The line separating game creators from players has always been extremely narrow. Yet players can consume new content far more quickly than creators can produce it. So in a hit-or-miss business like gaming, creativity does not scale well. Talent may be one of the industry’s biggest choke points, which is why user-generated content is such promising terrain for studio leaders. A broad, highly active community that both makes and uses content — on platforms such as YouTube, TikTok, and Twitch — sits at the heart of the expanding creator economy. That current is now reaching gaming.
Naturally, studios have been drawing on their fan communities as engines of innovation for decades. Doom, arguably the most iconic first-person shooter ever made, rose in the 1990s by exposing its source code to anyone prepared to make extra levels and add-ons — it was among the earliest games to spark the “modding” wave. And after seeing the quality of side projects built around its first-person shooter franchise Half-Life, Valve expanded from a publisher into a full digital platform, including Steam, the world’s largest digital marketplace for PC games. Even now, one of Valve’s biggest titles ever, Counter-Strike: Global Offensive, originated as a fan-made offshoot.
Games have a long, deep history of user-generated content, but those efforts were usually viewed as self-expression or specialized fandom: people made things out of love for the game and for the community, not primarily to make money. That is now shifting. Studios are gradually coming to see that the value creators add to their games deserves not just social prestige, but real compensation.
Through fan-built giants like Roblox — which nearly tripled payouts to outside developers last year — and still-emerging names such as The Sandbox and Mythical Games, where players can build and own their own blockchain-based game experiences, the creator economy is moving into gaming. Players are finding fresh ways to earn from what they make, whether by designing original worlds, crafting and selling in-game items on the blockchain, or reaching audiences through new streamer tools. At the same time, studios and developers are realizing that letting players contribute — and share in the profits — can create an edge. That could alter the core economics of game design and distribution in important ways.
The economics behind the UGC boom
The growth of UGC — and its adoption by major AAA studios — is not driven by simple excitement: it is mostly a matter of survival. The price of making games keeps climbing. Before COVID, game design veteran Raph Koster found that on a per-megabyte basis, a $5 million indie mobile game and a massive $100 million AAA cross-platform spectacle cost essentially the same to produce. That helps explain why large publishers are usually cautious — or at least why they place bets very carefully.
But even that spending does not eliminate the unavoidable push for constant novelty. A studio’s edge comes from its capacity to build fresh, appealing experiences. In a market shaped by hits, the ongoing demand for “more of the same, but something different” can be hard to manage. By inviting players and outside developers into the creative process, publishers effectively farm out innovation and reduce risk. Moving that burden from a small group of professional designers to a vast crowd of fans and dedicated players massively expands the design pipeline. Giving access to a game’s building blocks and urging players to make in-game items and experiences for others also acts as a continual early beta test for new content.
Over the last five years, Maxis, the Electronic Arts game developer, has produced about 5,000 individual clothing items for the life simulation game The Sims, according to EA senior VP Samantha Ryan. “But if you look at one of our biggest UGC sites, they’ve created 39,000 pieces in that same period of time,” she said at a recent panel. “There’s just no way as a professional development house to keep up with our players.”
Executives like Ryan are now saying openly what used to stay unsaid. Legacy publishers are famously slow to embrace new business models and technologies (VR is one obvious case). They generally prefer to “wait and see” until they are pushed into a category at a premium, often by buying their way in. For example: when Activision Blizzard eventually moved into mobile gaming in 2016, it paid $5.9 billion for King Digital. In this new period — intense fan participation paired with the monetization of both “passion” and leisure — creativity and virality in games are shaped not by tightly controlled corporate plans, but by outside, often social, forces.
For game makers, there is another benefit: now that most of the publicly traded and privately held industry earns revenue through a service model, there is too much content. Digitalization and the associated free-to-play model have made games accessible to everyone. In this crowded field of available games, it costs more to connect consumers with content. User-generated content helps offset marketing costs because it strengthens a company’s ability to keep players and reduces churn. Being part of an active community and having a steady stream of new material for the games they enjoy encourages players to stay longer. That, in turn, improves the average game life cycle and lowers the risk of substitutes.
The future of UGC: from social cache to cash
As with microtransactions before it, the growing spread of modders — driven by cross-platform tools such as Overwolf and Mod.io, which let developers build extensions and mods for thousands of existing games — has changed the game industry’s traditional business model. Now we are seeing the start of UGC’s next stage: games that open their platforms entirely so players can create self-sustaining, user-generated worlds — with player-owned economies to match.
That is the strategy that propelled Roblox’s blockbuster direct listing this spring. Millions of players are building millions of worlds on the platform. (According to Roblox, it is no longer even a “game,” but an “experience.”) Of course, Roblox is not the first to pursue this path; Manticore, The Sandbox, Rec Room, CREY Games, Playerstate, and Traplight Games are all building similar models. But Roblox was an early leader in direct creator payments: in 2013, it introduced a Developer Exchange program that not only let outside developers make games and digital accessories, but also split profits 50/50 with the company. Roblox’s spending on UGC developer payouts has increased every year since, and accelerated sharply during the pandemic. Last year, the company paid $250 million to developers; more than 1,250 creators earned at least $10,000 through virtual sales in their Roblox games, the company said in February.
Although Roblox is the clearest example of a successful UGC monetization model, the newer group of players in this area is testing fresh approaches. Rec Room, a social virtual world made up of player-created game rooms, expects to distribute more than $1 million in payouts to 2 million content creators this year through its Creator Compensation Program. Mythical Games builds blockchain-based games where players can earn money by buying and selling digital goods; this spring, the studio launched an in-game non-fungible token (NFT) marketplace in its Blankos Block Party game, where players can buy and sell the title’s toy-like characters and other digital goods. In the same way, last month Satoshi’s Games unveiled Elixir Marketplace, an NFT marketplace for games such as the upcoming Light Nite, in which players earn bitcoin rewards for mastering the game or selling and trading in-game items. On the community-led platform The Sandbox, creators can monetize assets and gaming experiences on the blockchain. On Immutable X, players can buy, sell, or trade digital items on Ethereum in game worlds like Gods Unchained. And in Axie Infinity by SkyMais players can earn income — hence the phrase “play to earn” — through NFTs by breeding and trading digital pets called Axies; there are even reports of players around the world, from the Philippines to Colombia, helping offset economic slowdown through these game economies.
While many of these new uses are blockchain-based, creators are also finding other ways to make money from in-game worlds: in Animal Crossing, for instance, some resourceful players made their own WeChat QR codes to show in the game so that other players could pay them for custom merch. Another active path is live-streaming platforms like Streamloots, which offer new ways for game streamers to monetize fan interaction in real time (for example, by giving a fan a one-on-one interview or offering advice on how to beat a specific game). The average Streamloots buyer spends $26 a month on digital interactions, more than four times the amount the average user spends on Twitch subscriptions.
Social game-making, not just playing
Traditionally, most entertainment asks us to consume passively: we binge a Netflix show; we watch a concert. But in gaming, the way audiences actively participate in entertainment — and even inhabit it — is changing. In experiences such as Roblox, The Sandbox, and Rec Room, the game’s point is to make a game. User-generated content is not just a new way to play — it is an increasingly workable monetization method, a form of identity, and a social link.
Character creation has long been central to role-playing games; through UGC, it is becoming more layered and more expressive. Avatars both create a deep emotional bond and allow the distinct experience of adventuring through a customized proxy. (And through companies like Itsme and Genies, those avatars are becoming more personalized.) Instead of using an anonymous pawn or token to move through a game world, we get to explore through the lens of a specific skill set and personality. Do I want to be a sniper this round, or rush in? Maybe I’ll be an undead rogue and go questing alone. More and more, gameplay is shifting from entertainment into expression.
Even deeper is the social element — the emotional urge not only to connect, but to make and contribute. By building original in-game items or experiences, we can share with others in ways that go beyond simply playing. Unlike the static scrolling of much social media, players can interact in real time in virtual form — some users are even getting married inside customizable game worlds like Rec Room. Fan art has existed for a long time, of course. But nowhere else is it the main revenue model the way it is in gaming today.
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Over the last three decades, as the gaming experience has grown richer, players have been asked to take part more deeply in an ever-widening set of decision-making exercises. In the end, the move toward advanced customization means we are shifting away from a single-purpose experience. We may be playing the same game, more or less, but we are increasingly doing it on our own terms. Now, through the next stage of UGC, we can also share — and sell — those customized experiences with others.
As it has already done in media, education, and the crypto world, the creator economy is now appearing in the wider games business. Yet while modding and UGC were once viewed as an extra source of revenue limited to a game’s most devoted fans, the future of creating, fighting with, trading, and selling in-game creations will be fully central to the player experience.