"Crypto gaming’s biggest challenge? Not the games, but the players"
GC ALPHA 38
Disclaimer: None of this information should be taken as financial advice. DYOR + I will hold some of the assets that are spoken of in this newsletter.
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(P2A) EVENTS & SOCIALFI
Sonic launched its Mobius Campaign S1
The Game Eco part of it has a $120K prize pool
Spellborne released PvP Leagues Era 5 (lasts until March 14)
Phase II of the Beacon’s New Frontier Quest is now live (note: you need a WOP)
Emblems have arrived in DUPER (collectibles used to power in-game actions)
Play games to earn keys, open lootboxes, and earn emblems
CARV Pass Season 8 is now live with data-driven rewards, seasonal NFTs, and leaderboard bonuses
Seraph launched Season 2 PTR, coming with new challenges, rewards, and game updates
AI Wayfinder released Community Quests (1% of the PROMPT allocation)
Swords of Blood is launching its P2A campaign today with $50,000 in prizes
Wonder Wars’ VIP Key Event started last Thursday
The key grants you a multiplier for the next main P2A events, only the top 1000 players will get it
Battle of Three Kingdoms is releasing on March 25th (with SGC token rewards)
After concluding CBT1, ROL Genesis will follow up with a second CBT next month, from March 17 to 23
MARKET TALK
THE STATE OF CRYPTO GAMING
After another studio announced it’s shutting down last week (Valeria Games), the third one in two weeks, more people in the industry started voicing their concerns and thoughts. Let’s take a look at some of the viewpoints:
Jonah said: “I don’t see web3 gaming happening anytime soon. I do believe social casino games will work.”
He elaborates on this point saying the user base only wants “casino” (speculation-based games), VCs aren’t eager to fund anymore, and game devs in crypto largely suck and the actual talent isn’t coming in
Gabriel Leydon pointed out that the argument of “crypto doesn’t have any good games” doesn’t make any sense. Since, a simple game like Screw Jam makes millions of $
He elaborates that the problem is the audience, not the games
Nick Metzler said: “Innovation happens in cycles. I've been saying for 2-3 years that the next cycle was not for gaming. It's the cycle after that.”
Furthermore, he mentions his article “A Fork in the Road (for Web3 gaming)”, explaining the two types of games he foresees in the future:
Path 1: Games with blockchain infrastructure, think of your mass-marketable games that have abstracted all crypto features (e.g. Off the Grid)
Path 2: Crypto-native games. Titles that are often (fully) onchain include aspects of financial speculation, game theory, risk-taking, risk-mitigation, etc. (e.g. Onchain Heroes)
Both types of games can co-exist, because they are made for different consumers
In essence, all three points highlight the existence of two audiences: they differ in motivation and greatly in size
Direct-to-consumer marketing, i.e., community building, isn’t a scalable marketing solution. It can help to bootstrap your game with players, but it won’t make it successful, so more games will have to start looking at how to market beyond CT
The above applies in the case you’re not solely building for degens
To add to this, from last week’s issue, the founder of Mystery Society: “…if I could have done anything differently, I would have focused on web2 growth…”
We’ve seen a couple of success cases for Path 2, but which game is going to be the catalyst for Path 1?
THE BATTLE OF THE GAMING CHAINS
Last week Hunter posted a good article on Ronin: “Open Ronin: The Easiest Bet in Gaming”
One of the quotes that stood out in this piece: “As other networks continue to lose relative mindshare and economic activity, Ronin morphs into the most straightforward proxy for blockchain gaming success.”
Another great read on this topic is from “pet3rpan” (investor at 1kx): “Thesis: Ronin ($RON)”
“As Ronin becomes permissionless, we believe that Ronin will become a critical infrastructure that every crypto game publisher will want to launch with…”
These reads on Ronin made me think deeper about “the battle of the gaming chains”
As you probably know by now, there are a ton of gaming (-adjacent) chains, where in 2024 new chains outpaced games
The pool of good available games in crypto is already small and will likely see less growth in the next few years, as the funding climate softened and fewer quality teams enter the space
This is the situation until AI-enabled development gets so good and we’ll see a tsunami of crypto-based apps
Whilst many chains choose to go the (large) grants route, Ronin “spent less than $10m to acquire the current ecosystem, primarily through investment in games as opposed to grants funding”
It’s no surprise games seek support on the distribution and publishing side, rather than just seeking funds. Even though that support is becoming much more selective now with Open Ronin
No other (or barely any) gaming chains have been able to replicate the success of this hand-picked approach of investing time and resources in a few teams with high potential (or it hasn’t come to fruition yet)
Looking at the current landscape of the largest gaming chains:
Ronin’s bets are largely on Path 2, but also has Path 1 bets on the Ragmon IP
Avalanche’s best bets seem to be on Path 1, like OTG and MapleStory U
Immutable’s bets are extremely wide, mostly on Path 1
Arbitrum’s and Treasure’s bets are a mix, but mostly on Path 2
WEMIX only cares about Path 1
Ronin’s approach of Path 2-first (e.g. Axie and Pixels) has worked well so far. However, the Path 2 pie isn’t growing that much, meaning mindshare per game will likely slow down or the few Path 1 games will have to attract more attention to the ecosystem
The use of Web3 in games is struggling because it neither solves a real problem nor creates a genuinely enriching or fun experience. I’m hoping we have a solution to this—but we won’t know until launch. For long-term success, the design and thinking must be rooted in delivering value to a strong community, rather than contributing to the avalanche of shitcoins wrapped in speculation, powered by a game that’s no different from what’s already available everywhere.