Top News
#1: Limit Break Breaks Fundraising Limits
The latest web3 title from Machine Zone founder Gabriel Leydon, Limit Break , has now raised $200M over two funding rounds. The latest fundraise announcement came with additional details around Leydon’s “new” take on web3 gaming — Free-to-Own. This model takes an approach that’s counter to the current NFT pre-sale culture in the same way Machine Zone side-stepped the race to $0.99 mobile games with F2P innovations many years ago. Much like with the previous pivot to F2P on mobile, free-to-own evolves the idea of free downloads into free NFTs, fully embracing the concept of democratizing digital ownership at scale. Limit Break kicked this off with the stealth mint release of its DigiDaigaku NFTs, which have since skyrocketed in price on secondary markets.
While you still may be wondering what exactly the innovation here is, it’s important to realize that Leydon’s strengths are in player psychology and marketing. Machine Zone’s first big hit, Game of War: Fire Age, was aggressively marketed to the point of using celebrities in commercials and became wildly successful as a result. With Limit Break, by giving away rather than selling the initial batch of NFTs, he is not only marketing the project successfully but also creating a core advocacy community of players who are much less likely to be disappointed by financial returns as they didn’t pay anything to join.
Between an interview given to VentureBeat and a Twitter thread he retweeted, a few more details emerged. First, and most obvious, there’s a strong emphasis on the ownership concept; it’s not just a giveaway but rather a free item that provides a real sense of digital ownership, the killer feature of web3 games that often brings about a stronger bond between a game and its community.
Additionally, just because some NFTs are free to mint doesn’t mean that all NFTs will always be free. Limit Break does intend to reserve some NFT assets to sell later as part of its business model but only after they have good financial traction on peer-to-peer marketplaces. It’s hard to say if this is a sound business tactic as the price Limit Break sells them for can’t be too high or it will look greedy, or too low and it will look like they are undermining the existing players. There are also other revenue sources, such as market transaction fees, and we imagine more yet to be revealed.
The other aspect being promoted as part of the free-to-own model goes back to CryptoKitties and the concept it pioneered of gaining new NFTs in some way by using existing ones. This model was both exciting and problematic for Axie Infinity as well in the form of breeding, a mechanism (which had a fee in this case) still used by many games as a way to let players drive the marketplace as a function of ownership. Limit Break referred to the concept as “factory NFTs,” which isn’t limited to just the idea of breeding. As Limit Break itself stated: “These Genesis NFTs lead to other NFTs through airdrops and more, none of which involve gimmicky fundraising tactics.”
Leydon released some additional details on Twitter, providing some clues as to how NFTs may fit into the system as well as announcing a September 2nd airdrop. It’s unclear just how much control players themselves may have over the NFT supply since the preceding quote implies that Limit Break will still be the one controlling distribution. Plus, the team also made it clear that the game developers are still very much in control over the game economy.
Much like the concept of governance tokens, in this model the game developer is incentivized to increase the value of the NFTs both for genesis minters and itself. That encourages keeping the NFTs scarce enough to avoid inflationary problems like the ones Axie Infinity ran into with overbreeding. We expect Limit Break’s free-to-own business model to become clearer as more information is revealed, but much like with traditional F2P, the models success will rely heavily on economy design. Like most F2P games, it must support users at scale while still converting some of them (the “whales”) into large revenue contributors.
Between F2P, P2E, P&E, P&O, and F2O, hopefully the industry will start converging on an ideal model for web3 and move on to better focusing on the actual game design. In reality, the ongoing evolution of these ideas is unstoppable, but Free-to-Own now has at least $200M backing it!
#2: Joyride Games Follows Solitaire Up With Trickshot Blitz
After releasing one of the quicker DappRadar chart-toppers in recent months (Solitaire Blitz), Joyride Games hit another success (at least by blockchain game standards so far) with the release of Trickshot Blitz on August 15th. As with Solitaire Blitz, the game is still targeting the short game, casual, mobile audience. Instead of being a card game, Trickshot Blitz is based on pool, with an emphasis on making trick shots, as the title suggests. Pool isn’t always the go-to for casual games compared to match-3 and merge genres, but Miniclip, for example, has seen pretty extraordinary success with its #1 game, 8 Ball Pool.
Trickshot Blitz provides the same utility token reward of Rally ($RLY) as Solitaire Blitz does. The token is more of a game ecosystem token and will continue to be used across Joyride’s games. There’s a max token supply of 15B, and 1/5th of that is already in circulation — meaning 80% is yet to hit the market. This provides some inflationary concerns — backed up by the significant price decline this year — unless demand holds up well to counter the rise in supply. We do note that the token value has steadily held between $0.03 to $0.04 since June, despite the second game being released.
Gameplay is centered around PvP competition with both single 1v1 matches and tournament brackets. Token-earning isn’t just distributed to winners of every match, however. The competitions that reward RLY from a prize pool require seasonal tickets to enter that can be gained through events and daily challenges, which at least gatekeeps easy token gains. Entry into competitive play also requires off-chain coins which act as a revenue source for Joyride games through ad watching and, tangentially, player referrals. This setup means the game requires a certain amount of dedication and skill to earn from the limited pool of tokens, but the game itself is still completely free-to-play and can be played casually without focusing on tokens. This begs the question of the purpose that tokens serve as they are given to such a limited audience, but the concept seems to serve more as a user acquisition play.
By promising the potential for on-chain rewards, the game is able to differentiate itself from other casual titles in the same genre. This is a tactic we expect to see commonly deployed as user acquisition on mobile becomes more difficult. Of course, there is still earning potential for skilled competitors willing to grind, but judging by the sudden drop-off in players just after peaking on August 23rd (88k to 16k in only 3 days per DappRadar), retention may still be an issue for those that aren’t capable of winning tokens. This is an unfortunate but expected downside of competitive earning models as skill is such a strong factor. This style of game isn’t going to transform the industry and will likely stay niche for some time, but it’s another example of experimentation, and we look forward to seeing how more casual games teams think about testing web3 functionality.
Game Announcements
- Veteran developers from Rockstar and Rovio announced a GTA-inspired web3 game called The Sprawl. Link
- Gods Unchained launched its daily play-and-earn system for GODS tokens. Link
- Splinterlands held its first SPS governance vote. Link
- Spider Tanks released Planetary Node Licenses for sale and announced an October 31st release date for the game. Link
- Galaxy Fight Club opened up play-to-earn mechanics for both free players and NFT owners. Link
- STEPN announced a partnership with football club Atlético de Madrid and digital asset platform WhaleFin to launch a co-branded Genesis sneaker NFT collection. Link
- Sunflower Land announced the launch of The Goblin War event on September 5th. Link
- Decentral Games launched its fast-paced Sit ‘n’ Go tournaments for ICE Poker. Link
- Illuvium released a large amount of game info as “leaks.” Link
- Dogami announced an upcoming tech demo for 100 users with token rewards on September 14th. Link
- Moonville Farms, a farming tycoon simulation game, launched its Pre-Alpha testing. Link
- Nova Rally, a WAX racing game, released an update with a new UI and token called CHARM. Link
- FantaVerse, a narrative monster-killing game, released a beta version. Link
- Neopets Metaverse launched a 4-week invite-only Alpha on August 22nd. Link
- Emergents, a superhero trading card game, launched a public beta. Link
- DeFi Land announced an upcoming mobile version of the game. Link
- Walking Dead Empires released a Pre-Alpha demo. Link
- Deviants’ Factions, an Immutable X trading card game, released a free Alpha. Link
- Pixion Games released the litepaper for its mobile game Fableborne. Link
- Richard Garriott’s NFT MMORPG released details including the name. Link
- Dice Masters launched its Decentraland-based RPG. Link
- Froyo Games announced an upcoming launch of its Gamebox Beta. Link
- Realms announced its first on-chain game, Eternum. Link
Funding Announcements
- Ready Player Me raised $56M in a Series B round led by Andreessen Horowitz. Link
- Temasek Holdings joined a $100M funding for Animoca Brands, adding to the ongoing funding round from January. Link
- Inworld AI raises $50M for metaverse AI characters in a round led by Section 32 and Intel Capital. Link
- Xterio, a mobile publisher, raised $40M in a round led by FunPlus, FTX Ventures, Makers Fund, and XPLA. Link
- Animoca Brands’ Japanese subsidiary raised $45M from MUFG Bank. Link
- Proof raised $50M in a funding round led by Andreessen Horowitz. Link
- Gallium Studios led by famed designer Will Wright raised $6M from Griffin Gaming Partners. Link
- Yesports raised $3.8M for its Web3 Engagement Platform in a funding round led by Spartan Capital. Link
- Fractional rebranded as Tessera and raised $20M in a funding round led by Paradigm. Link
- Koop raised $5M for an NFT fundraising platform in a round led by 1confirmation and Variant Fund. Link
- The Sandbox invested $1.7M in metaverse startup INDEX GAME. Link
- Polygon founder Sandeep Nailwal raised $50M to launch Symbolic Capital, a startup specializing in web3 startups. Link
Ecosystem Updates
- Xbox head Phil Spencer mentioned being pro-metaverse but cautious about P2E. Link
- Mythical Games is building an EVM-Compatible blockchain that may be used if “The Merge” on Ethereum doesn’t go as planned. Link
- Enjin has released a Developer SDK for Unreal-Engine-based games. Link
- OpenSea has seen a huge volume drop and fresh competition from SudoSwap. Link
Notable Market Moves
- Overall, most tokens followed the general crypto market downward this week. As usual, there are a few exceptions, but all the top 10 tokens finished in the red regardless.
- BORA performed the strongest — or rather the least worst — this week thanks to the September 1st launch of open world PC MMORPG ArcheWorld. BORA has been doing comparatively well recently and is one of the few tokens in the chart still running positive in the past year, with Gala being in a similar, even stronger, position just above it.
- Based on Axie Infinity’s AXS token performance, you wouldn’t even be able to tell that the game has moved fully over to Axie Infinity: Origin with Season 0’s recent launch. That said, AXS saw a small bump recently when the market noticed that a single wallet held half the circulating SLP (Axie’s in-game currency), but once it was revealed that the wallet belonged to a Binance bridge the price fell back down.
- It was a little surprising that APE didn’t see a small jump from the Snoop and Eminem Otherside-related performance at the VMAs, but this wasn’t anything terribly new and may have already been priced in. In fact, extreme optimism is very definitely priced in.
- This month, we’re keeping an eye on the upcoming Ethereum merge — aka shift to proof-of-stake. It should have a major impact on the fundamentals of blockchain games, but perhaps it’s a small step to eliminating the mass market’s concern about Ethereum’s high energy usage.
- As always, we remind you to look long-term, especially as crypto has already come a long way since the 2008 whitepaper and has a lot more growing to do. Regardless of short-term movements, it is pretty clear that this technology is entrenching itself more each year.
Content Worth Consuming
On average every web3 game has 40% bots (@LevanKvirkvelia Twitter thread) - “After analyzing 60+ games and services, we found 200,000 bots. On average, every web3 game has 40% bots.. we detect bots and multi-accounts by linking wallets belonging to the same person. We take a list of token holders, put them on a graph, and link wallets using our algorithm. The result is more like a petri dish!” Link
The Endgame of Web3 Gaming (Sam Peurifoy) - “In an alternate universe where Runescape was originally deployed as a web3 game, and such social collectibles were all instantiated as NFTs with secondary market trading character, it’s possible that their value to both the player and the game developer would be substantially higher. In a liquid and accessible market, I’d certainly choose to take a 4% royalty on secondary trades instead of selling locked cosmetics to players for $20 a pop. Then, my success would scale with the success of the game, instead of just incentivizing me to sell microtransactions and bail.” Link
What Do You Own - Axie Infinity Edition (Matt H) - “The wonderful irony here is that the main inspiration for Vitalik Buterin when creating Etherium, a side-chain of which is used to run Axie Infinity, was that World of Warcraft changed the attributes of his game character and how it helped him realise the horrors of centralised services. You couldn’t make this stuff up. Here we have a blockchain game amending asset attributes to balance their game, the exact same activity which Buterin found so disturbing. Ok, so Sky Mavis can balance my assets but at least they can’t take them off me… Unfortunately, whilst it’s technically correct that Sky Mavis cannot remove the NFT for your assets from your wallet, the reality is that they can still make your NFTs effectively useless. We need to go back to the Terms of Use to see what’s going on here.”
The Can’t Be Evil NFT Licenses (a16z Crypto) - “To help address these issues, we’re releasing a set of free, public ‘Can’t Be Evil’ Licenses, designed specifically for NFTs and inspired by the work of Creative Commons. The licenses are freely available for use by the community, and serve three goals: (1) to help NFT creators protect (or release) their intellectual property (IP) rights; (2) to grant NFT holders a baseline of rights that are irrevocable, enforceable, and easy to understand; and (3) to help creators, holders, and their communities unleash the creative and economic potential of their projects with a clear understanding of the IP framework in which they can work. Since most early-stage projects don’t have access to legal resources, we worked with some of the foremost IP lawyers in the web3 space to design six types of broadly applicable NFT licenses and make them available for all.” Link
Building Communities with a Unifying Vision (Derek Lau) - “For example, the unifying vision for the Guild of Guardians is to onboard millions of gamers into digital ownership and web 3 gaming. The shared, fundamental belief is that players should own their in-game items, and that we are on a collective journey to transform the gaming industry. And if we succeed, every community member will benefit, regardless of whether they care about the game, NFTs, tokens or something else. This unifying vision is also useful as a consistent, guiding light for making decisions. Trade-offs are easier to make when there is a goal that you are optimising for. And importantly, community members are more likely to support it, even if they don’t agree, or if in the short-term they may not benefit from it.” Link
A deep dive in NFT launch mechanisms (Konstantinos) - “The end of 2021 was euphoric for web3 games and NFT collections. NFT launches during that time were sold-outs, many times in seconds. Most projects put zero effort into structuring their NFT sale, slapping a price, and going along with the current. That is how our story begins. No-effort sold-outs abruptly ended in the spring when market conditions worsened. Gaming and NFT projects suddenly became interested in ‘the best launch mechanism.’ We are here to examine the mechanisms that have been explored and those that are uncharted waters.” Link
Variable Rate GDAs (Paradigm) - “VRGDAs provide a way to issue NFTs using nearly any schedule you would like while still allowing users to seamlessly buy them at any time. In the case of Art Gobblers, they allowed us to customize our community growth and UGC dynamics. In the case of 0xMonaco, it created a challenging and highly competitive game loop.” Link
What’s next for Play-to-earn gaming guilds? (The Metacast by Naavik) - “On this week’s Crypto Corner, Animoca Brands’ Jesper Lundquest and MMA Gaming’s Casper join your host Nico Vereecke for a conversation about Play-to-Earn Gaming Guilds. There seems to be a high chance that Play-to-Earn won’t work over the next years. What does this mean for the guilds whose existence depends on that business model? How can they reinvent themselves?” Link
How a design legend found web3 success (Deconstructor of Fun) - “This one is a treat! This week our stalwart host Ethan Levy interviews Graeme Devine, a true game design legend. From his groundbreaking work on 7th Guest and 11th Hour to Doom 3, to Age of Empires III and Halo Wars, to Magic Leap, Graeme has found success across many different platforms. Now, as a co-founder of QXR Studios, Graeme has added another notch to his belt with WAX-powered blockchain CCG Metropolis Origins. In this episode, we cover some of the highlights of Graeme’s illustrious career, how he found himself working on XR at Magic Leap and what attracted him to Web3. Most importantly, we discuss what he’s learned through the launch and operations of QXR’s first blockchain game in Metropolis Origins.” Link
