In another data point raising questions for blockchain-based gaming, Experimental Games' CryptoWars has pivoted away from running on the Plasma sidechain operated by Loom. Meanwhile, Loom appears to be pivoting away from gaming entirely. 

"No decent game can run nowadays fully on-chain, even though that was our gaming utopia," CEO Matias Nisenson told CoinDesk. Loom, he said, is discontinuing its service aimed at gamers, and Experimental doesn't trust any other provider. 

There are diverging accounts about what happened here. Nisenson told CoinDesk that Loom collapsed multiple times under the activity driven by CryptoWars. Loom disputes that account. 

"CryptoWars ran fine on Loom. Platform handled it fine," former Loom CEO Matthew Campbell wrote in an email to CoinDesk. Loom has not yet replied to a request for additional comment. 

Campbell claimed Experimental was upset Loom wouldn't provide funding for its game to continue operating. "Games don't make any money and just continually want the platforms to fund them. That just doesn't make business sense," Campbell wrote. 

Loom was very early into the scaling conundrum that has plagued Ethereum. It was a company doing a lot of things: tutorials, games and, most importantly, sidechains. Last autumn it even got into interoperability, starting with Tron and Binance Chain. In February, Loom notified users Campbell was stepping out of the CEO role. According to his LinkedIn profile, Campbell has been CEO at Remote Ventures since August.

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CryptoWars, which previously ran on Loom's Plasma sidechain network, is a resource management game that debuted last year as a massively multiplayer online game (MMOG). At its peak, the game had 12,000 players going at once, Nisenson said, making it one of the top dapps on Loom. To win, players built mines, built vaults, built an army and then used it all to grow a treasure chest.

Early on, it would run weekend-long global tournaments with solid prize packages put up by sponsors including the MakerDAO Foundation. Members of the CoinDesk editorial team burned a considerable amount of time last summer on one of these competitions (no prizes were attained). 

"Loom basically exploded" during the first CryptoWars tournament, Nisenson said. It improved but the game still put the network under too much stress. "Blockchain does not scale now," he said.

To be competitive, players basically had to stay by their terminals at all times. People weren't sleeping, Nisenson said.

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Loom had previously had a considerable focus on gaming, though its sidechains were meant to be useful for many applications. Not only did it provide services to game makers, it created its own Kickstarter-funded, zombie-themed collectible card game, Relentless. Its website touts other clients in the crypto gaming space, including Axie Infinity, Neon District and Crazy House. 

However, in the blog post about its leadership transition, Loom indicates other priorities, writing, "Recently, we've been working on a couple of new projects, one targeting the healthcare industry and one targeting the travel industry."

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It is unclear how that will affect the network's existing gaming titles.

One corner of the industry has long argued gaming would be crypto's gateway drug to the mainstream but video games have never really done as well as gambling. And that's where CryptoWars is headed. The game now only uses blockchains for one thing: money.

"We went from fully on-chain to just accepting crypto and paying crypto," Nisenson told CoinDesk. "We use Coinbase Commerce and MoonPay for crypto deposits and credit card deposits, respectively."

Money is important to the game now because its business model has shifted to players betting on who wins a 20-minute, one-on-one game. Rather than the weekend-long marathon sessions, competitors can now put up as little as $0.60 or as much as $100 on the 20-minute sprints. Whichever player wins takes the pot, after Experimental takes its 17 percent cut.  

Experimental calls this "play-to-earn," but to earn someone also needs to risk paying. That's why most people would call the model wagering. The new approach became necessary when the company realized there was no good alternative to playing large games on-chain.

The play-to-earn version soft-launched last week. In its first day, CryptoWars topped 600 one-on-one matches, with the most staked on a game at $100 (the max allowed).

The game is playable around the world, including most states in the U.S. Entering the game can be done in fiat. That said, winnings can only be extracted in crypto, so blockchain newbies will need to learn a wallet like MetaMask if they want to take their gains outside the game world.

If it can make the model work for CryptoWars, Experimental says it will invite outside strategy games onto the platform.

"The idea is: Most game studios all around the world, they just make games," Nisenson said. "Most of them are unsuccessful and they don't make money, but they are still good games." 

Players don't have to bet money to play the new version of CryptoWars. There's also a practice space where you can build your skills.

In fact, players will accumulate play money the more games they play in free mode. The game will release more play money regularly but players will need to be in the game to collect it, rewarding attention. Further, periodically the game will run tournaments where real money from sponsors can be won, and it will only take play money to enter. The first sponsored games should go up in the next few weeks.

Sponsors will also boost the winnings on games played with real funds at stake. This echoes the approach taken on decentralized finance (DeFi) site PoolTogether, where sponsors buy tickets to grow the pot, but never actually win.

The winnings will continue as long as Experimental can make this iteration turn a profit. In crypto gaming, that's been an elusive dream.