We’re rapidly entering an era where the Web2 industry is beginning to merge with Web3. It’s true that in many ways, Web3 is still only a nascent movement that’s just getting started. For now, the vast majority of the world’s businesses, applications and services are happy enough with Web2.
However, there are those who have come to recognize that Web3, blockchain and decentralization are no longer some radical new technology concepts, but that they’re steadily gaining traction and are here to stay. The assumption is that over the next 10 to 15 years, most industries will come to embrace Web3, just as how they came to accept the Internet when it first emerged in the 1990s.
It’s an opinion that’s becoming increasingly more popular, and with it many companies that established themselves in the Web2 era are now moving quickly to explore the numerous advantages that Web3 can deliver.
One of the biggest names to announce it will explore Web3 concepts was Ubisoft, one of the biggest video games developers in the world. In December 2021, Ubisoft announced a blockchain-based offering known as Quartz that enabled players of its popular Ghost Recon franchise to acquire non-fungible tokens (NFTs) called Digits.
Ubisoft’s Digits were essentially customized in-game items that players could acquire and then use to adorn their avatars in Ghost Recon. The company was testing the waters, so to speak, meaning that the NFT-based items had no actual impact on the gameplay. They simply made it possible for player’s characters to stand out from the crowd, with the items able to be resold on third-party NFT marketplaces.
Unfortunately for Ubisoft the idea didn’t quite get the positive reception the company had hoped for. The majority of Ghost Recon players were up in arms about the move, with hundreds posting criticisms on online forums and sites like Twitter, slamming the idea. Nonetheless, Ubisoft is clearly a big believer in blockchain’s potential, and pressed ahead with the plan anyway, releasing its NFTs on the eco-friendly Tezos blockchain that has a much smaller carbon footprint than Ethereum and Bitcoin.
Web2 Invests In Web3
While Ubisoft’s first babysteps towards Web3 came in for criticism, a number of tech firms have gone about the shift differently and have seen big benefits already. One of the best examples might be Everyrealm, a fintech company that started out with a real estate investing app that was later acquired by Republic.
Everyrealm’s founders leant on their experience in real estate investing to find the perfect niche for their specialist skills in the emerging metaverse space. For those who’ve been living in a cave recently, the metavese is an all-encompassing term for decentralized, virtual worlds that can be accessed using virtual reality and augmented reality headsets. Some of the most popular metaverses include The Sandbox, Decentraland and Facebook parent company Meta Platforms’ Horizon World.
Having sold its original product, Everyrealm switched its focus to investing in so-called digital land in some of the most popular metaverses. Its modus operandi is to buy up tracts of “virtual land” and “Land NFTs” and then develop that real estate on behalf of clients looking to establish themselves in Web3. Everyrealm now owns land in 27 metaverses and owns more than 3,500 Land NFTs. It then develops this land, creating metaverse communities for clients, offering navigational aids to help them find the ideal virtual space. It even monetizes these virtual spaces by creating special events and games, and charging users for access. Its revenue is derived from multiple sources, including rents, sales, access cards, tickets, memberships, retail sales of NFTs and digital goods, and even educational content.
Most recently, Everyrealm has expanded its Web3 presence with the launch of Hometopia, a metaverse-based house building game targeted at adults that’s comparable to The SIMS or Roblox.
Everyrealm isn’t the only startup applying legacy skills to the Web3 industry. Snapmuse.io is the creator of a unique platform that leverages NFTs to enable fans to become partners of their favorite YouTubers and social media influencers.
The problem Snapmuse.io is attempting to solve is that most YouTubers struggle to obtain funding to market themselves and develop their products. That’s because most financial institutions don’t see being a “YouTuber” as a job, but rather as more of a hobby. They won’t lend money to a YouTuber, meaning that creators’ only option is to sell the rights to their content or keep churning out new content to keep up a revenue stream.
Snapmuse.io provides YouTubers with an alternative option, allowing them to mint NFT collections and sell them to their fans. The blockchain-hosted NFTs give the holder the rights to a specified portion of the YouTuber’s earnings from ad revenue. In this way, fans can buy an NFT (providing funding for the creator) and earn an ongoing income that can potentially increase as the creator becomes more popular. It means fans become more than just consumers – they have the opportunity to become genuine partners to their favorite YouTubers and have a stake in their success. As such, these superfans are incentivized to go above and beyond to help their new creator/partners succeed, similar to how traditional investors will do everything in their power to help grow the Web2 startups they back.
Top Apps & Talent Accelerate Web3 Shift
Web3 is more than just an investment opportunity for companies whose roots stretch back to Web2. For Sweat Economy, Web3 provided an opportunity to truly revolutionize its fitness app and provide a ton of additional value to their users.
Sweat Economy launched in 2016 and quickly emerged as one of the most popular fitness apps on mobile, growing its user base to more than 120 million before its transition to Web3 last year. Seizing on its massive user base, Sweat Economy embraced a new concept called “move-to-earn”, creating a token-based economy that enables its users to earn cryptocurrency rewards for doing what they already did – exercising using its app. Not only do Sweat Economy users get in shape, they’re now able to earn SWEAT tokens which can be redeemed for rewards, simply for getting up and moving.
The transition has been a big success partly due to its ease of use. For existing users, entering Web3 was as easy as clicking yes on a push notification. Sweat Economy updated its app to give every user instant access to a Sweat Wallet that holds the tokens they earn from exercising, from where they can access online stores and make purchases with those digital assets. Once users created their wallet, they then became eligible for an airdrop of free SWEAT tokens, instantly onboarding them to the Web3 ecosystem.
These early transitions to Web3 have not gone unnoticed in the wider tech industry, and many professionals have jumped ship themselves, giving up their roles at legacy firms to embrace the fresh opportunities offered by startups in the blockchain space.
Dozens of notable Web2 execs have joined crypto-focused startups in recent months. One of the biggest names to do so was former Google executive Ryan Watt, who quit his role as YouTube’s senior managing director and global head of gaming to become CEO at the Ethereum scaling platform Polygon. Others include Facebook’s ex-chief marketing officer Sherice Torres, who recently joined Circle, the creator of USD Coin, and Pravjit Tiwana, who quit Amazon Web Services in order to join the crypto exchange Gemini.
In the case of newly-formed blockchain gaming studio N3twork Studios, the bulk of its executive leadership team comes from the Web2 gaming industry. The company was founded last year in order to focus on Web3 games after its predecessor N3twork Inc. was acquired by Forte. Among its leaders is President Matt Richetti, who previously worked for EA and Zynga, among other related companies. Furthermore, their executive producer Julius Hong is another EA veteran, while founder Neil Young is also the CEO of Games Industry at Forte. N3twork Studios’ biggest boast, however, is that it has more than 70 developers on its books who found their feet in the legacy gaming industry. In other words, it has a huge team of experienced developers at its disposal, putting it in perfect position to create the first blockbuster titles for the nascent blockchain gaming space. They are currently preparing for the launch of a play-to-own RPG game, Legendary: Heroes Unchained.
No Turning Back
Web3 is still getting started but there’s no going back. It promises to enable a major shift away from centralized applications and services to a decentralized, permissionless model that everyone has a stake in. By leveraging tokenized incentives, Web3 will create decentralized protocols accessible to everyone, providing greater value, transparency and more privacy than was possible with Web2.
Legacy tech firms and talents alike are beginning to recognize this trend and the positive benefits it will bring. Though Web3 remains far away from mass adoption, it has already passed the point of no return. Web3 still has its critics, of course, but we should remember that many people disparaged the internet when it first emerged and failed to see the value. These days though, just about every successful company has a strong internet presence, and in 20 years time the same will be said about the next iteration of the Web.