Fun and Games and Bubbles
Day 2 of my journaling experiment
I was supposed to write today the second part of my post on mistakes, detailing Fingerprints’ experience with Art Projects.
But since it’s a weekend I’ll discuss an area where I’m more a speculator than a builder: games and bubbles
It came as a surprise to me the dominance of games (or promises of games) in the web3 narrative this last year.
You’ll notice that I use games and metaverse almost like synonyms here.
The chart below was made in September 2021. It’s a visualization of something I’ve been talking for some time, how the market evolves in a series of bubbles, from different DeFi narratives to different NFT narratives. Bubbles within a massive crypto bubble, bubbleception.
The next bubble was clearly “the Metaverse” bubble, led brilliantly by Yuga Labs and the Bored Apes family of products.
The basic idea of Yuga was starting with a collectible, turning into a brand and than into a metaverse/gaming play. I went into more detail in this thread:
A game allows you to promise more than an art project or a fashion brand. That dramatically expands the TAM of a project. However, that also massively delays the time to market, because good games take years to be delivered.
Still TBD if Yuga and all the other players promising a metaverse experience will be able to bridge the gap between initial hype and delivery with intermediary product drops. The current expectations are so inflated that a crash has the potential to permanently kill the community, ending this bubble (and creating the next one).
The hype continues, but we already see the signs of narrative fatigue. The current macro scenario is also not helpful to crypto as a whole, and this NFT vertical will need new money coming in to sustain the hype.
But remember, fundamentally, there is some juice here, as there was with all the previous bubbles. Maybe the prices are not justifiable but the vertical will exist.
See you tomorrow.