Bridging the Divide: Ray Shares Insights on Merging Web2 and Web3 Gaming Environments in Asia

In this interview, Ray , Co-founder of Matr1x.io Zhao thoroughly investigates the complex landscape of Web3 gaming across Asia, providing an in-depth look at its unique challenges and opportunities. He compares the Asian market's dynamics with those of the West and delves into the convergence of blockchain, AI, and traditional gaming worlds.

What are the key differences between Web3 gaming in Asia and in regions like Europe and the Americas?

There are notable variances in gaming preferences between Asia and the West. In Asia, mobile gaming reigns supreme, generating revenues that are approximately double that of PC and console games combined. For instance, titles like Free Fire and PUBG Mobile boast astounding daily active users of 150 million and 100 million, respectively.

The popularity of mobile games in Asia can be attributed to various economic factors. Even in Japan, where gamers enjoy both mobile and PC/console options, the mobile sector continues to thrive. In stark contrast, gamers in the United States tend to favor PC and console experiences.

AAA Web3 titles face a significant hurdle: major PC gaming platforms such as Steam and Xbox are hesitant to embrace blockchain games. Although the Epic Games Store is more inviting, its smaller market share complicates user acquisition for PC-centric Web3 titles.

On the flip side, mobile gaming platforms can attract users at a lower cost through channels like Facebook and Google. This explains why numerous Korean and Japanese developers are prioritizing mobile game production. The revenue generated by mobile gaming in Asia significantly outpaces that of console and PC gaming.

At the moment, establishing a reputation in North America and Europe poses a real challenge for us. Nevertheless, we are confident that once players participate in our public beta testing, they will recognize that our games offer comparable quality to PUBG Mobile and Free Fire. This could shift perceptions about our commitment to delivering an exceptional product.

What obstacles stand in the way of broader adoption of Web3 and mobile gaming?

Web3 gaming firms must construct both captivating games and robust blockchain infrastructure. Even the slightest misstep in the blockchain framework can lead to disastrous consequences, undermining the project's credibility. Given the plethora of hackers, there’s absolutely no margin for error, which places immense pressure on blockchain development teams.

Since the peak of Axie Infinity, the count of Web3 gamers has seen a decline, and there are currently few popular Web3 games consistently attracting new users. Actually, the number of Web3 players pales in comparison to that of traders. For our title, we see potential in leveraging eSports and streaming to connect with Web3 users since shooting games hold immense popularity on platforms like YouTube.

The key lies in figuring out how Web2 players can engage in purchasing weapon assets. As it stands, users can acquire NFTs on iOS via fiat currencies due to lenient regulations compared to those surrounding tokens. We are developing a network that would allow individuals to purchase crypto assets using fiat similar to the Web2 model.

If a platform like Steam could effectively address critical challenges related to marketing, infrastructure, and payment, it would pave the way for numerous Web3 gaming studios to successfully penetrate the market and monetize their creations.

How has the demographic of Web3 gaming players and viewers in Asia evolved with the rise of blockchain technology?

The landscape varies significantly from one Asian country to another. In places like Malaysia, Indonesia, Thailand, and the Philippines, where the average monthly income hovers around $200, there is immense interest in games that can supplement daily earnings. Even earning just a few dollars daily from a Web3 game can be very enticing.

Conversely, in wealthier nations such as Japan, Taiwan, and Korea—where education levels are higher and average incomes are more substantial—the motivations differ. In these areas, fewer players are drawn to play-to-earn models for minimal amounts of money. Instead, many aspire to create assets for games. We're in the process of developing an asset editor to foster this creative economy, tailoring it specifically for regions with higher income levels.

How do cultural attitudes towards gaming and cryptocurrency impact the acceptance of Web3 sports and gaming in various Asian regions?

Cultural differences greatly influence gaming behaviors across Asian nations. For example, in Taiwan, MMORPG and strategy games are the most favored, while mobile and first-person shooter (FPS) games tend to rank lower. In Thailand, however, FPS titles top the charts, followed closely by mobile games, both of which are popular in the eSports sector.

The acceptance of Web3 in the eSports arena leans more towards the quality, balance, and visual appeal of games rather than whether they are categorized as Web3 or Web2. In Thailand, a sizable player base recognizes our game, with many hailing from Web2 backgrounds. The primary emphasis is on generating thrilling content and fostering competitive gaming.

What distinguishes Web3 eSports lies in the collaborative creation of assets alongside teams and hosts, allowing for shared revenue from these assets. This transparent approach enables us to engage all stakeholders contributing to the eSports ecosystem, offering them ongoing revenue from NFT trading royalties.

How are traditional gaming giants in Asia adjusting to the booming blockchain and Web3 gaming landscape?

The circumstances differ vastly across countries, largely due to varying regulations. In China, for instance, engagement with cryptocurrencies like Bitcoin and Ethereum is prohibited. However, regions such as Japan, Korea, and Vietnam are witnessing many game studios venturing into the Web3 domain.

The strategies often hinge on the vision articulated by company founders or CEOs. For example, while cryptocurrency trading faces legal challenges in Korea, companies are still devising lawful means to develop Web3 games. On the other hand, Japan and Vietnam present opportunities with available licenses for legal operation.

Numerous significant firms are actively investing in blockchain technology. In Korea, for example, companies like VSPN are making serious moves. Meanwhile, in Japan, industry giants like Sony, Line, and Square Enix are pouring resources into blockchain initiatives, many of which emphasize stablecoins and blockchain networks like the Particle Network.

How are gaming platforms leveraging artificial intelligence to enhance their offerings and player experiences?

I have witnessed some remarkable advancements in AI technology. It's clear that the entire industry is on the cusp of recognizing AI as a pivotal force for future growth. At present, we have several initiatives lined up for AI utilization. For starters, we aim to empower our community to design weapon skins effortlessly. With AI-generated content (AIGC), users can enrich their weapons with stunning visuals, crafting unique skins for their characters. 

This represents a tremendous opportunity and pioneering shift for us, particularly since weapon and avatar skins are crucial revenue streams for our games. We plan to share this revenue model with the community, which we anticipate confident will be noticeable by year's end.

Additionally, AI-driven players and non-playable characters (NPCs) are becoming increasingly vital in the gaming industry, particularly for shooter games. It is essential that AI bots perform at such a high level that they blend seamlessly with human players. This is an area all game developers should prioritize.

Lastly, we intend to harness AI technologies to strengthen our anti-cheating protocols. This is especially significant in the context of Web3 games, as cheating can severely disrupt the game’s economy. Our AI-based anti-cheating solution will be an integral part of our platform's infrastructure and complement our invested games.

Are there any emerging trends or technologies that could benefit Web3 gaming?

In my view, blockchain and AI are undoubtedly the two predominant trends shaping Web3 games, and we are just scratching the surface. If I were to identify a third trend, it would certainly be the innovations in VR and AR technology. I've had the chance to experience VR firsthand, and it's nothing short of astonishing. Many are now discussing the potential of 3D content, moving away from the conventional 2D formats we're used to.

For our organization, we have clear strategies in place. Our Web3 assets will be compatible across various games, and we have solid experience in developing AR and VR games. It’s relatively straightforward for a shooting game developer to modify their user interface for VR environments. I genuinely believe that the Metaverse is the ultimate ambition for gaming companies in the World of Arcade, although it could take around ten years for VR headsets to become mainstream.

How do you envision the evolution of Web3 gaming in both Asia and the West over the next three years?

Having frequented Dubai, I can feel the vibrant atmosphere pulsing through certain parts of the West; however, it's been quite a while since I visited Europe or the US. From where I stand, regulatory frameworks are pivotal. The regulations enforced in the US and Europe tend to be very stringent. If a shift in leadership occurs, I hold hope that updated regulations might finally allow users to enjoy NFTs more freely.

As for Asia, it presents an impressive landscape for Web3 gamers. There is an abundance of projects and studios that are continuously investing in top-notch Web3 games. Over the next two to five years, I anticipate a surge of exceptional Web3 titles to emerge. 

The market comprises affluent individuals from Japan, Korea, and Taiwan, alongside a vast number of aspiring earners in South Asia. With a population totaling two billion in South Asia, this region offers a sufficiently extensive market for a company to successfully expand its products. Nevertheless, formulating a truly engaging game for lower-end Android devices poses significant challenges. Regardless, I firmly believe the Asian region is exceptionally well-suited for mobile Web3 gaming.