Hi, I’m Severin Matusek and I’m the founder of co—matter.I write this newsletter to capture my thoughts on the evolution of culture. In this edition I speculate how web3 and the metaverse combine elements of games, identity building and world lore into a socio-economic operating system. At the bottom you’ll find a list of references for further reading.
I’ve been playing a lot of games recently.
As part of a new project I’m working on I’ve been diving deep into the mobile game space, aiming to understand what makes hundreds of millions of people play Candy Crush, PUBG, Clash Royale and Brawl Stars – free-to-download mobile games that make billions of dollars every year.
In the late 90s I played Nintendo 64 excessively and then, when I had an iMac with a 56k modem, spent my afternoons and evenings playing online multiplayer games like Starcraft. I still have vivid memories of this time: exploring the magical worlds of Zelda, playing Mario Kart against my brothers and friends, spending nights in online tournaments competing against some of the best Starcraft players in Germany, Korea and who-knows-where.
That was 20 years ago. So when I got the opportunity to work on the strategy for a new game I was excited. It’s not all fun and games after all. As many a venture capitalist has proclaimed on Twitter over the past two years, "the future of the internet will look and feel like a game".
If that future does what games to do us – keeping us hooked for hours on end, incentivising us with new rewards, constantly providing new challenges to gain points and unlock new features, making us create identities that give real purpose to our lives – then it's going to be a good future. For investors at least.
I always wanted to create a clickbait Youtube thumbnail
Clash Royale is a masterclass when it comes to these dynamics. I’ve started playing it as part of my research and, after a period of playing on and off for ca. three weeks, became so addicted to it that I flooded my bathroom because I forgot to turn off the water in the tub while playing.
I probably was pre-disposed to become addicted because Clash Royale builds on the same dynamics as Starcraft, the multiplayer game I played in the late 1990s. You build your battle deck with an ever-growing array of characters (knights, goblins, dragons etc.) that you can upgrade with new skills and fight other players in an arena, aiming to destroy their fort faster than they do yours. Each game lasts for three to five minutes and can be played from your phone anywhere with an internet connection. It’s the ideal leisure time occupation, whether you’re commuting, having some downtime at work or want to switch off your brain at the end of the day.
What surprised me about Clash Royale is its dedication to consistently shower you with new rewards. Every day after playing it I receive a notification that tries to get me back into the game. Once I’ve opened the app I get bombarded with new surprises: treasure chests full of gold to buy new upgrades, new characters, new maps, daily challenges, shop specials (only for a limited amount of time!), new star points, more gems, magic items, special keys. There are easily 10 different tracks of reward systems going on inside the game. It’s so busy that I haven’t figured out what each of them do. But that doesn’t matter. What it does to me is to constantly reward me for playing. Which makes me want to play even more.
5 seconds inside Clash Royale, I get showered with rewards such as free gold, star points, golden chests, chest keys, magic items, character upgrades and Epic Sunday free shopping. In the end it's still not enough to upgrade my Baby Dragon without purchasing extra gems in the shop.
My friend Martin and his son Neo visited Berlin a few weeks ago. Neo is 10 years old and likes AC Milan and Fortnite. Over pizza at night, Martin mentioned that Neo prefers to have his pocket money paid in Fortnite’s virtual currency, V-Bucks. Instead of receiving 100 Danish crowns (ca. 14 EUR/USD) every other week he’d rather have the equivalent of 2000 V-Bucks that he can spend directly inside the game. His most recent purchase was the Backlash skin for 96 DKK.
A skin is an interchangeable outfit to make your character look unique. Similar to how fashion works in the physical world it can signal a variety of things, most likely status. You often get access to special skins by having completed a challenge or task, being a member of a special guild or - as a shortcut to these time and skill-intense accomplishments - just purchasing it in the shop.
As Neo proudly proclaimed with eyes glowing with excitement, spending that money on the Backlash skin “was totally worth it.”
To parents this behaviour might sound completely unreasonable if not concerning. It reminded me of the Theory of Value I explored in my last newsletter where I tried to explain why I spent an unreasonable amount of money on an NFT. To me, it made sense because it gave me access, belonging and status in an environment that created value for me. To Neo it makes sense because the digital skin he purchased for his Fortnite character matters in his world: the environment in which he and millions of other kids spend a significant amount of their time in and have experiences that make it into their dreams at night.
Neo and I met in the metaverse to take this screenshot of his Fortnite avatar. He's not wearing the Backlash skin though because it's only available at the Playstation at his mom's place.
Besides my new habit of addictively playing Clash Royale I’ve an old habit of doomscrolling Linkedin at night. I’ve deinstalled Twitter from my phone years ago, deleted my Facebook account and, through unfollowing everyone but my close friends, made my Instagram so boring and uneventful that Linkedin (on my browser, not installed as an app) remained the last social media feed I can escape to. It turns out that removing apps from your phone does not remove a behaviour instilled by 15+ years of social platforms. So I turn to Linkedin as the last refuge to satisfy my insatiable brain with updates from my feed of random business connections I made over the past decade.
With all the games I’ve played recently I can’t help but notice that the weird and wonderful world of people posting about their career accomplishments feels like a game too. The most popular posts on Linkedin are people announcing their new skins, aka they’re either leaving a position or starting a new position. Linkedin pimps these posts with animations and illustrations while other players congratulate them on a “legendary run” and wishing them all the best in “starting their new challenge”. Needless to say that the names of many of today’s tech startups sound like games too.
If you’re running your own business that’s even better because you can create your own skins by giving yourself whatever title and description you currently aspire to. You can be a Chief Metaverse Officer or Top Web 3.0 Strategist without needing any credentials in the real world to support these claims. All you need to do is to create content and accomplishments that add credibility to the avatar you just created for yourself.
Anyone wants to play Crunchyroll?
The game we all participate in is called Aspiration. That’s why my Instagram Reels (IG’s version of TikTok’s algorithmic short video feed) is filled with expensive cars, hot women, bodybuilders, rope jumpers, basketball dunks and invitations to come to Dubai, habibi, because that’s where money can buy happiness. Inbetween those I get videos of people dancing in front of their cameras: they’ve learned that Instagram’s algorithm favors people dancing, so they follow its rule to convey a message (often promoting their business) while swinging along.
It wasn't too long ago when we LOL'd at kids dancing the moves from their Fortnite characters in real life. Now we bring our own moves to the metaverse to level up.
This year Em has the biz of her dreams. But she also has to dance for Instagram’s algorithm to get her message across.
It’s no surprise that we’re obsessed with the art of the scam in a culture where it’s becoming the norm to create an image of the person you aspire to be.
Netflix, Apple and HBO are full with documentaries about tricksters like Simon Leviev, the Tinder Swindler who emotionally abused and tricked dozens of women he met on Tinder, Adam Neumann, the WeWork founder who created a cult on false promises or Elizabeth Holmes, who was celebrated as America’s youngest self-made female billionaire before it was discovered that her biotech startup wasn’t as innovative as it claimed to be. One side of us is appalled by these stories, knowing that it’s morally wrong for someone to trick innocent people into their schemes.
But there’s also the part of us that is secretly fascinated by what Simon, Adam, Elizabeth and countless others got away with. In the game of aspirational make-believe they’ve scored the most points.
It’s not okay to be a Tinder Swindler, but it’s OK to have a TED talk about pretending to be a billionaire so you could see NYC’s best views.
The internet made it possible for communities to become something we are not born into but can choose voluntarily.
While that is as true today as it was in the early days of the world wide web, the shift we’re seeing today is in the notion of aspiration. We move away from the identities that rooted us in our physical presence (as in, our name as written in our passport) and create identities that place us within the virtual communities we’re part of. These identities are less rooted in who we are (via the reference systems that constitute our self in the real world) and more rooted in who we aspire to be.
The early days of the internet were about experimentation. We went online, chose a username, created a digital identity that was often represented through an avatar. In the IRC chats, bulletin boards and multiplayer roleplaying games of that era we didn’t know each other’s real world names and identities. I remember being part of LAN parties in the late 1990s where I met some of the people I got to know playing Starcraft and, for an entire weekend, talking to them IRL using their online username.
The web2.0 era that followed was defined by connecting our digital identities to our real world identities. Facebook pioneered that shift in 2008 when it changed its policy to people requiring using their real name on their profiles. This, plus a couple of other shifts in technology (e.g. the advent of mobile phone cameras anchoring the content we share more in the real world) led to the last decade being defined by us representing ourselves as who we are, or think we are, in the real world.
Now web3 seems to facilitate identities that are entirely virtual again. A majority of people engaged in web3 use imaginary usernames on Discord and Twitter. In stark contrast to the previous selfie-decade (people using the front-facing camera of their phone to take pictures of themselves, using them as profile pictures), the identities we create in web3 worlds go back to the digital avatars of the early days: cartoon illustrations, fantasy creatures, computer generated renderings that have no reference to our real world identities.
Instead, they are references of references. As Yana Sosnovskaya pointed out in an episode of the On The Other Side podcast, the web3 generation is the first generation that builds on digital culture itself instead of taking elements of physical culture as its reference points.
Web3 is going to be the socio-economic operating system behind the products and services that will shape our future experiences. While we see parts of it already in today’s culture influenced by platforms of the previous era, web3 with its capabilities to create value systems independent from our physical world will bring it to the next level.
It will take the elements that make games so meaningful and addictive to us today and combine with commercial products and services.
The key ingredients are:
Aspiration. Become the person you want to be
Identity. Create your character
Rewards. Get rewarded for playing / participating in the game, unlock new items
Currency. Earn and spend within the ecosystem, buy features and inventory to build your character and identity
Authenticity. Non-fungible tokens (NFTs) to certify ownership of in-game items
World lore. Narrative depth and richness, continuously co-created with participants
Let’s look at an example.
Poolsuite launched as an online radio player with quirky retro vibes in 2019. Enjoying widespread internet success amongst millenials like me, Poolsuite then expanded its golden 80s feelgood universe into a gift shop (t-shirts, caps, fondue sets, aqua cycles), its own sunscreen line, an exclusive NFT-based members-only club, an IRL party series and, just last week, ManorDAO where members pool funds together to buy a mansion.
What Poolsuite does better than most web3 projects is the world it creates. It builds on endlessly expandable references of a bygone era (1980s music, clothes, cars, drinks) and continuously releases drops that add to the identity of its participants (NFT Executive Member Card) and their aspiration (ManorDAO). Through its IRL events, set in a similar 1980s vibe, participants can experience and co-create the world they inhabit as members of this elusive club.
The same functionalities lie at the core of Friends with Benefits ($FWB), Bored Ape Yacht Club ($BAYC), and other successful projects in the space. Future brands will build similar worlds that invite people to participate, earn, spend, get rewarded and add to their identities.
"Holding the Poolsuite Executive Member card suggests your esteemed presence within the crème de la crème of internet high society, and says a lot about the way you live your life on the web."
What excites me more than future commerce opportunities (which TBH I couldn't be less excited about) are ways that games can help us learn, get educated and take action in a world that's falling apart.
One such example is Half-Earth Socialism. Based on the book "Half-Earth Socialism A Plan to Save the Future from Extinction, Climate Change and Pandemics", the browser based game invites players to take the lead of a globally elected government tasked with bringing warming below 1C, extinction rate below 20 and emissions below 0 - all while keeping people happy and preventing political opponents take the power away from you.
Instead of buying more NFTs, PFPs and executive member cards we should all be playing these sort of games.