TOKEN2049 in Dubai late April was yet another event showcasing the growing excitement and potential for web3 gaming, with Immutable leading the charge on location.
Our very own co-founder and president Robbie Ferguson joined other panelists, Yat Siu, co-founder and executive chairman at Animoca Brands, and Michael Wagner, co-founder and CEO at Star Atlas, to speak about the current state of web3 gaming and where it’s going in the next few years. The talk was moderated by Piers Kicks, partner at Delphi Ventures.
Here’s the breakdown on what Robbie had to say.
The current state and future outlook of web3 gaming
Web3 gaming is here to stay, and Robbie is incredibly bullish on the future of web3 gaming.
"Everyone is still massively underestimating how big web3 gaming is going to be," he stated. "Gaming goods are essentially the largest digital goods category that exists. There's $240 billion spent on video games every year, $150 billion of which are digital assets."
With this statistic in mind, he goes on to add how web3 gaming is the blue ocean opportunity traditional game studios are only now starting to realize, "Right now we have a model where Magic: The Gathering has roughly $20 billion of cards out there in the world, physical cards, but every year they can't monetize any of the secondary trading of these physical cards. So they're forced to issue $30-50 million of new cards, make all the old cards less valuable by making these new cards more powerful, known as power creep.”
“It would be a much simpler business model if they could take 2% of every transaction in perpetuity, no matter where they trade. And that model is now available to people in web3.”
That’s the future Immutable envisions – where players are given true ownership of their digital assets, and game developers no longer have to “continuously extract more value at the expense of anyone else in a negative or zero-sum way."
"When players have the option to sell, you have brand new monetization mechanisms, secondary marketplaces, royalties. But you also will take the size of gaming from $150 billion to trillions of dollars."
With over 330+ games now building on Immutable, Robbie predicts that “nearly 40% of these games will be launched in 2024. There's been nearly $20 billion US invested into games and gaming platforms in the last 4 years." He's confident that this investment will pay off, stating,
"You could throw this much money at a toaster and it would have product-market fit. So there are going to be hits."
Challenges and solutions for mainstream adoption of web3 gaming
While Robbie is optimistic about the future of web3 gaming, he acknowledges there have been challenges in onboarding everyday customers.
"The main thing that's stopped it up until now has been two things. Infrastructure has not been ready to onboard everyday customers. If you ask someone to sign up, and write down 24 seed words, you are losing 99.99% of your customers."
But it’s not like we haven’t thought of that! Immutable Passport is designed to make player onboarding seamless. "Finally we're having wallet infrastructure where you can, with for example Immutable Passport, sign them with email," Robbie explained. This smooth onboarding experience is already generating excitement, with Robbie noting that "Passport is helping overcome some FUD on early chain metrics."
As a testament to its success, Passport signups recently crossed 400,000. However, despite this impressive milestone, Robbie recognizes that another crucial challenge needs to be addressed for web3 gaming to achieve mainstream adoption: building fundamentally high-quality and interesting games.
"The things that we focus on at Immutable is, number one, the games we work with have to be fundamental quality games that you would want to play outside of web3. That's a really important bar," Robbie emphasized. "Web3 can add a ton of value, it can add a ton of monetization, but unless you would play that game if it were just a normal web2 game, it's going to be insufficiently high retention to be successful in the long run."
Growth and strategies for driving web3 gaming mainstream
Robbie believes that web3 will enable new, more sustainable business models for gaming.
The current model for user acquisition (spending ad dollars) has Google and Facebook emerging as the winners: "My vision of tokens, in the long run, is they can replace performance marketing spend.” Robbie noted.
Immutable is pioneering a new model, “where you can effectively take a proxy for the future value of the game. You can give it to people for free for signing up, and you can share it as they share it with their friends. We're incredibly bullish on this model of using tokens as a profitable and RoAS-driven user acquisition."
Immutable is already seeing impressive growth and success with this approach. "Last month, we won five times more games than we did the previous year, and our win rate across the last 6 months is 83% compared to competing platforms," Robbie shared. "The job for us now is to focus on making all the new games going live as successful as possible.”
The company is putting significant resources behind this effort. "We've got over $50 million of rewards pointed at the community in the next 3 months alone. We've got an enormous amount of games and tokens launching," Robbie revealed. He believes that "the wealth effect and the network effect from those [game and token launches] are going to be phenomenal."
As we look to the future, Robbie is confident that web3 gaming is on the cusp of a breakthrough.
"In the next 8 to 12 weeks, we have some of the biggest games in the world launching,” referencing games like Pixelmon, Treeverse, Illuvium, Guild of Guardians, Space Nation, and Blast Royale, which has 5 million installs.
“I'm extremely excited," he shared. "It's just that one hit that will be the inflection point."
Immutable is where you go to play web3 games
As Robbie said best, "Please, if you're a gamer, reach out. We've got a ton of stuff behind the scenes that's really exciting."
And he’s right! With 330+ games building on Immutable, we’re leading the charge in making web3 gaming accessible and enjoyable for gamers to play, and studios to build.
Join us during these exciting times – and start your Main Quest! – to experience first-hand the benefits web3 gaming has to offer.
