By Patricia B. Mirasol, Reporter
The online gaming industry will be the first to benefit from the adoption of Web3 since gamers already understand and are comfortable with using the decentralized Internet, which includes digital wallets and token accruement.
In-game economies — such as those in play-to-earn games like Axie Infinity — have room to grow as they are still in their earliest iteration, said Peter Ing, chief executive officer (CEO) and founder of BlockchainSpace (BSPC), a data aggregator and tooling provider for Web3 gaming guilds.
“In Axie’s economy … there are only two things you can do: you can earn and then only spend in one way,” Mr. Ing told BusinessWorld in an Oct. 18 interview. “You can imagine the economy’s not very robust yet.”
“We will see a lot more utility coming out of these in-game economies; things like, what can I use the token that I earn here for? What if you could also take that token, take it out of the game, and use it to spend on buying lights and glasses?” he said. “First, you need to create that economy where there’s enough things to do using your currency within the actual ecosystem itself.”
BSPC enables over 24,000 guilds, 80% of which began in the Philippines, and 2 million players in the metaverse.
Gabriel “Gabby” Dizon, a pioneer of the Philippine game industry and founder of Yield Guild Games, started loaning out his digital assets in the blockchain-based game Axie Infinity when he realized that their acquisition cost stopped some players from joining. This initiative grew into a model wherein rental income from Axie Infinity “scholars” were shared among the players, community managers, and the guild.
The economy is so new, Mr. Ing said, there isn’t any baseline yet for what accounts for a sustainable net income for guilds.
“Eventually, we want to treat all your online earnings in Web3 to be the same as your earnings offline, like any other traditional business. You should be able to spend what you earn online in real life,” he said.
BSPC, which mapped out micro-guilds in the Philippines in 2020 when Axie Infinity started gaining prominence, saw how these communities — by educating gamers on how to play, earn tokens, and exchange the latter into Philippine pesos — were instrumental in the rise of the number of gamers in the country to 3 million from 700.
“Never in the history of cryptocurrency have we seen such a vast adoption of any type of Web3 application,” said Mr. Ing.
(At a separate fintech event, Coins.ph CEO Wei Zhou pegged crypto penetration in the Philippines at about 15%–20%.)
The different metaverses being developed offer other use cases for Web3, Mr. Ing said. Digital assets such as non-fungible tokens (NFTs), which represent real-world objects like art and music, can also be applied to virtual land that offers customized experiences.
“Let’s say you have a rollercoaster experience on that land. You can now charge for the experience to be able to use that roller coaster,” he said.
Funding for Web3 businesses amounted to over$1 billion across 43 deals in the first half of 2022.
Companies exploring Web3 revenue streams include fitness giants Nike, which acquired NFT collectibles studio RTFKT in December 2021, and Adidas, which purchased digital real estate in Sandbox, a virtual world that enables players to build, own, and monetize their gaming experiences in the Ethereum blockchain.
According to Mr. Ing, those who work in crypto and believe in decentralization do not support the version of the metaverse envisioned by the social platform Facebook.
“It all comes down to ownership — because Facebook owns the IP [intellectual property], creator rights, and revenue streams,” he said. “In the decentralized version like the Sandbox, for instance, the assets are created and owned by the individual, and any revenue streams that may derive from the creation, or leasing, of the assets go back to the original creator.”