Thirdwave UGC

The recent announcement of Fortnite Creative 2.0 evoked a myriad of reactions from players, investors, & devs. Some think it’s way overdue, a few think it’s a nothingburger, but many more are coming around to seeing this as the harbinger of a new era in gaming. I believe that a renewed focus on UGC inside of games, in combination with broader global trends around digital asset ownership & sovereignty, will yield a remarkable explosion in compelling content, ultimately setting the stage for the next wave of dominant game IPs.

The History of UGC

It’s important to contextualize a brief history of user generated content (UGC) in gaming, because, to many, it may not be apparent just how formative the phenomenon has been to market dynamics. As an easy example of this, even the Wikipedia article for UGC itself lists the game Dota 2 as a UGC platform (because it has a level editor), but, in the same breath, Wikipedia fails to identify the original source of Dota 2’s own inception, which was the Warcraft III level editor, one of the quintessential greats of early UGC.

The first wave of UGC in gaming is adequately captured by Second Life, an early-00’s “real-life RPG” in which players essentially acted out alternate lives in a player-run universe with real currency standards, certain democratic processes, and “jobs.” The experiment was hugely popular, with millions of players directly contributing their own creativity to shape the virtual world around them using Second Life’s primitive UGC engine. It demonstrated, conclusively, that users were willing to dedicate their own time and creativity to building a game experience inside of a collaborative engine and, then, subsequently, also populating and playing the experience.

This set the stage for the second wave of UGC in gaming, which was best exemplified by Roblox, a “decentralized” game development platform that encourages users to create and upload their own fully scriptable games in the style of Roblox’s blocky art assets. Roblox was, ironically, released only a mere three years after Second Life, but it took nearly a decade (or more) to really reach mainstream adoption. Ultimately, in the same vein as Second Life, Roblox once again became an absolute hotbed of young gamer culture, where humankind essentially reinvented itself online, complete with the full human spectrum of good and evil, entirely enacted by mostly children. Crucially, Roblox improved upon the Second Life model by allowing straightforward monetization methods of content by creators. Today, creators make upwards of $30mn per year via their creations on the Roblox platform.

UGC Today

Which brings us to the current-day, in which Fortnite has quietly revolutionized the next great wave in gaming culture and creation by unleashing a barrage of extremely high-quality tools and aggressively favorable monetization policies directly into the world’s largest battle royale engine. While Second Life and Roblox before may have been small, niche interests at the edge of nascent technology used by comparatively few gamers and even fewer enterprises, Fortnite’s Creative 2.0 runs the incredibly robust & industry-leading Unreal Engine, which powers more things than you could possibly imagine – it’s a decent bet that out of the past ten Netflix shows you’ve watched, at least half of them utilized the Unreal Engine for CGI and editing.

And I’d be remiss to not highlight the obvious narrative overlap between “power to the creators” happening in traditional gaming juxtaposed with the drive towards personal digital sovereignty happening in the blockchain gaming space. The idea that your maps, creations, and skins can be bundled, tracked, & sold as digital assets (e.g. NFTs) is enticing for both new corporate entrants and budding creators – as both sides can recognize the benefits of more liquid markets, potential royalties, and the oft-touted “interoperability.”

As the world of gaming continues to rely more and more on UGC as a driving force, the conversation around digital assets in gaming will become substantially louder. Fortnite is just the tip of the spear. The next two years will set the stage for new (and younger) digital millionaires to take center stage, and I can’t wait to play.