Culture is often not separable from entertainment. Your tastes in the kinds of books, music, film, or art you consume have more to do with the language you speak, the values your family and friends espouse, and the economics of where you live than anything else.

You can say those preferences are even stronger when it comes to gaming, since it offers a level of interactivity that engages you more than most other forms of entertainment.

So it makes sense that cultural differences between Asia and the Western world are influencing how the web3 gaming market is developing. According to Robbie Ferguson, president and co-founder of web3 gaming company Immutable, gaming companies in Asia are on the frontlines of web3 gaming development because of the "very strong genre-fit" between web3 gaming and a lot of the existing popular games in Asia that are already highly driven by collectibles.

[Asian gaming developers] ushered in mobile gaming; they were at the advent of free-to-play and that means they actually say, 'This is a way to disrupt and sort of stay at the front,'" Ferguson recently said on the TechCrunch Chain Reaction podcast. "He added that the popularity of collectibles in existing mainstream titles in the region would align well with NFTs in web3 games.".

And that genre-fit is causing the development of this niche of the crypto industry to be skewed toward Asia these days.

"It's a little bit bifurcated," Ferguson said. "I think the consumer response is probably different right now between the West and between Asia. There's a lot of tailwind in Asia, but the Western countries are not as eager to dive in."

Ferguson and his company have heavily gambled on the crypto gaming market. Immutable provides a platform, of the same name aptly enough, to developers for building and scaling Ethereum-based web3 games, and the company develops and publishes web3 games through another unit labeled Immutable Games. The platform has attracted some traditional gaming studios and IP holders — including GameStop, TikTok, Illuvium and NFT marketplace OpenSea — to build games, too.

Immutable raised $200 million at a $2.5 billion valuation in March 2022, and in June this year, it launched a $500 million developer and venture investment fund.

Those bets may come good. In late July, Japanese prime minister Fumio Kishida said at the WebX conference in Tokyo that "web3 is part of the new form of capitalism." Though he wasn't talking about web3 gaming in particular, in 2022, Kishida said his government will promote and invest in web3 services like NFTs and the metaverse.

Clearly you don't see such enthusiasm on the part of governments in other markets," Ferguson added. "I think in the West, it's going to be a more cautious approach, where you're really making sure that these game designs are going to be pretty invisible in terms of web3," Ferguson said. "And that's just a branding piece.

That may have more to do with risk than anything. Ferguson feels Western gaming developers, especially the established ones, want to hedge. "They want to make sure that they know how to develop a successful game when this becomes the new paradigm of development and economic asset ownership."

Asian gaming companies are on the front lines of web3 gaming development.

In May, one of the world's biggest gaming companies, based in Japan, Nexon, said it would create a blockchain-based ecosystem based on one of its biggest online games, MapleStory.

That doesn't necessarily mean Asian companies will always take the lead in the web3 gaming race, though.

“I often think the second-place movers are gonna be the fastest. They want to show up number one, and see this as a new way to get bigger budgets [and] more spend,” Ferguson said. “There’s a lot of trends sort of converging there. We’re certainly seeing it still in AAA in the West, but it is slower, it is more cautious. And they’ll definitely be dipping their toes with prototypes, rather than going all in.”

Maybe the breakout game doesn't even come out of an AAA studio but forms from a smaller studio that just kind of figures out how to make their user-acquisition strategy grow.

"That's why we're building a platform, because we don't know what will be successful," Ferguson said. "We just want to help as many shots on goal succeed."

And even though it’s not entirely clear yet which web3 gaming model will be the one to win, a lot of traditional developers are still willing to take a shot.

“We’re seeing more web2 game developers than ever continue to build,” Ferguson said. “Last month, for Immutable, was our biggest sales month ever for onboarding games.”

A pretty insane update:@Immutable onboarded more games last month than ever in its lifetime.

Extremely proud of the product and GTM machine that is relentlessly and tirelessly on its way to bringing true property rights to gamers.

The end-game infra is here with @immutable and @0xPolygonLabs. pic.twitter.com/IWcAvaqNWt

— Robbie Ferguson ???? | Immutable (@0xferg) June 27, 2023

Immutable's recent sales growth and resulting apex are notable due to the fact the company has been around since 2018, through the recent bull market and play-to-earn gaming hype that took off in 2021.

In the height of this essentially sideways crypto market, we're onboarding more than ever," Ferguson said. "That is somewhat a reflection of the market share, but I think that's an incredible testament to people seeing this being a much better model for players. A lot more credible professionals are choosing to develop here.

This story was inspired by an episode of the podcast Chain Reaction from TechCrunch. Listen to Chain Reaction here to hear more stories and tips from entrepreneurs building today's most innovative companies.