Top News

#1: Immutable & Polygon Team Up

At GDC, one of the most significant announcements didn't involve a game but rather a strategic partnership between two major web3 Layer 2 blockchain players. Immutable revealed the bombshell news during its GDC Keynote Event that it will partner with its current competitor, Polygon. The collaboration aims to merge Immutable's gaming expertise and Polygon's infrastructure to create a new Layer 2 chain based on Polygon's Zero-Knowledge Ethereum Virtual Machine (zkEVM) technology.

The current primary Polygon proof-of-stake chain supports the Ethereum Virtual Machine (EVM) for Layer 2 smart contract support but lacks support for zk rollups, whereas Immutable is the opposite. Zero-Knowledge (ZK) technology enables the proof of the validity of a bundle of transactions using math without revealing all the details, hence the name. This technology improves transaction scalability by minimizing the amount of data transmitted and recorded. The newer zkEVM technology aims to merge zero-knowledge proofs with the ability to execute smart contracts, which can improve the scalability of games with more on-chain features.

Although Immutable recently launched its Unity SDK to enhance development on its chain, it still lacks support for smart contracts executed via an EVM, limiting developers' on-chain capabilities. Immutable's current zero-knowledge tech is based on Starkware, so the new chain resulting from its partnership with Polygon would be a significant shift, but it would not replace the existing IMX chain. Both companies share the broader goal of expanding the Ethereum ecosystem as the foundation and increasing liquidity across layers. The zkEVM network would allow developers to easily migrate projects from both Ethereum Layer 1 and other EVM Layer 2 networks like Polygon's.

For developers who are considering using the zkEVM network instead of the regular Immutable X, there is a catch: gas fees. IMX is attractive because it allows for gas-free transactions, but this is only possible because gas fees usually cover the cost of processing smart contracts, which Immutable X lacks. However, the advantage for Immutable X is that gas fees will be paid in the $IMX token, which will finally give the token a practical use. Polygon also benefits from this arrangement because $IMX gas fees will go to Polygon validators that require staked $MATIC, thereby increasing the demand for Polygon's token.

Before the official announcement, Immutable was able to convince a few developers to join their new chain. One of these developers was working on a game called Metalcore, which was initially meant to leverage the speed of Immutable but eventually moved to Polygon to incorporate more on-chain elements with smart contracts. Despite this, Metalcore has had successful alpha tests that demonstrate its potential, and Immutable has used it as a strong example of what future games could achieve. With the introduction of the zkEVM, Immutable can now leverage both speed and smart contracts, making it a prime candidate for Metalcore to return to Immutable with ease. Another game that Immutable showcased was Shardbound, a turn-based tactical collectible card game from 2017 that is being revived.

After experiencing funding issues following its Kickstarter campaign and suffering a slow death on Steam Early Access, the original Shardbound found itself in decline. To address this, Immutable collaborated with the developer, Bazooka Tango, to transition the game to the web3 environment and potentially move it to the Epic Game Store. Given that Immutable launched the Immutable X network with a card game, Gods Unchained, it made sense to choose a similar and easily understandable genre to promote the new network. Immutable also revealed that it partnered with a third game, a futuristic arcade sports game called Infinite Victory, to be featured on the new network.

The timing of the announcement from Polygon coincided well with the beta launch of their own zkEVM chain mainnet, which occurred less than a week later on March 27th and following a successful testnet run that began in October. Observing the adoption and use of the main Polygon version of the zkEVM technology will serve as a good indicator for its performance and stability prior to the Immutable version. The Polygon zkEVM was launched successfully, with a symbolic first transaction by Ethereum founder Vitalik Buterin, and has already earned the commitment of various projects. Existing game Oath of Peak and the upcoming Dead Drop from Dr DisRespect’s Midnight Society will both use the network, and Horizon's Sequence wallet will also adopt it.

With the Immutable zkEVM network looking more like a concession on Polygon being a games platform, it’s good to see that there will still be some competition between the two networks for games. The big difference is that while Polygon will have a mix of games and apps, Immutable will be focused primarily on games. 

Despite having Polygon Studios primarily as a means to pull projects over to its chains, Polygon insists that infrastructure is the real focus and this partnership reinforces that. Despite the fact that Polygon Studios was initially created to attract projects to its chains, Polygon insists that infrastructure is its primary focus, and this partnership with Immutable further reinforces that. To showcase the mutual benefits of the partnership, Immutable invited Ryan Wyatt, the head of Polygon Studios, to speak about the partnership at the keynote event. Additionally, Immutable used the event as an opportunity to promote the benefits of their upcoming Passport system, which will simplify the onboarding process for games such as Metalcore. Between Passport and the Unity SDK, it’s clear Immutable wants to help game developers focus on game development first. 

With this alliance of sorts between the two big Layer 2 networks, other blockchains are feeling the pressure. There are two other big competing ZK technologies from Starkware and zkSync also vying for adoption and also helping promote zero-knowledge proofs as a must-have feature for future scalability. 

WeMade even recently announced a partnership with zkSync to extend its Wemix Play blockchain, and some Japanese investors in Oasys, like Square Enix, have been adopting Polygon due to the network’s maturity and readiness. With all these ever-improving Layer 2 networks building on the back of Ethereum, alternative Layer 1 solutions like Solana and Avalanche are increasingly looking more and more inadequate, especially considering Ethereum is so core to NFT volume.

While there are still scores of web3 games still in the development phase, there will be plenty of blockchain options to choose from going forward, especially when building for EVM networks. It is unlikely that there will be any clear winners in the near future, but the fact that two major players have found a way to collaborate should keep the industry healthy for the time being. With advancements in tech making development and scaling more accessible, the biggest challenge facing game developers now will likely be funding.

Game developers who have not managed their funding properly may encounter runway issues this year as venture capitalists tighten their purse strings and reconsider extending their support. Both Polygon and Immutable have made significant contributions to the gaming industry in order to attract developers to their respective blockchains, but it remains unclear how competitive this funding landscape will be moving forward and how much of those funds will remain available.

#2: BAYC's Power-Packed Metaverse Returns

Yuga Labs has been busy with a number of BAYC projects lately, with multiple new initiatives rolling out over the past month. Those include the opening of the “Power Source” NFT mint and a Second Trip event to Yuga Labs’ metaverse platform Otherside.

The Power Source mint is available to individuals who participated in the Dookey Dash competition and achieved high scores with their Sewer Pass NFTs. For those who are not familiar, the Sewer Pass NFT was given out to BAYC/MAYC owners and allowed them to play the endless runner game Dookey Dash for a limited time to earn high scores, which were then recorded in the Sewer Pass NFT metadata.

A player's performance in Dookey Dash was converted into a Power Source NFT for the next stage of the project's NFT rewards. The type of Power Source NFT minted is dependent on the ranked score of the Sewer Pass, with eight different types available. In addition to the score achieved in Dookey Dash, the metadata for Sewer Passes includes an additional mystery "Companion" trait that is passed on to the minted Power Source NFT for some users.

Yuga Labs has finally revealed the mystery behind the Power Sources' utility. These tokens contain an HV-MTL Mech, or Heavy Metal Mech, with eight different types that correspond to the Power Source type. The mech types will be unveiled in early April, marking the beginning of "Evo 1" in a journey towards "Evo 2" that will commence in May.

Although we still don’t have a clear indication of where the project will eventually lead, the HVs (pronounced "Heavy") will evolve based on player decisions across multiple trait combinations. The "HV-MTL Forge" will include components such as blueprints, materials, and upgrade crafting, and player choices will determine this evolutionary process.

Meanwhile, Yuga Labs ran the “Second Trip” to Otherside on March 25th following the success of the prior “First Trip” event. While Otherside is meant to be Yuga Labs persistent “metaverse,” it has so far consisted of single-day access to custom designed multiplayer experiences similar in approach to Fortnite concerts. These experiences are designed to showcase the tech of Improbable, the U.K. gaming infrastructure company and Yuga’s partner on the project. 

This event managed to pack in over 7,200 simultaneous visitors, exceeding the 4,500 of the First Trip, thanks to a guest pass system allowing Otherdeed holders to bring a friend. It also helped that unlike the first experience, this one didn’t require a download and could be accessed through a web link. Joining the event took visitors to what Yuga Labs called “Infinity Space,” featuring a variety of art styles, environments, customized avatars, more accessibility, and new game mechanics. 

During the event, participants were divided into four teams led by influencers Brycent, Jimmy Wong, Champ Medici, and Lowbellie. Teams competed in various point-scoring challenges, such as collecting golden "magic blobs" and navigating a giant blue pyramid. The event culminated with a dramatic scene in a desert with a sprawling dinosaur boneyard and an enormous monster appearance. 

Much like the First Trip, the overall vibe of the experience was like an interactive virtual concert more than an actual online game experience. The purpose of the experience is to demonstrate both the interactive player scaling capabilities of the technology and Yuga Labs' progress in experience building. Otherdeed holders also got a second chance to pick up a First Trip Obelisk piece, which was added to their Otherdeed NFT metadata.

Yuga also launched a new 2D strategy game called Legends of the Mara (LOTM), which helps progress the narrative and picks up after the events of the Second Trip into Otherside. LOTM is a collection-based game that explores the lore behind Otherside’s Koda creatures. The Koda showed up as rare tokens associated with Otherdeed land plots that could be decoupled and traded. 

In early April, Otherdeed owners will have the opportunity to claim a "Vessel" NFT that will transform into a "Mara" creature NFT for this specific game. What's important to note for future gameplay is that the Mara creatures will have three different roles: farming (to gain resources), enchanting (to gain buffs), and hunting (to defend land).

Although it is not clear how the gameplay will work, the game's website mentions that Maras will ingest "Sediment Fragments" harvested by Kodas and Farmer Maras to develop different traits while evolving into a KodaMara by ingesting a Seasonal Catalyst with traits of its own to adopt. Based on this information, it seems like the overall game design will center around resource management, with NFTs transforming in various ways toward an unknown goal.

It’s now clear Yuga Labs  is building up an entire universe of projects revolving around BAYC and Otherdeed NFTs with plenty of lore and mystery involved. Yuga Labs, which began as a high-priced PFP NFT project, aims to generate interest in owning these NFTs to maintain the value of what was originally a straightforward procedurally generated image.

Despite the variety of experiences like Dookey Dash, Otherside, and Legends of Mara, Yuga Labs hasn’t really demonstrated much in the way of game design or production skill so far. Dookey Dash is the closest thing to a real, working video game and yet it a short-term and extremely derivative experience, despite the connection to novel blockchain tech. With the short game-like experience provided in the Second Trip, it seems as if Yuga Labs is aware its rather simple experiences don’t quite qualify as full-blown games yet.

Yuga Labs is exploring similar territory to Limit Break with the Sewer Pass and Legends of Mara, offering airdrop-like NFT claims and crafting-style mints that enable the combination and shifting of NFT traits. This development seems to be a natural progression for many NFT projects based on four key concepts: minting, burning, trading, and modifying.

Unlike Limit Break, however, many of these project developers lack experienced game developers to transform NFTs into something more interactive and enjoyable. Yuga Labs, on the other hand, has Improbable’s multiplayer tech to create large-scale shared experiences, even if this cannot be considered a true metaverse platform without eventual interoperability or external connections. In the meantime, Yuga Labs has managed to maintain high NFT values across BAYC, Otherdeed, and now HV-MTL, the latter of which has already seen almost $17 million in trading volume in just two weeks.

Upcoming Game Announcements

• Dead Drop’s released a playable “Snapshot V” with more pre-alpha access via Tower Key NFTs. (Link)
• Splinterlands launched beta access of its Soulkeep tower defense game for high quantity NFT holders. (Link)
• Nexon announced MapleStory Universe will be on Polygon and released info from its GDC talk. (Link)
• Chainmonsters announced personal islands for Q2 featuring housing, workshops, and farming. (Link)
• Neopets Metaverse ran an open alpha for the Polygon GameOn event. (Link)
• Superior released an early access update with 20 new powers and more. (Link)
• Civitas revealed details of its Ever Crystals critical to land gameplay. (Link)
• Walking Dead: Empires released a new public playtest with expanded features. (Link)
• Worldwide Webb began its Season 0 launch event. (Link)
• Square Enix revealed 10,000 different characters for its upcoming game Symbiogenesis. (Link)
• XLGames opened pre-registration for MMORPG ArcheWorld. (Link)
• Portal Fantasy announced a partnership with Polygon and unveiled a new roadmap. (Link)
• Hunters On-Chain went live on the Polygon testnet. (Link)
• Evermoon announced a partnership with Immutable to scale its MOBA. (Link)
• Delabs revealed a lawnmower racing game, Rumble Racing Star unveiled. (Link)
• 9Lives Arena, a 1v1 PvP fantasy game, announced it will be joining Oasys' HOME Verse. (Link)
• MetaKing Studios announced a partnership with Polygon Labs for Blocklords. (Link)
• Gran Saga: Unlimited's 1st Community Test went live for eligible testers. (Link)
• TreasureDAO announced ZeeverseGame, a F2P monster-tamer MMORPG for Arbitrum. (Link)
• THNDR released a new bitcoin earning puzzle game, Bitcoin Blocks. (Link)

Live Game Announcements

• Gods Unchained released a new card set, Band of the Wolf (Link)
• MetaOps, a cross-chain FPS, officially switched to Free-to-play (Link)
• Cards of Ethernity's launched its Pre-Season Ranked Tournament (Link)
• Undead Blocks added weapon NFT renting support for passive earning (Link)
• Kongregate expanded the Bitverse universe with an exclusive gaming experience in The Sandbox (Link)
• Blast Royale ran a free mint for its new Corpos NFTs (Link)
• Aavegotchi introduced its own gaming chain, Gotchichain built on Polygon Supernets. (Link)
• ICE Poker released an update with player levels integration, assigned seating improvements, and more. (Link)

Funding Announcements

• CCP Games raised $40M to build a new web3 game in the Eve universe in a round led by a16z. (Link)
• OP3N raised $28M for its web3 social app in a Series A round led by Animoca Brands. (Link)
• Limit Break acquired the free NFT minting platform FreeNFT. (Link)

Ecosystem Updates

• Lamina1 has announced an early access program for partners including HTC, Dubit, 0.xyz, and Neon Media. (Link)
• Epic Games revealed that around 20 more Web3 games will be added to the platform. (Link)
• Game7, YGG, Magic Eden and Fenix Games announced a Web3 Games Collective. (Link)
• Magic Eden released a new web3 gaming hub called Magic Eden Games. (Link)
• Information leaked showing Microsoft may be testing web3 wallet integration in Edge. (Link)
• A16z announced the launch of SPEEDRUN, a 6-week startup school for gaming devs. (Link)
• Moxy announced Season 1 of its “eSports for All Beta Challenge” with a $100k USDC prize pool. (Link)
• Dapper Labs announced wallet-less onboarding for the Flow blockchain. (Link)
• IndiGG announced a $200K esports championship. (Link)
• Animoca Brands announced a partnership with Hex Trust to launch Gryfyn, a multi-chain custodial wallet focused on NFTs and player onboarding. (Link)
• Oasys announced a giveaway of 1K Virtua Fighter NFTs. (Link)
• RLTY, a metaverse event company, announced a partnership with Ready Player Me for avatar support. (Link)
• Wemade announced a partnership with another South Korean blockchain, Near. (Link)
• Polygon Labs announced a partnership with Unstoppable Web to launch .polygon domains. (Link)

Notable Market Moves

• Most of the market followed general crypto in a mid-week downturn before returning back up. Unlike Bitcoin and Ethereum however, most gaming tokens ended up near or just below where they began the week with a few recovering a bit less.
• MAGIC suffered the most this week, failing to recover from a mid-week dip. The pessimism around the token may have been a result of the Treasure DAO giving away MAGIC as part of an AI Arena tournament. There is also a focus on Arbitrum shifting temporarily to Arbitrum token airdrops, some of which Treasure DAO announced it would be giving away.
• RENDER also lagged a little in recovery, although at this point it’s mostly just some of the early 2023 hype calming down after some price corrections. Render Network has been attempting to ride some of the AI coattails lately which may or may not pay off in token prices this year.
• ApeCoin was the best performing token of the week thanks to the successful Otherside Second Trip test, trading excitement around the HV-MTL NFTs, and Legends of the Mara info release detailed this week. Given some of the recent momentum behind the projects, we expect it could see some price growth if more utility can be provided in the short term with events like Dookey Dash. 
• As usual, we recommend looking and thinking long term. This week the market mostly broke even, but continued fear and instability around banks and the financial sector are likely to influence the entire crypto market, including games, going forward. 

Content Worth Consuming

• How a crypto skeptic is making Web3’s most anticipated game (VentureBeat): “I still am very skeptical of what’s happening in web3 on a general basis. There are a lot of problems with it. But a year and a half ago–we had been working on this game Wildcard, which I’ll tell you more about, but fundamentally it started five-six years ago with this vision Katie and I had to build a game that was as much fun to watch as it was to play. It could bring together competitors and their audiences in a new way that hadn’t been done before. This is inspired by things you’re all familiar with: what’s been happening on Twitch and YouTube and streaming platforms. We started to see this happen with gamers and our audience six years ago. In some cases we had people who were watching people play our games more than they played themselves. This was something new.” (Link)
• Redefining Investment: A VC's View on the Metaverse, Web3, and DeFi (Economics Design): “In this video, we sit down with Alex Wettermann, from Shima Capital. He has extensive experience in the world of tech investment. We interviewed him to get his view on the exciting new investment opportunities emerging in the metaverse, Web3, and DeFi. Join us as we delve into the cutting-edge technologies and trends shaping the future of investment and explore the potential risks and rewards of this rapidly evolving landscape. If you're an investor or simply curious about the latest developments in the world of finance and technology, this video is not to be missed!” (Link)
• Making New Innovations on the “Play to Own” Model (XPLA): “We learned that if we let the users have ownership and if they get rewards, this had to be behind a significant gameplay gate. We must ensure they are gamers before giving them awards to make it sustainable. Also, we learned that we have to be able to have more control over the system, such as over how much total rewards we are distributing to the users and the conversion rate between the tokens and in-game currencies, to make this work, and we built additional systems to support this.” (Link)
• First Light Games on taking NFT games mainstream (Blockchain Gamer): “Free-to-play to might sound bad on paper, but actually, if you can play all these games for free and they’re high quality, then it turns out that once you’ve played this game for a little while, you’re going to be more likely to monetise, because you’ve realised the value it’s given to you. I think all of these things can be solved. It’s early days. People say there’s a large pushback, but is there? I think the fact is, there’s hardly anything to get excited for. As soon as you start having a few really strong titles that are good and that you can play, and you just think they’re fun anyway – then the rest of it will start to unlock. I don’t think it will be immediate, but I do think it will happen at some point because there are a thousand blockchain games in development, if not more. We got into the space because it’s a marathon and not a spring. And learning this is really important.” (Link)
• Progressive De/Centralization: A Playbook for Building Decentralized Applications (Kydo): “To address these challenges, I will introduce the Progressive De/Centralization Playbook, a series of steps that builders can take to achieve decentralization while not directly violating regulatory requirements. This approach (at a high level) will maintain decentralization and product agility while ensuring regulatory compliance. This playbook would be most helpful to founders who have not spent a large amount of time following different governance activities/dramas.” (Link)
• Polygon and Immutable zkEVM Partnership w/ Sandeep Nailwal & Robbie Ferguson (Bankless): “David interviews Polygon Co-Founder, Sandeep Nailwal & Immutable Co-Founder Robbie Ferguson on their new zkEVM Partnership. The three dive into the announcement, what it means for IMX and MATIC, how this partnership impacts the future of web3 gaming, and so much more.” (Link)

A big thanks to Devin Becker for writing this update! If Naavik can be of help as you build or fund games, please reach out.