Good morning, and welcome to my first substack article. If you’re reading this, I’m truly appreciative that you’ve taken the time out of your busy schedule to absorb my thoughts.
Now, to work. Today I’ll be discussing the narrative of Blockchain Gaming, and where I see it going. I’ve spoken about this topic multiple times:
But never at length. Now, I have the chance to write out what I really think about the sector and where I see it going. To understand this sector, we must first examine the catalysts that brought this narrative up to the surface.
The emergence of the “Play-2-Earn” narrative
I believe that this narrative was catalysed by two key events that happened in 2021. Obviously, I’m not saying that these two events were the SOLE reasons. But I stand to believe that they acted as catalysts that set off a chain of events to where we are today.
The AXS bull-run
The re-branding of Facebook to Meta
The AXS bull-run showed crypto natives that tokens built on a game, could in fact succeed. People saw this and realized that maybe, just maybe, the play to earn narrative could have some merit behind it.
You know, I’ve only been here for 4 months. But even I knew what Axie Infinity was before I joined; So while naysayers can say “Oh, XXX game had pumped before Axie"; Well, I haven’t heard of that game and that makes it bad. But that’s just how the space works. The fact that Axie took up such a large mindshare of the crypto space, on top of having a working product and a token that made people rich, convinced many people that this “might be the next big thing”. And if you read any of Cobie’s articles, you know that the FOMO in crypto-verse is real. People soon started scouring the ground for “the next Axie”.
Now if the AXS bull-run onboarded crypto people to the narrative, the Facebook re-brand brought in the normies. When one of the biggest tech companies in the world says that they’re going to “focus on the Metaverse”, any institutional investor would have to be incredibly stupid to fade it.
So you can bet that every hedge fund VP was being made to research all they could on the “metaverse” - and lo and behold, SAND, MANA, and all the other coins that had some sort of VR narrative was the first thing that popped up on their Google search results.
Smart brands like Adidas saw the first-mover advantage and took it. (BAYC x Adidas). Other brands like Nike didn’t want to lose out in this game, and soon all other brands followed. We saw Coach, Pepsi, Stan Lee and so many other big names launch their own NFTs.
This domino effect basically brought the words “metaverse” and “play-2-earn” to the forefront of everyone’s minds. As of today, 2 Jan 2022, there has been thousands of “games” launched. And many more still in development. The narrative is now in full swing.
But the narrative is far from it’s peak; it’s only just begun
The technology solves many different pain points. In a world with lockdowns, the metaverse offers the opportunity for us to socialise without going out. In an era of influencers, brands can advertise their digital assets without even creating a physical product - just a few lines of code would do. And degens in crypto can now click buttons with better graphics. What’s not to like?
But the truth is, this is a nascent sector that lacks the tech to make any substantial product as of now. I mean, this narrative practically didn’t exist a year ago. There are a lot of problems, such as:
Metaverse technologies just aren’t there yet
This is a problem specific to those games that require Virtual Reality. Truth is, Virtual Reality is great but just not at the point where a user can spend 8 hours on it without getting bored. I’ve seen clips of Decentraland and people just look so bored.
The games aren’t fun
Games are incredibly complex systems that take years to design. A good triple-A game takes what? 2 years? I’m not too sure, but a quick google search tells me that the best games have taken more than 5 years to design and build.
Your NFT game where you connect to a website to stake and get $TOKENS can hardly be called a game. It’s just some quick cash. Wolf game has dropped from 5e to 0.9e. Wizards and Dragons, Vikings and Villagers and so many others have followed the same fate. They’re just quick cash grabs with no long term sustainability in mind.
The barriers of entry are too high to onboard normies
A hero in DFK costs around $300 USD to play. I can buy 5 triple-A games at that price. Metal Gear Solid V, a game that I absolutely love, costs 1/10th of the price of the hero. Come on, let’s be real. These prices are absolutely insane to the average gamer.
As it stands, DFK and many other games are just gamified click-farms. Again, degens in crypto are just yield-farming but with better graphics.
These are just some of the problems I see plaguing the industry. I mean, that’s just how it is innit? It’s a new industry; every game that goes to the moon is walking on the corpses of thousands of games that never took off.
But as an investor, a new industry offers investing opportunities like no other. Here comes the part you have been waiting for - what does this mean for YOU, and how can you capitalise on it?
Look for games that solve these existing problems
I believe that the Blockchain gaming sector will split into 3 different and distinct areas in the future.
Play-to-Earn (P2E) games; games that allow you to earn while playing
Currently, games like DFK and MAGIC are both “gamefi” and P2E in the sense that they allow you to earn while playing. But I sincerely believe that P2E is widely misunderstood right now. At its core, I believe that play to earn means that players have the ability to play while earning is just a feature.
For current Web2 companies like Ubisoft, they shouldn’t go down the route of introducing any sort of $TOKEN. All I want to see is the ability for my Rainbow 6 gun skins to be tradeable on some sort of marketplace; to be able to sell my skins for money. It costs nothing to the game developers but will allow gamers to finally reap some sort of monetary incentive from the games that they spend hours playing.
And so, I will be investing in games that focus on the fun-first aspect of the game. That’s the core idea: The game has to be FUN, and have close to no monetary barriers of entry. BUT, they have some feature that allows people to make money. Thus they can scale with volume and onboard large amounts of players easily. I don’t have an idea of what this looks like (yet), but I will know it when I see it.
Gamefi (Gamified Finance);
In the spirit of crypto, I believe that we’ll see tons of games trying to do what AXS has done. And since everyone is looking for the “next AXS”, you could probably do well if you just invested a bit into every gaming coin in existence.
Otherwise, I think you should focus on games that have some sort of strong team and community backing them. For games, the team is everything. A weak team = a weak game. Bet big on the teams you believe in, and just hold. MAGIC was one of those plays with a strong team. I’m sure there’ll be many more.
I’m still waiting for a game that truly simplifies De-Fi for the average normie, while still having LPs and yield farms in the back.
Metaverse gaming; games that focus on VR worlds (Sandbox, Decentraland)
I don’t like where we’re going with the metaverse. In my opinion, the biggest bull case for VR is just the simple fact of being able to talk to someone and interact with them in a virtual setting. Owning land and any other sorts of assets just seem to be putting the cart before the horse, but I may be wrong.
I will probably look to find VR coins that are doing something innovative - like VAIL has been pretty interesting lately, and the game seems cool. But ultimately, the best way to see if a game is good is to play it. I’ll definitely need to get an oculus sometime soon.
And let’s not forget that 2022 will be the year of brands and hype. FRONTIER has already announced a partnership with Ubisoft (note: partnership is different from development). But there will definitely be many more to come. These games will act as good investment opportunities as well; we’ve seen how that panned out with CloneX, BAYC and many more.
Ultimately, I believe that the narrative won’t go away anytime soon. I believe that 2022 is the year of the games; that we’ll see many projects succeed, and many, many more failing. The key to knowing which ones will succeed is to look at their product; and think for yourself: will people play this game?
Wow! If you’ve made it to the end, I’m super grateful. Honestly, I never liked writing articles because I found that I had to mimic some sense of “professionalism” - hence why I enjoyed twitter threading more. I could be waaaay more informal there.
But I realised that, well, this is my substack. And I’m just going to write in a way that I enjoy; because in the end that’s all that matters innit?
Anyways, I hope you enjoyed the read. I would like to take this chance to thank some wonderful people who pushed me to start this - hopefully I didn’t disapooint!
Thank you String, Knicksfan930, terv0, ellie, bodhi, fleet, fizzy, for saying that you liked my threads ^-^
And thank YOU, for reading this piece. Hope you took something away from it!