Robbie Ferguson | Immutable (@0xferg): Secret Rewards: How Web2.5 Will Eat Web3, And Then The World

Secret Rewards: How Web2.5 Will Eat Web3, And Then The World Yesterday, we opened Immutable Play to all games, including those from web2. This makes Immutable the first platform in the world where web2 studios like Ubisoft can offer crypto rewards to their players. Importantly, these are studios that aren’t branded as "web3", but still want to reward their players with web3 incentives. Why is this such a big deal? The importance of converting web2 Immutable's mission is to bring the benefits of web3 to every player in the world, and to help our games reach the biggest audiences possible. To do this we need scale. Although we've already grown massively since launching Play last year, the number of games that currently classify themselves as "web3" are limited. Last year, more web2 games were launched on Steam every 32 days than have launched on web3 in the last 7 years. The top 5 web2 studios have a combined MAU of over 1.1 billion players, more than every narrative in web3 combined. TLDR, if we want our current games to be breakout hits, we need to bring them the users from web2. This can either be done by: Acquiring new web2 players to our existing games Acquiring new web2 games, along with their existing players Over the last year we've successfully scaled strategy 1, going from 0 to +5.6 million wallets. Due to a convergence of factors, strategy 2 is now a viable option for the first time in history. Yesterday we started work on it with Ubisoft and their 200 million UbiConnect users. Why this is suddenly possible For the last few years web3 gaming has fought an uphill battle. Unclear regulations have made the mainstream cautious, and although web3 offers obvious benefits to studios and their players, major companies have needed to hold back for fear of being non-compliant. This year the barriers have begun to fall away: The CLARITY Act will exclude certain "video game assets" from being digital commodities, creating a clear pathway for AAAs to launch gaming tokens. Stablecoins have emerged as a simple payment infra for non-crypto natives, supported by the GENIUS Act, and recent mainstream publicity such as the CIRCL IPO. The Epic Games court case means that games can sell NFTs via the appstore without a 30% fee. This week, Epic Games won another victory in the Australian courts. The claims about web3's superiority are finally being validated with real case studies in UA, monetisation, and retention. For instance, Immutable's creator leaderboards recently converted a token reward pool of $10k into over 13 million impressions. We estimate the same impressions would've cost over $165k in web2. The landscape has changed so much over the last 12 mths, we’re now in talks with multi-billion dollar studios about how they can launch gaming tokens. Old grudges However, there's still a cultural lag that needs to be overcome. Big web2 companies won't join web3 if they think their players don't want them to. And in part they're right. The average consumer's view of crypto is several years out of date, and it's still a world they have no interest in joining. They don't want to remember a 12 word seed phrase. They don't want to worry about what chain they're on, or wallets, or gas fees. They just want to play fun games. Secret rewards How do we solve for this? Immutable Play has abstracted its web3 elements away almost entirely. All a player has to do is sign in with an existing Google login, and they're automatically given an Immutable Passport wallet they can use to start playing. In fact, none of our paid ads to web2 players use the word "crypto" or "web3" anymore. We keep the value proposition simple: If you play games, you can earn rewards. Once they're on the site, new players are slowly introduced to more complex web3 mechanics as they progress. First they play games. Then we show them how they can earn gems, a type of offchain reward that they’re already familiar with from most mobile games. Then they’re using their gems to participate in the weekly rewards, and by the time any inherently "web3" concepts are introduced, their previous reservations are long forgotten. Gems are a great metaphor for how we’re bridging the gap between these worlds. Convincing a Clash of Clans player to make the leap into crypto is quite hard - but convincing them to take the small step to “web2.5” hardly feels like a change at all. We believe that all games will transition to web3, but they will do so quietly, and many users will never call it by that name. The next 10,000 web2.5 games Now we're applying this strategy to games as well. Instead of attempting the hard sell - trying to convince a web2 studio they should rebrand as a web3 studio - we're simply letting them use Immutable Play to give out rewards. User acquisition is every studio's biggest problem. Web2 games spend over $300B on UA every year, and will inevitably transition to whatever strategy is the cheapest. Once they're on Play and they see the results for themselves, we're confident that we can convert web2 games further down the web3 funnel. First rewards as UA, then Passport, then NFTs, and finally tokens. This is how we soft onboard the next 10,000 games to web3. This is how we bring hundreds of millions of users to our ecosystem. Ultimately, we believe this is how web3 gaming wins.