Web3 fills the void at GDC 2024 as traditional gaming reels from layoffs

GDC 2024 was quieter, more reserved than usual. The industry has been suffering from over a year of massive layoffs, and you could feel the pain on the expo floor. However, as the traditional industry pulled back, web3 companies poured in, with Avalanche and Arbitrum taking center stage. After a difficult twelve months, this GDC was as much about what was missing as what was shown.

Avalanche shows up big

The Avalanche ecosystem had one of the best showcases of anyone presenting on the expo floor. They were able to bring out their big guns, and showcase prime titles such as Shrapnel and Providence, but also left room for key subnet partners like Merit Circle’s Beam.

It has long been said that teams operating gaming chains will have to become publishers in order to properly support studios deploying on their infrastructure. With a number of top titles in early access or getting ready for early access, Avalanche showed up in a big way.

It was also nice to see the ecosystem set up right next to traditional gaming projects. From what I’ve heard, this attracted the attention of a number of traditional industry people. Arbitrum and Start Atlas also had nice presentations and deserve credit for their strong representation of web3.

ImmutableX did not showcase at the expo

However, it was hard not to notice the absence of ImmutableX at the event. After spending years building its reputation as the premier destination for games and gamers in the web3 space, ImmutableX has been giving ground to competition, in particular Avalanche and Arbitrum.

Last year’s tie-up between ImmutableX and Polygon was supposed to produce a web3 gaming behemoth, but the reality has been far from that. The two have been struggling to keep studios satisfied, with teams defecting to other ecosystems.

Most recently, Polygon lost MapleStory Universe to Avalanche, and it is likely not going to be the last big-name loss for the ImmutableX-Polygon pairing. Teams have been frustrated by the developments around zkEVM, and the two are also starting to lose to competitors when it comes to funding.

AAA was nowhere to be found

Another thing that caught the attention of many was the notable absence of most of the industry giants and AAA title showcases. As big as the expo show was, without marquee names, it felt a little empty. 

There could be many reasons for studios to pass or reduce their presence at the conference. For one, spending a lot of money on eye-catching presentations could look bad amidst the budget cuts and layoffs going on seemingly at every major studio.

Another reason could be the major studios’ focus on their own gaming events, as Microsoft, Nintendo, and others have been putting on individual showcases in order to not share the spotlight with competitors. This could be a dangerous trend, as ultimately this was one of the reasons for the death of E3.

AI, AR/VR take center stage

This year the promise of technology compensated for the lack of marquee titles. AI was obviously a big conversation point. InWorld AI showed off the prospects of next-generation NPCs.

However, optimizing the production side of gaming may be even more impactful in the short term. With budgets ballooning, AI-enhanced development could spell the difference for many studios. Bot-powered game testing also caught my attention.

AR/VR technology seems to be expanding its footprint. For instance, I saw a team showing a game board, which can project 3D games people can play on. Still, Meta had the biggest booth in this segment.

The industry could use a breakthrough on the console side, and Quest 3 and Vision Pro seem like steps in the right direction. However, it is unclear how long it will be before we see a mass market breakthrough for gaming on this front.

Epic continues to fight the good fight

Epic Games continues to push forward its UGC vision with the UEFN, and that was on display at UGC. Fortnite and Roblox have been the two prime examples of UGC economies, but questions are swirling regarding the incentives math working out for everyone involved.

On top of that Epic Games announced the launch of the Epic Games Store on iOS and Android. The company has the user base and the budget to fight the distribution oligopoly that currently presides over mobile gaming.

The ongoing legal fight with Apple and the recent ruling against Google Play give studios hope that the predatory practices, particularly those of Apple, will come to an end. Given how friendly Epic has been towards web3, this is definitely one to watch as studios continue to integrate web3 technology into their games.

Godot pushes forward

It was nice to see another sizable stand for Godot at GDC. Despite the release of Godot 4 and subsequent updates, the gaming engine is still far away from being able to compete with Unreal Engine and Unity, but persistence and community building help to chip away at the lead. The web3 space knows that better than anyone.

In fact, there have been a few attempts in the web3 space to leverage Godot to develop gaming infrastructure, but to this point, these haven’t yielded much success. The expo did have a networking solution for MMORPGs, however, that offered its first engine integration for Godot.

After the giant missteps made by Unity with respect to their pricing policy changes, there is a feeling like it’s time for a shakeup in the game engine space. It would be interesting to see if web3 gaming infrastructure teams will try to take advantage of Godot in this year’s efforts.

A missed opportunity

While web3 gaming booths were right in the middle of all of the expo action, it felt as though the traditional gaming and web3 worlds were as separate as ever. Sure there were many people intermingling between the two, but based on a number of conversations I had, the traditional gaming industry continues to harbor many of the old misconceptions about web3.

For example, while I was walking over to test the Star Atlas build, I was pulled over and asked if I wanted a demo of an AR-enhanced gaming world. Naturally, I did. I shook hands with the founder, and then he noticed “crypto” on my badge. The conversation soured instantly.

While he still gave me a brief demo, he was quick to point out that he is strongly anti-crypto, and did not want to waste anyone’s time. When I pressed him for why he felt this way, all I got in response was something about horror stories that he heard, the lack of provable NFT interoperability between publishers, and that ultimately no one wants it.

This was not the only conversation I had that suggested that traditional gaming teams relied on hearsay and outdated information to form their opinions of web3. However, web3 engineering and thought leaders that were located just an arm’s reach away at the show also did nothing to dispel these erroneous notions.

After waves of devastating layoffs in the gaming space, there is a lot of top-tier talent looking for new homes, but they continue to distrust web3, and it did not look like web3 studios showcasing at the expo were actively building bridges.

It could be sample bias on my part, but the web3 showing at GDC felt like it was geared more toward investors than developers, publishers, and potential technology partners. There always seems to be a shortage of quality developer relations personnel in web3, and it really showed at GDC.

The web3 space currently has momentum as well as capital but is in dire need of gaming talent. The industry leaders need to be proactive in evangelizing the technology throughout traditional gaming, or it will miss a golden opportunity to strengthen its ranks.

Disclaimer: This commentary is not investment advice. It does not purport to include any recommendation as to any particular investment, transaction or investment strategy, or any recommendation to buy or sell any investment. It does not reflect any attempt to effect any transactions or render any investment advice.

This post is solely for informational and entertainment purposes. It is inherently limited and does not purport to be a complete discussion of the issues presented or the risks involved. Readers should seek their own independent legal, tax, accounting, and investment advice from professional advisors. The views reflected in this commentary are subject to change at any time without notice.

The authors or their affiliates have ownership or other economic interests or intend to have interests in BTC, ETH, SOL, and may have ownership or other economic interests or intend to have interests in other organizations and/or crypto assets discussed as well as other crypto-assets not referenced.