The video gaming industry has experienced tremendous growth, evolving from its modest origins in 1972 with Pong to an industry serving billions of people around the world. According to recent estimates, games generated at least $280 billion of revenue in 2023, surpassing the combined revenues of the movie and music industries. In order to get there, game developers have relied on technological developments to create games that are higher in quality with better business models. In this report, we discuss why Web3 technology is one of these developments which will lead to an improvement in player experience and monetization for developers. And there is one company that currently serves 70% of the emerging Web3 gaming market.
That company is Immutable, an infrastructure solution for Web3 game developers that provides a scaling solution and developer tools to build Web3 elements into games. Immutable’s journey began in 2018 with the launch of Gods Unchained, a digital trading card game that faced scalability challenges due to Ethereum’s limitations. The founders recognized the need for a new infrastructure tailored for games and developed Immutable X, one of the first Ethereum Layer-2 solutions. Recently, Immutable partnered with Polygon to launch their second rollup using zkEVM technology, offering a gaming-focused Layer-2 solution with reduced gas fees and increased transaction throughput.
Immutable is taking the approach of building a “vertically complete” platform for game developers. This means their goal is to offer a suite of tools that will serve every need a game developer may have when integrating a Web3 element such as Passport for seamless user onboarding, Checkout for multi-currency payment processing, and Open Orderbook for transparent and efficient NFT trading while enforcing royalties and aligning incentives between creators and consumers.
With over 3 billion gamers worldwide, the untapped potential for Web3 in gaming is immense. The industry’s monetization models have historically evolved alongside technological advancements, and Web3 is poised to make in-game purchases more appealing while generating recurring revenue through royalties. Users will benefit from in-game ownership economies, potentially encouraging greater investment of time and money into their favorite games.
Immutable’s existing game ecosystem, robust treasury, and approach to vertical completeness position it favorably in the Web3 gaming market. The company’s emphasis on creating engaging and accessible gaming experiences for a mass-market audience differentiates it from competitors and aligns with long-term value capture in Web3 gaming.
The Immutable ecosystem already boasts high-profile titles such as Gods Unchained, Guild of Guardians, Illuvium, Pixelmon, and numerous upcoming games. As the gaming industry continues to evolve, we believe Immutable will emerge as a leader in developing solutions that unlock new possibilities for players and developers worldwide, shaping the future of gaming in the Web3 era.
