Shrapnel: The Face of User-Generated, User-Owned Gaming
Shrapnel: The Face of User-Generated, User-Owned Gaming
This week we discuss portfolio company Shrapnel – one of web3’s hottest emerging gaming properties – and the growing movement towards user-owned, user-generated content, bolstered by the rise of generative AI this year.
Gaming is Begging for Web3
Gaming represents a nearly half a trillion dollar industry, with estimates ranging from $200B to $400B+ and rising, and there are now more than 3 billion gamers worldwide (nearly half the world populace) according to Newzoo – with global purchases of additional in-game content projected to exceed $75B in 2025. Spurred on by the amazing breakthroughs in compute, GPU, NLP, and generative AI (think Nvidia, OpenAI, Delysium), the quality of the games being produced today is also reaching an inflection point and the costs of game production are rapidly decreasing – making games exceedingly lucrative.
Yet, despite their massive global appeal and participation, traditional gaming is highly centralized. Most of the decisions are made by a relatively small handful of gaming execs and developers at publishers – like EA and Activision – who also reap most of the rewards of a global audience in the billions, while players have little say in decision making or game design. And whatever you spend in one game, like on Fortnite skins, typically cannot be transferred or used in any other game, making it also exceedingly siloed.
Generative AI and user-generated content tooling are also reaching an inflection point and gamers want to participate not just in owning games – but in making them. Which is why the opportunity in web3 gaming is so large and why we were so excited to invest early on in Shrapnel – one of web3’s hottest emerging gaming titles, set to release on PC in 2025.
Meet Shrapnel: The Face of User-Owner, User-Generated Games
Built by the BAFTA and Emmy award winning team behind titles like Call of Duty, Halo, and Bioshock, Shrapnel is a AAA-quality, post-apocalyptic, extraction-shooter style web3 game which combines cutting-edge user generated content (UGC) tooling, NFTs, and heavily moddable game assets to allow users to make the game truly theirs. (Check out the early-access game trailer from GDC 2023 here, it’s pretty epic!)
Unlike traditional gaming models, the core vision of Shrapnel revolves around giving players true ownership of in-game assets, making them stakeholders in the virtual worlds they inhabit and giving players unprecedented control over the games they play and create.
Their professional grade UGC tools (built in Epic Games’ Unreal Engine 5) allow players to create custom skins, maps, weapons, sound effects, music and more, which are minted as NFTs that can be used, traded, or licensed (shown above). UGC creators are rewarded in $SHRAP tokens when other players use their creations and Shrapnel provides modular blueprints, templates, and plugins to get gamers started – creating a virtuous gaming experience in which players help build the game and share in the rewards. (Check out their whitepaper to learn more).
Built by a Veteran Team at the Heart of Gaming
In addition to being spot-on with the trend toward user-owned and user-generated content, the team behind Shrapnel is also one of the world’s most prolific teams in gaming and media. Spun out from HBO, they’re the BAFTA and Emmy award winning group behind notable (multi-billion dollar) franchises including Call of Duty ($30b+ lifetime grossed), HALO ($6B+ grossed), Madden NFL ($2b+ rev. annually), Bioshock, Destiny, Star Wars, Hawken, Skylanders, Westworld, and over 30 more. Between them, the team members have contributed to winning more than 40 entertainment awards, multiple Emmys and a BAFTA — while reaching hundreds of millions of fans.
This is one of the reasons we were so excited to participate in their highly oversubscribed Series A round in late 2023, as the game was being developed. The very popular round was led by Blockchain Coinvestors’ partner, Polychain Capital, alongside Brevan Howard’s new digital assets arm, Franklin Templeton (whose blockchain portfolio is rapidly growing), and a handful of notable gaming investors. The early signs are already hinting at Shrapnel being one of web3’s first hit, AAA-quality franchise titles.
A Strong Beta Sets the Stage for PC in 2025
Early access to the game went live on the Epic Games Store earlier this year and responses to the ongoing alpha tests have been very strong. In contrast to traditional AAA games, where studios typically keep their communities in the dark about gameplay and design until launch – Shrapnel is honoring its community-first approach and involving its community at every stage of development. Tens of thousands of players have now participated in various early access events, informing ongoing edits and updates along the way. In the first half of 2024, the team already built out new fiat onboarding, a marketplace for weapon skins and fragments, and staking.
Led by gaming industry veteran Mark Long, the team continues to push the ticket on what’s possible with user-generated game assets and NFTs and envisions creating an ecosystem where players own their content and can amass a library of assets and content that can be used across any, and eventually, all games. As a result, the team is already generating massive buzz around web3’s next big game, which launches in 2025 on PC. (We’ve seen evolving versions of the build; it’s quite impressive, especially compared to web3’s existing gaming properties).
Looking Ahead – A New Paradigm for Game Ownership & Design
Today, Shrapnel – in addition to marking one of web3’s first, true AAA-quality titles – is well positioned at the growing intersection of user-owned and user-created gaming. Their PC launch in 2025 will mark a shift in the gaming industry, where players are no longer passive consumers but active creators and owners of the worlds they help shape.
Looking ahead, Shrapnel is poised to set a new standard in how games are created, owned, monetized, and played. In a world where players increasingly demand more control and involvement, Shrapnel offers not just a game, but an ecosystem where creativity and collaboration are rewarded. As we look to the future, the line between game development and gameplay is already starting to blur, and Shrapnel is leading the charge into this new era.
Author
Christopher Nelson
Head of Digital Asset Research