Game Over for Game Over

Forget your forever home, this is the forever game and you will love it.

Ian Emerson
Fabric Ventures



At $200bn-$300bn annual revenue¹, Gaming is bigger than the Music and Film industries combined.

This is not a new phenomenon, Arcade games alone surpassed pop music and Hollywood combined in 1982². Gameplay of course is the core proposition that engages players, but surprisingly often in the history of the video game industry, value generation has come from new business models rather than novel gameplay: the adoption of home consoles, digital downloads, and free-to-play, among others. These new business models have been possible as a result of technological development and cultural shifts. The next major shift is towards sovereign ownership of assets enabled by blockchains, along with the permissionless nature of smart contracts to manipulate those assets. When looking for venture-scale opportunities within gaming, one of the best candidates is the forever game, a game which continually provides new challenges and progression for players without reaching an end. This type of game requires balance, eventfulness, competition, player investment, and community. Through player owned assets and permissionless development, it is now possible to achieve such a game, by enabling greater player investment and supercharging community involvement.

Video Game Industry annual revenue ($bn) split across platforms



A perhaps surprising conclusion when examining the history of games is that popular play patterns have remained relatively persistent over time.

Of course this is true for board games like Backgammon, Chess, and Go, but it also turns out that the biggest drivers for revenue growth in the video game industry have often been a result of business model changes as opposed to completely novel gameplay.

Spot the difference between Halo: Combat Evolved released in 2001 and Halo: Infinite released in 2021:

You would expect more change given 2 decades and 3 console generations of development between the first and last Halo release.

The biggest change in those 20 years is not what you do in the game, but how you access the game and how the developer charges you for it. Halo: Combat Evolved required buying a physical disc in a box in a brick & mortar store. Halo: Infinite is instantly downloadable for free, but barrages you with pop-ups to spend on cosmetics, including $20 just for the privilege of looking like the main character from the original game.

The business model of Halo has changed far more dramatically than the game itself.

This is not a lone phenomenon, if we examine the last few decades, technology has repeatedly enabled new business models that have disrupted the game industry:

In each of these cases Gaming has been an early adopter of new technologies, and a harbinger for broader societal change:

  • Home computing
  • Digitally distributed software
  • Freemium SaaS
  • Social virality
  • LTV vs CAC optimisation
  • User Generated Content (UGC)
  • The modern internet consumer

By examining the industry’s revenue growth with this new lens, one can see the impact that these technologies have had.

Gaming has always been an early adopter of new technologies


Where new gameplay has been popularised, its genesis most often can be traced back to modding.

A testament to the power of the open movement, ‘modding’ is the practice of modifying video games through either built-in editing tools (e.g. WarCraft III map editor), permissioned mod managers (e.g. Steam Workshop), or even illegally, independent of the game publisher.

The fact that new business models have stimulated so much growth in the industry does not diminish the innovation of gameplay itself, nor the requirement for games to be fun. However, if you look at recent successful new genres, they are mostly the direct descendants of mods.

Under the hood of Counter-Strike is actually Half-Life.

Notable examples of popular game genres that came from mods include:

  • Tactical Shooters: Valorant from Quake’s Team Fortress
  • MOBAs: League of Legends from WarCraft III’s Defense of the Ancients (DotA)
  • Battle Royales: Fortnite from Arma II’s DayZ
Most modern competitive genres owe their existence to modding.

Unfortunately in each of these examples, although billions of dollars of value have been created and captured by subsequent games, the original creators have not always been rewarded for their innovations.

In some examples, modders found jobs at the original modded game’s studio or for another studio to build a similar game e.g.:

  • Robin Walker and John Cook, 2 of the 3 co-creators of Team Fortress were hired by Valve to develop the standalone Team Fortress Classic and Team Fortress 2
  • Eul and Icefrog, developers of DotA were also hired by Valve to work on Dota 2
  • Dean Hall, creator of DayZ, went on to make a standalone game of the same title

However, given the success of the mods themselves and the entire creation of a new genre, this is meagre compensation. What can be done to ensure more of the credit goes to the value creators?


Now that we have established that new business models enabled by adopting pioneering technology disrupts the game industry and modding creates new game genres, what could be the next large technological shift? Digital sovereignty and the decentralization of data networks, resulting in:

  1. New business models from Player-Owned Assets
  2. Improved modding via Permissionless Development
The future disruptors of the Video Game Industry

The result of these shifts is the enabling of forever games, games that continually provide players with tangible progress, new experiences, and new challenges, without reaching an end. They present one of the best opportunities for creating highly successful venture-scale games and require 5 key components:

  • Balance
  • Eventfulness
  • Competition
  • Player Investment
  • Community

How can web3 impact these components? Well gaming is broad, so we’ll split it into 3 verticals which can each leverage blockchains to varying degrees:

  1. Autonomous Worlds (high touch)
  2. MMOs/Hardcore
  3. Mobile/Casual (low touch)

Autonomous Worlds

The majority of web3 games up until 2023 have primarily explored only one consequence of blockchains: player owned assets

The core feature of these early games is that game assets (skins, items, currency) are not recorded on a centralised server, but on a decentralised blockchain such that the user has control to do what they please (trade p2p, borrow against them, rent them out). This protects players from being punished and essential services like fiat off-ramps being shut down e.g. CS:GO skin trading accounts having $2m worth of skins banned, because Valve wants to maintain their closed ecosystem.

As well as player owned assets, blockchains also enable persistence and permissionless development.

Why Web3

Persistence increases one’s willingness to put value (time, money, & effort) in the game (player investment). So long as there is an active player base, effort and resources directed towards a game are an investment in a forever game not expenditure in a momentary experience. While having a decentralised ledger of assets is nice, if the game logic is being executed on a centralised server, then much of the value of those assets suffers from counter-party risk of whoever controls that server (the developer and the server owner). This leads to tragic scenarios like 14 years of player effort in WoW China vanishing at the flick of a switch when NetEase and Blizzard’s licensing agreement expired. The game was still popular, it wasn’t due to be sunset, however a corporate disagreement got in the way of player enjoyment & players’ accrued value/status.

Permissionless development supercharges the modding activity that has incubated most successful new game genres. Much more than just light UI/client/map modding, this concept takes community to the next level. MMOs have always been shaped by the actions of the community and players finding exploits or coordinating in unexpected ways. Rather than put the onerous task of fighting these fires on the core developer however, autonomous worlds incorporate this as part of the metagame (eventfulness). This not only enables the modding community to fix issues, but also to contribute to balance, whereby different metas can run in parallel and it is up to the user to choose which state to play, giving them a more powerful voice rather than forcing them to exit.

Famously, Vitalik Buterin was inspired to create Ethereum in part because of Blizzard’s centralised decision to nerf his Warlock’s Siphon Life spell in WoW. If his sentiment was shared among a significant portion of the playerbase then the un-nerfed state could have continued to exist. In reality there have been many private WoW servers, the largest having 800k registered accounts, that were shut down by Blizzard and only after 200,000 people signed a petition to create official Classic servers did Blizzard finally concede in 2016 to start development and subsequently release WoW Classic in 2019 after more than a decade of denial dating back as far as 2008.

We can learn much from the story of open source in the early days of the internet. Based on his observations of the Linux kernel development process, Eric Raymond wrote an essay in 1997 and later a book in 1999 entitled The Cathedral & The Bazaar. In it he describes two competing software development models, one being The Cathedral, wherein code is restricted between releases to a few select developers and the other The Bazaar, developing code in full view of the public. His central thesis was that the more widely available source code is, the more rapidly bugs can be discovered and fixed. This is analogous to the patterns observed in modding communities and the acceleration of community contribution; even in brilliant games, mods improve quality of life and expand on the content within days of release. So by empowering the decentralised collective of the Bazaar, far more can be achieved than if we only look towards the central Cathedral for answers.

Open Questions

The following questions remain unaddressed, but are currently under exploration by many studios and platforms like Cartridge and Lattice:

  • How can we overcome technical constraints such as: Incomplete Information, Automation & Collusion, Ticking
  • How can we align incentives within composable systems?
  • How can we prevent metagame stagnation in systems with no centralised content producer and immutable base rules?
  • What areas of game design are uniquely explored with Autonomous Worlds?

It is expected that within a year some of these can be tackled in production like using zero-knowledge proofs to obfuscate global state, while others may be prohibitively expensive to achieve and instead require designing games that avoid them as is the case with Sybil resistance and Ticking. While others are long-term challenges that require constant iteration like designing incentives, metagames, exploring game design.


Forever games are not a concept unique to web3. The longest duration play pattern board games like Backgammon, Chess, and Go have been around for 100s to 1000s of years in various guises. Even in the absence of the internet, competitive single player games like Tetris and split screen multiplayer sports and fighting games could potentially become forever games (if it weren’t for the broken console business model requiring annual releases, sports games like Fifa and Madden are perfect candidates).

Early MMOs like Ultima Online and later Lineage, EverQuest, and Asheron’s call created communities and iterated upon eventfulness, pioneering the path for virtual economies. Hardcore session-based games like Counter-Strike, League of Legends, and Fortnite brought competitiveness.

Where web3 can contribute is in supercharging player investment through tangible virtual goods and community through inclusive governance.

Why Web3

As mentioned above when owning and fully controlling one’s digital assets, one is much more likely to invest in the game and as a result be engaged with it. There is early data to support this among emerging web3 games, comparing cohorts of asset owners vs. regular players. One of our portfolio companies has seen owners compared to non-owners:

  • Convert 4.3X more from visitor to player
  • Retain 1.8X more D1
  • Retain 7.2X more D7
  • Retain 8.3X more D30
  • Retain 10.1X more D90
  • Play 1.8X more games per active day
  • Have 10X the highest blended 2.5 year LTV per player in their game category in the US

This effect is possible in traditional video games, as time or monetary investment causes similar results, the difference will be the strength of attachment — no longer just psychological, but also overtly financial, and aligning the incentives for community members to see the game (and its assets) succeed.

In addition to increased engagement for players, there are tools available to developers to enable virtual economies. As a result of the development of decentralized financial (DeFi) primitives, the surrounding infrastructure for the transfer of value is far more developed within web3 vs. traditional games, not only reaching feature parity with simple p2p trading, checkouts, and fiat on/off-ramping, but in areas beyond that have not been possible like renting, loans, delegation, and other derivatives. Historically these activities have only been possible through informal trust-based agreements between players or have come with significant compliance overheads that only the largest publishers are able to support, and even then with reticence given the costs. Smart contracts not only enable more enforceable financial agreements, but through self-custody and emerging changes in regulation may reduce or completely remove the onus of compliance from the publisher to enable real money trading via fiat on/off-ramps

Community is where web3 really shines. Almost all games are accompanied by an end user license agreement (EULA), these limit the publisher’s responsibilities and liabilities and limit what the player is allowed to do, but have you ever read one? The EULA results in the publisher having supreme power over the player, able to ban or penalize players for not adhering to their rules if you are caught farming, trading off-platform, or otherwise consuming/providing services that are not provided by the publisher themselves, but have an unmet demand among the playerbase. The most that a player of a traditional game can do is furiously write on community boards that are rarely read by publishers or in the most privileged cases vent grievances through player councils that may give feedback to the publisher in an advisory manner.

By contrast one of the core values of web3 is decentralisation and providing the community with governance power. Of course if it is implemented only superficially the publisher retains control, but at the very least the game has been developed with this in mind and so given these expectations the publisher is disincentivised from ignoring the community who are the source of success (direct revenues and further distribution through evangelisation. And if implemented more meaningfully e.g. programmatically without backdoors from the core devs, then the community can control things like quality of life improvements and dispute resolution, that may not require critical attention from the core devs.

Open Questions

The outstanding issues for the adoption of Hardcore, partly offchain games revolve around player behaviour and additional friction vs. value proposition that blockchains provide:

  • Can there be a funnel that converts PC gamers when onboarding to a new game to login using a wallet and why would they do so?
  • Does the user segment of MMO players prefer blockchain games because of participation in deeper governance?
  • How do we avoid game economies where the early adopters become overlords without a proper progression route for newer players?

These are all ongoing problems that studios and developer tooling/service providers are iterating on and will continue to improve just as with UX and live services in traditional games.


Success in casual games revolves around minimising your customer acquisition cost (CAC) and maximising their Lifetime Value (LTV).

As casual players are predominantly on mobile and are less engaged with their games and the communities around them, the barrier to entry to and level of education required for complex economies and governance systems is likely too high.

Why Web3

Thus casual games will benefit primarily from the ideological shift towards player owned assets (player investment).

This has been discussed in both the prior sections: Autonomous Worlds and Hardcore games. The goal is toreduce CAC through the appeal of vouchers/rewards/assets and increase LTV through greater retention and willingness to spend on assets that can be recouped in the future or have greater utility than in a single game.

Open Questions

It remains to be seen whether casual gamers indeed get increased enjoyment because of owning their assets/bonuses/status across games and/or ability to see a return on their investment and whether this net effect increases spend or sees value leak out of the previously closed system.


There is a long way yet to go in proving out the benefit of blockchains in live games, however there is a disruptive opportunity potentially on the order of magnitude of free to play for player owned assets to change the business model of video games and for permissionless development to accelerate the experimentation of novel gameplay, resulting in some of the first true forever games.


Thank you to everyone who entertained my rambling, spars with me regularly, and reviewed early drafts:

Dan from Sfermion, Jamie from Bitkraft, Greg from Makers, Harry from LVP, Gaurav from Galaxy, Jeremy from Delphi, Serge from YGG, Uri Levanon, Chris Lee, among others.

Our portfolio founders Coop from Earn Alliance, Harry & Ste from Magicave, Alex from Trailblazer, Tarrence from Cartridge, Susan from Petaverse.

Max & the Fabric Team

Many others who have shaped my understanding of the industry, whether wittingly or not.

Fabric is a venture contributor: building, backing and accelerating the boldest ideas in Web3, to create a more open and fair economy. As a top European Web3 fund, Fabric focuses on being the “first institutional cheque” invested in companies, crypto assets and digital networks on a path to be global winners.

The Fabric team is made of founders and operators who have built companies to over $3 billion in value, and holds operational and investing experience from Google, PayPal, Sun Microsystems, Visa, Accel, Headline, and EQT. Fabric Ventures’ portfolio includes Sorare, NEAR Protocol, Immutable, Sky Mavis, Nansen, Consensys, Messari, Polkadot, Ledger, Ramp, YGG, Argent, 1inch, and The Graph.

For more information on Fabric’s portfolio, opportunities and our investment thesis please visit our website and follow us on Twitter & LinkedIn