time, many of those people saw the market crash, and have gotten smarter about which kinds of projects – especially in gaming – are going to run into the same problems.

This is why we’re building the Web3 Zynga – an extremely successful business that develops games for mainstream users and lets loyal players earn real value and a stake in the TAKI network by earning TAKI rewards. With this approach of bringing “Play and Earn” mechanics to a fast-growing, revenue-generating business, we believe we can fix traditional gaming’s core problems by prioritizing engaging and enjoyable gameplay alongside earning opportunities.

BCN: Your company Taki Games is a play-and-earn games platform that publishes first- and third-party titles. What are some of the games in your stable and how do you make the business model sustainable?

WG: Taki Games specializes in casual mobile games because we know they have gameplay with product-market fit among hundreds of millions of mobile gaming’s 2 billion players. This lets us iterate on Web3 features that make these games 10x more valuable than traditional games for mainstream players.

We’re specifically focusing on bringing loyalty systems on-chain, enabling players to earn rewards based on value they generate for the network – not just by driving empty metrics.. To ensure sustainability, we monetize through in-app purchases, advertising, and subscriptions. Revenue is then utilized to buy back and burn our governance token $TAKI, then rewarding the community for their contributions.

With this approach, we’re building a more durable gaming network, and also starting to bring gaming’s $200B+ in annual revenues on-chain through the $TAKI token.

BCN: With another year adding to the maturity of the gaming industry, do you see venture capital (VC) firms funding more web3 gaming projects? Also, what do you think of their behaviour during this bullish cycle?

WG: I think just 6 months ago, VCs would have generally said that they would continue to focus on infrastructure and defi, and let the game chains and studios that collectively received billions in funding in the last bull market continue to mature and launch games to prove out the thesis that gaming would become a primary driver of mainstream adoption.

Well, the last few months seem to have proved this. Both new and old gaming chains have seen an extraordinary run-up in the market. And studios such as ours are generating millions of installs, and growing user bases. The question is which of the initial breakout successes will continue the momentum, and which will crash once after the initial excitement.

Looking ahead, VC behaviour will be driven by how the first phase of this cycle plays out. Most VCs will see that gaming has momentum, and will reinvest in the sector. The smart money VCs will form their strategy based on the projects that actually maintain momentum – not just in gaming, but also in more mature sectors like defi and infrastructure. The lesson from these sectors is that hype is an amazing bootstrapping device, but does not translate into long-term value. We believe projects like Uniswap, which creates real market value for its users and token holders, will increasingly serve as a model for long-term success in Web3 gaming.

BCN: Can you explain inflation in the context of Web3 gaming rewards? What are the pros and cons of inflationary versus deflationary reward mechanisms and which one is better suited to fix the sustainability problems observed in Web3 gaming?

WG: Inflation occurs when the supply of in-game tokens exceeds demand, leading to a decrease in value. This is a challenge for Web3 games that reward players with tokens in order to bootstrap a user base, but don’t succeed in bringing demand in line with supply. This can result in a runaway imbalance that drives the price of the asset down toward zero.

On the other hand, reducing the supply of tokens over time with deflationary mechanisms, can help maintain a token’s value, but make it harder to attract new users.

To make the games rewarding and sustainable for players, it’s wise to combine the best of both models: Reduce the economy’s supply by burning tokens and injecting tangible value through revenue generated from real business activities to stabilize the game’s economy.

BCN: Millions of gamers want the benefits of Web3 gaming without the complexity. But many games use blockchain just because it’s possible to build on the blockchain rather than because the blockchain elements make the gaming experience better. What are the top three things Web3 games can do to eliminate complexity?

WG: In my view, three principles should guide how we build:

Keep the gameplay simple and familiar. Innovating with blockchain is complicated enough. Why make things even harder for the user and yourself as the developer? Take games that players already like, and use blockchain to enhance specific features – don’t try to reinvent the end-to-end experience.

Make blockchain an enabler, not a barrier. Too many games are adding friction to games by requiring users to learn about an unfamiliar technology before they even get started. Add blockchain functionality where it would seem normal to a user.

Build trust by taking users on the journey. Our job is to get mainstream gamers to the “Aha” moment with Web3 where our games feel familiar until the value of Web3 becomes immediately and profoundly clear. Gaming started with Pac-Man and Space Invaders before it produced Diablo IV and Dead Space. Offering comprehensive tutorials and resources is vital for educating players on Web3 gaming’s benefits.

BCN: What is Taki Social and why have you decided to sunset it?

WG: We’ve witnessed the tremendous growth of the Taki Games initiative, despite having launched just a few months ago. Our community engagement and user base for games have grown significantly, embodying our vision to build the Web3 Zynga—a revolutionary, player-owned mobile gaming network. To maintain focus on this gaming initiative and to further its growth and expansion, we aim to optimize our team’s resources and efforts.

Launched two years ago, Taki Social has played a crucial role within the TAKI community, significantly enriching the $TAKI token’s ecosystem. However, we’ve decided to discontinue support for Taki Social to redirect our resources more effectively towards our gaming initiatives, thereby fostering community growth. We are committed to ensuring a seamless transition for users to access their tokens on Taki Social before ceasing support. This decision marks just the beginning for the TAKI community and Taki Games. We are poised to reach new heights.

BCN: Do you see in-game ads becoming an integral part of Web3 games? If so, how can game developers ensure that the ads do not negatively affect the user experience?

WG: Advertising drives about half of all revenues in traditional gaming, so we shouldn’t be surprised to see the same in Web3 gaming.

Other gaming industry veterans will know that gaming is one of the most scientific, sophisticated, and fiercely competitive sectors when it comes to advertising. There is a deep and broad advertising market structure that has formed around traditional gaming, generating multiple multi-billion dollar businesses, and driving innovation that ripples out to adjacent industries. I’m anticipating the same sort of evolution to take place in the Web3 gaming industry, but faster, and with higher stakes.

Today, mainstream gamers will see the same types of ads in Web3 games as they do in traditional games. Given how rapidly the Web3 gaming space is growing, expect equally rapid innovation in the world of in-game advertising: more and more advertisers will target users based on the contents of their wallet, and an increasing share of those advertisers to target users with offers in the form of tokens – similar to token-based marketing campaigns we see today, but much more sophisticated in terms of targeting and pricing.

What are your thoughts on Weiwei Geng’s remarks about the future of Web3 gaming? Let us know what you think in the comments section below.