The web3 gaming market is set for explosive growth, with projections estimating an increase from $4.6 billion in 2022 to $65.7 billion by 2027.
"Everyone is still massively underestimating how big web3 gaming is going to be," says Robbie Ferguson, co-founder and President of Immutable. At Immutable, we've been at the forefront of this revolution since its inception. Our journey mirrors the evolution of web3 gaming itself - from early experiments with on-chain games to the current push for mainstream adoption.
In this post, we'll explore the key phases of web3 gaming's evolution, the challenges faced along the way, and how Immutable has helped shape the industry's trajectory. From the early days of CryptoKitties to the rise of play-to-earn models and beyond, we'll dive into the innovations, missteps, and breakthroughs that have defined this exciting space.
Whether you're a gamer, developer, or simply curious about the future of web3 gaming, join us as we unpack the past, present, and future of web3 gaming.
Let's dive in.
The First Wave: On-Chain Gaming Experiments (2017-2018)
The concept of trading gaming assets isn't new - remember RuneScape gold markets?
But blockchain technology opened up new possibilities for true digital ownership and trading of digital assets. CryptoKitties, launched in 2017, became the first breakout hit in the blockchain gaming space. This breeding and trading game for digital cats caused significant congestion on the Ethereum network, highlighting both the potential and limitations of on-chain gaming.
Immutable, then known as Fuel Games, entered the scene with Etherbots in 2018. This on-chain battling game allowed players to own and trade robot parts as NFTs, then use them in battles. However, we quickly realized that the real value wasn't in the on-chain battling mechanic itself, but in the ownership and trading of the digital assets.
This insight led to the development of Gods Unchained, launched later in 2018. This online trading card game allows players to truly own their cards as NFTs, earn them through gameplay, and trade them on Immutable marketplaces.
By focusing on creating a functioning gameplay loop combined with true digital ownership, Gods Unchained set itself apart in the early days of blockchain gaming and laid the foundation for Immutable's future developments in the space.
The Hype: Play-to-Earn and Virtual Lands (2019-2021)
As Ethereum gas fees skyrocketed, many early web3 games became unplayable. Imagine paying $50 in transaction fees for a game assets valued at $15.
This challenge drove Immutable to develop ImmutableX, our layer-2 solution designed to make blockchain gaming scalable and affordable. This positioned us as a pioneer in scalable web3 gaming infrastructure.
The rise of Axie Infinity during the first web3 gaming hype showcased the potential of play-to-earn models, with stories of players buying houses with their earnings. Simultaneously, a virtual land rush took off, with investors pouring tens of thousands of dollars into digital plots in projects like Decentraland and The Sandbox.
As the market embraced play-to-earn and virtual land trends, ImmutableX initially opened its platform to a wide range of NFT projects, not just gaming.
The Transition: Gaming Guilds (2021-2022)
This era saw the rise of gaming guilds and "scholarship" systems, allowing players to borrow in-game assets from owners for a share of earnings. This model aimed to lower entry barriers for new players.
However, many projects struggled with unsustainable tokenomics, leading to rapid inflation and economic instability.
Immutable initially opened its platform to a wide range of NFT projects, but we soon realized that gaming offered the most promising path to blockchain mass adoption.
We pivoted to focus exclusively on gaming, aiming to partner with quality studios to showcase how web3 elements could enhance gameplay without compromising on fun. This shift in strategy set the stage for developing more sustainable game economies and long-term player engagement.
The Age of Abstraction: Pushing Towards Mainstream Adoption (2022-Present)
Today, we're seeing the first wave of high-quality web3 games that can compete with traditional titles. Games like Hunters on Chain show how web3 elements can enhance gameplay without alienating mainstream players.
We’re now entering the “Age of Abstraction” because the key to mainstream adoption lies in creating games where players don't even realize they're interacting with blockchain technology.
One of our feature games Guild of Guardians, for example, allows players to enjoy the game without immediately engaging with web3 features, gradually introducing them as players progress.
We're also seeing increased interest from major gaming companies. Out of the world's 40 largest gaming companies, 29 are already investing in web3, either by developing blockchain games, investing in projects, or hiring for blockchain positions.
Immutable's focus has now shifted to solving key challenges in web3 gaming:
- Onboarding: Simplifying the process for new users to start playing web3 games.
- Marketplaces: Developing user-friendly platforms for trading in-game assets.
- On-ramping: Making it easier for players to convert fiat currency to crypto for in-game use.
Our Immutable Passport is a game-changer, allowing players to sign up with an email instead of navigating complex wallet setups.
This abstraction of crypto mechanics is crucial for mainstream adoption.
The Future of Gaming is Here on Immutable
At Immutable, we believe that with web3 technology the gaming industry is on the cusp of a transformation similar to the free-to-play revolution, and other major shifts in gaming distribution models before it.
However, we're mindful of the challenges ahead. Our co-founder Robbie Ferguson notes, "Everyone hated free-to-play when it first came out. They revolted against any new form of modernization, and quite frankly, why shouldn't they because it's often been at their [the gamer's] expense."
At Immutable, we're committed to ensuring that the web3 gaming revolution benefits both players and developers.
Throughout this journey, our role has evolved from game developer to ecosystem builder:
- Over 380+ games are now signed on our platform, with many set to launch this year.
- Immutable zkEVM has seen rapid adoption, with nearly 2 million monthly active users.
- Immutable Passport has reached 1.5 million sign-ups, more than doubling from 400,000 in just one month.
With Immutable's cutting-edge technology and unwavering focus on user and developer experience, we're about to usher in the next era of web3 gaming – one where fun comes first, and the benefits of digital ownership seamlessly enhance the gaming experience.
Join us in building the future of gaming.
