Source: Race3

Web3 gaming is popularly known as Gamefi because it integrates games and decentralized finance. Web3 games are games that are built on blockchain technology or with the use of cryptocurrencies as incentives. The web3 gaming sector has experienced significant growth both in several investments pouring into the sector and in the number of players. Web3 games are known as one of the sectors responsible for onboarding new users in the crypto space.

While it is poised as one of the major narratives for this cycle and it is predicted to flush out web2 games, there are still a lot of areas lacking in web3 games which web2 games have in abundance. We must compare between web2 and web3 games to understand what areas are lacking in each.

This article will dive into the differences between web2 and web3 in terms of architectures, gameplay (user experiences), incentivization, underlying technologies, and economic models.

Web2 vs Web3 Games

1. Architecture: Web2 games, as we know them, operate on centralized servers and are controlled by game developers, giving them control and unlimited access to users’ data, etc. The majority of Web3 games offer censorship-resistant and trustless gaming environments by utilizing decentralized protocols and blockchain technologies.

2. Incentivization and Gameplay: Web2 game models often require players to make in-game purchases. Web3 games, termed play-to-earn, tend to attract players by incentivizing them. In my opinion, web3 games focus on over-incentivizing players rather than making the games enjoyable. This heavy focus on incentivizing often makes blockchain games less enjoyable than web2 games.

3. Data Privacy Concerns: Since Web2 games collect and store user data on centralized servers, they pose concerns about data privacy, security flaws, and user surveillance for targeted advertising. Web3 games often do a better job at protecting users’ privacy as some games require a simple wallet connection (instead of filling out names, emails, etc) for players to play the games.

4. Economic models: Tokenization is used by Web3 games to represent in-game assets as fungible tokens (cryptocurrencies) or non-fungible tokens (NFTs). Staking, awards, and governance tokens are a few examples of cryptoeconomic incentives that encourage player engagement and support the game's economy.

5. Ownership: Web3 games allow players to monetize their investments and take part in cross-game economies by providing full ownership and interoperability of in-game assets. Web2 games, on the other hand, lack interoperability and have restricted ownership rights.

6. Innovation: Decentralized technology and community involvement fuel Web3 games' innovation and experimentation in player experiences, economic structures, and game design. Web2 games are still creative, but they are frequently limited by centralized control and conventional development paradigms.

Web3 games signify a paradigm change towards decentralized, player-owned, and interoperable gaming experiences, whereas Web2 games have dominated the gaming industry for decades. In the gaming environment, Web3 games provide new avenues for player participation, economic empowerment, and creative expression by utilizing blockchain technology, tokenization, and decentralized governance.