Thread by @WuCarra

The gaming industry is in the midst of an M&A arms race— a period of consolidation unlike anything we’ve ever seen before. What does it mean for the future of games?

tl;dr: I’ve never felt more sure that web3 is the future of games

https://twitter.com/Tocelot/status/1488213070077775872

1. Indie game studios are facing pressure from all sides, which begets more consolidation

- Hard to compete w big $, fast-follow development, & preferential cross promo
- When platform becomes the largest publisher, studios lose their key pt of leverage (x-platform distr. deals)

@FortniteGame & @LeagueOfLegends understood this / dominated culture by eschewing publishers and making themselves available on every platform games can be played on

2. Consolidation => innovation plateau

- The consolidation curve is a well documented phenomenon in most industries hbr.org/2002/12/the-co…
- Typically it takes around ~25 years for an industry to mature to the point of 70-90% consolidation among top 3 firms.

- Recall that Ultima / the 1st commercial broadband MMOs were released in 1997, exactly 25 yrs ago…
- When this happens, growth becomes harder, margins get thinner, bigco hysteresis sets in, and the most innovative builders leave to spawn their own newcos (more below)

3. Shittier UX

- Focus on late stage profit->⬆️subscription prices
- Content gets funneled to vertically owned distr. channels (i.e. Elder Scrolls exclusive to Xbox). Same content balkanization in TV: verticalization + exclusive media rights = must sub to every streaming service

- Closed source siloing enables top-down rule-making that affects devs and customers (cf: App Store 30% fee, which instigated Epic / Fortnite lawsuit)

4. Web3 is a new pt of leverage that allows the most innovative game devs to circumvent the tradgame industry & go D2C

- Direct user acq/community engagement

- Web3 takes the Fortnite ex. to its logical extreme, bringing universal avail, down to the object level (Axies can be bought,sold,&played anywhere)
- Open economies provide ownership incentives that drive composable (&finally profitable!) esports, creator economies,&guild growth

We’re already starting to see mass migration of boundary pushing game devs toward web3– esp in Asia, where many of the most sophisticated publishers have announced full pivots to web3 (the west has traditionally trailed Asia game adoption by a few years)

And this year, super fun AAA web3 games made by top web2 game alumni will finally come online.

@MiniNations is ripping. @mechafightclub is on deck. @AxieInfinity's Origin game is well on its way. The tide is shifting. Dm me if you’re a web2 game dev ready to ride the wave 🌊