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Colossus (Invest Like the Best / Business Breakdowns)Podcast16 Sep 2021Source: joincolossus.comHost: Patrick O'Shaughnessy

Justin Waldron - The Future of Social Gaming - [Founder’s Field Guide, EP. 50]

In plain words

This podcast discusses the future of social gaming. Guest Justin Waldron argues that games are evolving from standalone products into social tools, like 'pizza' that gives people a reason to hang out. He's bullish on 'instant gaming'—games you can play with friends via a link, no download needed. He mentions Zynga (the company he co-founded at 19), whose poker game is still huge after 14 years because friends are there; Zoom as a model for instant connection; and Substack, which lets creators monetize directly, similar to the tool he wants to build for game creators.

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Justin Waldron (co-founder of Playco, co-founded Zynga at age 19) discusses the future of social gaming. The core argument is that games are evolving from entertainment products into content creation tools and becoming key gateways to the metaverse. He believes that instant gaming—enabled by link sh

~7 min full read · 6 sections
Deep Analysis

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At a Glance

Guest Justin Waldron (Co-founder of Playco, co-founded Zynga at age 19) discusses the future of social gaming. The core thesis of this episode is that games are evolving from standalone entertainment products into tools for content creation and a key gateway to the metaverse. Justin Waldron argues that people are not "packing up and moving to Mars" into a brand-new virtual world. Instead, through daily activities like video chats and instant games, they are unknowingly migrating their real-world selves into virtual spaces "piece by piece." He believes this is the more realistic evolutionary path for the metaverse.

Games as Content, Links as Portals: The Underlying Logic of Instant Gaming

Justin Waldron believes the next growth frontier for games lies in becoming "content creation tools" and "social excuses," rather than just standalone applications. He points out that the current success of mobile games heavily relies on "performance marketing," which leads game design to cater to individual players rather than fostering interaction between friends. Playco's solution is "Instant Gaming": a game that can be shared via a link, played immediately with friends, with no download or registration required.

  • Historical Context: From Zynga leveraging the social graph on Facebook to magically place friends at the same poker table, to the current siloed nature of mobile games, Waldron believes the industry took a detour. Now, he aims to return to the essence of social gaming.
  • Mechanism Breakdown: The core of instant gaming is removing all friction. This is not just about "zero loading time" technically, but also "zero barriers" in the user experience. It draws inspiration from Zoom's success—a single link brings people into a shared space. Waldron compares this type of game to "pizza," an "excuse" that gives people a reason to get together.
  • Data & Analogy: Waldron notes that Zynga Poker, a 14-year-old game, remains the largest free-to-play poker service. Its core strength is not that it is the best poker game, but that "your friends are there." This illustrates the power of network effects.

Technical Challenges & Platform Strategy: "Adding Flavor" Within Existing Ecosystems

Playco does not attempt to build a brand-new virtual world. Instead, it chooses to deeply integrate with existing social platforms (e.g., Zoom, Facebook, TikTok) by embedding gaming experiences within them. This requires Playco to solve a technical challenge that is the opposite of mainstream game engines (like Unity, Unreal): how to make high-quality games load instantly in a browser.

  • Technical Mechanism: Mainstream game engines optimize for "graphics quality," while Playco optimizes for "loading speed." They need to solve the fragmentation issues of web browsers and achieve an experience of "load first, then stream assets," with the goal of making users feel like they are not playing a web game.
  • Platform Collaboration: Waldron emphasizes that the key to collaborating with platforms is not to view them as "distribution channels," but to jointly create "experiences for the platform's users that cannot be replicated outside the platform." This means Playco needs to deeply understand the unique culture and user behavior of each platform, rather than simply porting games.
  • Falsification Criteria: If users do not show significant demand for the "click a link to play a game" experience, or if platforms cannot provide sufficient API support, Playco's "parasitic" strategy will face challenges.

Business Model & Future Projections: Gradual Monetization from Ads to NFTs

Waldron believes Playco's business model is diversified and gradual, with the core being to leverage a larger user funnel (top of funnel) to explore multiple monetization methods. He is particularly optimistic about the "creator economy" and the application of NFTs in gaming.

  • Business Model: In the early stages, it will likely rely on advertising and virtual goods. In the long term, Waldron hopes to provide "game in a box" for creators with followers, allowing them to create games and monetize them directly without coding, similar to how Substack empowers writers.
  • Role of NFTs: Waldron believes NFTs should not be a ticket to enter a game, but rather an "Easter egg" within the gaming experience. By lowering the barrier to entry, letting users have fun first, and then gradually revealing the collectible and utility value of NFTs (e.g., using an NFT to summon a celebrity avatar in a Zoom game), the user base for crypto games can be massively expanded.
  • Ten-Year Vision: Waldron envisions future games "living" within the multiple communication channels people use daily (messaging, voice, video), becoming a multi-modal social experience. The ultimate goal is to help people better connect with those they care about, and even bridge divides.

Mentioned Positions

Position Guest Sentiment Key Data
Zynga Positive (Historical Achievement) Founded 14 years ago; Zynga Poker remains the largest free-to-play poker service
Zoom Positive (Model Benchmark) Achieves "instant" video conferencing via a link; serves as a reference for Playco's gaming experience
Roblox / Minecraft Neutral (Industry Reference) Representative examples of user-generated content (UGC) platforms
Substack Positive (Investment Target) Empowers creators to monetize directly; an inspiration for Playco's game creator strategy
Lambda School Positive (Investment Target) Provides educational leverage through technology
Pledge Positive (Investment Target) Enables any platform to easily embed online fundraising features
Dapper Labs Positive (Advisory Role) Exploration in the NFT and crypto gaming space

Judgments Worth Remembering

1. "We are moving ourselves into the virtual space piece by piece, not packing up and moving to Mars." (Justin Waldron) — He believes the metaverse's evolution is gradual, occurring through daily activities like video chats and instant games, rather than a one-step transition to a VR world.

2. "Games are 'pizza,' an excuse for people to get together." (Justin Waldron) — People need a reason to gather with friends online; games can play this role, much like a real-world dinner party.

3. "The best platform opportunities come from first creating a killer product that people love, and then having the community 'pull' you into turning it into a platform." (Justin Waldron) — He opposes building a platform for the sake of it, arguing that one should first create value and then go with the flow.

4. "We are not treating platforms as distribution channels; we are creating experiences for them that cannot be replicated outside their platform." (Justin Waldron) — This is the core principle of Playco's collaboration with social platforms, ensuring a high degree of alignment of interests.

5. "Let users have fun first, and then slowly reveal 'oh, by the way, this is an NFT'." (Justin Waldron) — He believes crypto games should lower the barrier, using gameplay to attract users, rather than requiring them to connect a wallet upfront.

6. "Humans are better than any game designer at creating endless, interesting content for the people they care about." (Justin Waldron) — This is the theoretical foundation for Playco designing games to be more like social networks, emphasizing that the "content" generated by user interaction is the key to retention.

7. "Zynga Poker is still the largest free-to-play poker service after 14 years, not because it's the best poker game, but because your friends are there." (Justin Waldron) — A concrete example illustrating the immense power of network effects in gaming, far surpassing the quality of the product itself.