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Gaming is Eating the World and How Gaming Can Can Restore Trust in Society

Almost exactly a decade ago, Marc Andreessen famously proclaimed:

Software is eating the world.

Source: A16Z

With hindsight, it’s clear Marc Andreessen was not just right, he was absolutely right.

Even before considering the proliferation of software in 2020 in a COVID-driven world, software was already well on its way to dominating most aspects of our lives by 2019.

And what makes that proclamation even more incredible was how out of consensus that view was when it was written in 2011.

2011 was only 10 years post-Dotcom crash (and just a few years out from the depths of the 2008 financial crisis).

While Google and Facebook were already rising and thriving disruptors of the tech future to come, it was not consensus that software would eat the world (yet).

As Andreessen put it at the time, investors actually hate technology!

Today’s stock market actually hates technology, as shown by all-time low price/earnings ratios for major public technology companies. Apple, for example, has a P/E ratio of around 15.2 — about the same as the broader stock market, despite Apple’s immense profitability and dominant market position

Source: A16Z

And, of course, my personal favorite example:

Source: The Atlantic

$1 billion!

Today, conservative estimates place the value of Instagram at north of $200 billion.

I can only imagine how many people today would wish to be able to go back in time and offer $1 billion for Instagram!

But a lot has changed since then. And what as once prophetic is now consensus.

Since 2011, many people have riffed on Andreessen’s prophetic statement in order to update it for the times.

Over the last few years, for example, many have suggested that fintech / payments is eating the world. Does seem like it!

Likewise, many have also suggested that crypto is eating the world. Does sort of seem like it! At least if Bitcoin / Ethereum prices and Coinbase’s market cap are any indication…(though I say that with a bit of jest, in all seriousness, there are a lot of interesting projects / technology / ideas cooking in the crypto space).

Today, I’d like to suggest a 3rd riff: Gaming is eating the world.

I believe games will increasingly permeate society. People will increasingly organize their life around games. And everything will become a game (though I do not necessarily mean gamification). And this will happen because games are likely the best hope we have left to restore trust in society.

Before I dive in…I’ll need to give credit where credit is due. I have been highly inspired by two essays.

The first is Matthew Ball’s highly acclaimed essay “7 Reasons Why Video Gaming Will Take Over“.

Matthew Ball is probably the single most important person driving greater awareness and excitement around the concept of the Metaverse. Although Neal Stephenson was the one to coin the term through his seminal book, Snow Crash1, published in 1992, there is no doubt that Matthew Ball is the one that has brought the greatest attention to the concept in the last few years.

It’s a brilliant essay. I highly encourage you to read it (because my summary of it will likely not do it justice…).

Matthew Ball ultimately argues that gaming is on track to become the dominant form of entertainment because it is the most engaging and most accessible medium of all entertainment formats. Not only is it the most engaging and accessible medium, video games are successfully replicating the elements that made TV successful and then some. There is greater and growing variety of games. You can game in more places than you can watch TV / movies. Games are becoming more culturally relevant and social in a way that traditional entertainment formats are not. And most importantly, games have the tightest feedback loops compared to any other format. Because games are interactive and living, games receive feedback from gamers and evolve in a way that TV or movies cannot. All traditional entertainment formats are static. But games are living. And all of these things together make games a unique medium that can potentially cater to more people than any other entertainment medium in history.

The second essay that served as inspiration for this post is Peter Rojas’ “Why Do Video Games Work So Well As Social Experiences?“.

Peter Rojas’ essay ultimately tries to explore why video games became the go-to medium for maintaining friendships during pandemic lockdowns. For example, perhaps you were one of the millions of people that bonded over Among Us. Or Fall Guys. Or Animal Crossing…while Peter Rojas shares many insights throughout, the core insight boils down to: “[games helped] facilitate the act of being friends“. For non-gamers, this may sound like heresy (“nothing can replace offline interaction!”), but if 2020 can serve as evidence, there are some reasons to believe it’s possible and true. Many people came together through games, not necessarily because of the game itself but because games can provide a structured experience on which to do friend-y things. It’s a shared experience. You can create shared emotional moments. And games allow people to socialize with as high (or even higher frequency) than people can offline (this was, especially true in 2020).

On that last point, Peter Rojas explains it best:

But proximity is not enough on its own. Friendship also needs both frequency and duration of interaction. It’s tough to make a new friend or stay close with an old one if you only see or speak with them once or twice a year (which I can tell you as a 45-year-old, is something that can all too easily be the case as you start to get busy with your job and family). Social gaming can make it easier to increase both the frequency with which you interact with your friends (by offering an excuse to get together on a regular basis) and the duration of those interactions (because the games are fun to play it’s easy to pass time quickly). 

Source: Peter Rojas

While both of these essays are highly thought-provoking and insightful in their own ways, both of them also focus very narrowly on video games.

However, I think the concepts introduced in these two essays are even more powerful when we consider it in the context of games as a philosophy rather than just games as an entertainment medium. What makes games great does not have to be confined to video games. We’re already starting to see the philosophy of games start to penetrate into non-gaming areas, but there is so much more room for growth. And the reason this is potentially exciting is because games have the potential to create social interactions in a way that modern society desperately needs.

What do I mean by games as a philosophy?

I mean…Environments that establish clear goals for participants and provide structured learning in order to help participants “level up”.

Every video game is like this.

Every video game starts you at “level 1” and teaches you slowly and methodically how to get to “level 100” to “defeat the final boss”.

What makes this philosophy powerful and robust is that it changes behaviors. Every “level up” gets you to become slightly better at your craft until you are ready for the ultimate goal / challenge. Without learning how to be better, you cannot advance. The feedback is tight and clear. And ultimately, you want to get better because, if it’s created correctly, it’s fun.

Most people think games are just about “having fun”. I don’t know about you, but games are not fun unless the game does a good job helping you get better. (Or, unless you like losing.) The only “fun” games that don’t require you to get better are pure games of chance (like lottery scratch cards or game loot boxes…this is what I consider gamification instead of games…).

This is true even of social games. For example, Among Us. It’s a game in which space crew mates are tasked with uncovering the imposters that are secretly murdering the crew. Though there are no “levels” like in a traditional video game, you do quickly learn to level-up in terms of how to fish out suspects, how to spot lies…or if you’re playing the imposter, how to murder and how to lie!

While every video game is like this, many non-video game experiences are / can be like this, too.

For example…

Tinder – Tinder is a game! It’s game where you swipe a screen left or right a lot, and then after some time, you accomplish a goal (meet someone). This just happens to be a game that has real-life offline implications. People made fun of online dating not that long ago, but it’s now the dominant way that new couples meets.

For example…

WeChat Lunar New Year red packets – Prior to WeChat’s lightning success with Lunar New Year packets in 2014, Alipay dominated mobile payments in China. Alipay seemed literally unassailable. But almost overnight, WeChat redrew industry borders when they turned the straightforward Lunar New Year tradition of red packet gifting into a game. It was fun! And it piggybacked on a goal that everyone in China has (to gift money to people they know), while also teaching people o level up by learning how to send money via WeChat. This ultimately taught a whole country how to be very, very mobile financially savvy, and catapulted China to the forefront of global fintech.

And as Connie Chan from Andreessen Horowitz explains, it’s all because it was a game:

By injecting gaming mechanics into its digital version of red packets from the get-go, WeChat helped make P2P payments a new form of social communication: Sending money no longer feels tacky but socially welcomed, with a message. (It is a messaging platform after all!). Equally important as accelerating the adoption of payments, these gaming mechanics also led to much higher usage of group chats.

When WeChat first launched Red Packets, it offered two basic options: send money to an individual or send money to a group of friends. Many users flocked to the latter option because the sender was allowed to specify not only the total gift amount and message, but also how many winners could claim a portion of the prize (with each amount randomized by WeChat). So for a group of, say, 50 members, the sender might only choose to give out 10 prizes — meaning only the first 10 members of the group who claim the prize get anything. This lottery-like feature sent recipients into a frenzy, because they would all “receive” the red envelope at the same time, have no idea how many people are allowed to win it, and so would race to claim Red Packets before the prize money ran out.

Source: A16Z
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The actual method of sending the packets via randomized amounts is gamification in my book (it’s more like gambling), but the collective behavior of learning how to send money to people for the country as a whole was and is the game. And WeChat did that exceedingly well.

The reason I point all of this out is because modern society has become lost.

Years ago, when society was simpler, people could easily see the results and consequences of their decisions. The natural feedback loops that existed in society were tighter.

If you flunked high school, well you probably had a pretty tough time in life. So don’t flunk high school.

If you lived in a blue collar town and you refuse to bulk up or don’t enjoy exercise, well good luck making a living.

If you said something nasty to someone in your neighborhood, well that’s not nice…and you’ll probably face the consequences of that.

But modern society has become much more complicated than most people can comprehend anymore. And most people are lost. Most people can no longer see / receive the feedback that they desperately need in order to understand whether what they are doing will lead to good or bad results.

For example, many people over the last 20 years have gone to college, only to discover that they have earned a degree that has taught them nothing useful! There was / is very little feedback to tell them a priori that they were / are on the wrong track.

For example, you can say something nasty to someone online, and you might actually feel great about it! But you will never really know the harm or consequences of what you’ve done. And whether what you did was good or bad, you’ll get a lot of “likes” out of it.

For example, many people used to be able to invest in treasury bonds that paid 10-20% interest rate (very tangible and tight feedback when you can see your money grow in real-time with low risk!), but now the average person has to invest in the stock market to earn a positive return but may not know for years whether the decision (GME! AMC! Stonks!) they made is right or wrong.

There is simply no reasonable feedback anymore. And without reasonable feedback, it’s no wonder that increasingly people are taking on more and more destructive behavior without even knowing it. Whether in our personal lives, professional lives, or political lives.

The wrong way to try to tame this demon is through gamification.

Gamification and games are almost the same if you squint…but one teaches you something while the other only guarantees you fun.

The wrong way to try to tame this demon is like what Robinhood is attempting to do in gamifying investing:

Robinhood introduces users to “investing” by giving new users some free stock that you literally scratch off like a lottery scratch card:

Source: Twitter

And users are rewarded with (admittedly very fun!) confetti whenever you trade!

Source: CB Insights

Call me old school, but most people are probably better served buying and holding a diversified basket of blue chip stocks or an index. Yet, Robinhood rewards users whenever they trade. No rewards for just sitting tight.

All of these things are fun, but they don’t teach you how to level up.

I don’t mean to pick on Robinhood…it just happens to be a convenient example.

But the message is all the same – Modern society has become complex to the point where people no longer have reasonable feedback loops to iterate behavior on. Modern society is like taking a new player, getting them to “level 10” and then dropping them on “level 100” when they turn 18 years old without further guidance and expecting them to figure it out.

And if this persists, society is going to get a whole lot weirder. A lot of times, doing the “right” thing is downright boring or not obvious…but there is an opportunity for games to permeate society and reintroduce feedback loops where it is needed.

One increasingly obvious side-effect of the death of feedback loops in modern society is the growing lack of trust in our communities.

This makes sense. When communities were small and simple, and everyone knew each other, it’s easy to establish trust.

But in our modern society, no one knows each other anymore. And if I say the wrong thing or look a certain way, I might get hurt.

And, unfortunately, rather than try to resolve this trust issue, the leading minds of the day believe it is best to accept there is no trust anymore and simply deal with it by creating systems that do not require trust.

This is the whole ethos around crypto – Systems that do not require trust.

There is nothing wrong with that (and there are very good and robust reasons why such systems might be better), but it pains me to think that we as a society is increasingly accepting as a default that we must trend toward a trust-less society!

Maybe that is where we will end up anyway, but I think we should at least try to restore trust if we can!

However, as difficult as the situation seems, there are actually reasons to be hopeful.

One thing that I have been fascinated by is hearing, anecdotally, 1/ how many people are able to meet their significant others online, and 2/ how many people have been able to make real-life friends through video games.

Both of these are fascinating because they are becoming extraordinarily common whereas it’s rare to hear about people meeting new friends (or significant others) online through general social media.

So…something about dating apps and video games make it particularly conducive for forming new relationships. Even when you can’t interact with them in physical space!

It is even more interesting when you consider how online dating is about to eclipse all of offline dating as the primary channel for new romantic relationships.

And I believe it all comes down to how these services (dating and video games) address modern society’s trust deficit.

In the physical world, trust is established in very subtle ways. It’s not established through words or legal documents…it’s often established through repeated interactions. If you interact with someone enough times (perhaps you ride the same bus at the same time everyday…or you run into each other at the same lunch spots), you can begin to understand other people and the scope of behavior that is possible. If you walk past the same person enough without getting attacked, well that person is probably not threatening. And this understanding, through repeated interaction, is what underpins trust.

But repeated interactions must also begin small, one step at a time! It’s very hard to meet someone for the first time and quickly trust the other person enough to engage in a large financial transaction, for example. It almost always has to start small.

Unfortunately, these small, recurring opportunities for establishing trust have become harder and harder to come by. The world has become a larger place. It’s harder and harder to run into the same people (unless it is in a structure setting like work or school). And the stakes have become higher. We hear more and more about how unhinged some strangers can be, which further reduces our desire to engage with people we do not know.

But if you really think about it – that’s what games can be perfectly situated for. Games are not only a structured environment that teach you how to level up, games are also highly conducive environments for random people to engage in small, repeated interactions that can create trust over time.

If the objective of a game is to do XYZ and you meet someone random that refuses to do XYZ, well you know that person can’t be trusted digitally OR in real life! And if you meet someone that just works really well with you to complete the game, then perhaps this person can be trusted. And if you do enough online, and establish enough trust, perhaps this person can be trusted offline, too.

This is not a hypothetical. For many young people, meeting new friends online through games is already very much a reality…

To close the circle, we’ll need to return to the beginning.

I began this post by discussing how Marc Andreessen got the future right when he said a decade ago that “software is eating the world”.

Since then, the world has changed a lot.

There is a lot more technology.

But also a lot more chaos.

And a lot less trust…

Software is still eating the world, but I think games are eating the world, too.

I have no idea if games will eat the world or not. I’m no Marc Andreessen – I cannot see the future as clearly as him…

But what I do know is that if games eat the world, there is a chance we can leave the world a better place if we do it right.

Some people fear a future of games where people play games to escape.

I fear that future, too.

But I can also imagine a future where games can bring us closer together. And help us restore the trust that we have lost but want so deeply in our hearts.

There’s a lot to fear, but, as always, I’m an optimist.

1Snow Crash is (probably?) Silicon Valley canon. Highly recommended. If the Metaverse becomes reality by the 2030s, Snow Crash will have predicted the world 40 years into the future in addition to predicting the internet, digital viruses, and other highly relevant technology concepts we live with today. Undoubtedly one of the most predictive texts ever written.