Web3 has a platform problem

Today, there are about 3.2 billion gamers. Most of this astonishing growth has come from the launch and expansion of new platforms. 

New platforms succeed because they create new customers: they convert normal people into gamers.

Every major gaming innovation had a secret to its success: it reduced friction in some significant way.

• Home consoles: Play games without spending quarters or leaving your house.

• PC gaming: Play DOOM on the machine you told your family you needed for schoolwork.

• Casual games: Download games instead of going to the store, and try before you buy.

• Social games: Free to play games with massive viral distribution built-in.

• Mobile: Games in your pocket on the device you already own.

This is true of business models, too. Free to play became the most successful business model innovation of the past couple decades because it removed the biggest barrier to becoming a gamer: the price of admission.

By any reasonable metric, blockchain gaming adoption is pitiful - about 2M monthly active users as of today, according to Dappradar. Steam alone hit 134M MAUs last year!

This is not surprising: blockchain games are higher friction than regular games: they cost more (hello, upfront NFT and land sales), they are harder to use, and the games mostly suck.

To date, the big carrot blockchain games have offered their users to overcome these points of friction has been financialization: now you own these assets, and you can participate financially in the game in some way.

There have been near infinite variations on this pitch, from the ponzinomic play to earn model pioneered by Axie, to the diet “play and earn” version that has recently become trendy but is ultimately as much of a dead end.

Crypto natives love financialization - they think that adding markets and trading to anything makes it better. But there’s a reason they call themselves degens - normal people do not think this way! 

Financialization damages the escapist fantasy that draws people to entertainment, creates incentives that lead to in-game problems like botting, and attracts users who are only interested in the money. It is appealing to some, but only a minority.

If blockchain gaming is ever going to break out of this tiny niche and become significant, we’re going to need something else. 

So, what will that be?