Hello and welcome to Dark Tunnels, a newsletter dedicated to exploring the emerging ecosystem of fully onchain games. Dark Tunnels is published by Always Scheming, a research consultancy focused on the future of interactive entertainment.

The following essay is Issue #11 of Dark Tunnels. This was our final edition of 2023, focused on bold predictions for the year to come. Enjoy!

Over the last few weeks, I’ve spoken with founders, investors, builders, and degens from across the onchain gaming ecosystem to get their answers to a simple prompt:

“What is your boldest prediction for how the FOCG/AW space will evolve in 2024?”

Below, you’ll find a selection of their responses. I have roughly bucketed them into categories for easy perusal, and in some cases, made light edits for grammar and clarity. Where possible, I have provided links to Twitter handles for the people in question.

Have a spicy take of your own? Let me know on Twitter or shoot me an email at DarkTunnelsNewsletter@gmail.com.

Let’s start things off with some optimistic takes, shall we?

We’re all hoping for more growth, but how do those most active in the space see that playing out? Where will the growth come from? And will it be sustainable?

“Currently, onchain games are 5% of the whole web3 gaming market. This figure will grow to 15% in 2024, and then 40% in 2025.” [1]

stokarz, Minters World

“We will see an FDV of $500M for a FOCG token.”

Anon, Investor

“A fully onchain game will hit 100,000 DAUs.”

Dith, Proof of Play

“We will see a game with 15% Day-60 retention.”

Will, AllianceDAO

“At least one onchain gaming token will appear in top 200 cryptocurrencies on CoinGecko’s ranking.”

stokarz, Minters World

“2024 will be an AW Spring year🌸**! We will see a killer app from the AW/FOCG space!“**

Komorebi, Komorebi’s Hacker House

“I believe that a few successful fully onchain games will drive massive outsized activity and blockspace usage, and cause many other games loosely onchain to adopt the tech these teams have been building.

Specifically, Starknet will see the largest influx of players and builders to onchain games, because the low fee environment, scalability, and native account abstraction make it the most attractive surface area to build on. Starknet will be known as the place to build onchain games.”

Jean-Paul, Influence

“The value is going to become so clear and so compelling that even Axie is gonna start a fully onchain project!”

baz, Tonk

“In 2024, fully onchain games will have their “Axie Moment,” with speculative interest from the whole web3 community and skyrocketing token prices.

Unfortunately, as happened to Axie, these expectations will be way overblown and we'll see a multi-year trough of disillusionment before we find true product-market-fit.”

Nico, BITKRAFT Ventures

While it’s inevitable that those most active in the ecosystem will be among the most optimistic about its growth, I think we’d all do well to consider Nico’s warning above. As you’ll soon see, there are many others who share his skepticism.

Nevertheless, two things can be true at once: that the space will grow, and that it will also face increasing disillusionment from both internal and external stakeholders.

I, too, believe that the fully onchain games ecosystem will see continued growth. To be specific, I expect the number of games to double in 2024. However, the long term viability of most of those games will be essentially non-existent, as the vast majority of projects in the space will continue to be experimental or hobbyist in nature. [2]

(Also, as a side note, major kudos to the folks putting actual numbers on their predictions! I’m eager to see how accurate these prove to be in 2024.)

1. This prediction is in reference to data found in the recent State of Web3 Gaming 2023 report from Game7. Check out this thread for more info.

2. This is again in reference to the Game7 report, which tallied just under 100 fully onchain games in 2023.

Ecosystem growth is great and all, but how will it actually take shape at the level of individual games, tech stacks, and business models? Tactically, how will teams execute on their growth plans?

Let’s see what you all had to say:

“The most sticky FOCG will be a mobile-first one.”

Lord Secretive, Realms

“Developers of fully onchain games will converge on genres which are massively multiplayer, have a persistent world, and a market economy.”

Anon, Builder

“We'll see the composability / UGC thesis begin to play out, with the first successful player-run business or mod that becomes widely known. It will be the reference case / example to propel more of the same.”

Dith, Proof of Play

“More teams focus on degen tokenomics. Until we do this, the amount of venture investment into onchain games will be stagnant still.”

Anon, Founder

“The FOCG/AW space will slowly discover and accept that it has to grapple with the same MEV problems that DeFi does. Some games will be rendered unusable or unenjoyable due to poor design that isn't MEV-resistant.

Reactions to the MEV reality will include a faction advocating for short term anti-sybil/anti-bot solutions, including but not limited to proof-of-humanity, limited access, "PoW access," and permissioned games. But none of the anti-sybil/anti-bot solutions will be perfect, and the games that implement them will likely introduce too much friction to create real growth of adoption (beyond airdrop farming and economic ponzi games).”

CometShock, The Lunar Expanse

“There'll be a mainnet FOCG that has onboarding so smooth [that] users don't know it’s onchain.”

Small Brain, Small Brain Games

“FOCG developers will realize how pointless it is to try and monetize as protocols. They will shift to monetizing client behavior and game qualia.”

Neeraj, Moonstream

“While we will see several AW ecosystems blossom with many new games (and tokens go up), the player count will be made up of mainly fellow builders and long-time community members.

At that point, AW games will need to rethink their UA / marketing and look towards some of the flagship titles coming out of web3.”

Nejc, Game7

“We will see more mixed-mode games that combine EVM assets (such as those on Arbitrum) with ZK, instead of having to choose between Solidity or ZK for your game.”

Sebastian, Paima Studios

“We'll realize that shared execution for games is a dead-end for most use cases and start using much more natively ZK-friendly tech to build provable games that can be executed anywhere (not necessarily onchain, on end-user computers) and verified on any chain.”

Sylve, Briq

“In 2024, we will see teams tackle the challenging areas of hidden data onchain, and offchain proving.”

Jean-Paul, Influence

“More teams will realize the benefit of a more onchain/offchain solution.”

Anon, Founder

Definitely a wide variety of takes here! I’d personally add a “+1” to a couple of these predictions.

First, I’m strongly in agreement with Lord Secretive on the promise of mobile onchain games and would expect to see more games move to mobile in 2024 (though I may be biased as a former mobile games PM). I know this is definitely on Pirate Nation’s long-term roadmap, and I think the popularity of Draw.tech showed everyone the promise of building for mobile first.

Additionally, I think Neeraj is spot on with his point about monetizing clients rather than protocols. I wouldn’t go so far as to say that monetizing via protocols is pointless, but I’d simply point out that client monetization is a far more proven model in the games industry and therefore much likelier to see greater adoption in 2024.

The term “autonomous worlds” certainly received a lot of attention in the community this year. The phrase seems to be both nuanced and contentious, with differing definitions from one person to the next.

Let’s see what the community had to say on the topic:

"Autonomous Worlds are future digital kingdoms where the rules have been rewritten to empower its inhabitants. To me, this leads us to a much more interesting place than the current centralised approaches.

But the reality is that we’re against a ticking clock to find product-market fit. In 2024, we need to do a better job of turning exciting ideas into exciting games.

I can imagine that Autonomous Worlds features heavily in the next bull run, and that might give us some breathing space, but it’s precarious to rely on investor sentiment and market cycles for too long."

David, Playmint

“Before the end of the year we will have a new name for this type of game world that will have come bottom up - from the players and participants in these worlds, not the builders.”

Lord Secretive, Realms

“People will question the true value of autonomous worlds.“

Anon, Founder

“[We will see] the rise of autonomous virtual beings that own themselves and generate profit and loss in autonomous worlds.”

Tim, Scrypted

“Without a greater focus, execution, and clarity on product thinking with regards to how autonomous world design principals directly contribute to a net better end user game loop, the whole space will be more likely to give up and devolve into a pattern of design which it has fought hard to evolve away from: unsustainable player ponzis.

In 2024, there will be a little less “kumbaya” and hand-holding, and more testing of principles held by various camps of thought.”

Peter, 1kx

Clearly, there are a wide variety of opinions on this topic. Personally, I’ve tried to stay away from defining or classifying autonomous worlds in my writing. I tend to take a more pragmatic view of fully onchain games in this newsletter, and despite the many differences of opinion on AWs, I think that most would agree that they are far from a reality today.

In fact, I will go a step further and predict that 2024 will see the term “autonomous worlds” morph into another “metaverse” or “play-to-earn” — a phrase that sounds interesting and edgy to those not active in the space, but that eventually becomes overused and overhyped to the point of meaninglessness.

And that’s a wrap for our 2024 predictions!

Apologies if your hot take or your favorite game or builder didn’t make the cut. These views obviously aren’t representative of the entirety of the space, but I think they give us a nice cross-section of various ecosystems, approaches, and outlooks for the coming year.

Finally, a massive THANK YOU for sticking with Dark Tunnels in 2023!

If you read this newsletter, if you shared it with your friends and colleagues, if you reached out to me with ideas and feedback, know that that means the world to me and that I am tremendously thankful for your support. Thank you for making this possible and for supporting this little passion project of mine.

See you all next year!

Hello and welcome to Dark Tunnels, a newsletter dedicated to exploring the emerging ecosystem of fully onchain games. Dark Tunnels is published by Always Scheming, a research consultancy focused on the future of interactive entertainment.

The following essay is Issue #11 of Dark Tunnels. This was our final edition of 2023, focused on bold predictions for the year to come. Enjoy!

Over the last few weeks, I’ve spoken with founders, investors, builders, and degens from across the onchain gaming ecosystem to get their answers to a simple prompt:

“What is your boldest prediction for how the FOCG/AW space will evolve in 2024?”

Below, you’ll find a selection of their responses. I have roughly bucketed them into categories for easy perusal, and in some cases, made light edits for grammar and clarity. Where possible, I have provided links to Twitter handles for the people in question.

Have a spicy take of your own? Let me know on Twitter or shoot me an email at DarkTunnelsNewsletter@gmail.com.

Let’s start things off with some optimistic takes, shall we?

We’re all hoping for more growth, but how do those most active in the space see that playing out? Where will the growth come from? And will it be sustainable?

“Currently, onchain games are 5% of the whole web3 gaming market. This figure will grow to 15% in 2024, and then 40% in 2025.” [1]

stokarz, Minters World

“We will see an FDV of $500M for a FOCG token.”

Anon, Investor

“A fully onchain game will hit 100,000 DAUs.”

Dith, Proof of Play

“We will see a game with 15% Day-60 retention.”

Will, AllianceDAO

“At least one onchain gaming token will appear in top 200 cryptocurrencies on CoinGecko’s ranking.”

stokarz, Minters World

“2024 will be an AW Spring year🌸**! We will see a killer app from the AW/FOCG space!“**

Komorebi, Komorebi’s Hacker House

“I believe that a few successful fully onchain games will drive massive outsized activity and blockspace usage, and cause many other games loosely onchain to adopt the tech these teams have been building.

Specifically, Starknet will see the largest influx of players and builders to onchain games, because the low fee environment, scalability, and native account abstraction make it the most attractive surface area to build on. Starknet will be known as the place to build onchain games.”

Jean-Paul, Influence

“The value is going to become so clear and so compelling that even Axie is gonna start a fully onchain project!”

baz, Tonk

“In 2024, fully onchain games will have their “Axie Moment,” with speculative interest from the whole web3 community and skyrocketing token prices.

Unfortunately, as happened to Axie, these expectations will be way overblown and we'll see a multi-year trough of disillusionment before we find true product-market-fit.”

Nico, BITKRAFT Ventures

While it’s inevitable that those most active in the ecosystem will be among the most optimistic about its growth, I think we’d all do well to consider Nico’s warning above. As you’ll soon see, there are many others who share his skepticism.

Nevertheless, two things can be true at once: that the space will grow, and that it will also face increasing disillusionment from both internal and external stakeholders.

I, too, believe that the fully onchain games ecosystem will see continued growth. To be specific, I expect the number of games to double in 2024. However, the long term viability of most of those games will be essentially non-existent, as the vast majority of projects in the space will continue to be experimental or hobbyist in nature. [2]

(Also, as a side note, major kudos to the folks putting actual numbers on their predictions! I’m eager to see how accurate these prove to be in 2024.)

1. This prediction is in reference to data found in the recent State of Web3 Gaming 2023 report from Game7. Check out this thread for more info.

2. This is again in reference to the Game7 report, which tallied just under 100 fully onchain games in 2023.

Ecosystem growth is great and all, but how will it actually take shape at the level of individual games, tech stacks, and business models? Tactically, how will teams execute on their growth plans?

Let’s see what you all had to say:

“The most sticky FOCG will be a mobile-first one.”

Lord Secretive, Realms

“Developers of fully onchain games will converge on genres which are massively multiplayer, have a persistent world, and a market economy.”

Anon, Builder

“We'll see the composability / UGC thesis begin to play out, with the first successful player-run business or mod that becomes widely known. It will be the reference case / example to propel more of the same.”

Dith, Proof of Play

“More teams focus on degen tokenomics. Until we do this, the amount of venture investment into onchain games will be stagnant still.”

Anon, Founder

“The FOCG/AW space will slowly discover and accept that it has to grapple with the same MEV problems that DeFi does. Some games will be rendered unusable or unenjoyable due to poor design that isn't MEV-resistant.

Reactions to the MEV reality will include a faction advocating for short term anti-sybil/anti-bot solutions, including but not limited to proof-of-humanity, limited access, "PoW access," and permissioned games. But none of the anti-sybil/anti-bot solutions will be perfect, and the games that implement them will likely introduce too much friction to create real growth of adoption (beyond airdrop farming and economic ponzi games).”

CometShock, The Lunar Expanse

“There'll be a mainnet FOCG that has onboarding so smooth [that] users don't know it’s onchain.”

Small Brain, Small Brain Games

“FOCG developers will realize how pointless it is to try and monetize as protocols. They will shift to monetizing client behavior and game qualia.”

Neeraj, Moonstream

“While we will see several AW ecosystems blossom with many new games (and tokens go up), the player count will be made up of mainly fellow builders and long-time community members.

At that point, AW games will need to rethink their UA / marketing and look towards some of the flagship titles coming out of web3.”

Nejc, Game7

“We will see more mixed-mode games that combine EVM assets (such as those on Arbitrum) with ZK, instead of having to choose between Solidity or ZK for your game.”

Sebastian, Paima Studios

“We'll realize that shared execution for games is a dead-end for most use cases and start using much more natively ZK-friendly tech to build provable games that can be executed anywhere (not necessarily onchain, on end-user computers) and verified on any chain.”

Sylve, Briq

“In 2024, we will see teams tackle the challenging areas of hidden data onchain, and offchain proving.”

Jean-Paul, Influence

“More teams will realize the benefit of a more onchain/offchain solution.”

Anon, Founder

Definitely a wide variety of takes here! I’d personally add a “+1” to a couple of these predictions.

First, I’m strongly in agreement with Lord Secretive on the promise of mobile onchain games and would expect to see more games move to mobile in 2024 (though I may be biased as a former mobile games PM). I know this is definitely on Pirate Nation’s long-term roadmap, and I think the popularity of Draw.tech showed everyone the promise of building for mobile first.

Additionally, I think Neeraj is spot on with his point about monetizing clients rather than protocols. I wouldn’t go so far as to say that monetizing via protocols is pointless, but I’d simply point out that client monetization is a far more proven model in the games industry and therefore much likelier to see greater adoption in 2024.

The term “autonomous worlds” certainly received a lot of attention in the community this year. The phrase seems to be both nuanced and contentious, with differing definitions from one person to the next.

Let’s see what the community had to say on the topic:

"Autonomous Worlds are future digital kingdoms where the rules have been rewritten to empower its inhabitants. To me, this leads us to a much more interesting place than the current centralised approaches.

But the reality is that we’re against a ticking clock to find product-market fit. In 2024, we need to do a better job of turning exciting ideas into exciting games.

I can imagine that Autonomous Worlds features heavily in the next bull run, and that might give us some breathing space, but it’s precarious to rely on investor sentiment and market cycles for too long."

David, Playmint

“Before the end of the year we will have a new name for this type of game world that will have come bottom up - from the players and participants in these worlds, not the builders.”

Lord Secretive, Realms

“People will question the true value of autonomous worlds.“

Anon, Founder

“[We will see] the rise of autonomous virtual beings that own themselves and generate profit and loss in autonomous worlds.”

Tim, Scrypted

“Without a greater focus, execution, and clarity on product thinking with regards to how autonomous world design principals directly contribute to a net better end user game loop, the whole space will be more likely to give up and devolve into a pattern of design which it has fought hard to evolve away from: unsustainable player ponzis.

In 2024, there will be a little less “kumbaya” and hand-holding, and more testing of principles held by various camps of thought.”

Peter, 1kx

Clearly, there are a wide variety of opinions on this topic. Personally, I’ve tried to stay away from defining or classifying autonomous worlds in my writing. I tend to take a more pragmatic view of fully onchain games in this newsletter, and despite the many differences of opinion on AWs, I think that most would agree that they are far from a reality today.

In fact, I will go a step further and predict that 2024 will see the term “autonomous worlds” morph into another “metaverse” or “play-to-earn” — a phrase that sounds interesting and edgy to those not active in the space, but that eventually becomes overused and overhyped to the point of meaninglessness.

And that’s a wrap for our 2024 predictions!

Apologies if your hot take or your favorite game or builder didn’t make the cut. These views obviously aren’t representative of the entirety of the space, but I think they give us a nice cross-section of various ecosystems, approaches, and outlooks for the coming year.

Finally, a massive THANK YOU for sticking with Dark Tunnels in 2023!

If you read this newsletter, if you shared it with your friends and colleagues, if you reached out to me with ideas and feedback, know that that means the world to me and that I am tremendously thankful for your support. Thank you for making this possible and for supporting this little passion project of mine.

See you all next year!