Welcome back to Master the Meta by Naavik. Last Sunday's most popular links included: Polygon’s list of the best games of 2022 (so far), Derrick Strickland’s breakdown on MAUs for Steam, Epic, Playstation, and Xbox and Derek Lau’s piece on the six biggest challenges to launching a web3 game as a F2P developer. With that, let's jump into Wednesday's issue.

Crypto Corner #17 — Michael Sanders: Horizon Blockchain Games

In this Crypto Corner episode, Michael Sanders, Co-Founder and Chief Storyteller at Horizon Blockchain Games, joins your host Nico Vereecke to discuss:

  • What blockchain brings to gaming

  • The next generation of blockchain gaming wallets with Sequence

  • Blockchain trading card games with Skyweaver

  • The future of gaming

Key Resources: Episode summary | Youtube Video | Podcast. If you’d like us to discuss any other gaming-related topics, do reach out at [email protected]. We’d love to hear your general thoughts and feedback, too!

#1: The Role of The BD Manager in Blockchain Games

Source: Unsplash

These past few months as blockchain gaming has gone more mainstream, I’ve anecdotally seen a number of gaming jobs with unique web3 characteristics pop up: Business Development Manager, Community Manager, and Game Economy Designer, to name a few. While each deserves its own blurb, I’m going to focus on the BD role because it’s one that I’m most adjacent to in my job as a VC and at Naavik. What is the BD role? Why is this role important? And how might someone go about getting this role?

What is the BD role and Why Is this Role Important?

In a nutshell, the BD job is about forming partnerships with games – this is a sales-adjacent role with a ton of crossover in venture and product. Typically, we’re seeing these roles pop up in Layer 1’s / Layer 2’s like Polygon or Avalanche or on blockchain agnostic platforms like Opensea or Mysten Labs. Partnership objective at each company invariably differs, but the goal, which is to onboard users through games, remains the same. Let’s look at a few examples of how a gaming BD role might differ across companies.

  • At Avalanche, the primary goal for a BD manager is to get the most talented teams and studios to build on Avalanche in order to onboard users, driving activity and user growth to Avalanche. I’d break down their role as such: 1) analyze nascent game studios, 2) form relationships with key decision makers, 3) develop a nuanced case as to why the studio should build on Avalanche, and 4) persuade the studio to build on Avalanche vs. another Layer 1 / Layer 2.

  • To the contrary, the goal of a BD manager at Magic Eden is to drive NFT volume (new and existing users) to the platform. This can be accomplished through primary drops, the company’s game launcher, or to get even more creative, interfacing with studios to influence Magic Eden’s product roadmap directly for games – fractionalization of NFTs, lending, etc. Here, the BD manager would want to prioritize game genres and studios that have the potential to 1) drive primary market sales and secondary market sales but also 2) develop long-term, exclusive rights with the studios and publishers to take away share from other marketplaces. It also might be around chatting with studios about why Magic Eden is a better solution than a company building their own marketplace directly into the platform.

  • The BD manager at e.g Phantom Wallet will also have a different type of job. Their role will likely encompass developing key relationships with studios, understanding how best to integrate Phantom Wallet into the game’s economy, and pitching the revenue-driving portions of the business – like staking – to the studio. In this role, there will likely be a lot more product positioning vs. necessarily the analytical rigor in the other two roles.

While BD managers are not uncommon roles at traditional games companies, the unique nature of composability and relational products in web3 has elevated the role into something a bit different, involving analysis, product knowledge, and partnerships experience. Right now the focus is on relationships with studios that drive volume and influence product decisions rather than forming large partnership agreements between e.g EA and Xbox Game Pass (which a traditional BD role might encompass). There’s also a lot of optimism around gaming as an onboarding mechanism for web3, so the BD manager’s role has become a priority for companies across a variety of platforms to accommodate this enthusiasm.

How Might Someone go about Recruiting for this Role?

There’s a lot of excitement for these types of roles – Polygon’s VP of Gaming BD role on our job board was Naavik’s most applied to job ever on our job board. And for good reason – it’s a fun mix of technical, sales, and business that has the potential to influence a business’s trajectory (fwiw, as an example, Crabada did ~50% of Avalanche’s January volume, which speaks to gaming’s potential to drive volume). Especially if you’re not coming from a traditional BD background, here’s how I might think about strengthening the muscle for this role.

Based on the role and the company, investigate what are the most important levers to a business. We outlined a few above, but across marketplaces, Layer 1’s / Layer 2’s, and other platforms, the needs of the BD role might differ. To give an example for one, here’s a thought exercise I went through for a hypothetical marketplace company.

Example framework a BD manager might make for gaming partnerships

So now that we have a framework to leverage, how should we actually apply it to something more tangible? Leveraging the framework above, let’s create a weighted scoring criteria for a variety of games (note: the ratings and studio choices I use are completely arbitrary and are for example purposes only. Blank cells are undetermined information. It might also behoove us to include AAA publishers and esports teams in this matrix as well).

Arbitrary scoring criteria for a variety of games

Going through this scoring criteria, it’s easy to see what levers matter and what might drive leverage to your company / inform your approach as a BD manager. For this specific example above, I weighted NFT Transaction Volume as the highest weight because I think it matters most for a marketplace’s needs. In contrast, core game loop is weighted lowest because it’s often hard to determine this for pre-launch studios.

Next, we might want to zoom in on a specific studio and further develop an understanding as to why it makes sense to reach out to the team.

Example company spotlight a BD manager might produce

The flow from framework to scoring criteria to company spotlight is emblematic of the analysis a BD manager might go through on a day-to-day basis – they want to be choosing the best gaming companies to partner with. And so, from the company’s perspective, approaching a conversation with BD manager is also a pitch on why it would make sense to work together – you’re evaluating them for their ecosystem knowledge, product potential, resource capacity, etc. as they simultaneously evaluate you for fit.

The BD role is multifaceted, fun, and creative. If you’re thinking about pursuing a role in this space, there are a lot of amazing friends of Naavik hiring across a variety of companies. And if you’re hiring for this role, do get in touch – I’m sure we can find a ton of incredible candidates. (Written by Fawzi Itani)

#2: Gaming’s Great Convergence

Source: SuperJoost

After several spectacular years of growth, interactive entertainment is teeming with cash, creativity, and confidence. The question that is starting to emerge, however, is: where to next?

First, publishers have been eagerly looking to diversify their portfolios. Their dependence on the blockbuster successes of their major franchises — NFL MaddenGrand Theft AutoCall of Duty — pushed them to diversify their portfolios. And so they have. Activision Blizzard acquired King Digital to expand its addressable audience, and most recently Take-Two followed up on two earlier mobile acquisitions (Social Point and Playdots) with the $13 billion purchase of Zynga. They have also ventured further into more mainstream content development than ever before as evidenced by the release of the World of Warcraft movie and the announcement of an adaptation of Bioshock earlier this month.

Source: SuperJoost

The growth of the top US-based publishers has been formidable. A decade ago, Take-Two traded at $15; today its share price hovers around $160. Activision Blizzard’s share price increased from $12 to $80, and Electronic Arts grew from $16 to $125. On average, these game makers increased eight-fold and outperformed the S&P500 which roughly tripled in value during that same period. Not bad for a niche entertainment industry.

Platforms, as the second group of industry protagonists, have started bulking up. Apple, keen on growing its service-based revenue, invested around $500 million in its Arcade service and continues to foreground its growing gaming prowess during announcements and product releases. Its effort pales in comparison to Microsoft’s recent $69 billion acquisition of Activision Blizzard, but with $14 billion of annual revenue coming from mobile games, Apple and its ilk have a vested interest.

Other, well-funded firms are trying their luck to evolve into platforms. In particular, Epic Games, which is valued at $42 billion, has been eagerly gobbling up new assets to jumpstart its flywheel. Ranging from the $35 million purchase of Houseparty in 2019 to the recent purchase of Bandcamp, team Sweeney is not just trying to become a platform but a next-gen entertainment ecosystem. One wonders when Epic will announce its own music and film production labels.

Finally, non-endemic firms have stepped up their investments in gaming. Historically consumer-facing organizations have kept their initiatives modest. Even a project like Burger King’s release of several hamburger-inspired titles on the Xbox to promote its chain of fast-food restaurants was clearly a one-off. But today things look rather different as the growing number of non-endemic firms pushing into gaming is diverse and well-funded.

One sub-group in this category consists of adjacent entertainment companies. Over the past two years, we’ve heard an increasing amount of clamor coming from Netflix which has been hiring senior execs from the games industry to head its own internal division aimed at growing and retaining its subscriber base. Similarly, a film production company like A24 is showing increasing signs that it is exploring video games as a key growth area. And not to be outdone, Warner Music Group recently announced a collaboration with Peleton around a guitar-hero style cycling game and a partnership with blockchain gaming company Splinterlands. Oh, and this week we learned that Snoop Dogg has joined FaZe clan as one of its board directors as the “esports media platform” readies itself for a public offering.

Source: SuperJoost

A second subset is consumer packaged goods. Among the growing number of brands looking to reconnect with younger audiences via games, high-end clothing labels offer perhaps the most credibility. Cross-collaborations of fashion design showing up in-game and iconic game-couture mincing down a real-life runway present an obvious marriage between design-heavy industries.

The eager builders of emerging technologies form the third sub-category. They range from a startup-gone-wild like Sky Mavis that benefitted from the surge of attention for cryptocurrency and saw the popularity of its Axie Infinity skyrocket in just a few months to a big tech incumbent suffering an identity crisis like Meta. Despite their different business models, these would-be innovators all share the conviction that interactive entertainment will catalyze user adoption for their proprietary inventions.

These are but a few examples, obviously. But they illustrate that the momentum we see in the games market today is the result of three powerful and well-funded industry groups coalescing at the same time. Among other things, it explains why market concentration in the games industry has remained relatively low, despite an accelerating rate of larger acquisitions.

The Next Decade in Gaming

But it does bring some worrying long-term implications, especially around innovation. With an exacerbated sense of risk aversion, publishers have started to offset their dependence on only one or two franchises by expanding their IP catalogs. Embracer, for instance, has been on an absolute studio buying rampage. Take-Two regularly boasts it has 93 titles under development. Others are riding the brake. Activision Blizzard hasn’t made any meaningful acquisitions since King Digital nor released any credible expansions or replacements of past successes. And EA, well, it’s still thinking about things.

As platforms expand their first-party content and cross-platform capabilities, they are better insulated from market volatility. But it blurs the lines between their roles as platform holders and game publishers in the industry. In the short term, we’re told, existing titles will get equal access and marketing support. But what does that look like in five years? And, how much innovation can we really expect here? Platform holders are not known for their innovation.

With less to lose currently, non-endemics may yet offer up something we haven’t seen before. That depends, of course, on whether or not the commonly iron-fisted brand managers and solipsistic tech firms will allow for it. Their loyalty is with the mothership and content, whether interactive or otherwise, must serve the primary revenue model.

Abundant growth in combination with big firms’ risk aversion spells the onset of mediocrity. There’s a good chance that the dominant logic that governs conglomerates will come to serve as the playbook for strategy in gaming as well. Once the current momentum ebbs away, many of them will be tempted to manage for margins. Let’s hope not. (Written by Joost van Dreunen, originally published in the SuperJoost newsletter)

📚 Content Worth Consuming

2021 Steam Year In Review (Steam): “At the end of every year, our team sets aside time to review and assess the past twelve months and recalibrate our priorities for the future.This annual exercise gives us an opportunity to explain exactly what we spent our time on and why. It also lets us lay out a bunch of data and decisions in front of the broader PC industry, which we believe generate a useful feedback loop of questions, suggestions, and requests from game developers and publishers. Encouraged by those results, we’ve kept up the practice each year-- and now we have this 2021 Year In Review ready to share with you.Steam’s ongoing success is ultimately driven by two factors: the games available to players, and the quality of experience players can have with those games. In general, we direct our energy towards two goals: 1)Make sure PC games can quickly and easily ship on Steam, minimizing friction and maximizing developer control. 2) Provide games with a rich, ever-improving ecosystem of tools and features so that Steam is the best place for customers to own and play the game.” Link

Roblox’s Female Creators Are Building Virtual Empires (Input): “In a male-dominated gaming landscape, some female creators on Roblox appear to be thriving. Last year, 30 percent more female creators started using Roblox Studio compared to their male counterparts. But before we dive into what it’s like to be a female Roblox creator, there are a few things you should know about Roblox. First off, it’s a growing platform for young gamers. In Roblox’s “2021 in Data” report, the publisher revealed its userbase grew from 32.6 million to 50 million by November 2021. Users log onto Roblox from 180 different countries, with the United States, Brazil, and the United Kingdom as the top three nations with the most engagement time on the platform. A part of Roblox’s appeal is the fact that there is a seemingly endless supply of virtual “experiences,” which are often gamified. Last year, the median Roblox user visited 40 different experiences.” Link

How To Soft Launch a Game in 2022 (Matej Lancaric): “Launching a mobile game takes loads of work. After months of development, and production time, the soft launch period comes. Soft launch will provide you with the opportunity to test your server infrastructure and ensure it will be able to handle the load of a global launch.For free-to-play games, and especially for those with in-app purchases, it is important to determine how well the game will do globally and if it has a good retention profile and monetisation mechanics.Simply put, this will tell you if your game will be profitable and you should aim for a global launch or simply kill it. If you plan on looking for a publisher for your game, you should be aware that many publishers will look for some soft launch data before committing to any sort of monetary guarantee. Therefore, doing your own soft launch is highly recommended, as it will put you in a much better position during negotiations. In this post, I’ll be covering a few items that I believe are MUSTS for anyone in, or about to enter, soft launch. But before we start, there is something you can do even before soft launching your mobile game." Link

Reverse Engineering North Korea’s Gaming Economy: Intellectual Property, Microtransactions, and Censorship (Game Studies): “This article looks at the history of the North Korean video game industry and its reliance on piracy. Most video games sold in North Korea today are modified versions of popular foreign games. The extent and content of these modifications is analyzed through reverse engineering. This analysis reveals that modifications aim to adapt or implement monetization systems such as micropayments for the games and to censor sensitive elements in order to replace them with nationalist or socialist content. Pirated North Korean video games are thus shown to embed two diametrically opposed ideological directions: supporting the country's nationalist, post-colonial socialist ideology while at the same time fostering capitalistic consumption and profit-maximization.” Link

🔥 Featured Jobs

You can view our entire job board — all of the open roles, as well as the ability to post new roles — below.

Thanks for reading, and see you next week! As always, if you have feedback let us know here.

Don’t miss our next issue!

Sign up to receive the #1 games industry newsletter, straight in your inbox.