Sandbox co-founder foresees AAA game studios embracing web3

Speaking to crypto.news in an interview, Sebastien Borget, co-founder & COO of The Sandbox, discussed the hurdles that web3 gaming faces on the path to mainstream adoption.

Web3 is transforming the gaming sector. In what can be seen as a massive shift from traditional gaming platforms, web3 games let players engage deeper with the games in novel and decentralized ways.

These games offer players more control & ownership over their in-game assets, such as items, characters, & currencies. Players can trade, sell, or even create their own assets.

Major AAA game publishers have already been testing these new waters in a bid to enhance players’ gaming experiences. For instance, Gaming giant Ubisoft, popularly known for top-grossing video game titles like Assassin’s Creed and the Far Cry series, pioneered the integration of NFTs within its hit game Ghost Recon: Breakpoint.

Although web3 games aim to empower players, the sector has received a lackluster response from the wider gaming community, which still prefers traditional web2 games. Per a Blockchain Game Alliance report, 51% of users believe that player onboarding is the biggest challenge, while 37.2% consider poor gameplay an issue.

Gaming giants like Ubisoft and Sega have recently slowed down their efforts to release new web3 games as they continue to look for a way to crack the mass adoption code. This comes as more than 75% of web3 games launched in the last 5 years have outright failed per a 2023 end-year report by CoinGecko.

In spite of the hiccups, the sector is expected to grow significantly, with some projections speculating it to be a $30 billion industry by 2030. Borget, who is also the president of the Blockchain Game Alliance, shared his insights on the matter.

You have said before that AAA companies are likely to wait for smaller studios to innovate in the web3 space before entering themselves. How do you see this pattern of adoption playing out, especially given the current infrastructure developments in web3 gaming?

It’s rather natural within every industry that the largest players are the least inclined to embrace the latest innovations. Their existing business model is largely dependent on the web2 model, and they’ve already earned dozens, if not hundreds, of millions of dollars based on this. So they’re lacking the agility to start looking at new revenue opportunities or they might consider it as too small even if it’s ten million in revenue. This is where the new opportunity lies for smaller and more flexible studios. They are culturally more prepared and genuinely challenged to explore new avenues and try new things at a much faster pace. And it’s what we’ve seen in the past: only small teams have this approach to testing, iterating, failing, sometimes failing fast, but rebounding quickly. 

What about the big players?

Large companies face numerous process overheads, which hinder their agility. However, at the Blockchain Game Alliance, we see big companies like Nexon, Come2uS, Ubisoft, Atari, and G2A entering web3 and Blockchain Gaming. Yet, the way they’re doing this essentially involves setting up separate teams that are not constrained by the limitations of big companies.

From your experience, what are the biggest challenges facing the development and adoption of web3 games today?

The first one is a lack of emphasis on fun and the prioritization of gameplay over simply having a game. This is a recognized issue within the industry, and efforts are underway to elevate the quality of player experience in Web3 games to match that of web2 games. And the technologies of blockchain, NFT, and cryptocurrencies are here to support gameplay, to make it more attractive for users. The second challenge relates to user experience (UX). 

Why is that?

Onboarding users still involves multiple steps, such as setting up wallets, which can be time-consuming. While opening a bank account or a new mobile operator account also takes time, the process in Web3 is perceived as complicated. Unlike in Web2, where App Store and Google Play drive accessibility, Web3 lacks such conveniences. However, just as early iPhones lacked features present in modern ones, UX in Web3 has shown improvement over the past four years, and there’s optimism that it will continue to evolve positively.

With the integration of blockchain technologies with major gaming engines like Unity and Unreal, what technological hurdles do web3 games still need to be overcome to compete with current web2 games?

I think it’s great that within some of the top two most used game engines in the world by the gaming industry, we have some form of direct integration that facilitates users to interact with wallets and interact with web3 in general. I think there are still some hurdles to overcome, such as distribution and access to players. However, on the development side, it’s becoming easier and easier thanks to Unity, Unreal, and also solutions like Stardust, which help remove the complexities that blockchain presents for developers.

What approach should game developers take?

Game creators should focus on making great and fun games. Implementing any new technology like blockchain requires blockchain developers, architects, security audits, skills, and competencies that are not typically found within a video game team. Therefore, having middleware solutions and solutions that reduce the need for specific resources is a great advantage.

What strategies would you recommend for attracting traditional gamers to the web3 gaming ecosystem without alienating them with the complexities of blockchain technology?

I think, again, it’s all about traditional gamers; the first step is to attract them with fun gameplay and offer new experiences that they may not find anywhere else. Then, I believe there’s a lot of emphasis on onboarding education. This is where guilds and other communities can contribute. I also think it can be helpful if larger platforms enter the fray and allow users to discover great games without the complexity of blockchain, either through simple wallets that can connect or through stores that enable or authorize Web 3 games. We’ve seen Google Play move in that direction and the Epic Store as well. So, I’m confident that blockchain will continue to progress in terms of adoption and recognition through the commitment of our members, hard work, and focus on the right priorities.

Could you discuss the role of NFTs and token economics in enhancing gameplay and player engagement in Web3 games?

The important part here is that once someone is committed – either as a creator participating in building player levels, creating their own avatars, or more content in the game – they are ultimately interested in the success of the entire game and in building up a network by connecting with other players and communities within it. So, whether you’re a creator or you own one of the game’s assets, you become an active stakeholder rather than just a passive consumer. Players feel that through their contributions—such as bringing in friends, adding content, and participating in the game’s economy—they also benefit themselves. This not only brings financial benefits but also enhances the fun, attracts more people, and enables participation in overall value creation, which definitely drives engagement.

What are some innovative ways you’ve seen these technologies applied in gaming?

What we’ve seen, which is really interesting, is that we are in the early days of innovation here, and there’s a lot of experimentation ongoing in Web3. People are using decentralized finance mechanics more. Instead of buying content, you can stake your token to access content, experiences, etc. Owning an NFT can give you access either to a whitelist or to more content and experiences, where you can climb leaderboards or earn more rewards. Even the simple mechanic of rewarding people with free assets, or what we call an airdrop of tokens, is now becoming the new way. So, instead of selling content to engage users, we offer them content, provide them with a glimpse of the experience, and then hook them with the fun of participating in it. It’s still early days, so we’re looking forward to seeing much more innovation in the space.

Are you expecting any major AAA gaming publisher to make any moves in the coming years, considering big names like SquareEnix and Sega have already experimented in this sector?

Yes, we are, and Square Enix, Ubisoft, and Atari came into the industry. These are just a few of the large names that have either announced or actually published games using blockchain technology and NFTs. We can expect to see more existing AAA gaming publishers move into the space as they are being challenged by the current business model of free-to-play and premium. Additionally, we’re witnessing new actors emerging and growing into large companies. Being pioneers and early adopters in the space, they have a higher chance of seizing opportunities in the sector. Perhaps we’ll start seeing consolidation in the space, similar to what we’ve seen in other industries before.

Will we see a future where the intersection of AAA gaming and web3 creates an economy that empowers both the players and developers?

Yes, I do believe there’s definitely going to be an intersection where AAA gaming and Web3 creators create an economy. Actually, we’re already seeing that a lot. Think about Animal Crossing from Nintendo. People started to collect resources and wanted to sell to each other until Nintendo blocked it. So it’s quite natural for players who want to exchange resources with each other, and blockchain is a technology that facilitates that, giving back power and ownership to users of the data they own and the money they spend to acquire such content. This transition moves from an economy of renting assets to owning assets.

And how would that be possible? 

I believe that it’s going to grow on a larger scale within larger games. Once they attract larger and larger communities, it will become, and it’s already perhaps becoming, a standard for Gen Z that any digital asset they own is theirs, can be traded, and then brings value. This model not only brings value back for them as players but also offers a new model that developers can embrace.