Image: ebud.ethDALL-E 2

Nov 02, 2022 • 28 min read

Serotonin Web3 Gaming Review

Even as the online gaming industry skyrockets, web3 shows there's a different way to win.

Design + Development
Connie Jun
CK Fletes

Executive Summary

Over the past decade, the online gaming sector has undergone a transformation that eclipses that of nearly every other legacy industry. From fewer than 2B gamers in 2015 to over 3B gamers worldwide today, what was once considered a youthful pastime is now a global phenomenon that transcends age, gender, and geography.

Web3 gaming too has experienced its moment in the spotlight. The NFT boom of 2021 brought with it a wave of innovation and speculation in how web3 would transform online gaming. Despite global attention and a projected $12bn in VC funding in 2022 alone, however, the first wave of web3 games has been undeniably rejected by the vast majority of traditional gamers.

The last year has yielded valuable insights for gamers and developers who view blockchain technology as a nuanced tool rather than a silver bullet. At today’s rate of growth, online gaming doesn’t need web3 — but lessons from the history of game monetization demonstrate how both studios and gamers can benefit tremendously. 

It is easy to say that most traditional gamers today “hate web3.” But what gamers actually hate is the erosion of their in-game entertainment value and the feeling that their entire online experience is designed to pad someone else’s pockets. Classic titles like Fortnite, PUBG, and League of Legends were originally inspired by custom mods created by gamers themselves, and game studios and gamers should be creating more opportunities for collaborative ideation and value creation. 

This is where the opportunity for gaming’s adoption of web3 truly lies. As gamers increasingly expect more control and ownership over their own online experiences, in-game or otherwise, blockchain technology enables a wide range of potential solutions to the gaming conundrum. Here lies the intersection of web2 and web3 gaming.

Let’s dive in.

Part 01

The state of gaming

Today’s online gaming sector is massive and growing. With over three billion gamers worldwide, the global gaming industry is positioned to increase from its 2022 market cap of $222B to $321B by 2026. With a 8.4% CAGR, gaming is one of just three industries to add more than $100B in revenue to its base over the 2022 - 2026 forecast period. Mobile games currently account for the majority of the online gaming industry’s revenue and growth, and this segment alone is on track to generate $103.5 billion in 2022.

The growth in gaming has been propelled by a number of compounding developments. Technical innovations like Unreal Engine have allowed gaming to leapfrog development times. Social factors like COVID have driven unprecedented numbers of people to online distractions and entertainment. The rise of streaming and community platforms like Twitch have brought secondary audiences (and economies) to gaming in droves.

Without even a mention of web3 or blockchain technology, gaming is situated for a bright future of growth, innovation, profitability, and audience engagement. Why then, would the gaming sector and gamers themselves pay attention to a new technology stack like web3?

To understand the future of gaming, we need to take a quick look at the past.

Part 02

What’s in Play: The History of Gaming

The history of gaming has been shaped by the constant tension between gamers and gaming studios. The source of this tension has always boiled down to monetization: how will gaming studios recoup the (increasing) time and money spent on developing games? And, most importantly, will players even like the games enough to pay? In the last few decades, we have seen three distinct economic models emerge, each of which impacts studios and gamers differently.

Buy to Play describes buying a game once and owning it forever. This remains the most straightforward form of game monetization, and was the bread and butter of game monetization well into the early aughts.

Buy to Play titles are among the most culturally resonant in the industry. AAA studios dominate these titles, pouring resources into gratifying gameplay, rich effects, and deep lore. The same depth of development, however, has stifled innovation as large studios caution from departing too much from past, proven models. Moreover, the pressure to monetize has resulted in infamous missteps, such as Diablo III’s auction house that allowed players to trade with one another and kicked a portion back to the publisher. The severity of backlash from gamers convinced Blizzard to remove the auction house entirely from the game in the subsequent update.

The problem is that video games don’t make natural investments. In their quest to squeeze quarterly earnings from years-long development cycles, the suits have steered mega-publishers away from single-player, story-driven concepts…When they do greenlight one-and-done titles, studios hedge their bets by doubling down on established formats.
Mac Schwerin

Quote & Image:

Pay to Play describes subscription-based models, from individual Pay to Play games to platforms like XBox Game Pass. Popularized by iconic PC games like World of Warcraft, subscription games are often high-fidelity and constantly evolving. Gamers accept ongoing payments in exchange for quality gaming experiences that appear endless as the studio continues to develop over time.

However, Pay to Play raises concerns about cost and accessibility, especially when the annual cost of top subscription games like World of Warcraft surpass the upfront cost of AAA Buy to Play titles. Additionally, the constant updating of Pay to Play games means that gamers are more frequently subjected to the whims of the game developer, which can degrade gameplay and disappoint gamers. Vitalik Buterin himself experienced the downsides of unilateral decision making while gaming, even joking that his disappointment with a Blizzard update sparked his vision for Ethereum.

I was born in 1994 in Russia and moved to Canada in 2000, where I went to school. I happily played World of Warcraft during 2007-2010, but one day Blizzard removed the damage component from my beloved warlock's Siphon Life spell. I cried myself to sleep, and on that day I realized what horrors centralized services can bring. I soon decided to quit.
Vitalik Buterin
Co-Founder, Ethereum

Image: ‘Siphon Life’ by Zebradots-Benediction

Free to Play games entice players with no-cost entry, and then monetize through in-game upgrades, advertisements, and/or purchases. These games, such as Runescape and Fortnite, have wielded some of the most engaged and passionate communities of gamers ever witnessed online. 

However, as the mobile market has overtaken gaming, free to play has evolved into a freemium model, in which the game becomes markedly difficult to win without paying for “optional” add-ons. This creates a “pay to win” environment that erodes the nuance of gameplay and quickly crosses the line from difficult to dissatisfying.

Freemium models are skewing game monetization. A 2017 study of iPhone in-app purchases revealed that 1% of users are responsible for nearly 60% of that spend. This means that freemium game developers, though technically building games that can be played by anyone, are constantly pressured to create incentives that appeal to a tiny fraction of total gamers.
Everett Muzzy
SVP, Serotonin

These three distinct business models reveal a fundamental issue of gaming: the monetary tension between game studios and gamers. Judging from the history of game development, we can presume that future iterations of gaming will continue to struggle with this tension. The recent explosion in freemium games doesn’t bode well for gamers’ future, suggesting that in-game monetization may grow to dictate how all games are created. To avoid a future of creative stagnation and gameplay repetition, a fundamentally new way of creating and monetizing games is needed.

Part 03

Web3 x Gaming

Even without web3, the gaming industry will continue to skyrocket. However, so too will many of the issues mentioned in the previous section, as larger investments incentivize AAA developers to fall back on tried-and-true design patterns instead of taking creative risks. At its philosophical core, web3 can help address many of these issues by returning power to the massive community of global gamers, creating more financial opportunity for indie developers, and releasing new innovative technical capabilities.

Leveling Up: What Gamers Want

Innovation is sorely lacking in the gaming business. The artwork keeps getting better and gameplay has improved, but it’s incremental. These are our evolutionary changes, not revolutionary changes, and game designers should be doing something that represents a much greater sea change.
Lawrence Siegel
Co-founder & Chairman of

Image: Moxy

What Gamers Want

Rewarding passionate, skillful gamers over deep-pocketed opportunists.

In-game monetization has greatly benefited game publishers’ bottom lines, and it makes financial sense to target gamers who are willing to pay for in-game bonuses. But there is also a strong contingency of gamers who enjoy a “min-max” approach to gameplay, like the mad lad who recently completed Diablo II as an untwinked pacifist sorceress. These players entertain and inspire their respective gaming communities by shunning outside help and choosing to take the scenic route.

To that end, there is serious upside for game studios that find ways to reward dedicated players who provide non-financial forms of value to the gaming community. This may involve monetizing around a gaming ecosystem rather than directly in-game, as is the case with in-game analytics services like Dota Plus and CS:GO 360 Stats, which target serious competitors and don’t detract from others’ in-game experience.

Stronger feedback loops between creators and gamers.

There is a huge opportunity for games to be co-created with the community, subject to some degree of iteration based on real-time feedback from gamers. Forcing unsanctioned content created by modders to be distributed to the public free-of-charge, as was the case with Sims 4, or banning custom mods outright has a chilling effect on the community. Rather, game studios should harness their community’s passion and redirect it towards improving their actual products.

If industry leaders proactively engage with the die-hand fans responsible for these innovations and help establish a more collaborative trajectory, their creative output and financial support can eclipse any existing concerns they have about ceding some control to the gaming community.

Provide gamers vested interest in games through true asset ownership.

Most gamers aren’t trying to make a living from playing their favorite games, but many want the value gaming ecosystems generate to be dispersed more widely. This may take the form of the positive feedback loops mentioned above, but ultimately gamers need something they can truly call their own.

Character customizations and digital economies have been at the core of most successful modern gaming titles, but true ownership means having full autonomy over your digital identity and assets beyond the game itself. Just as we enjoy owning things IRL that express who we are, so too should we extend ownership to the digital landscape.

What’s in the Way

Many gamers see forms of in-game monetization as predatory and unfair.

In-game monetization has a long history as antithetical to the gaming experience, which is meant to prioritize gameplay and lore above all else. This is especially true as gamers encounter new revenue models that make games more expensive to play over the long run, driven by recurring paywalls and microtransactions for in-game goods and services. 

Game studios that take a heavy-handed approach to in-game monetization inadvertently incentivize developers to prioritize players who prefer to buy things rather than fully engage with the broader in-game environment. This is why many monetization models beyond Buy to Play ultimately result in a “Pay to Win” outcome, which benefits players who are willing to take shortcuts to gain an advantage over other players.

Gamers have no say in the trajectory of their favorite games.

Existing feedback loops are slow and gaming communities are often overlooked when new features or expansions are rolled out. 

Some players take things into their own hands, and unsanctioned player mods have been around for as long as video games have existed. But very few of these grassroots projects ultimately influence a game’s official development. As a result, players are increasingly taking their dissatisfaction with existing games into their own hands. This was precisely what happened when a group of No Man's Sky players created their own cryptocurrency to fuel their self-made digital services market, in lieu of the game publisher’s lack of responsiveness and inaction. 

Gamers are subjected to perpetual payments, but don’t actually own anything.

There is no doubt that developers benefit from closed ecosystems that allow them to capture the entirety of in-game revenue and secondary digital asset sales. These gaming worlds are essentially walled gardens featuring items and characters that aren’t usable across different environments, and gamers ultimately do not actually own anything. 

As a result, these closed ecosystems are inherently limiting to the user experience and increasingly out of vogue, especially as our digital personas become a bigger and more “real” part of our core identity beyond the world of gaming.

To date, the gaming industry has largely been unable to provide gamers with the philosophical, fundamental desires above. Improved graphics and features can take the gaming industry so far, but already a movement is emerging in opposition to the creative direction and monetization of AAA studios.

A growing contingency of serious gamers flocking to indie games reveals that many gamers are looking for novel experiences that AAA games increasingly cannot, or will not, provide. The solution is not for legacy studios to focus on incremental improvement, nor should they be re-skinning past successes ad infinitum. The only way for the gaming industry to escape its recurring cycle of “creator vs. player” tension is to explore entirely new ways for everyone to win.

Web3 Gaming: Traction, Interest, and Investment

We’ll soon experience a Cambrian explosion in gaming. I’m seeing a lot of new designs - a lot of new game designs, token designs, and a lot of crypto nativeness. And at the end of the day, the web2/web3 tribalism will melt away. Why? Because regardless of whether you are a web2 or a web3 game designer, you are a game designer. And that’s what matters.
Jeremy Parris
Gaming Analyst, Delphi Digital

Image: Delphi Digital Twitter

While not everyone within the gaming community is excited about the role web3 may play in gaming, a growing number of gamers are taking notice and interest.

  • 3% of gamers are open to earning some form of currency for in-game labor. 
  • 52% think the metaverse will change the video game industry.
  • 40% are interested in a mix of both the “playing” and “earning” aspects of the metaverse.
  • 34% are interested in completing cryptocurrency transactions in the metaverse.

Investors have also taken note of this burgeoning interest. Institutional money is swiftly pouring into the nascent space, funding longtail innovation that will result in established games adopting web3 elements in addition to brand new, web3-native games. AppLovin recently offered $17.5 billion to acquire Unity, a game design engine known for its ability to spin up metaversal gaming experiences. Immutable, an NFT scaling platform, recently raised $500 million to support developers building blockchain-based games. And Animoca Brands, Asia’s biggest investor in web3 projects, recently confirmed a $110 million investment round, and if the company puts its money where its mouth is then the web3 gaming sector will likely see some of that money.

These are massive moves, and they are by no means isolated incidents. Capital investment in crypto has declined overall so far this year relative to last year’s record $32 billion, but web3 gaming investments have continued picking up pace, with $2.5 billion in VC funding allocated to web3 gaming in Q2 2022 alone. If anything, this speaks to the industry’s belief that there is a strong advantage in leveraging web3 technology even if legacy models remain profitable and enjoyable.

Source: DappRadar

The State of Web3 Gaming

To date, web3 gaming has been dominated by a handful of proof-of-concept projects that have attracted a comparatively tiny subset of the global gaming community. Though investment and innovation are pouring into the space, the vast majority of web3 “gamers” are crypto users who see today’s games as another opportunity to earn money, not to enjoy novel gameplay. It would be dishonest to say that the ecosystem today is full of exemplars of the power and opportunity of web3 gaming. In fact, we’d argue that the dominant models of web3 gaming live in the market today are in many ways detrimental to the public perception of the space.

Specifically, “play-to-earn” (P2E) is the leading model of web3 gaming today, and it has violated some of the core tenets of gameplay and beliefs of gamers. Gamers’ complaints about play-to-earn games center on the following:

Monetization of everything
Repetitive, predictable gameplay
Upfront barriers to entry
Unintuitive UX

It is clear that today’s dominant play-to-earn model places too much emphasis on monetization and not enough on gameplay. As Lawrence Sigel of mentioned above that much traditional gameplay today is just slightly altered and not truly revolutionary, we’d argue that today’s play to earn “web3 games” are mostly just DeFi with a veneer of gamification, not actually a true revolution in gameplay itself.

None of today’s live blockchain-based games come close to the replay value of Fortnite, nor the emotional resonance of Dark Souls, and because so many web3 games are little more than dressed up DeFi protocols, their assets’ value ebbs and flows with the broader crypto market. This is a sharp contrast from traditional gaming, which has historically been recession-proof and economically anti-cyclical since people spend on gaming even as they cut other forms of discretionary spending.

If the last year has proven anything, it's that gamers have "succeeded" in resisting NFTs during the most recent bull market. Despite the proliferation of NFTs nearly everywhere, the gaming industry wasn't taken over, and web3 didn't establish a firm stake in the future of gaming. Devs and studios won’t succeed in forcing NFTs into the hands of gamers, no matter how lofty their ideas of the future. Web3 gaming will succeed when gamers choose to accept it; and gamers will accept it when it genuinely provides improved gameplay and enjoyment.

But if the investment and innovation into web3 gaming in the last year suggests anything, it is that this is all about to change. Web3 native companies such as Horizon and Forte that have been building for years are starting to come to market with games and dev tooling. Behemoths like Anomica Brands are publicly stepping into the space and partnering with web3 leaders like Polygon, which has its own hyper-active web3 gaming division. Scrappy studios are creating titles like Wilder World with graphics that rival those of AAA games. And platforms like Faraway are making it easier for developers to add powerful, utility-driven web3 features to their games. Though web3 gaming has gotten off to a rocky start with the proliferation of play-to-earn games, we believe its future is bright.

The Marketing Firm for Web3

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Predictions for the Next Frontier

At a macro level, web3 gaming will evolve into a more sustainable model that deprioritizes cryptocurrencies and NFT valuations in favor of more nuanced, aesthetic gameplay. Here’s what that looks like:

Web3 games will focus on immersive experiences, not earnings

In-game assets are not worth owning unless the games themselves are genuinely enjoyable to play, and a growing number of web3 games will prioritize immersiveness over profitability.

The first generation of play-to-earn games sparked significant interest from the web3 community, but ultimately even breakout successes like Axie Infinity have now been panned as dressed-up money grabs or marketing devices for their underlying blockchains. Gamers are highly sensitive to any signs of over-financialization and forced opt-ins, and gaming studios that want to avoid this stigma will increasingly explore new gaming models like “play-and-earn” and “play-and-own”, which are less reliant on high-value NFTs to drive gameplay. Genopets, for example is a "move-to-earn" game with backing from Pantera Capital, prioritizing players' daily physical activity as a core component in gameplay rather than monetary spend.

Creating immersive experiences in web3:

  • Dual-track gameplay: Projects like Shrapnel and Human Park are creating web3-enabled games that do not require owning on-chain assets in order to play. This allows crypto skeptics to enjoy the same game and advance at the same rates as NFT holders, but without access to bonuses such as seasonal events, special skins, and on-chain leaderboards.
  • On-chain automation: Future web3 games will benefit from the introduction of blockchain-enabled features beyond in-game assets, such as on-chain NPCs and other advanced smart contract deployments. These features add an element of spontaneity and immersion that is sorely missing in today’s web3 gaming space.
  • Interoperable wallet layers: One of the major pieces missing from today’s blockchain games is simplicity of onboarding. As the space matures, we expect much of the “crypto-complexity” abstracted away by smooth payment layers. This will allow developers to integrate new blockchain capabilities while simultaneously onboarding new players swiftly, securely and most importantly - easily.
What web3 brings is permanence - something that lasts forever and you can see and experience in a long-term fashion. There is skepticism around this because “pay to play” hangs over the space and is offensive to gamers who have been hurt in the past from putting money into a game and getting nothing back.
Steven Na
Executive Producer, Human Park

Image: Human Park OpenSea

Cross-game interoperability will accelerate

The lines between different web3 gaming ecosystems will increasingly blur, but it will take some time for this to become a widespread trend.

The past few years have witnessed several major crypto hacks targeting cross-chain bridges and interoperability remains a difficult goal to achieve. As a result, the market has given mixed signals on whether this will remain a major focus for game developers in the near future. But network interoperability remains a top-line goal for the broader web3 space, and which will likely make it easier, and attractive, for different web3 games to leverage each others’ in-game assets and communities to expand their user base.

Gaming projects will attract other web3 communities by developing tailored features that allow these communities to use select third-party NFTs as in-game power boosts, wearables, and/or access keys. This will be a mix of official cross-game partnerships and unsanctioned unilateral initiatives. For instance, a bootstrapped game developer may choose to create a custom in-game skin for BAYC NFT holders in order to tap into the project’s prestige without being formally endorsed by Yuga Labs. Alternatively, legacy game studios may license out their IP to be tokenized and actively utilized within a web3 gaming ecosystem. Ultimately, this will imbue NFTs and other similar in-game assets with more in-game utility and potential value.

User-generated content and community game modifications may also begin playing a larger role in this space. The next generation is coming of age playing visually program games such as Minecraft and Roblox and now Fortnite and PUBG – each with their own variant of in-situ build capabilities. These players will be accustomed to in-game environments that can be fully customized to their liking, and web3 gaming projects should take note.

The latest generation of players grew up learning to visually program in Minecraft and Roblox before aging into the likes of Fortnight and PUBG. And as they become older, get a job, and start earning disposable income, they're not going to suddenly stop wanting to make their own games. That’s why the first web3 gaming franchise that offers an opportunity to mod at an unprecedented level will be very successful.

Image: NEON

Gaming DAOs will gain prevalence (but not dominance)

Gaming-related DAOs will continue to grow more numerous and varied, but the results will be mixed.

Decentralization enables contributors from all locations, identity groups, and financial backgrounds to participate in industries they have historically been frozen out of. In this arena, DAOs have the potential to radically transform both game development and fandom. There is already a sizable ecosystem of gaming guild DAOs like Yield Guild and GuildFi, which pool investments in NFT gaming assets and connect web3 gamers around the world. 

In the coming years, we will see the rise of more ambitious gaming DAOs, from incubator/accelerator DAOs focused on connecting founders with specific gaming expertise to full-fledged game developer DAOs set on democratizing web3 game design. These various gaming DAOs will occasionally overlap in terms of focus and function, and communities like Kapital DAO are already trying to provide more structure to these shifting gaming coalitions.

Gaming DAOs feel like the natural evolution of "guilds" but more focused on cooperation and ownership amongst players versus a centralized group of investors. As more games utilize in-game assets, it will make sense for people to borrow items on-demand for specific games. Additionally, gaming DAOs can play a major role in ownership of eSports teams or even in-game IP. Imagine a gaming DAO having key decision-making rights around a character in a game like Super Smash Bros or League of Legends. While the DAO shouldn't be able to impact the gameplay itself, giving them authority over how the character's likeness is used and monetized could be extremely beneficial for fans of a franchise.

Image: @BoredElonMusk

Types of Gaming DAOs

Gaming Guilds
Accelerator DAOs
Developer DAOs

The Metaverse will blur the lines between gaming and everything else

Future web3 games may overlap with open-ended metaverses, but developers must remain focused on defining and refining their own value proposition and target audience.

Over 70% of gamers recently surveyed most strongly associate the term “the metaverse” with Meta (e.g. Facebook). This is generally not a positive association, but with so many promising metaversal projects springing up outside the confines of centralized VR environments like Meta’s it’s doubtful that Meta will remain the de facto face of the metaverse for long. In fact, the metaverse is already changing the way many people socialize, work, play video games and interact, and this burgeoning ecosystem has the potential to become the most valuable, diverse source of community and commerce in the world. But products that are designed for everyone are not specialized for anyone, and the web3 sector will see the emergence of niche metaverses based around common interests, aesthetic ideals, and varying levels of exclusivity/inclusivity. 

These immersive environments will blur the line between gaming and other forms of online activity and commerce, and game designers must continue to focus on providing the cathartic, escapist gaming experiences players demand rather than over-extending their offerings in a way that dilutes in-game enjoyment.


Devising a Web3 Gaming Strategy

There is no doubt that traditional gaming and web3 will continue to overlap in interesting ways. Given that there are plenty of exciting opportunities to explore at this cross-section, we’d like to provide a few helpful tenets for companies and communities keen on flourishing within the space:

1. Stick to a clear product roadmap

Every successful web3 gaming project will live and die by its product roadmap. It’s ok to be super ambitious and slightly hazy when it comes to your long-term vision and final product, but your near-term priorities, current constraints, and consequent user experience need to be mapped out in full detail from the beginning.

Key considerations include:

On-chain ⟷ Off-chain Environments
Custodial ⟷ Non-Custodial Asset Management
Community Inputs ⟷  In-house Development
Community Funding ⟷ Venture Capital
More funding sources are a blessing for devs. But if you’re doing a community sale, then be upfront and specific about what people are getting - which oftentimes is not equity. Keep in mind that VCs have experience investing in companies and understand product evolution; whereas for many community members, it’ll be their first time investing in a startup. Transparency, managing expectations, and positive relations with your investor group—whether public, private, or a mix—will be key to your success.
Michael Sanders
Chief Storyteller, Horizon


2. Be Intentional With Your Community

The business decisions reflected in your project roadmap should ultimately determine your multi-channel approach to community building and storytelling. Having a strong community is the bedrock of any successful web3 gaming project, but it’s easier said than done given the differences in interests and opinions separating many traditional gamers and web3 fans.

Plan out a clear timeline
Make your roadmap a part of the journey
Be community first. Money doesn't translate towards network effects. You want your users to value their reputation within your economy, not just the potential economic output. Without a strong focus on reputation, you're just creating a more convoluted form of DeFi.

Image: Cryptunez twitter

3. Don’t Treat Tokenomics as an Afterthought

While community culture and in-game lore can take on a life of its own over time, the onus should always be on a game’s creators to establish and maintain a sustainable in-game economy. Many popular video games are fueled by in-game economies conjured up by the players themselves, from Diablo II’s legendary SoJ-based barter system to the No Man’s Sky community’s recent dalliance with fan-created cryptocurrencies. However, these still entail deliberately designed in-game economies with enough flexibility for players to come up with their own parallel value systems – which is usually the right approach.

Token design is very important and also very damn hard. Tokens need to both have liquidity and utility, both of which are hard to provide reliably. Utility for tokens is a more reliable but harder way to provide stability, mostly because it requires smart labor and asset investment and is hard to establish early on or without a large budget.
Web3 gaming studio, developing on decentraland


Game designers should note these important models, baking in strong initial structure along with future adaptability. In short, they should not leave these in-game economies to chance, especially when tokenized assets and true player custodianship is involved. After all, while gamers can be remarkably imaginative and strange, and you never know how players will engage with your final product. That’s why you should strive to have a self-sustaining ecosystem from the start.

Avoid over-financializing everything
Monetize around players, not in-game
When you’re doing something worthwhile, the world eventually follows. It may take one, two, three years to get to 50%, and forever to get to 100%, if you ever do. But will there be an arcade in web 3.0? The answer is yes.
Nolan Bushnell
Co-Founder of Atari and

Image: Moxy

Closing THoughts

There is incredible potential within the web3 gaming space, but future successes will not necessarily mirror past hits. In fact, focusing on the last two years is willfully short-sighted. Much of the criticism the traditional gaming community directs towards web3 points to the NFT craze of the last two years, citing obsessive monetization, (at best) one-dimensional utility, poor product-market fit, and a host of ponzi schemes. The market downturn of the last six months has armed these critics with a particularly zealous sting to their accusations.

These feedback cycles often caricaturize genuine advancements within the web3 space and are a predictable part of technical innovation – especially when it comes to something as potentially impactful as blockchain technology. Each time something fundamentally new is created within the web3 space (initial coin offerings in 2017, liquidity farming in 2019, etc.), blockchain’s open-source nature ensures that this innovation cannot be captured or controlled by a single entity. This leads to market influxes as innovators (and scammers) fuel the public’s collective imagination and desires, the market skyrockets, and then corrects. Each time, the residual innovation from the collection of developers results in a remarkably strong technological foundation.

Crypto innovation can oftentimes feel chaotic, but it’s an asymmetrical bet towards the upside. There will be more markets, more bubbles, and more bursts in the future. But each time brings another layer onto the global decentralized tech stack that will facilitate increasingly composable and nuanced innovations. 

So instead, look even further back to the foundations of crypto. What brought crypto to life was the recognition that a digital world controlled by its users is better than one that subjugates them. The gaming and web3 worlds are not that different, and both are actively applying new technologies to elevate their core value proposition. And while not every attempted union between web3 and gaming will last, the projects that manage to successfully marry the two will literally change the game.