8 web3 gaming experts discuss hurdles and opportunities in the road to wider adoption
What will it take to spur more mainstream gamers to pick up and play web3 games? We asked eight web3 gaming experts to find out.
Spiraling costs are killing the mobile gaming space
Mobile gaming is set to reach $315.9 billion this year, according to Statista, but it’s not easy money: Various subscription models, IP, operating costs and how people access games make it an expensive endeavor that can be prohibitive for anyone who wants to try something new or different.
Ryan Horrigan, co-founder and CEO of game developer Artie, understands the obstacles that need to be overcome when it comes to publishing new games. “If you look at the mobile game publishers today, it’s kind of like the movie business,” he said. “You either have indie arthouse titles in gaming, like what you find in Apple Arcade. These are really high-quality, story-driven games that don’t make much money, but they’re very artistic and they win awards. Or you have the equivalent of summer movie blockbusters, these mega games from these mega publishers.”
As a consequence, he argues, there’s little room for anyone in between: newer developers who are trying to put their games in front people.
“It’s very difficult for new game developers to cross the chasm to compete with the establishment,” Horrigan said. “Like if you started making games 10 plus years ago, at the dawn of app stores, and you succeeded, there’s a pretty big moat between you and any new folks coming forward.”
Horrigan outlined the particular issues that make the moat between new developers and the establishment prohibitively wide and deep, and it starts with costs.
Spiraling costs are killing the mobile gaming space by Haje Jan Kamps originally published on TechCrunch
How Metafy founder Josh Fabian caught the attention of 776 by building in public
In over a decade of investing in startups, Reddit co-founder Alexis Ohanian has only once offered to fund a founder on the spot. That founder was Josh Fabian, CEO of Metafy, a video game coaching platform.
“We were able to just engage and talk like humans, and Josh told us his story in a very different way,” said Katelin Holloway, a founding partner at 776, where Ohanian is general partner. “Not only was it incredibly compelling from a business perspective, it was incredibly compelling from a human perspective.”
As Fabian explained at TechCrunch Disrupt, Metafy has a pretty fun founding story. Once a competitive Yu-Gi-Oh player in his childhood, Fabian was working as a lead designer at Groupon when he became obsessed with mobile gaming.
“I would spend my bathroom breaks very productively playing a game called Clash Royale,” Fabian said. He eventually became one of the top 20 players in the world and streamed for up to 4,000 viewers on a daily basis, but he wasn’t making much money — that is, until fans started asking him to pay him for private coaching. In just six months, he made $40,000.
When Fabian’s children wanted to get better at the Pokémon Trading Card game, he hired one of the best players in the world.
“He offered to teach them for $20-an-hour, which is less than what we pay our babysitter,” Fabian remembered. He said he asked the player if he did Pokémon full-time, but the player said he worked a minimum wage job at a warehouse. That got Fabian thinking about building a business to let people in similar situations make a living off their gaming expertise.
This past February, Metafy raised a $25 million Series A round, co-led by 776 and Tiger Global.
Building in public
How Metafy founder Josh Fabian caught the attention of 776 by building in public by Amanda Silberling originally published on TechCrunch
Immutable onboarded more web3 games in Q3 than any other quarter, co-founder says
Earlier this year, Immutable, a web3 gaming firm with its own layer-2 chain, Immutable X, launched a whopping $500 million fund to boost gaming on its platform. Fast forward a few months and the company says things are going according to plan.
“It has been super busy,” Robbie Ferguson, co-founder of Immutable, said to TechCrunch. “In the last quarter, we’ve onboarded more games than the rest of the company’s lifetime combined. As far as we know, it’s been more than any other layer-1 or layer-2 [blockchains] in the world and nearly half of those games came from competitors in migrations.”
In Q3, Immutable onboarded about 50 games and has over 1,000 games being built in a “testing environment,” Ferguson said. “These are ones we’ve actively gone after.”
Some games, like Delysium and Ember Sword, were initially developed for the layer-2 blockchain Polygon but switched to Immutable X, the company’s NFT platform and layer-2 scaling solution for the Ethereum blockchain. Other games, like Deviants’ Factions and Undead Blocks, migrated over from the defunct Terra ecosystem after it imploded in May.
Today, Immutable X launched GameStop’s NFT marketplace out of beta, which will provide GameStop players and customers across the U.S. access to NFTs tied to games on its layer-2 chain. This announcement follows GameStop and Immutable X’s partnership and $100 million joint grant fund from February.
“The attraction we’ve already seen and interest from this community has been insane,” Ferguson said. “We recently shared something on Reddit and had 100,000 people sign up for Guild of Guardians’ waitlist in under two days, just from a single post. So the strength of this community is enormous compared to existing user bases in crypto.”
Immutable onboarded more web3 games in Q3 than any other quarter, co-founder says by Jacquelyn Melinek originally published on TechCrunch
5 tips for launching in a crowded web3 gaming market
The first wave of the play-to-earn (P2E) gaming boom seems to be coming to an end. There are still plenty of blockchain studios staging successful multimillion-dollar raises around the globe, but competition for funds has tightened to the point where only standout projects are winning backers.
With great strategy more important than ever, here are a few tried-and-true steps you can take that will help set you apart when you’re seeking capital and preparing for liftoff.
Leverage experience in the traditional gaming studio sphere
The blockchain gaming market is full of builders who are experienced in crypto but haven’t built traditional games.
I’m a prime example. Pegaxy was the first game I worked on and the first I launched. Like many other web3 games of its time, its mechanics and graphics were fairly basic at the start. But while simplicity was fine with the web3 gaming crowd, it has become increasingly clear that P2E will need to attract traditional Web 2.0 gamers if it is to scale, and these gamers demand much more. To please this demographic, builders will need games that have it all: superb graphics, strong mechanics and rich lore.
You can have the best team and the best game, but without a solid monetization strategy, those mean little.
That’s why a founding team that pairs an understanding of web3 fundamentals with experience in building and monetizing Web 2.0 games for mobile, desktop and console platforms will set you apart in this market.
It’s also why, after Pegaxy was launched, we founded Mirai Labs. We wanted to assemble an expert team to build games that appeal to the traditional gaming community.
Develop a clear, straightforward monetization strategy
Most traditional P2E games have fairly simple revenue models that rely on users buying and holding the token that serves as the in-game currency.
This means that when large groups join and play a game at once, token prices and revenues rise in tandem. But when market conditions change — or when players just lose interest in a game — there can be a mass exodus of users. This is bad for revenue and can be catastrophic for token prices. Therefore, building a game that succeeds in the long term means developing monetization strategies that can weather market ebbs and flows, those that couple the best of web3 tech with proven Web 2.0 revenue models.
5 tips for launching in a crowded web3 gaming market by Ram Iyer originally published on TechCrunch
Disdain for NFTs in video games is part of a slow green revolution
There has been stiff backlash against NFTs in video games since they first started popping up. In general, both gamers as well as industry professionals have disapproved blockchain implementations in video games, mostly over concerns over the environmental impact that the technology has.
But NFTs aside, the video game industry is often left out when we talk about industries that have a major impact on the environment. However, some in the industry have been taking steps to ensure that the industry goes greener.
With indie development growing more commonplace these days, the number of video games coming out every month is higher than ever. And as the industry grows, so does its impact on society. While indie studios are typically a risky bet for investments, parts of the cohort have attracted interest, especially NFT games in 2021. Given the impact the underlying technology has had on the environment, we felt it would be apt to more closely examine the entire video game industry’s impact.
Roblox beefs up its developer tools as it looks to a future beyond games
When I spoke to Roblox in 2020, the company was in the midst of rebuilding its entire underlying infrastructure. It had been running into issues with downtime due to insufficient resources to meet demand and needed to build a modern, cloud-native system to handle its growing user base.
But beyond the nuts and bolts of that system rebuild, Roblox had some ideas for their developer users as well. The gaming platform was also looking at its developer tool set and how it could prepare for a world where the venerable web browser was no longer its main delivery mechanism.
Roblox aims to democratize game development, letting its users build games regardless of their technical skill. You could be a 10-year-old in Peoria or a team of professional game developers in Tokyo — whatever your skill level or motivation, the idea is to provide a platform where people can build games.
But the company believes that the Roblox platform could have more uses and is building a new approach to accommodate the required flexibility while keeping it easy to use. By hiding the underlying complexity from less experienced developers and building a flexible new system for more technical users, Roblox is looking to move beyond games into other experiences like virtual concerts, commerce and more creative approaches.
“We look in some ways like a very specialized cloud provider, and our community comes in and builds all this stuff on top of it.” Dan Sturman, CTO, Roblox
We recently caught up with Roblox CTO Dan Sturman to get an inside look at how this project is coming together, the challenges of building a tech stack for the masses and the company’s foray into virtual currency.
Rethinking the tool set
While the terms “web3” and “metaverse” get tossed around quite often these days, especially when talking about a social gaming platform with a monetization engine, Roblox wants to avoid the jargon. Instead, the company wants to build a flexible platform that moves content seamlessly across device types, whether it’s phones, headsets or desktop computers.
“Metaverse is a term that’s been blown up and overused and it’s non-specific. But I tend to go back to these two core elements: 3D and social. There’s so many interesting things you can do when it’s a 3D environment. It’s within a collaborative sort of mode with some group of people — your friends, your colleagues, people with the same interests, whatever that is. Those two coming together, I think, have a ton of power behind it,” he said.
Blockchain gaming unfazed by crypto volatility as gamers ‘seek out entertainment’
The web3 gaming industry is one of the few sectors seemingly unaffected by current crypto market conditions, with capital continuing to pool into the space — and some industry players say it’s for good reason.
“The current market environment is funny,” Robby Yung, CEO of Animoca Brands, said to TechCrunch. “People have a tendency to couple crypto markets with blockchain games and content, but actually it’s only as appropriate as linking tech stocks on Nasdaq with the businesses of tech companies. There’s a certain correlation, but it’s tenuous.”
While the crypto industry was in free fall over the past few months, web3 games remained fairly stable. In May, over 1.15 million daily unique active wallets interacted with blockchain games, down just 5% from the previous month, according to a DappRadar x BGA Games report.
The number of active users “has nothing to do with the market,” Yung said. “You can argue it’s countercyclical because as we see in entertainment products, there tends to be more consumption when the economy is not so good because people will seek out entertainment,” he added.
While the future of the industry was in question amid the bear market of 2018, there has been tremendous validation and progress since then, Yung said. “The rest of the year will definitely be challenging, but I’m optimistic for the first quarter of next year.”
What the Binance bailout of Axie Infinity means for crypto’s future
The company behind Axie Infinity, a popular crypto play-to-earn game, raised $150 million in funding this week to help reimburse users who lost funds worth about $625 million in a hack last week. Axie Infinity’s creator, Vietnamese gaming studio Sky Mavis, had garnered wide acclaim for building the most-played NFT game of all time, with 2.2 million monthly active players, according to the company.
What’s interesting about this funding round is that it was led by crypto exchange Binance – the highest-volume exchange globally – although Binance hadn’t participated in Sky Mavis’ prior raises. More on that later, but first, some context.
Existing Sky Mavis investors, including Andreessen Horowitz, Paradigm, and Accel, joined Binance in this round to help bail out Axie, but once news of the hack broke, their involvement was all but expected. Those investors already had a financial stake in the game’s success, particularly a16z, which led the company’s $152 million Series B round last October. Sky Mavis earned a nearly $3 billion valuation during that round, signifying quite a bit of fanfare for a company that had raised a total of just $7.5 million five months prior.
The hack, which took place on Axie’s Ethereum-based sidechain, Ronin, marks the largest known crypto heist to date. It was a bad look not only for Sky Mavis, but also for investors like a16z that had hyped Axie as the future of crypto. It begins to look even worse when you consider the demographics of Axie players overall – over 25% are unbanked, the company said, and many are low-income workers in developing countries who rely on Axie for a significant portion of their income.
It took six days before Sky Mavis or any of its investors discovered the hack had occurred, which infuriated a lot of people, and once the company found out, it immediately scrambled for solutions. While Sky Mavis announced it was working with law enforcement to investigate the situation, it’s very rare for funds to be recovered after a crypto hack, let alone returned to users. The search process is just too complex, given that there’s no information about the hacker readily available besides the wallet address they used to transfer funds out of Axie.
It’s worth noting that the majority of the funds are still sitting in the hacker’s wallet, although the hacker did appear to move some 2,000 ETH out of the wallet to privacy tool Tornado Cash, which allows users to mask their wallet address while withdrawing funds.
So if Sky Mavis couldn’t track down the hacker and recover the funds that way, it had to think of other ways to make up the shortfall or risk the reputational hit of letting its users take a huge financial loss that stemmed from the company’s own security weaknesses.
Tap your community and the K factor to drive viral growth
Going viral is the dream, but most projects need a little push.
Mariusz Gąsiewski, Google’s CEE Mobile Gaming Lead, compares going viral to sightings of the mythical Yeti, the legendary snow creature that allegedly roams the Himalayas.
“Many more people are talking about it than really saw it,” he told TechCrunch, noting that viral growth comes in two types: “real” and “supported.”
“Viral requires advocacy,” said Gąsiewski, meaning that most viral products trickle up via various levels of acceptance. Products that gain “real” virality are usually built from the bottom up, with smaller groups finding and sharing them until they eventually break the barrier.
Bored Apes, for example, began in the depths of NFT subculture, eventually crossing over into the mainstream thanks in part to disbelief at the prices paid for the artwork and promotion from celebrities like Paris Hilton and Jimmy Fallon.
Supported virality, said Gąsiewski, is bought and paid for.
“It is more common, although still rare,” he said. “In this case, someone is trying to create a snowball effect through advertising, working with influencers, etc.” He said this variant has become more difficult to create as audiences become more media-savvy.
“Even hyper-casual games whose growth strategies were based on such idea[s] in the past do not work in that way anymore,” said Gąsiewski. “Their growth combined is with strong user acquisition (UA) activities.”
Formerly known as word of mouth, virality is the middle path, Solydaria creator Andrew Yakovlev said via email.
“It’s the hardest, yet least expensive, the path between the paid media ‘push’ path on one side and the content-based ‘organic’ ‘pull’ path on the other. Each of the three paths has their black, white and gray practices, their vices and virtues,” he said.
Yakovlev pointed to the K factor formula:
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k=i*c
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i = average number of invites sent by each customer
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c = average % conversion of each invite sent
In other words, given the size of the audience contacted, how many individuals responded and potentially engaged? Through a mixture of real and supported user acquisition, many marketers believe they can generate viral growth rates.