Web3’s Biggest Problem is Solved; Time to Unleash the Uh, Product?

Ah, web3: a past marked by rug pulls, North Korean heists, and prices more volatile than Gamestop shares. However, for all its misgivings, audiences still capitalize web3, with prices far from zero. Parallel, a new web3 CCG hit a half-billion market cap considering token and NFT prices, and yes, it’s pre-launch. Despite flaws, Parallel looks cool, and games like Sipher are turning heads, while Sorare is already established. Chris Heatherly is brewing something with Mystery Society, giving ‘Among Us live-service’ a jolt. But for all its hopes, web3 has been blocked by distribution and confined to the browser. Epic Game Store, a trusted brand, now carries web3 games, even with an Adults Only rating. Finally, Web3 is playable on mobile, with the compromise of giving Apple 30% and tacking on an equivalent user-facing tax. All this festers into 2024 as the year web3 ships a chart-topping product; it can’t keep failing upward. Right?

As Eric Kress reminds us, new platforms and genres represent new opportunities. Disequilibrium persists before market leaders establish themselves. Look no further than Palworld, an early Survivor-Crafting genre entry, where a key hire came from a part-time convenience store worker. New platforms grow audiences and, ultimately, the industry. If you want gaming to win, you want web3 to win because that means games win.

Despite slow infrastructure advancements (hello, Forte) and high transaction costs, platforms like Immutable‘ IMX are emerging default solutions. Remember, Steam wasn’t easy to use on launch, but its exclusive Half-Life distribution made the ‘juice worth the squeeze.’ Web3 founders tell me they want to ‘onboard the first billion users to crypto,’ but this means designing something worth surviving the ‘web3’ part for; web3 must make its content juice worth the onboarding squeeze. This challenge extends to tokenomics, where simplicity should be a priority over complex economic models.

Web3 still needs to find an ‘off-the-shelf’ tokenomics meta. Teams shouldn’t need economic manifestos to launch web3 games, but virtual goods get complicated when they carry a real-world price. It’s been hard to figure out tokens: a hard currency, an annuity, and a growing stock all-in-one, but if it needs to be anything, it’s yield for owners. Firms must integrate concise ways they ‘share the means of production’ with stakeholders in exchange for capital. Or avoid the ordeal entirely and only permit account selling. At risk of self-harm, games shouldn’t need a game economist to succeed.

Web3’s journey, led by inexperienced pioneers, remains challenging. Distribution is no longer a barrier, but content and tokenomics remain immature. Success lies in creating concise tokenomics and delivering compelling content worth the web’s gripes. Web3 likes to remind skeptics that ‘it’s so early,’ which is true, but 2024 must be the year it gets a bit older.

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