Stablecoins in Games Flourish as Gaming Tokens Struggle

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Welcome back to another week of Gaming Crypto! I’m Kostas and this week we examine how web3 gaming studios are slowly turning towards stablecoins.

Are Stablecoins the way forward for web3 gaming?

This week, Luke Barwikowski, the founder of Pixels said that, 

“Longterm, $PIXEL will be phased out as a reward currency and USDC will be given instead (including staking yield). The primary use-case of $PIXEL will shift to staking/governance”

This pertains to the new role that $PIXEL will play in the ecosystem, as it will eventually not be used as an in-game currency.

Last month, PLAYTR0N, the company behind Sui’s console, SuiPlay, announced the Gaming Dollar. Not only aiming to adopt stablecoins in web3 games as the primary in-game currency, but going one step further by creating a unified stablecoin specifically for gaming. 

The assumption here is that stablecoins can provide a stable and predictable in-game economy that isn’t suffering from token price swings and unsustainable economics. The fact that it’s still a stablecoin and not simply an offchain in-game currency, means that developers can still enable real-money features such as player earnings, loyalty programs, and peer-to-peer trading.

The second, more obvious consequence, are fee reductions. Not only are stablecoin payments faster, but they also allow developers to significantly reduce the fees that are paid.
For example, a game charging $1 for an in-game item might lose $0.05-$0.20 to payment processor fees. Using a stablecoin like USDC on a low-cost blockchain like Base could reduce this to under $0.01, saving significant costs, especially for high-volume microtransactions, which are the backbone of gaming revenue.

Not only that, but in terms of global payments in games, stablecoins eliminate currency conversion fees and international transaction costs, which can range from 1-3% plus fixed fees. Players can pay in stablecoins regardless of their location, and developers receive the exact amount without exchange rate losses.

Stablecoins over fiat

Apart from the reasons already mentioned, where a developer can leverage stablecoins to heavily reduce fees and to align incentives between them and their players to improve retention and user acquisition, there are other hidden advantages. 

Few think this, but game companies are often very cash strapped and have great cash flows when their titles are flying. But, very few are utilising their treasuries to generate a return, while with stablecoins, that becomes much easier. For a studio sitting on a large treasury, that's a legitimate revenue stream. Especially for mobile studios, generating a 5% yield on their Treasury instead of next to nothing, it will be a game changer. Naturally, the necessary security measures will have to be put in place and the stablecoin will have to be a trusted partner.

Stablecoins also offer a way for non-crypto native games studios to dip their toe in the water, without having the exposure to something more volatile or the need to ever adopt a web3 economic model. The implementation starts with stablecoins, and slowly studios can experiment with game economies more adjacent to web3. That perhaps leads web3 gaming in a future with blockchain enabled games, but with limited or no speculative aspects.

AppTokens vs Stablecoins

AppTokens are programmable tokens designed for web3 games, letting developers control liquidity and usage. They're meant to be used, like in-game currencies, but with built-in limitations to prevent abuse by large holders or bots. For instance, they can stop whales from manipulating the economy, or hoarding the token in exchanges outside of the game.

The usage of one does not necessarily eliminate the other. At heart, both are looking to enable blockchain-enabled games without the speculation that has plagued web3 gaming. AppTokens allow more flexibility and creative usage, while stablecoins are the easiest and quickest way to experiment with player earnings and in-game trading.

The choice between AppTokens and stablecoins depends on the game's objectives. AppTokens offer flexibility through programmable features, such as:

• Task-gated usage, incentivizing player engagement (e.g., tokens unlock after completing quests).

• Fixed-value resource swaps, ensuring predictable in-game exchanges (e.g., 2 Ore = 1 Steel).

• Developer-defined trading pairs, insulating the economy from external volatility.

Stablecoins, conversely, provide:

• Stability, ideal for payouts and external transactions.

• Wide acceptance, simplifying integration with global financial systems. Stripe, Visa and Mastercard are all integrating stablecoin payments.

• Less developer responsibility, as stability is managed by the issuer, reducing liquidity management needs.

A trend or a major shift?

What we're seeing with Pixels and PLAYTR0N isn't just a trend—it's a fundamental shift in how developers are thinking about web3 gaming. Instead of trying to create the next speculative crypto casino disguised as a game, they're focusing on building actual sustainable gaming economies. If that means that we need to remove all speculative tokens then so be it. 

This approach addresses one of the biggest criticisms of web3 gaming: that it's all about speculation rather than fun gameplay. By using stablecoins, developers can create games where the economic incentives enhance the experience rather than overshadowing it.

Until now, there has been a push from blockchain gaming studios to launch a token that is representative of everything. But, now that most teams understand that funding is drying up and will need to generate revenue, they see that stablecoins are a much faster way to go live, remove many of the dangers of a token and still maintain room for heavy handed iteration.

The question isn't whether stablecoins will play a role in web3 gaming's future—it's whether studios will be smart enough to adopt them before their competitors do. The ones that make this transition early will have a massive advantage in player retention, revenue optimization, and building truly sustainable gaming economies.