Gaming is one of the use cases that will eventually bring Web2 consumers and gamers into Web3, but not in the way most people in the industry think. It will not happen through virtual worlds created in a metaverse of VR, far from it. For us, Gaming is and will be the best route to onboard digital native consumers because of their familiarity with in-game digital items that have ‘value’.
Earlier this year a digital item was sold to a gamer for $400,000 (reportedly paid for using cryptocurrency), this collectible was a ‘skin’ used in CS:GO (a popular shoot-em online multiplayer game that has been around for many years). Most gamers are not enthusiastic about Web3 as they see it as being scammy and tainted by recent high profile collapses; they also do not believe the NFT hype. However, the appetite for in-game items on secondary marketplaces is booming, indicating that gamers understand the value of in-game items, though they often deal with a considerable amount of friction to buy and sell these items as well as an inability to sell them onto another account when they no longer want to play the game.
Digital currency is very much part of Web2 games like Fortnite, CS:GO, Destiny, Battle Royale and Roblox that scores of users pour millions of dollars into every year buying in-game assets. Roblox has over 66 million daily active users (DAUs) and made $7 million a day in 2022, much of it in the game’s native currency Robux, which only has value in the Roblox ecosystem. Gamers are already familiar with virtual currency and understand how to buy and earn in-game assets. Over 3 billion play video games and these consumers are primed for a gamified digital future.
We can see this happening with a number of brands announcing high-profile partnerships with popular online multiplayer games and their ecosystems:
Nike's Web3 community platform .SWOOSH has teamed up with popular online multiplayer game Fortnite to reward players with digital sneakers. This brings a massive audience for Nike's .SWOOSH with over 240 million users logging into Fortnite monthly. "Airphoria," a collaboration between Nike, Fortnite creator Epic Games and branded game builder Beyond Creative, was available until the end of June. All Fortnite players who played this island for 10 minutes or more received the Air Max 1 '86 Back Bling cosmetic in-game asset within Fortnite. Additionally, players who linked their Epic Games and Nike accounts through Airphoria claimed an "Achievement" on .SWOOSH. Although, these ‘Achievements’ were not tradable or have a monetary value; they represented a unique way to engage and link into a large segment of customers for Nike that may not have accessed them.SWOOSH before. As an Epic Games spokesperson said:
"Epic's partnership with Nike and the launch of 'Airphoria' is one of many future collaborations enabling players to opt-in to connecting their online presence across ecosystems. This is all part of a larger effort to bring Nike's Air Max brand into the world of Fortnite with cosmetics, Fortnite islands, and account linking between Nike and Epic, introducing Nike .SWOOSH achievement badges for players who link accounts."
Nike has collaborated with Fortnite on several other digital items, including the Airie and Maxxed Out Max outfits, which can be purchased through the Fortnite Item Shop in-game.
Gunzilla Games <> Avalanche
Another recent partnership which highlights this is Gunzilla Games partnership with Avalanche to create GUNZ, an innovative and sustainable blockchain-based digital economy platform fully built on Avalanche. Designed with the gaming community in mind, GUNZ will give players the option to get involved in Play-to-Own mechanics by offering verifiable transparency, and this will be fully integrated into the next will be first integrated into Gunzilla Games’ upcoming Battle Royale 2.0 game, Off The Grid (OTG).
“Our partnership with Avalanche not only allows us to leverage its highly scalable and secure blockchain infrastructure but also ensures a seamless, low-latency gaming experience for our players,” explained Vlad Korolov, CEO and Co-Founder of Gunzilla Games, “By building GUNZ, we aim to revolutionise the gaming landscape with a transparent in-game asset management system by providing a number of market-standard features for game developers who are creating their economy on blockchain.”
This particular combination of opportunities was noted by Alex Connolly, co-founder and CTO at Immutable:
“Gaming is the perfect candidate for spurring Web3 mass adoption simply because there are so many gamers in the world who are already used to trading digital items and buying digital things.”
Web3 gaming developer platform Immutable partnership with blockchain protocol Polygon Labs is designed to accelerate this transition to Web3 gaming. According to their press release, Immutable will power its platform products using Polygon's zero-knowledge technology to simplify the process of onboarding game studios and developers in Web3. The alliance aims to provide an option for businesses accelerating time-to-market and giving access to an ecosystem that will be one of the largest and most liquid for end users.
“By combining the number one Web3 gaming platform – currently serving hundreds of game studios and millions of players – with Polygon’s best-in-class zkEVM technology, we are building an Ethereum-centric gaming ecosystem that is poised to take Web3 mainstream and bring digital ownership to millions of people around the world,” said Robbie Ferguson, Immutable president and co-founder. “Billions of dollars of skins are sold each year with no rights for players – we’re changing that so players are in control, and ownership is the expectation.”
Both Immutable and Ethereum are focused on expanding the burgeoning Web3 gaming industry with new tools and mainstream partnerships. In June, Immutable launched a $500 million venture fund for Web3 games, while Polygon has launched a business unit devoted to advancing Web3 gaming. Immutable has partnered with companies including GameStop, DC Comics and Marvel to build out over 140 new titles building on the existing platform. Immutable also launched an all-in-one passport system early this year to make the sign-in and management process easier for Web3 gamers, while gaming engine Unity has expanded support for Immutable X in its developer toolkit.
All of these partnerships demonstrate that mass adoption is not just a pipe dream anymore for Web3. All of these brands and companies are embracing and exploring how to collaborate using digital platforms and assets to better serve and delight their customers. Adoption takes time, but quietly this new gaming universe is taking shape.