Platforms capture value, protocols distribute it. The 30% fee on Steam and the App Store is a tax on distribution, not a payment for value. This model is a centralized bottleneck that extracts rent from developers who have no alternative distribution channels.
gaming-and-metaverse-the-next-billion-users
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The Future of Game Publishing is Protocols, Not Platforms
An analysis of how composable, permissionless protocols will unbundle the $200B game publishing industry, replacing rent-seeking platforms like Steam and the App Store with open infrastructure.
introduction
THE VALUE CAPTURE MISMATCH
The 30% Tax is a Bug, Not a Feature
App store monopolies extract rent from developers, but on-chain protocols invert this model by aligning incentives.
On-chain publishing is a public good. Protocols like Starknet's Dojo or Arbitrum Orbit provide the foundational game engine and settlement layer. They monetize through sequencer fees or native token utility, not by taxing developer revenue. This creates a positive-sum ecosystem where infrastructure success is tied to game success.
The new moat is developer liquidity. Platforms compete for users; protocols compete for builders. A successful game on an L2 like Immutable zkEVM attracts more developers to its tooling and shared liquidity pools. The network effect shifts from captive users to composable assets.
Evidence: The 30% tax extracts ~$50B annually from developers. In contrast, the total value locked in gaming-centric ecosystems like Ronin or Immutable represents capital that flows to developers through grants, staking rewards, and asset interoperability.
key-trends
THE FUTURE OF GAME PUBLISHING IS PROTOCOLS, NOT PLATFORMS
Three Trends Killing the Platform Monopoly
Steam, Epic, and Apple's 30% tax is a legacy toll on a $200B+ industry. Open protocols are unbundling their walled gardens.
01
The Asset Protocol: Immutable, Ownable In-Game Items
Platforms treat skins and items as licensed data, revocable at will. On-chain asset protocols like ERC-1155 and ERC-6551 turn them into player-owned property.
- True Ownership: Assets persist across games and marketplaces.
- Composable Liquidity: A $50B+ NFT market enables instant, permissionless trading.
- Developer Royalties: Programmable, on-chain fee streams replace one-time platform cuts.
$50B+
NFT Market
30% → 2.5%
Fee Compression
02
The Settlement Layer: Frictionless Value Flow
Platforms act as centralized payment processors, creating settlement lag and trapping capital. Blockchain settlement layers like Solana, Arbitrum, and Polygon enable near-instant, global value transfer.
- Microtransactions Viable: Sub-cent fees enable new economic models.
- Cross-Border by Default: Eliminates regional payment gateways and currency conversion.
- Transparent Ledger: Real-time revenue analytics versus monthly platform statements.
<$0.001
Avg. Tx Cost
~400ms
Finality
03
The Distribution Graph: Community-Driven Discovery
Platform algorithms prioritize big marketing budgets, burying indie titles. Decentralized distribution protocols like Guilds, Decentraland, and on-chain achievement systems create merit-based discovery.
- Viral Loops: Players earn by curating and onboarding others.
- Anti-Fragile Ecosystems: Games are nodes in a network, not tenants in a mall.
- Data Portability: Player graphs and reputations move with the user, breaking platform lock-in.
100k+
Active Guilds
70%
Lower CAC
deep-dive
THE STACK
Anatomy of a Publishing Protocol
A publishing protocol is a modular, permissionless stack that decomposes the functions of a traditional game publisher into interoperable layers.
The core is composable primitives. A publishing protocol is not a monolithic app but a set of interoperable smart contracts and standards. It provides permissionless building blocks for asset creation, distribution, and monetization, enabling developers to assemble their own publisher.
It inverts the platform relationship. Unlike Steam or the Epic Games Store, a protocol does not own the user relationship or gatekeep distribution. It functions as neutral infrastructure, akin to how Unreal Engine provides tools without controlling game sales.
The data layer is sovereign. Player identities, assets, and progression live in user-controlled accounts (e.g., smart contract wallets) and on public ledgers. This breaks the publisher's monopoly on user data and enables portable reputations.
Distribution is a marketplace of services. The protocol facilitates a competitive ecosystem for discovery, matchmaking, and social features. Think The Graph for indexing game states or Livepeer for decentralized streaming, not a single curated storefront.
Revenue flows are programmable. Royalties, affiliate fees, and ad splits are enforced by smart contracts, not corporate policy. This creates transparent, real-time value distribution across developers, creators, and community contributors.
Evidence: The model is proven in DeFi. Uniswap's AMM protocol facilitates more volume than most centralized exchanges without operating a single order book. Game publishing will follow the same disintermediation path.
THE FUTURE OF GAME PUBLISHING
Platform vs. Protocol: The Economic Divide
Contrasts the extractive, centralized model of traditional gaming platforms with the composable, value-accruing model of on-chain game protocols.
| Economic & Technical Feature | Traditional Platform (e.g., Steam, Epic) | Web2.5 Hybrid (e.g., Fortnite, Roblox) | Fully On-Chain Protocol (e.g., Loot, Dark Forest, MUD) |
|---|---|---|---|
Primary Revenue Model | 30% transaction fee on all sales | Creator marketplace fees (25-50%) + in-app currency cut | Protocol fee (0-5%) + native token accrual |
Asset Ownership | Licensed access (DRM-enforced) | Platform-controlled virtual goods | Player-held NFTs on L2s (Arbitrum, Starknet) |
Developer Lock-in | Proprietary SDKs, closed ecosystems | Proprietary engine & asset pipeline | Open-source engines (MUD, Dojo, Paima) & permissionless deployment |
Secondary Market Royalties | 0% (platform captures all value) | Controlled by platform, optional for creators | Programmable (e.g., 5% to devs) via smart contracts |
Mod/Game Forkability | ❌ | Controlled UGC within platform rules | ✅ (Fully composable, forkable game state) |
Interoperability Standard | None (walled garden) | Limited to platform's internal economy | ERC-6551, ERC-721 for cross-game assets |
Monetization Latency | 45-60 day payout cycles | 30 day cycles for top creators | Real-time, on-chain settlement |
Value Accrual Target | Platform shareholders | Platform & top 1% of creators | Protocol token holders, developers, players |
protocol-spotlight
THE FUTURE OF GAME PUBLISHING
Protocols Building the New Stack
Traditional platforms extract rent and lock in creators. The new stack is a composable protocol layer that unbundles publishing into its core functions: asset ownership, distribution, and monetization.
01
The Problem: Rent-Seeking Platforms
Steam, Epic, and mobile app stores take 30% royalties and act as gatekeepers. They own the player relationship and can delist games arbitrarily, stifling developer economics and innovation.\n- Captive Audience: Zero direct player relationship for devs.\n- High Friction: Weeks-long approval cycles for updates.\n- Non-Composable Assets: In-game items are locked to the platform's database.
30%
Standard Cut
0%
Asset Portability
02
The Solution: Immutable Asset Standards
Protocols like ERC-1155 and ERC-6551 turn in-game items into player-owned, composable assets. This creates a liquid secondary market and enables new gameplay mechanics via account abstraction.\n- True Ownership: Players can trade, sell, or use assets across games.\n- Programmable Items: ERC-6551 allows NFTs to own assets and interact with contracts.\n- New Revenue: Developers earn royalties on all secondary sales.
ERC-1155/6551
Core Standards
Perpetual
Developer Royalties
03
The Solution: Permissionless Distribution Networks
Protocols like HyperPlay and Sequence build storefronts as aggregators, not gatekeepers. They connect players to games via wallet, not a centralized account, enabling direct distribution and discovery.\n- Direct Relationship: Developers own their player base and payment flow.\n- Aggregated Liquidity: Players access games from multiple launchers in one interface.\n- Reduced Fees: Protocol fees are typically <5%, drastically undercutting incumbents.
<5%
Protocol Fee
Wallet-Native
Distribution
04
The Solution: Automated On-Chain Economies
Smart contract protocols automate in-game economies, replacing centralized servers. Loot Realms' Autonomous World model and TreasureDAO's MAGIC ecosystem demonstrate sustainable, community-run economies.\n- Unstoppable Games: Logic persists on-chain, resistant to shutdown.\n- Composable Currency: $MAGIC acts as a cross-game currency and governance token.\n- Aligned Incentives: Value accrues to participants, not a corporate parent.
24/7
Uptime
Ecosystem
Aligned Incentives
05
The Problem: Fragmented Player Identity
Web2 forces players to create new accounts for every game, losing progress and reputation. Social graphs and achievements are siloed, preventing a cohesive metaverse.\n- No Portable Reputation: Your Steam level is worthless elsewhere.\n- Friction Onboarding: Email/password sign-ups for every new game.\n- Siloed Networks: Cannot bring your friends list cross-platform.
10+
Average Logins
0
Portable Social Graph
06
The Solution: Sovereign Player Protocols
Identity protocols like ERC-6551 (Token-Bound Accounts) and Worldcoin provide portable, self-sovereign identity. Your wallet becomes your universal gaming profile, carrying assets, achievements, and reputation.\n- Unified Profile: One wallet for all games, assets, and friends.\n- Provable Reputation: On-chain achievement NFTs verify skill and history.\n- Sybil-Resistance: Proof-of-personhood protocols combat bots and farmers.
1 Wallet
Universal Identity
ERC-6551
Sovereign Accounts
counter-argument
THE INCUMBENT ADVANTAGE
The Steelman Case for Platforms
Established platforms possess network effects and capital that nascent protocols struggle to overcome.
Network effects are defensible moats. Steam's 120M monthly active users and curated storefront create a discovery and trust engine that fragmented Web3 storefronts cannot replicate. This user inertia is a primary barrier to protocol adoption.
Capital enables market-making. Epic Games spent over $1B on exclusivity deals, a subsidy model that protocol treasuries cannot match. This capital funds user acquisition at a scale that token incentives cannot sustainably compete with.
Integrated toolchains reduce friction. Unity and Unreal Engine provide end-to-end development suites with built-in asset stores, analytics, and publishing tools. Fragmented Web3 stacks like Paima/Argus or Starknet's Dojo force developers to assemble infrastructure.
Evidence: The Epic Games Store's 5% revenue share, enabled by Fortnite's profits, undercuts Steam's 30% and Apple's 30%. No decentralized autonomous organization (DAO) currently has the capital reserves to subsidize an equivalent loss-leader strategy.
risk-analysis
CRITICAL FAILURE MODES
The Bear Case: Where Protocols Fail
Protocols promise a decentralized future, but these systemic flaws are why most will fail.
01
The Liquidity Death Spiral
Protocols rely on composability, but liquidity is fickle. A single exploit or governance failure can trigger a massive capital flight that the system cannot recover from, as seen in cross-chain bridge hacks.\n- Capital Efficiency is a mirage without sticky incentives.\n- Vampire Attacks from newer protocols constantly siphon value.
-99%
TVL Crash
> $2B
Bridge Losses
02
The Governance Capture Problem
Decentralized governance is often a slow-motion takeover by whales and VCs. Token-weighted voting leads to plutocracy, not meritocracy, stifling innovation and aligning incentives with capital, not users.\n- Proposal Fatigue leads to <5% voter turnout.\n- Treasury Mismanagement becomes inevitable.
<5%
Voter Turnout
>60%
VC Token Share
03
The Interoperability Illusion
True cross-protocol composability is a security nightmare. Each new integration introduces trust assumptions and attack surfaces. The "Lego" narrative breaks when the blocks are built on different, insecure foundations.\n- Oracle Manipulation can drain multiple protocols at once.\n- Settlement Finality mismatches cause irreversible errors.
~500ms
Vulnerability Window
10+
Trust Assumptions
04
The Speculative Utility Trap
Protocol tokens often have no utility beyond governance and fee capture, which only works at scale. Without sustainable demand sinks, the token model collapses into pure speculation, decoupling from the underlying network's value.\n- Fee Switch Activation often tanks token price.\n- Staking Yields are just token inflation in disguise.
-90%
Post-Inflation Price
>95%
Speculative Volume
05
The Regulatory Blowback
Protocols operating in legal gray areas are systemic risks. A single jurisdiction's ruling (e.g., the SEC on staking) can invalidate the core economic model, forcing protocol forks or collapse. Compliance is antithetical to permissionless design.\n- OFAC Sanctions can censor base layers.\n- Security Classifications destroy token utility.
$4.3B
SEC Fines (2023)
100%
KYC Leak Risk
06
The Complexity Catastrophe
To solve one problem, protocols add three new layers of complexity. The resulting technical debt and cognitive overhead alienate developers and users. The "modular" stack becomes a fragile house of cards where no one understands the full stack.\n- Audit Costs can exceed $500k per contract.\n- Time-to-Market for fixes stretches to months.
>1M
Lines of Code
+300%
Bug Bounty Costs
future-outlook
THE SHIFT
The 2025-2026 Inflection Point
The economic and technical architecture of game publishing will shift from centralized platforms to modular, composable protocols.
Publishers become protocol orchestrators. The core function of a publisher—funding, distribution, and monetization—is unbundled into specialized protocols like EigenLayer for pooled security, Hyperliquid for on-chain order books, and LayerZero for cross-chain asset flows.
Platforms capture rent, protocols capture value. A platform like Steam extracts a 30% tax on transactions. A protocol stack, using ERC-6551 for composable assets and Uniswap V4 hooks for in-game liquidity, redirects that value to developers, players, and stakers.
The technical moat is composability, not content. A traditional publisher's walled garden locks in users. A protocol-native publisher's game assets are permissionless financial primitives, instantly tradable on Blur or usable as collateral on Aave.
Evidence: The $10B+ market cap of gaming-adjacent infrastructure like ImmutableX and Ronin demonstrates capital is betting on the protocol layer, not individual game studios.
takeaways
THE PROTOCOL PARADIGM SHIFT
TL;DR for Builders and Investors
The $200B+ gaming industry is being unbundled. The future belongs to composable, credibly neutral protocols, not walled-garden platforms.
01
The Problem: Platform Lock-In
Traditional platforms (Steam, Epic) act as rent-seeking intermediaries, taking 30%+ revenue share and creating siloed ecosystems. This stifles innovation, fragments player assets, and centralizes control.
- Revenue Leakage: ~30% of all in-game revenue is captured by the platform.
- Asset Fragmentation: Skins and items are trapped within a single game or publisher's ecosystem.
- Innovation Tax: Developers cannot easily integrate best-in-class tools from other platforms.
30%+
Revenue Tax
0
Interoperability
02
The Solution: Credibly Neutral Settlement Layers
Blockchains like Solana, Arbitrum, and Immutable provide a neutral, open-state layer for game economies. This enables true digital property rights and permissionless composability.
- Asset Sovereignty: Players own their items as NFTs, enabling provable scarcity and real secondary markets.
- Composable Economies: A sword from Game A can be used as a skin in Game B, enabled by standards like ERC-1155.
- Reduced Friction: Direct peer-to-peer settlement cuts out intermediary fees, redirecting value to players and developers.
100%
Ownership
-95%
Settlement Fee
03
The New Stack: Modular Game Publishing
Publishing is decomposing into specialized protocols. Think Matchmaking as a Service (LootRush), Asset Bridging (LayerZero, Wormhole), and On-Chain Economies (TreasureDAO).
- Best-of-Breed Tooling: Developers assemble their stack from specialized protocols, not a monolithic SDK.
- Shared Liquidity: Games tap into unified liquidity pools for assets and players, reducing cold-start problems.
- Protocol Revenue: Value accrues to infrastructure providers based on usage, not rent-seeking.
10x
Faster GTM
$1B+
Protocol TVL
04
The Investment Thesis: Own the Rails
The massive value capture shifts from individual game studios to the foundational protocols that enable the entire ecosystem. This mirrors the shift from websites to AWS.
- Recurring Revenue Streams: Protocol fees scale with ecosystem activity, not hit-driven game releases.
- Asymmetric Upside: Successful gaming protocols (e.g., a dominant asset bridge) become multi-chain standards.
- Defensible Moats: Network effects in developer tooling and liquidity are harder to disrupt than a single game.
100x
Market Expansion
Platforms
Becomes Commodity
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Protocols Shipped
$20M+
TVL Overall