Merit Circle on the web3 gaming revolution: Why so much gaming talent is leaving web2 for web3

Across the gaming industry, talented creators are leaving their roles in web2 organizations for the uncharted territory of web3. Merit Circle speaks to three former web2 gaming professionals who’ve made the switch to understand why.

In 2022, Twitch co-founder Kevin Lin raised $24 million to launch Metatheory, a web3 firm dedicated to blockchain-based games and virtual worlds. Ryan Wyatt left YouTube, where he says gaming had become the platform’s second biggest vertical, to lead a new gaming studio at Polygon. These are headline examples, but they’re not outliers.

As a DAO focused on gaming, we at Merit Circle have noticed that there’s a trend emerging here: web2 gaming professionals are leaving the traditional sector for web3. What is motivating them?

The magic of ‘true digital ownership’

Marty Burgess, Lead Designer at blockchain gaming studio and NFT platform Raini — whose The Lords of Light title recently launched on Beam — has worked with some of the world’s largest publishers across mobile, desktop and console games. “I had very little knowledge around web3 when I started at Raini”, he says. “But the team’s design goals around true decentralization and true digital ownership really made me want to keep working in this space.”

True digital ownership — what does it mean in practice? Currently, it’s something like this, according to Shrapnel CCO Colin Foran, who is now firmly committed to web3 after cutting his gaming teeth at Microsoft Game Studios Publishing: “You shouldn’t have to go to Reddit to sell your Warcraft mount, and publishers shouldn’t be able to reach into your game inventories and invalidate purchases.”

Compared to the state of affairs with web2 games, true digital ownership might sound like an end in itself. But other benefits ripple from it. “If you take the player-owned assets idea a step further, there’s literally nothing stopping players from creating their own experiences/games/whatever they want with the assets that they own,” explains Marty.

Which brings us round to the little word that so often gets forgotten in discussions of web3, with its immutable blockchain and fierce decentralization and enigmatic DAOs: fun.

“Where things get interesting for me is when we start thinking about things like provenance, or history of ownership for digital assets,” says Colin. “If you pick up a weapon that was used by your favorite streamer to win a tournament, now you start contributing to this mythology or shared history in your game environment. Then we start talking about a world where a player base is defining what weapons are legendary because of how they’ve been used, rather than having a publisher tell you that one weapon is cooler than another because it has a gold shader on it or whatever. It feels like the technology is starting to accommodate the way people like to play, rather than forcing people to fit into the shape of the tech.”

Marty of Raini sees it similarly. “Probably the biggest difference to me, having now worked and released games across both ecosystems, is just how much earlier web3 communities are able to get involved in the game community. And due to the fact that so much more of the game and information is on chain, how much more open and transparent you can be about what you’re actually building.”

The rocket fuel of web3-powered innovation

But it’s not just the gamers who are set to be unshackled by web3, of course. The designers and developers and publishers are feeling it, too.

“Every once in a while you get a new technology — whether it’s a new console, motion controls, the blockchain, etc — that forces you to re-interrogate design sensibilities that you may have started to take for granted. It can force you to shake things up and keep yourself sharp,” explains Colin.

Niko Vuori, Founder & CEO of web3 music management simulation game Blockstars, has seen a lot of game formats in his career, and a lot of new game tech. He was there in the early days of Zynga, working as a product leader on major mobile titles, before going on to co-found the voice gaming innovator Drive.fm. Now, with Blockstars, he has moved over to the world of web3.

“I love making games at the intersection of gaming and technology,” he explains. “Seeing if a new technology or set of technologies that could make more fun open up.” There’s that fun word again.

Web3 and your hard-earned cash

With lessons learned from the Axie Infinity chapter, the new wave of web3 games foreground fun over finance. For Colin Foran of Shrapnel, it’s really not a big deal that web3 games have fine-tuned trading mechanics. “The financial element to the tech just feels like a natural maturing of how we interact online,” he says. “We’ve been able to buy stuff online for a while now.”

Niko points to a shift in our view of how digital activity and economics intersect. “There has been a recognition that digital assets can be just that: assets, right? You can actually own something digital and know that you actually own it. Until blockchain really kind of blew up, digital assets weren’t really that. They were just a copy. And Dapper Labs [which creates digital collectibles such as NBA Top Shot] has proven that there’s a huge market and a lot of interest in owning things like that. The consumer sentiment has shifted in that way.”

Moreover, the immutable nature of the blockchain means that you’ll own a digital asset much more securely than you would, say, a physical trading card. “That’s a huge factor,” says Marty. “Look at the recent Magic: The Gathering 1/1 Lord Of The Rings card (the one that was sold for $2 million to Post Malone). Sure, Hasbro said there was only one printed and it was out in circulation, but a lot of the comments online were doubting this. Thanks to the blockchain, our players would know with certainty that there is only one copy of the card.”

Technical advances in web3 mean that gamers wary of cryptocurrencies will, in the not too distant future, be able to spend and cash out in fiat currencies. This is one of the most appealing and game-changing functionalities offered by Beam, a web3 enhancement tool for game developers created by the Merit Circle DAO.

Going from zero to one

For Colin, the thrill of working in web3 is about satisfying an obvious hunger among the gaming community for something new: “If we do our jobs, web3 gaming signifies new IP at a time of heavy franchise fatigue. It promises new experiences, and new ways to use your stuff.”

Niko sees his own excitement slightly differently. “We’re currently seeing a lot of experimentation with what’s possible,” says Niko. “We’ll see some web3 integrations that are really interesting and that will then inspire other game developers to say, ‘Ah, that model worked’. Seeing what does work is what’s exciting to me. The ones that do will be extremely successful and will hopefully define a whole new genre of gaming.”

Colin also flags the buzz of experimentation. “I think web3 has been in a world of theory and speculation for a while — when the rubber hits the road and complex, robust projects are exposed to millions of monthly users, we’re going to have to rapidly reconcile how we think people should use our tech vs. how they actually use our tech. That will probably be a painful experience, but will ultimately kick off the next round of experimentation and invention.”

Some past web3 experiments haven’t worked — Niko points to digital land sales and the metaverse — “But we just haven’t yet seen the web3 equivalent of the mobile models, where you pick it up for free and then there are microtransactions. That was what blew up the mobile gaming sector. What is the equivalent for Web3? I don’t know, but I know it’s out there and game developers are gonna figure out what it is. When we see that first hit game, I think it’s gonna be a zero-to-one type moment.”

Want to learn more about Beam?

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