This year, about 3.2 billion people — or about 40% of the world’s population — will play games, with total spending close to $200 billion, estimates industry researcher Newzoo. Web3’s suppliers want a share of this gigantic market. Criticism of the first generation of crypto games, dominated by the play-to-earn model, has already been well documented, so the question for developers now is what decentralized games should look like.
In July, I wrote that game industry veterans overwhelmingly agree that blockchain games should be fun to play and provide a sustainable financial model, both of which are lacking in play-to-earn games like Axie Infinity. When it comes to genres, many of them believe that massively multiplayer online (MMO) games have a chance to bring the masses to web3. The genre, which has spawned epic titles with booming virtual economies like World of Warcraft and EVE Online, could take advantage of in-game assets like blockchain-based tokens to enable real user ownership, they say.
And one country in particular has the potential to drive this transition.
“China has the best MMO teams in the world,” argues Jerome Wuwho worked on World of Warcraft’s China publication during his three years at The9 and seven years at Blizzard, followed by stints at nWay, Baidu Games and 360 Games.
Like many of his industry peers, Wu jumped on the web3 train. For the past year, he’s been working on a space-themed MMO title called Space Nation, which aspires to become a AAA blockchain game with co-founders including veteran game director Tony Tang and film director Roland Emmerich, who is known for his high-budget disaster movies. . The game has a total budget of $40 million.
The team is spread across multiple countries, and core development takes place in China because “the country’s MMO developers are the most efficient and cost-effective in the world,” Wu said.
While China may not produce the most original and impressive gameplay — which may be why Tencent and Netease recently sought out creative directors in the US — the country’s game developers have caught up with their Western counterparts on other fronts.
But if China doesn’t have the most creative minds, would the web3 games live up to users’ expectations? Blockchain games are still in their infancy and have more pressing issues to solve, Wu argues. “What they need now is a better economic system and a more solid technical infrastructure, right where China’s lead lies.”
“If NetEase decided to go into web3 gaming, it could pose a threat to the rest of the industry,” Wu says, referring to the Chinese gaming titan behind the MMO. Fantastic trip to the westone of the most profitable video games of all time.
But neither Tencent nor its rival NetEase has made any visible forays into decentralized gaming. As a former director of Electronics Arts noted, large companies are generally more cautious about pursuing a new industry, especially one whose reputation has been tarnished by Ponzi-esque play-to-earn games.
China’s strength in MMO is the advantage of a latecomer, Wu argues. Homegrown developers didn’t begin to emerge until around 2000; at that time, they had no chance of beating top games imported from foreign companies, such as MMO works Stone Age, Cross Gate, Legend of Mir, MU, and World of Warcraft. But foreign games needed help with localization and publishing, which gave Chinese companies an opportunity to build expertise and learn from these big titles.
MMO’s success, Wu says, depends largely on a well-designed economic system and practical, rigorous community management. “By working on product operation and publishing for foreign games, Chinese studios have gained in-depth understanding of economic and social design, user behavior and monetization. They quickly turned around and used that knowledge in their own game development, which is why most of their early hits were MMO.
“You will find that Chinese are always at the forefront of coming up with new business models and then improving them,” he adds. It may come as no surprise that China also pioneered the free-to-play monetization model.
Having a solid infrastructure is also key to a genre of games that allows hundreds of thousands of players to be online at once. The game operators in China have been trained from day one to avoid crashes. “The internet in China was so complicated and shaky in the early days that we had no choice but to continue supporting our IT and network stability,” recalls Wu. “That wasn’t something Western studios had to worry about, so they were more focused on the big plans than preparing for a network crash.”