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#1: The DigiDaigaku Bowl

After four months of hype, web3 gaming company Limit Break successfully executed on its big DigiDaigaku Super Bowl “free mint” commercial. That’s not to say it didn’t manage to confuse viewers, both web3 natives and newbies. The ad itself, oddly a little simplistic and low-budget-looking for a $6.5 million Super Bowl spot, was primarily focused on getting viewers to scan a QR code for the promise of a “free digital collectible” — no mention of NFT in sight. 

A big part of the confusion was in the limitations of the giveaway. With only 4,000 “Dragon Egg” NFTs up for grabs from the QR code, those that tried to claim one after the collection was exhausted were instead redirected to Limit Break co-founder and CEO Gabe Leydon’s Twitter page, giving the promotion the air of a bait and switch to many. Another setback for Limit Break was in trying to appeal to a non-crypto native audience by offering something that required you have a digital wallet set up, something your average Super Bowl viewer likely hadn’t ever done before. 

The ad also wasn’t really set up to achieve its touted goal of “onboarding the masses.” With a Super Bowl commercial for Leydon’s previous game, Game of War: Fire Age, viewers were able to go download the game and jump right in immediately thanks to its F2P nature. With this promotion, however, there were 10,000 NFTs to giveaway and only 4,000 reserved for those who scanned the commercial QR code. With those being quickly minted by web3 natives with wallets ready to go, its unlikely any web3 newbies got their hands on an NFT at all. This means that all the ad really accomplished for the masses was directing them to Twitter and probably baffling most of them.

There’s no legitimate reason the ad couldn’t have led to a time-limited, but not quantity-limited, NFT minting except by design for reasons of scarcity. When you promise a “free digital collectible” by scanning a QR code and then direct most viewers to a Twitter raffle for 5,000 of them that requires following someone you’ve likely never even heard of, it can easily reinforce the impression that much of web3 still revolves around building hype and dangles promises of riches down the line.

As far as technical execution, Leydon said everything went smoothly, thanks to Limit Break’s preparations and an expectation of technical stress. After all, Leydon is no stranger to such stunts, having famously executed the Mobile Strike Super Bowl ad featuring Arnold Schwarzenegger in 2016 (and the Game of War one with Kate Upton before that). The DigiDaigaku ad did have one key advantage: it was the lone crypto-related ad to air during The Big Game, after numerous major crypto exchanges backed out of buying spots following the downfall of FTX. That made Limit Break’s stand out a bit more even though the company opted for the softer “digital collectible” terminology rather than anything overtly crypto or web3-related. Leydon has stated since the commercial that he believes at least from the technical side, giving away a direct mint for NFTs through a commercial is a huge game changer.

Knowing that the 4,000 NFTs would be claimed quickly, Leydon was prepared to take advantage of the huge follower gain by reserving 5,000 of the batch for a follow-up whitelist mint that required following him and authorizing a Twitter connection to the whitelist system. There were also 1,000 whitelist spots for current DigiDaigaku NFT holders to give them some priority in the process, for a total of 10,000 NFTs.

Without a playable product and a confusing string of promotions and events for DigiDaigaku dating back to Fall 2022, it’s hard to say if the promotion will successfully convert new participants. Among the already converted, however, the secondary market transactions have already hit $2.9 million, according to Cryptoslam, and will likely see another uptick around the airdropping of “Dragon Essence” NFTs and the final 5K giveaway. 

The floor price at time of writing hovers around $400, but it hit $700-plus in the hours following the ad. It’s not hard to imagine some of those lucky enough to score one just from scanning a QR code might be motivated to cash out for an easy win. Knowing whether to hold or sell can be a tricky proposition depending on how involved in any given NFT project a participant wants to become, especially so for Limit Break considering every NFT release from the company has either involved some form of minting process or airdropping of new NFTs. The upcoming airdrop of “Dragon Essence” is a perfect example, as it will be limited to holders of Genesis DigiDaigaku NFTs, Hero NFTs, and Super Villain NFTs with the the latter two being derived from a mix of special mints and airdrops for existing holders. 

The “Dragon Essence” NFT itself will likely need to be burned in the near future to convert the “Dragon Egg” NFT into an actual “Dragon,” meaning those new to the project who picked up a “Dragon Egg” will have to either decide to dive in further and buy a secondary market “Dragon Essence” or just sell the egg, which is more likely for an underwhelmed NFT recipient. Like many web3 projects, DigiDaigaku has yet to release or even reveal an official game, instead relying on hype and speculation to drive interest in its NFTs and an eventual product launch. 

At this point, it’s worth looking back at how the project has evolved so far to get an idea of where it’s going. 

The project publicly kicked off with a “free” mint of the Genesis DigiDaigaku NFTs, free being generous considering it required users pony up the  Ethereum gas costs to mint the collectible. But compared to its eventual value, many fans saw the Genesis NFTs as effectively freebies worth investing in. The free mint itself was already a bit of an attention grabber in a space dominated by high-cost mints, but the real attention draw was Leydon’s participation and subsequent promotion on Twitter. To those familiar with Leydon’s marketing impact on mobile free-to-play hits from the Game of War: Fire Age and Mobile Strike days at mobile studio Machine Zone, it seemed likely DigiDaigaku could be the real deal.

While the project’s roadmap stayed shrouded in secrecy, the company noted early on that the free mints were intended to be part of a “factory” model that let holders influence the future supply of NFTs through airdrops and exclusive mints. This promise of future rewards without just invoking ideas of staking lead to a mix of speculative buying and also true believers holding on tight to see what came next. It wasn’t too long before the first airdrop for Genesis NFT holders arrived in the form of new Spirit NFTs, with the utility of both remaining a mystery. 

The next part of the mystery was revealed with the release of DigiDaigaku’s “Questing” smart contract as a pseudo-crafting system. The first usage of the system was to allow for the creation of new Hero NFTs where the input NFTs would determine the type of Hero from three categories. If the input was a Genesis NFT and Spirit NFT that matched, the result would be a “Royal Hero.” If the two NFTs were mismatched it would be a “Warrior Hero.” And if the input was only a Spirit NFT and no Genesis NFT at all, then it would be a “Rogue Hero.”

All three options required staking the NFTs into the contract for one day and then the Spirit NFT would be burned and any Genesis NFTs would be returned alongside the new Hero NFT. This was the first demonstration of the “factory” model at work as more than just simple airdrops and also a driver of secondary market transactions due to the purported benefit to matching up the two NFTs.

The next stage of the project began with an NFT airdrop to existing holders, this time for both Genesis and Hero NFT holders. The twist was that the types of NFTs being held started to influence the new drops. Genesis NFT holders received two Dark Spirit NFTs, holders of Royal and Warrior NFTs received two Dark Spirit Hero NFTs, and holders of Rogue NFTs received one Dark Spirit Hero. 

It became clear that the chain of minting and burning would start to matter and rarity or “quality” was becoming a major factor. This again started to drive secondary trades as Leydon teased the next two elements of the project: Potions and Villains. Much like the previous Hero crafting system, the questing contract was again used to mint the next NFT, Villain Potions. Unlike the Hero mint, this only required a Dark Spirit of some kind to burn and instead of three tiers, there were two, Villain and Super Villain. Villain Potions required burning either a Dark Spirit or Dark Spirit Hero and a Super Villain Potion required burning one of each. 

As usual, it wasn’t exactly clear at first the difference between the two, but Limit Break seemed to suggest that a Super Villain would be better and more desirable. In another small twist, Villain NFTs weren’t airdropped but instead were available via another free mint, but with some whitelist opportunities. The trick here was that the free mint was for Masked Villain NFTs and one of the previously mentioned Potions was potentially necessary to convert or “reveal” the Masked Villain NFT to the actual Villain or Super Villain NFT. 

There was again three tiers of Villain NFTs and the bottom tier was an option to convert the NFT with no potion, but this was obviously going to result in a lower-value NFT. As a result, those who received a Masked Villain NFT free mint had to decide whether to sell the NFT masked, unmask without a Potion, or acquire a Potion NFT (assuming they didn’t already have one) to convert it, similar to the situation later on with the free Dragon Egg mints.

Up till now the two or three tiered result system was fairly simple to understand, but the different possible results for the “unmasking quest” had so many variables that Limit Break released a spreadsheet of all the possible “recipes” and outcome types to help buyers understand the system.  Villains suddenly had three types of potential attributes like weapons, enhancements and calligraphy, which will no doubt be important in future recipes. 

Veterans of web3 NFT projects will be no stranger to NFTs have varying trait attributes and how breeding systems can influence minting, but this level of ongoing complexity is likely overwhelming to new and casual participants brought in from a Super Bowl ad. The system for hatching the project’s sought-after Dragons has yet to be revealed, but there are already three tiers of Essence being airdropped with Genesis NFT holders getting the best, Heroes holders getting the middle tier, and Super Villains getting the worst. Of course, as is the case with many of these NFT projects, the higher up the pyramid you are, the better your airdropped rewards, which Limit Break made clear from its initial “factory NFT” approach. 

Throughout the evolution of the DigiDaigaku project, Limit Break has inked some interesting cross-promotion deals with other upcoming games. The first of these was with NFT game Castaways and required a special airdropped NFT key from Limit Break to participate. The second was with the now-defunct EtherOrcs game and also required a special airdropped NFT key. Both of these were special events meant to merge audiences across projects, and it definitely won’t be the last given Limit Break’s ambitions. 

The DigiDaigaku Discord also runs its own internal activities in the form of meme and trivia contests for “Digi Points” that can be spent in the “Digi Store” for emojis and bot command access on the server, a new norm for NFT Discord communities. All told, there has been a tremendous amount of social media marketing for a game that is not only nonexistent, but also devoid of even a hint of what the eventual product might look like. 

Having past experience as a game developer, Leydon has earned more trust than your average web3 project lead, but Limit Break has so far failed to offer a roadmap, whitepaper, or any of the usual teases that we’ve come to expect of blockchain games. This has put a tremendous pressure on Leydon’s personal brand to boost the perceived value of a seemingly endless chain of NFT minting and burning. There are clearly venture backers who see promise here and believe in the fuuture of the project, as evidenced by the $200 million the company raised last year. Yet that appears to only be fueling the speculative hype in lieu of any concrete details. Even overly ambitious projects like Star Atlas have shared more information than Limit Break at this stage. 

Whether the project does eventually deliver on the hype and have a significant impact on web3 gaming is unclear, but what we do know is that that DigiDaigaku will certaintly influence the future of web3 game marketing. In addition to the $6.5 million Super Bowl commercial, overall marketing costs are beginning to add up across art and smart contract development for new NFTs. That’s not to say Limit Break isn’t making any money from these drops, as it currently does receive 10% royalties from secondary market transactions. 

But so far, the overall trading volume and estimated royalty revenue of just $4.2 million, according to data from Cryptoslam, doesn’t even cover the cost of the company’s Super Bowl ad. So it’s fair to say Limi Break isn’t intending to subsist on royalties as its primary business model. 

Despite recently developing and releasing an open source smart contract library to help protect royalties, Leydon has indicated DigiDaigaku may shift to a model of sharing royalties with NFT holders. It’s clear the game intends to continue relying on this go-big-or-go -home marketing campaign to generate hyper and interest and drive secondary NFT sales. And Leydon has made a point of hailing the uncapped price potential of NFTs in contrast to traditional mobile gaming IAP. But if NFT sales at the moment are justifying the project’s apparent business model. 

Just for the sake of example, here are the floor prices for some of the different DigiDaigaku NFT types at time of writing on OpenSea: Genesis NFTs - $16,000; Spirits - $5,000; Heroes - $3,700; Super Villains - $1,200; Super Villain Potions - $1,400.

It’s difficult to evaluate the potential for such an opaque project, but it’s clear Limit Break is slowly building toward something greater, one NFT collection at a time. Whether its a long-term success or failure, we expect other projects to draw inspiration from DigiDaigaku over the next year. The concepts around free mints have already caught on and we could see some of the “questing” style of minting new NFTs replace traditional breeding concepts for some projects. We may also see some of the airdrop methodology replace traditional staking concepts for some, as Limit Break doesn’t seem to be interested in heavy-handed methods of preventing secondary market transactions. 

So far there is no indication the project intends to involve a fungible token or even a blockchain other than Ethereum, bucking trends around token economies and Layer 2 networks as well. Some comments from Leydon do hint at the possibility the actual game will launch as a formal mobile product, but that could require significant policy changes from Apple and Google in the future to accommodate web3 products. 

It’s still too early to tell whether the Super Bowl commercial has converted any non-believers over to the world of web3, but at least Leydon and Limit Break have gained new Twitter followers and Discord members to preach to. Given the backlash against crypto commercials in the wake of the FTX downfall, it’s understandable if a majority of viewers approach web3 gaming and NFTs with skepticism, especially with such a confusing redirect to Leydon’s Twitter account. Already, there’s been plenty of backlash against the stunt for what appears to have been an elaborate maneuver to boost Leydon’s brand. 

We imagine that like most marketing, the ploy was simply to drive curiosity and awareness as there’s no question that he can simply give away 10,000 Dragon Egg NFTs at this point. We can only hope, given the scope and backing of the project so far, that DigiDaigaku isn’t another web3 disaster waiting to happen, and to be fair Limit Break hasn’t directly asked for a single penny anyone but its investors. That’s promising, for now. 

Upcoming Game Announcements

• Wildcard announced a series of promotions and exhibitions starting February 23rd. (Link)

• Square Enix announced a partnership with Polygon for an interactive experience around its upcoming web3 game Symbiogenesis. (Link)
• Red Door Digital announced partnerships with StarLaunch and Solanium to expand NFT availability for Reign of Terror: Awakening. (Link)
• Phantom Galaxies airdropped rewards to those who completed the early access missions and minted their collectible Poster NFTs. (Link)
• Cross the Ages, a Polygon based TCG, opened a marketplace on Immutable X for cards. (Link)
• Shrapnel announced details for a free 10K SCU NFT mint with whitelist spots. (Link)
• MetaWars announced a closed tech demo for late February. (Link)
• PolkaFantasy launched a second beta along with with an exclusive Mana Cup Tournament. (Link)
• Pixelmon launched training adventures. (Link)
• Paradise Tycoon announced Genesis Chests leading up to the Genesis Land mint. (Link)
• Starfall Arena, a web3 MOBA, announced it will be launching on Arbitrum Nova. (Link)
• XP Foundry is migrating on-chain assets of its mobile game Rooniverse from Solana to ImmutableX. (Link)
• Titans of War, a history based TCG, announced it will be launching on Immutable X. (Link)

Live Game Announcements

• Sunflower Land released a new currency called Block Bucks meant to help save on blockchain gas fees. (Link)

• Worldwide Webb released its Battle Royale mode for PvP combat. (Link)
• Project Red, a mafia-themed FPS game, announced free to play weekends every other weekend. (Link)
• Galaxy Fight Club begins its $200K Cross-IP Championship competition on Februrary 19th. (Link)
• Decentral Games launched a Prize Marketplace for ICE Poker. (Link)
• Aurory announced a new Blitz Battle mode. (Link)
• Nine Chronicles is running its 2nd PBFT (Practical Byzantine Fault Tolerance) test from February 13th and ends on February 27th. (Link)
• The Sandbox announced its first land sale for 2023 called “Voxel Madness.” (Link)
• Aftermath Islands, a WAX based metaverse, announced new adventures. (Link)

Funding Announcements

• Tower Pop raised $2.1 million for a Omega Royale, a battle royale/tower defense hybrid in a round led byPlay Ventures. (Link)

• Nefta raised $5 million in a seed round led by Play Ventures. (Link)
• Ajuna raised $5 million for its web3 gaming platform for developers in a round led by CMCC Global. (Link)
• Soccerverse raised an undisclosed amount in a seed round led by Hiro Capital. (Link)
• Napster announced an acquisition of a web3 music startup called Mint Songs. (Link)

Ecosystem Updates

• Sequence announced a partnership with Magic Eden to integrate Sequence Wallet. (Link)
• MoonPay announced a partnership with LooksRare for easier payments. (Link)
• WeTransfer, a file sharing service announced a partnership with Minima to host NFTs. (Link)
• Bitcoin NFTs are now becoming a thing thanks to Ordinals. (Link)
• Discovery Sports launched an NFT Loyalty Program for NBA fans on Immutable X. (Link)
• Reddit mints 9M avatars thanks to a Super Bowl promotion increasing adoption. (Link)
• Paxos was ordered by NY regulators to stop minting BUSD for Binance. (Link)
• The Sandbox announced a partnership with ZeptoLab for game related experiences. (Link)
• Shopify has added more NFT tools for merchants. (Link)
• An NFT renting patent from Sony appeared from a filing in July 2022. (Link)

Notable Market Moves

• Both of the big winners here are two tokens that have been doing fantastic the last few weeks and suffered from very little dip in price: Render and Magic. Render token benefitted primarily thanks to the DAO passing a new tokenomics model called “burn-and-mint equilibrium,” which may result in more token burning overall. Magic got a boost from some good initial BattleFly traction and release of treasure tags alongside lots of other game updates from the Treasure DAO ecosystem.
• Illuvium also managed to move above BORA and WAX to take the bottom spot thanks to excitement around the announced Illuvitars NFTs set for release in March. We expect to potentially see the token increase in price if future betas manage to hype up expectations for the game higher.
• As always, we recommend looking at the long term and keeping in mind the evolving crypto market. This year is likely to see heightened crypto regulation, which will likely be a long-term benefit, but may have varying impacts in the short term.

Content Worth Consuming

• Account Abstraction For Web3 Gaming (Shima Capital) - “Account abstraction enables onboarding flows on par with that of web2. This approach grants developers the flexibility and control they need to create unique and personalized gaming experiences. Although many of today’s solutions offer very similar feature sets, here are a few must-have features:” (Link)

• Philippines Enamored by Metaverse Despite Many Getting Burned in Play-to-Earn Game Frenzy (Beincrypto) - “The Philippines has topped the list when it comes to interest in the metaverse and housing the most number of web3 gamers. According to new research by Coin Kickoff, the Philippines has the highest interest in the metaverse. Google searches from 193 different nations were analyzed in the study. The country recorded 2,421 relevant Google searches per 1,000 individuals.” (Link)
• Why Japanese game companies are going blockchain w/ Oasys (Blockchain Gaming World) - “Jon Jordan talks to Daiki Moriyama and Ryo Matsubara from Oasys about how the gaming blockchain is leveraging the growing interest in web3 from Japanese game companies ranging from Sega and Square Enix to Gumi and Bandai Namco.” (Link)
• Deconstructing Bored Ape Yacht Club’s Dookey Dash (Naavik Gaming Podcast) - “Axie Infinity marked the beginning of Web3 gaming season. But since then, the industry has not seen anything that comes even close to matching the excitement, engagement or adoption of Axie. With Dookie Dash, has Yuga Labs, the team behind many of the biggest NFT projects on the planet, finally built the next hit Web3-native game, and potentially even the beginnings of a Web3 gaming ecosystem? Your host Niko Vuori talks with Web3 analyst Thomas Pan to find out if Dookey Dash is the next big milestone moment in the evolution of Web3 gaming.” (Link)
• On-Chain Games ft Playmint, Curio and Citadel (FOGDAO) - “In this episode, we’re taking a deep dive into on-chain games with Playmint co-founder and CEO David Amor, Curio co-founder Yijia Chen, and Citadel Chief Economist Connor Skific. The three of them are building unique games on the blockchain. We go into what they’re building, why they are building it, where the complexities lie, and much much more." (Link)