This Web3 world promised us a great reset, a digital utopia where creators are better compensated and players actually own their in-game assets. Instead, we were pitched the promise of decentralized platforms, open metaverses, and a future where we wouldn’t suffer under the thumbs of evil gaming monopolies. A shadow is creeping into this vibrant landscape: the erosion of NFT royalties. We need to be making those choices today! If we fail to act, this promised paradise will become nothing more than an amusement park for profit-thirsty conglomerates, forcing its architects to miss out.

Are We Killing The Golden Goose?

Think about it: what makes Web3 gaming exciting? It’s more than the blockchain buzzwords or the allure of “digital ownership.” It’s the promise of new forms of play, exciting new ways to be social, and a creator economy filled with joy and possibility. That whole ecosystem is dependent on the fact that creators will be in a position to be incentivized. Royalties, a small share of each secondary market sale of an NFT, form a key part of that incentive. They’re not the margin—they’re the meat. They’re the lifeblood that sustains the creative engine.

Consider a scenario where creative professionals only received compensation when they first sold their work. No royalties on resales. Now apply that to the Mona Lisa. Absurd, right? That’s exactly the path we’re taking in Web3 gaming. Other platforms are overtly disincentivizing, often going so far as to abolish royalties altogether in a bid to lure in the volume. With these moves, they’re prioritizing short-term gains over long-term sustainability while eating the seed corn. This is not only detrimental to creators, it is harmful to the broader Web3 gaming ecosystem. It stifles innovation, devalues art, and in the long run, kills the goose that lays the golden eggs.

This is actually a bit like what happened to the music industry when Napster came out. In the early days of digital music, Napster offered free access to millions of songs, which was incredibly appealing to consumers. At the same time, it eradicated revenue avenues for musicians and labels. Consequently, vibrant music creativity and production largely collapsed. Web3 gaming is at a similar crossroads. If we prioritize short-term gains in the process by canceling royalties, we endanger our creative bedrock. This is the foundation that makes Web3 gaming so enticing to begin with.

Fairness: Remember The Web3 Promise?

Web3’s foundational tenet is about decentralization and empowering the user. It’s about taking power from the corporations who have abused it and giving it back to the people. Taking away creators’ royalties is a classic case of centralization in disguise. Platforms are essentially saying, "We'll give you the infrastructure, but we'll decide how much you get paid." This is not decentralization at all. This is just feudalism with a blockchain swagger.

Think about traditional game development. Developers spend countless hours and their best creative blood developing worlds, characters, and narratives. Sure, they get a salary—though that’s where it begins. They don’t get a penny of the billions earned from secondary markets for physical games or in-game items. Web3 is a massive opportunity to correct that mistake. By doing so, it establishes a clear and fair economic relationship where creators are directly rewarded for their contributions to the ecosystem.

What happens when creators feel cheated? They leave. They move their talent, their innovation, and their passion elsewhere. Otherwise, they will risk losing the talent to traditional gaming, where at least they know they have a consistent paycheck. Or they may decide to give up on the space altogether. This would mean that Web3 gaming resulted in a desolate landscape of derivative assets and soulless experiences. Is that the future we want?

Community: Time To Embrace True Ownership

Web3 is more than a tech play. It's a movement built around community. It's about building shared experiences, fostering collaboration, and creating a sense of belonging. A community can only flourish on the basis of equality and mutual concern. When creators are unfairly valued, we all lose.

In some cases, we need to change the prevailing narrative from “royalties are a burden” to “royalties are an investment.” While they’re a very small fraction of the broader market, taken together, they’re a huge investment in the future of Web3 gaming. Through their support of innovative creators, they are helping to create a more equitable and sustainable ecosystem.

The future of Web3 gaming is ultimately in our hands, but it will require fostering a truly fair and sustainable ecosystem for creators to thrive. Now will be the time for real ownership—let’s go! This means not just for the players, but the artists, developers, and creators building the future of the Metaverse. Let's not let greed destroy the very thing we're trying to create: a better, more equitable future for gaming.

Beyond the economic case, we should focus on the ethical imperative of sustainable NFT royalties. Otherwise we may as well go back to Web2.

  • Education: We need to educate players about the importance of royalties and how they support creators. Many players simply don't understand the economics of Web3 gaming and the crucial role royalties play.
  • Platform Accountability: Platforms need to be more transparent about their royalty policies and actively promote and enforce them. They should also explore alternative funding models that don't rely solely on transaction fees.
  • Community Standards: The Web3 gaming community needs to develop and enforce ethical standards around royalties. This could involve boycotting platforms that don't respect creator rights or creating decentralized marketplaces that prioritize royalties.
  • Smart Contract Enforcement: Advance and standardize the smart contracts to automatically enforce royalties on every transaction.

Ultimately, the future of Web3 gaming depends on our ability to create a fair and sustainable ecosystem for creators. It's time to embrace true ownership, not just for players, but for the artists, developers, and innovators who are building the Metaverse. Let's not let greed destroy the very thing we're trying to create: a better, more equitable future for gaming.

If we don't prioritize the ethical imperative of sustainable NFT royalties, we might as well just go back to Web2.