Culture is often inseparable from entertainment. Your affinity for the kind of books, music, film or art you consume has more to do with the language you speak, the values your family and friends espouse, and the economics of where you live than anything else.
You could argue that those preferences are even stronger when it comes to gaming, since it offers a level of interactivity that engages you more than most other forms of entertainment.
So it makes sense that cultural differences between Asia and the Western world are affecting how the web3 gaming market is developing. According to Robbie Ferguson, president and co-founder of web3 gaming company Immutable, gaming companies in Asia are on the frontlines of web3 gaming development due to the “very strong genre-fit” between web3 gaming and a lot of the existing popular games in Asia that are already highly driven by collectibles.
“[Asian gaming developers] ushered in mobile gaming; they were at the advent of free-to-play and that means they actually say, ‘This is a way to disrupt and sort of stay at the front,’” Ferguson recently said on the TechCrunch Chain Reaction podcast. He added that the popularity of collectibles in existing mainstream titles in the region would align well with NFTs in web3 games.
And that genre-fit is causing the development of this niche of the crypto industry to be skewed toward Asia these days.
“It’s a little bit bifurcated,” Ferguson said. “I think the consumer response is probably different right now between the West and between Asia. There’s a lot of tailwind in Asia, but the Western countries are not as eager to dive in.”
Ferguson and his company have bet extensively on the crypto gaming market. Immutable offers developers a platform for building and scaling Ethereum-based web3 games via its aptly named subsidiary Immutable Platform, and the company develops and publishes web3 games via another arm called Immutable Games. The platform has attracted some traditional gaming studios and IP holders such as GameStop, TikTok, Illuvium and NFT marketplace OpenSea to build games, too.
In March 2022, Immutable raised $200 million at a $2.5 billion valuation, and last June it launched a $500 million developer and venture investment fund.
Those bets may come good. In late July, Japanese prime minister Fumio Kishida said at the WebX conference in Tokyo that “web3 is part of the new form of capitalism.” Although he wasn’t talking specifically about web3 gaming, in 2022, Kishida said his government will promote and invest in web3 services like NFTs and the metaverse.
Ferguson noted that you can’t see such enthusiasm on the part of governments in other markets. “I think in the West, it’s going to be a more cautious approach, where you’re really making sure that these game designs are going to be pretty invisible in terms of web3,” Ferguson said. “And that’s just a branding piece.”
That approach may have more to do with risk than anything else. Ferguson feels Western gaming developers, especially the established ones, want to hedge. “They want to make sure that they know how to develop a successful game when this becomes the new paradigm of development and economic asset ownership.”
In contrast, gaming companies in Asia are on the frontlines of web3 gaming development.
In May, Japan-based Nexon, one of the biggest gaming companies in the world, said it would create a blockchain-based ecosystem based on one of its biggest online games, MapleStory.
That doesn’t necessarily mean Asian companies will always take the lead in the web3 gaming race, though.
“I often think the second-place movers are gonna be the fastest. They want to show up number one, and see this as a new way to get bigger budgets [and] more spend,” Ferguson said. “There’s a lot of trends sort of converging there. We’re certainly seeing it still in AAA in the West, but it is slower, it is more cautious. And they’ll definitely be dipping their toes with prototypes, rather than going all in.”
The breakout game may not even come from an AAA studio but may form out of a smaller studio that just figures out how to make their user acquisition strategy grow.
“That’s why we’re building a platform, because we don’t know what will be successful,” Ferguson said. “We just want to help as many shots on goal succeed.”
And even though it’s not entirely clear yet which web3 gaming model will be the one to win, a lot of traditional developers are still willing to take a shot.
“We’re seeing more web2 game developers than ever continue to build,” Ferguson said. “Last month, for Immutable, was our biggest sales month ever for onboarding games.”
A pretty insane update:@Immutable onboarded more games last month than ever in its lifetime.
Incredibly proud of the product and GTM machine that is working tirelessly to bring true property rights to gamers.
The endgame infra is here with @immutable and @0xPolygonLabs. pic.twitter.com/IWcAvaqNWt
— Robbie Ferguson 🅧 | Immutable (@0xferg) June 27, 2023
Immutable’s recent sales growth and resulting apex is significant given that the company has been around since 2018, through the recent bull market and play-to-earn gaming hype that took off in 2021.
“In the peak of this essentially sideways [crypto] market, we’re onboarding more than ever,” Ferguson said. “That is somewhat a reflection of the market share, but I think that’s an incredible testament to people seeing this being a much better model for players. A lot more credible professionals are choosing to develop [here].”
This story was inspired by an episode of TechCrunch’s podcast Chain Reaction. Subscribe to Chain Reaction to hear more stories and tips from the entrepreneurs building today’s most innovative companies.
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