A Guide to the Future of Gaming
17 min read

A Guide to the Future of Gaming

A Guide to the Future of Gaming

If gaming is eating culture, I’d like to avoid being eaten. But if you’re interested in the future of gaming, what should you do? Besides playing lots of games, of course.

Gaming is a large, dynamic industry, but the future of gaming comes down to how technology will influence three areas: new experiences, expansions in how players interact with their favorite games, and new economics. They’re each massive rabbit holes to dive into, but hopefully this guide gives you a place to start.

Games sit at the intersection of art, technology, and business. But technology enables what is even possible for both art and business models.

Decreasing chip manufacturing costs shrank the arcade cabinet and brought it into the home with early consoles. The internet and app stores enabled free-to-play, games-as-a-service mobile games. You can’t separate the tech from the game experience or the business model. Just try making a game-as-a-service with microtransactions on a NES.

Our job is to figure out what new technology enables for consumers. Fortunately we don’t need a crystal ball to divine the future - we can just take a look at what emerging tech is already creating on the fringes of mainstream gaming.

Sometimes it feels silly to buy into some early tech like VR or Stadia. (I backed the Ouya on Kickstarter. I get it.) Playing Roblox as an adult makes you really wonder if you’re missing something. But so did playing Quake III on dial-up. If you want to get in early, you gotta be willing to experience some janky gaming experiences. Jump in.


Gaming is a dynamic industry – yes, there are long-lasting games (League of Legends, World of Warcraft, etc), but new genres regularly sweep through the population. Fortnite’s Battle Royale mode catapulted it into the mainstream and transformed it into a cultural phenomenon… yet it was only released in September 2017. Afterwards everyone tried to make a battle royale game. But less than three years later, most studios that haven’t already found success have moved on. The combination of long development cycles and network effects in gaming (particularly in multiplayer games) means studios are always trying to find the Next Big Thing.

The next big thing is often something that comes from the edges of existing games. League of Legends arose from a custom map mod of Warcraft III. The battle royale genre was initially popularized through an ARMA mod. The next big games aren’t being formed out of nothing - they’re coming from stuff that’s out there already, just maybe not as popular or polished yet.

So what are the less mainstream, less polished gaming experiences that currently exist? VR, cloud gaming, and virtual spaces.


VR has been The Next Big thing for decades, but has particularly hyped up in the last several years. If you’ve ever tried Beatsaber on a VR headset, you’ll probably agree that there’s something there, but it’s hard to say when (or if) VR will become mainstream. The VR idea maze by Benedict Evans from 2016 marks the beginning of the recent spike in interest, after Facebook’s acquisition of Oculus in 2014. In it, he puzzles over how we might navigate through the “maze” to get to a large-scale consumer product.

Beatsaber is awesome, but what's next?

Four years later in The VR winter, we’re still not really sure. There’s the classic VC maxim that “the Next Big Thing will start out looking like a toy”. This is usually used to counter any dismissals of an early product. But as Chris Dixon himself says in the original article:

This does not mean every product that looks like a toy will turn out to be the next big thing. To distinguish toys that are disruptive from toys that will remain just toys, you need to look at products as processes. Obviously, products get better inasmuch as the designer adds features, but this is a relatively weak force. Much more powerful are external forces: microchips getting cheaper, bandwidth becoming ubiquitous, mobile devices getting smarter, etc. For a product to be disruptive it needs to be designed to ride these changes up the utility curve.

Will better GPUs, better screens, better headtracking, and lighter headsets make the difference for VR, or is this version of VR with head-mounted displays, just the end of a dead branch that started with the Virtual Boy? Who knows! If you want to discover the future, you have to be okay playing around in the margins.

Cloud gaming

The other hot new thing of the last couple years has been “cloud gaming”. This is traditionally pitched as the ability to stream games running on hardware in the cloud to a lower-power device. It sorta mirrors the “net PC” craze of the 2000s when everyone thought we’d just run thin clients at our desks, and do all the heavy PC processing on a remote computer. The problem with cloud gaming (in that incarnation) is that so far it’s just boring.

The most important and undeniable criticism of both Google and Amazon's entries into the games business is that they're boring. Stadia is a boring service. Google seems convinced that changing the way games are delivered is exciting – it is not. Games are exciting. The technical details of how they're played doesn't matter until it starts messing with the experience, at which point it's annoying. At its very best, it's not exciting, it's invisible.  (Source)

Not only is Stadia boring, it’s also not clear who it’s for. Stadia costs $10/month + $99 for the hardware and you still need to pay for individual games beyond the small collection of free games they offer. Xbox All Access lets you pay $25/month for 24 months and get the Series S console and 24 months of Xbox Game Pass ultimate which provides a much larger library of games and new releases than Stadia. (And Microsoft’s offering will only grow thanks to their acquisitions of studios like Zenimax. Ben Thompson has a good post on that here.)

What is the market for players who can afford a Stadia setup but can’t afford the option from Microsoft?

If cloud gaming is so uninteresting, why are we talking about it at all? Cloud gaming deserves study because it can still succeed, but in a different form. Cloud gaming will find success when we build a new experience that is fundamentally enabled by the cloud. Rival Peak is one example of this - it’s a mashup between game, stream, and reality show.

The quasi-reality show stars 12 artificial intelligence characters who are contestants in a Survivor-like competition set in an animated Pacific Northwest. The live audience can influence the outcome of the contest by grinding away at tasks and helping their favorite characters.

This Twitter thread from Jacob Novak (the CEO at Genvid Technologies, who built Rival Peak) is an excellent summary of this exact idea. The whole thread is worth reading, but here are some particularly juicy bits:

Thus big hits in cloud are going to be individual games that are made using new cloud technologies, and not necessarily because of the distribution platforms. Developers don't need Stadia or Luna or Xcloud to create something new, just AWS and streaming SDKs like @GenvidTech.
People don't usually realize it, but League of Legends is successful because of technical change too. With the cost of distribution and multiplayer going down a decade ago thanks to cloud, plus the growth of integrated graphics, F2P League of Legends became possible.
The opportunities in gaming always come at the onset of a major technical change. This opportunity doesn't relate to or require distribution from a major platform- League did it themselves. And what's interesting is that this is proven sustainable time and time again.

This doesn’t mean cloud gaming as defined as streaming games to users (like GeForce Now or Stadia) can’t make money. In fact, Newzoo predicts revenues of $1.4B in 2021 for cloud gaming services. But these are still fundamentally games you can already play today, just delivered to more people. That’s useful but not game changing (sorry).

Historically, most winners on new platforms aren’t the old winners from the previous platforms (at least not at first). Arcade cabinet manufacturers lost to Nintendo on consoles. EA lost to Zynga on Facebook. Zynga lost (initially) to mobile-first game companies on mobile platforms. This is because the old games are not built for those new platforms. How could they be… they’re games purpose-built for the previous platform. Maybe the controls don’t translate perfectly, or the play times are different, or the business model has changed. And so it is with cloud gaming as well. If you want to study the future, don’t bother streaming Assassin’s Creed to your computer - go play/watch Rival Peak instead.

Virtual spaces

The final type of experience that I expect to grow in the future are an oldie but a goodie: virtual spaces. Virtual worlds aren’t remotely new (Second Life launched in 2003), but they’re becoming much more accepted. You were kind of a weirdo for hanging out in Second Life, but now kids everywhere hang out in Roblox. This trend has accelerated thanks to everyone being stuck at home due to the global pandemic, and people more than ever hang out with each other online.

I am not a fan of how Roblox looks but... no one seems to care.

Additionally, the idea of virtual spaces needing to be a single, fully-featured world looks outdated. There are people trying to build large-scale virtual worlds players can inhabit (more on that in the economy section), but mostly people hang out with their friends as they travel from one game to another. Tonight it’s League of Legends; tomorrow Valorant.

These experiences are disjointed right now, but they’re becoming more interconnected. Roblox offers endless user-created minigames that players move seamlessly through. My friend list persists from one game on Steam to another. Game companies are reluctant to make their services interoperable (just like web companies), but players are already circumventing this. My friends already exist on Discord where we hang out and talk whether we’re playing games or not. Who knows… maybe Discord will become the meta virtual space that sits underneath all these silos.

Virtual spaces blur the line between new gaming experiences (like Roblox, or Fortnite creative mode) and things that don’t really seem like games at all. Was Second Life ever really a game? That brings us to the next category - expanding ways for players to engage with their favorite games… even when they’re not playing.


Here’s an inconvenient truth if you’re a gamer - you can’t play games all the time. We have to do other things like write blog posts or eat. It’s inconvenient, really. But we’d like to stay engaged with our favorite games even if we can’t play them directly, and those games want us to stay engaged too! In a world where many games are neverending games-as-a-service, keeping players engaged is critical to retaining them and not losing them to some competitor. So the second major area to study is how gaming experiences are expanding beyond the game itself.


The most obvious form of this is streaming. In 2017 the audience for gaming video content was already larger than HBO, Netflix, ESPN and Hulu combined. And the estimates for a 21% viewer increase between then and now were wildly off: Fueled by people stuck at home during the pandemic, the size of the market ballooned to 1.2B viewers in 2020. Watching other people play video games may sound weird if you’re not doing it already, but it’s not really any different from watching someone do something that you’re interested in. People who like to cook like watching cooking shows. People who like to cycle like watching the Tour de France. People who play video games like to watch other people play video games.

I have never met Mark Zuckerberg, but this story of a “super disturbing” encounter with him talking about how he likes watching Civilization streams on Twitch doesn’t seem that weird at all? Is chess grandmaster Hikaru Nakamura somehow enabling a bunch of “sociopaths” (again, not my words) by streaming chess to hundreds of thousands of fans? The reaction to Zuckerberg watching Civilization streams seems to reveal more about the observer than the subject to me. Rant aside, don’t underestimate how much people love watching other people play video games. AOC is already using it to reach out to future voters - ignore it or condemn it at your own peril.


The cooler, older sibling to streaming is esports. I mean, you get to be a gaming professional! What kid doesn’t dream of playing video games as their job?

On paper this makes sense: Sports is a big industry, people play video games just like they play sports, ergo esports should be a big industry. But esports are actually in that awkward teenage phase right now - they seem kind of like regular sports, but they’re different in many key ways. The entire article is worth reading, but here’s a short summary of how the incentives of the actors in the system are not all aligned:

  • Adam Silver and Roger Goodell (of the NBA/NFL) try to make money for the team owners. In esports the game maker is not optimizing the owners or league, but for the sport itself (i.e., the game). The incentives for the game maker are ultimately to keep people engaged so they will buy stuff (the game, DLC, cosmetics, etc). The NFL is not trying to sell you more footballs.
  • FIFA/MLB/PGA make money selling the entertainment of the league itself (i.e., getting millions of people to tune in so they can sell ads to advertisers). Games make money primarily by players buying stuff in them, not through selling ads. For them, esports is a marketing/brand thing, not a big moneymaker.
  • Game publishers take up to 50% of revenue attributed to their esports leagues (for centralized leagues) - i.e., after a team buys a franchise fee, they pay a royalty back to the publisher! In contrast, the NBA collects revenues to allocate to the teams. In other words the league operates FOR the owners, not the other way around.

One way teams are trying to capture more value is by unifying multiple teams under a single brand - e.g., TSM has a League of Legends team, Overwatch team, Valorant team, etc. But most major leagues don't allow for brand sharing now across other leagues now. As a result, for the most successful "teams'' such as 100 Thieves, esports is marketing for them. The real money comes from streaming and YouTube videos (where they reap 100% of the ad revenue) and merchandise. It’s no accident that the home pages of FaZe Clan and 100 Thieves (two of the hottest teams right now) are merch storefronts.

Can you tell this is an esports team?

Still, there’s no denying that esports has huge appeal and will only grow from here, especially as more and more people play games and spend time online. Esports has been growing at 15% YoY and total viewership is projected to surpass every major sports league in the US except for the NFL.

The easiest way to get into esports is to first find a game you love playing, then see if there are big streamers for it, and then see if there’s a competitive scene to watch. If you try watching esports for a game you know nothing about, you run the risk of jumping straight to calculus before you’ve learned algebra – good esports broadcasts will try and make the game understandable for new players, but it’s always much better if you understand how the game is played.

Other formats

Esports and streaming are the two most obvious expansions, but you’ll increasingly be able to engage with games in every part of your life. Gaming IP will finally make it to movies without being awful (we hope). We had to wait until the 2000s to recycle all the great comic book IP from the 60s into successful films; maybe it’s just a matter of time for games. Starcraft was released in 1998, maybe by 2040 we'll be free from the curse of Uwe Boll.

Or take Hermitcraft - best described as a TV show featuring 18-20 Minecraft players (called “hermits”) all building together in a shared world that gets reset each season. (I describe it as a “TV show” because they’ve really gotten it down to a science at this point: a hermit may play for 50 hours in a week, but then cut all the footage down to a 20 minute episode, complete with voiceovers, fast-forwards, and multiple camera angles.) And lest this come across as some niche thing that only diehard Minecraft players watch, the most popular hermits get millions of views on every new episode. The friend who introduced me to Hermitcraft has watched hours of the show and never played the game. (If you’re looking for somewhere to start, I personally like Mumbo Jumbo and Grian.)

Another example is The Spiffing Brit: a YouTube channel solely dedicated to breaking games by finding unintended balance issues. Here’s one on gaining infinite money in Civilization 6. Hey, maybe Mark Zuckerberg should check this one out so he can play Civilization with as much money as he has in the real world.

Ultimately all these expansions create ways for players to engage with their favorite games even more than before. And that in turn leads to stronger communities, which leads to more content and engagement for more people to engage with, spiraling upwards in a positive feedback loop. That’s why when we talk about gaming eating culture, it includes expansion into other forms of media like TV and film – because if games are the biggest form of media, people will want to be able engage with their favorite IP in as many ways as possible. Perhaps some day not too far from now, Blizzard World won’t just be an Overwatch map…

Super Nintendo World is a thing... maybe this will be real some day too.


Earlier on we talked about technology enabling new business models. But a VR game sold by Steam will enable the same kind of business models that we know today. There may be some evolution in terms of the tactics or kinds of digital assets that are sold, but it’s hard to imagine something transformational within that model. We’ll have microtransactions, games-as-a-service, gatekeepers and app stores, and user generated content. If that’s where things stop, this section would be pointless. But there are some other trends happening largely outside of gaming right now that will come to games in the future: the creator economy and crypto.

Both the creator economy and crypto are popular topics at the moment - we’re in mile one of a marathon, and no one is entirely sure where we’ll end up, but both are already impacting the world in major ways, and there is no way games escape untouched.

The creator economy

The creator economy describes the shift of power from aggregators or publishers directly into the hands of creators. Traditionally, creators have relied on publishers to get their creations out into the world. Journalist Bob Woodward needed the Washington Post to reach readers. After all, printing and distributing newspapers is not cheap. But the internet has obliterated the costs of production and distribution, and we’re now catching up to that reality.

Li Jin’s posts on The Passion Economy and the Future of Work and 100 True Fans are excellent places to start if you’re new to this concept. Everyone’s favorite newsletter service, Substack, is having a moment riding this trend. Everyone is starting a Substack. (This site doesn’t run on Substack, but if you’d like to subscribe at the bottom, I would love to have you!)

The creator economy is already present in gaming, most prominently in the form of user generated content (or “UGC”). UGC powers games like Roblox, where the games are made by users. Adopt Me, one of the biggest games within Roblox, had 50M monthly users alone as of July 2020. Even within more centralized, traditional games that are operated by a single company, UGC can play a big role. Minecraft may be owned by Microsoft, but it’s longevity is partly due to the extensive moddability of the game. You can make Minecraft look like a super-rendered high-gloss interior design magazine. You can enable a nuclear engineering mod complete with an “in-depth nuclear fuel system featuring many fuel types” and “complex fusion system”. You can add furniture or vehicles. The list is endless.

I honestly just wanted an excuse to share this video because it's SO cool.

Minecaft doesn’t compensate these creators, but many have found ways to thrive through donations from players. Other games are more direct - Roblox pays creators directly based on when users spend Robux (the virtual currency) in their game. Valve pays CS:GO skin creators a cut of revenue when someone either buys a loot box with their skin, or sells it on the peer-to-peer market (and has reportedly paid out over $45M to skin creators). Epic’s Support-A-Creator lets creators create codes that players can use when making any purchase to support that creator. And “creator” here isn’t just limited to people who can build 3d assets - they can be anyone who creates any kind of content or community for their games.

Crypto / NFTs

The world currently seems to consist of two camps: One camp is super into crypto; the other camp wants to get as far away from the first camp as possible. If you’re in the second camp, before you run away, bear with me for a bit, because the creator economy has the potential to be supercharged via crypto. Frankly it’s a long and complex subject, but someone else has already done the work of tying it all together and making it entertaining, so let’s just start there: Packy McComick’s The Value Chain of the Open Metaverse. I strongly recommend reading his entire piece – go ahead, I’ll wait.

Just as it was for Web3 and NFTs, 2020 was a coming out party for the front-end of the Metaverse, namely virtual worlds and video games. The natural evolution of virtual worlds mixed with COVID to create a cocktail of new use cases, increased interest, and higher valuations.

If Packy is right (and I’m in the “into crypto” camp, which means I largely agree with his thesis), then web3, open protocols, NFTs, and the Metaverse will all be inextricably linked to the games of the future. Gamers are already willing to pay billions of dollars for digital assets. No gamer thinks buying digital goods is strange. Hasbro is already considering NFTs for Magic: The Gathering and other franchises. Imagine the combination of ravenous gamers already willing to spend on digital assets, the creator economy, virtual spaces and crypto and NFTs.

Of course the current frenzy around NFTs in particular may look like a bubble – and I think it’s a reasonable bet that most of the stuff being made today will go to $0 in the future – but it’s looking less and less likely that the entire space will suddenly vanish. Again… you gotta be willing to spend some time (and money) on things that don't work out if you want to be ahead of the curve.

The Next Big Thing is already here

There is an often overused phrase that technologists love by author William Gibson: “The future is already here, it’s just not very evenly distributed.” But I think for games it’s mostly true. Millions of people are already playing with everything I’ve written about here, even if your typical PlayStation-owning gamer hasn’t yet. The components of the future of gaming are here already, but what’s exciting is we don’t know what form it will ultimately take. There’s an excellent podcast interview with Chris Dixon about crypto that is worth listening to in its entirety, but one part that stuck out to me is that predicting the future that is enabled by new technology is hard, even when the technology already exists:

I remember this very clearly. If you took a smart person in 2009 or 2010 and asked them to rank all the different things you might do someday with a GPS chip, most people would not have had calling a car as the killer app. There were all sorts of other things people would have had. The point just being, it's hard to predict, but entrepreneurs will eventually figure it out.

But importantly this doesn’t mean that the old things will go away:

If you look at the things that are popular on the iPhone today. They're either generally one of two things. They're either things that existed before the iPhone; Facebook and Amazon. Those are still very popular applications on the iPhone. Or frankly, they're things that take advantage of the new capabilities that didn't exist before. Snapchat, ephemeral messaging, Instagram and Snapchat is having a camera with you at all times and a very personal consumption experience of the photos right on your phone, Uber and Lyft, et cetera. All these things, you just simply couldn't do. So I think the same thing will happen with blockchain. You'll have things that kind of port over from the old world, but then you'll have all this new wave of stuff that didn't exist before.

Gaming has a history of this - with every new technology cycle, new games and experiences add to the existing ecosystem (vs something like music where new technology has eaten the old).

So this is the likely future for games as well: new things enabled by new technology, adding to the old. The building blocks for the new things are already here, it’s just a question of how they get combined to build something new. If you figure it out, let me know. In the meantime I’ll be out there on the fringes.

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