One blockchain game gaining meaningful attention lately is Crazy Defense Heroes (CDH), which first soft-launched in late-2017 and is published by Animoca Brands. CDH is a mobile tower defense game and the second game in the Crazy Kings franchise (the original Crazy Kings tower defense game soft-launched in 2015). We’ll dig into the strategy in more depth below, but, in short, Animoca Brands is striving to blend free-to-play (F2P) and play-to-earn (P2E) not just together in one game but across the whole Crazy Kings franchise.

It’s a big and interesting ambition, and CDH is having a moment and experiencing a level of downloads it hasn’t seen in a couple years. According to DappRadar, it’s the 8th largest blockchain game in terms of active users over the past month (150k) and 5th based on the past week (123k). Plus, according to SensorTower, the Crazy Kings franchise has now exceeded 4 million total downloads across iOS and Android, and the majority come from CDH, which is clearly still growing.

Source: Sensor Tower

This burst of growth is driven by the recent shift to crypto, which picked up speed last year. In March, Animoca detailed the “Tower Experiment” in this litepaper, which explains the P2E pivot, the purpose of TOWER tokens, and the goal to build a “platform” of F2P games that all plug into the Crazy Kings franchise and all leverage TOWER. In May, Animoca began selling “TOWER Chests” which include Game Card NFTs that will be usable in a new upcoming PC-based tower defense game (where there are naturally fewer crypto / payments restrictions). And over the second half of the year, the team began rolling out more P2E features and reward pools for CDH players. 

We’ll dig into the tokenomics and the realities of building multiple games around the same token, but let’s first take a look at the gameplay itself.

A Brief Look at CDH’s Game Design

For full disclosure, we have been playing CDH for a long time! To put it simply, it is a fun and well executed F2P tower defense mobile game, but it’s no Plants vs Zombies either. That helps it garner a relatively healthy long-term (D30+) retention curve versus some of the best in the tower defense sub-genre, even though the game’s early retention still has a ton of room to improve. And it nets $50-100k/month in IAP revenues on average.

Source: Sensor Tower

Compared to other tower defense games that are more than 4-5 years old, there is nothing very unique about this game’s design systems:

  • The core loop is a simple battle -> progress -> upgrade one.
  • The meta systems are quite deep (many game modes, clans, heavy live operations, etc.) and what one would expect from a F2P game this mature.
  • There is a ton of content to play through, which keeps the game experience fresh and drives strong long-term retention.
  • Level design, difficulty balancing, and economy strategy is generally on-point, which keeps the game fun and drives respectable monetization.

What’s more interesting about the game design, though, is how Animoca has implemented P2E elements within the F2P loop. Since there are no definitive guidelines from Apple / Google about P2E, Animoca has been smart to take a risk-averse, light-touch approach. Not only does this approach help hedge Animoca’s bets against getting kicked off the stores, but it also helps the company maximize experimentation to extract learnings – all while operating in a platform gray zone and not impacting F2P revenues. Here is a quick overview of how CDH goes about it, but refer to this post for more details.

With all that context, it’s worth asking two questions:

  1. Who is Animoca targeting with these features?
  2. What is the metric impact of adding P2E mechanics to a F2P game?

For the first question, Animoca is clearly targeting tier-2/3 countries such as Brazil, Vietnam, and the Philippines after the introduction of the P2E mechanics. This is quite in-line with how other games like Thetan Arena have focused their UA strategies on similar countries. It should also be noted that CDH’s user acquisition is happening across iOS and Android, but there is no indication currently on whether these user acquisition efforts are profitable.

To answer the second question, there are a few observations:

  1. For Brazil specifically -
    1. Revenue volume increased, following increases in downloads due to targeted user acquisition.
    2. Average monthly revenue per download has moved up +31% after the inclusion of P2E, which could be due to either 1) better quality Brazilian users coming in through P2E-branded user acquisition creatives, or 2) the P2E elements incentivizing normal quality Brazilian players to IAP monetize on the F2P mechanics and increase their chances of “earning”, or 3) a mix of both 1 and 2.
  2. On a worldwide basis (since we weren’t able to extract Brazil-specific metrics), there is no significant change to downloads, revenue, revenue per download, retention, and engagement metrics before and after P2E. In other words, the P2E elements have not incentivized the majority of players in the game to engage / retain / monetize any differently with the game. However, this should be taken with a pinch of salt because the P2E implementation is really light / hidden, and targeted P2E user acquisition activities weren’t active in all territories.
Source: Sensor Tower

Further, Animoca itself has reported an increase in retention rates after the introduction of P2E elements. While the image below does not mention which territories saw this retention increase, a 2x increase to D7 retention is nothing to take lightly considering how hard this is to do in typical mobile F2P game development. But reading in between the lines of the 2x retention increase and the worldwide retention numbers above, one can conclude that Animoca has cherry-picked the retention data below, and it likely represents retention increases in territories where targeted P2E user acquisition activities occurred.

Source: Twitter

What all this tells us is that the light / hidden ways P2E elements have been designed into CDH’s F2P experience have minor-to-zero material impact on the game’s KPIs for worldwide audiences. However, showcasing P2E elements in UA videos helps attract a higher volume (and potentially higher quality) of audiences from tier-2/3 countries, which thereby increases associated revenue volumes.

Since we have no view on how profitable these installs are for Animoca, it would be slightly premature to conclude that showcasing P2E elements in UA videos for F2P games is a novel UA strategy. At the same time, we shouldn’t forget that this user acquisition isn't just onboarding players into CDH, but the Crazy Kings franchise, where the TOWER tokens can increasingly be used across games. It’s also possible that the current CDH community may become the seed audience for an upcoming CDH PC game. Therefore, there could be a few UA layers here to consider when thinking about profitability.

A Brief Look at CDH’s Tokenomics

According to the litepaper, TOWER is an “ERC-20 token on the Ethereum blockchain designed to be a medium of exchange, utility, and governance for the Crazy Kings franchise.” In other words, TOWER is earned by playing games in the franchise, and it can be used to purchase in-game items and tournament entry fees, as well as participating in governance (which we know little about at this point). TOWER isn’t built specifically to manage the CDH economy, but CDH will reward players with it and likely integrate it in other ways over time. It also runs on Polygon, a promising layer 2 ecosystem that we covered last month.

The TOWER token, despite its short tenure trading, has also seen wild volatility – lows below $0.01, highs above $0.14, and it currently trades for around $0.02. At the time of writing, that equates to a current market cap of $5.4 million and a fully diluted market cap of $230 million. That’s a big 42x difference in market caps that’s easily explained by the token issuance schedule. There is a fixed supply of 10 billion TOWER tokens, which will steadily release to various stakeholders starting last year and ending in 2026.

Source: Litepaper

Here is a look at the allocation among stakeholders. Nothing stands out as outlandish, but the P2E component does seem to be on the low side:

Source: Litepaper

Additionally, there are currently two ways to acquire TOWER:

  1. By playing Crazy Kings and CDH and earning it as rewards for various types of progress
  2. Via platforms like Uniswap where it’s paired with a handful of currencies, including ether

A third form of earning TOWER in the future – that admittedly we don’t know much about yet – will be staking franchise NFTs in order to passively earn tokens. Plus, as the new PC game comes out – another thing we’ll learn about in the coming weeks and months – it should provide yet another means of earning token rewards. There’s absolutely more to think through here: How will community rewards work? How will P2E work once all tokens are issued in a few years? How should governance work when the community is spread among different games? We’ll aim to keep you posted as any big, new updates emerge. 

What Does it Mean for the Franchise Ecosystem?

TOWER is still in the early stages of its development. It’s clear that Animoca wants to do more with the existing mobile games, the PC-based game will be quite important, and more DeFi features still need to be built out. It’s an unfinished ecosystem with big gaps that are hard to fully predict from the outside; we’ll need to learn more over time.

That said, Animoca’s unique approach to using one token across multiple tower defense games is an interesting proposition worth studying. It’s the kind of tactic that would likely never work across games with more complex economies (or across genres); after all, delicate economy balance changes in one MMO could completely screw up another CCG if they shared the same currency. Plus, imagine the nightmare of governance if different voting factions belonged to different games with conflicting priorities. It still may hold some risk for the Crazy Kings franchise – which also diverges from the popular dual-currency approach – but sharing a single currency may very well be possible across a handful of tower defense games, which all share the same specific subgenre and have much simpler economies to begin with. 

Having one currency is also beneficial to users in the sense that it’s easier to understand. Onboarding is already simplified given the games are free-to-play and available on app stores, but having one token be the source of rewards, spending, and staking across games likely reduces barriers to entry on the P2E side and even makes cross-selling more viable. Players, of course, still need to go into a browser to manage tokens which adds a step (not to mention using Polygon and crypto off-ramps), but the F2P and easy-to-starting-earning nature of CDH is likely a big part of why it’s shot up the ranks over the past month.

Of course, a single unified currency and/or platform isn’t unprecedented. Traditional publishers – with Ubisoft as the first mover – will likely create central platforms to house all their NFTs/token(s) in one place. And Gala Games, another example we covered recently, has Gala Coin, which can be used across its multi-game platform for various purchases, although most of its games also still have their own tokens, too.

Whatever the case, it’s good to see a fun F2P game not only become a popular blockchain game but be central to a larger ecosystem ambition. It’s impossible to judge the long-term success of these Crazy King franchise efforts without learning more about the upcoming PC game, but it’ll certainly be a great learning experience. It’s also unlikely that these tower defense games will attract players seeking meaningful income, but it’s still attracting players in less-developed regions, and it’s cool to see player-owned economies be embedded into a traditional type of game in a relatively simple way. There almost certainly will be bumps in the road – we’ve already seen tremendous volatility in the value of TOWER and historical downloads – but this is a story we look forward to updating you all about over time.

Aaron Bush and Abhimanyu Kumar wrote this essay.

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