Why is Gamified Economy going to replace Economy in Games?

原文标题：《A&T Capital:Gamified Economy开启通向元宇宙的大门》

原文作者：Jasmine与Steve，A&T Capital

Blockchain game was born from BTC network, thriving on ETH, after &nbSP; EOS  The brief silence on Tron and BSC, SOL, AVAX, NEAR and other emerging public chains are fully active. The wealth effect of the new public chain will lead to the development and deployment of new games.

Compared with traditional games, chain games are in the early stage of user immersion experience and playability. Because NFT and collectibles of linked games have pre-publicity properties, ecological products and tokens have performed well in the secondary market of some games before they are officially launched, such as My Neighbor Alice on BSC and Star Atlas on Solana. But a stronger experience and immersion are needed to make the metasverse a reality.

The development of chain games is closely related to external mobility, game mode design and community operation. Among them, Axie, the most successful chain game in 2021, set off a new model of P2E. Gamified Economy will eventually replace Economy in Games because it brings a different model to traditional Games and allows players and communities to be more involved. It also provides an alternative income for unbanked users in low - and middle-income countries such as the Philippines, Indonesia, Venezuela and Brazil.

Online gaming is very important. YGG, a Filipino head miner, also received investment from Delphi Digital and A16Z. At the same time, YGG holds a lot of NFT assets in the game category, and also makes some early investments in some game projects. So far, the returns are considerable.

Axie is a phenomenon-level chain tour, success is inevitable among many accidental factors. Axie has many advantages over P2E imitation mode. At present, the head effect of chain games is obvious, and the profit model and development space of middle and tail projects are general.

Gamified Economy A new game Economy model will eventually replace Economy in Games

Video games have always been "big-business," from the emergence of arcades in the '80s to the awakening of casual mini-games in the' 90s to the recent coronavirus-fueled boom that has seen on-screen interaction become the world's most popular form of entertainment.

According to statistics, the annual direct revenue of the global traditional game market in 2021 is between $175 billion and $200 billion, 21% higher than 2019 before the global epidemic. More than a third of the world's population (between 2.7 and 3.1 billion) are gamers, and the average gamer spends four hours a week playing games. In this article, by comparing traditional games with chain games and reviewing the evolution of chain games, we will explain why we believe crypto games have the obvious potential to revolutionize the game landscape.

In terms of player data, the geographic distribution of global players is almost correlated with population distribution, but we noticed a huge gap in the distribution of spending on games. Three countries (China, the United States, and Japan) together account for less than a quarter of the world's population, yet account for 52% of global gaming revenue; The ten countries that contribute 69% have only 29% of the world's population and, except For China, are broadly defined western developed countries.

A study of game per capita income in the chart below shows that, with the exception of China, Japan and South Korea (where games are more culturally important) and India (where games are less culturally important), most countries/regions earn between 0.1% and 0.15% of GDP per capita from games.

It is worth noting that the star of this chain tour & NBSP; Axie Infinity  And YGG's creative team are all from the Philippines and Indonesia, where per capita game revenue as a percentage of GDP is comparable to that of western developed countries. These two countries have low GDP per capita, but they spend almost as much on games per capita as the developed world. In addition, Japan and South Korea are among the top three in the following table, which is worth paying attention to.

In terms of the gaming market, it grows in waves, adapting to each new generation of players and their respective gaming habits. There are several ways in which traditional game markets drive spending, retention and ultimately profit.

Initiatives driven by reducing barriers to entry for games (" Pay-as-you-go "arcades, consoles, game streaming, free-to-play, casual and super mini games, etc.)

By targeting certain common human behavioral traits (peer pressure in social games, loot box use/gambling, collectible hoarding, mindless spending)

The Sunk cost fallacy trap, aimed at the human psyche (People decide whether or not to do a thing not only by its merits but also by the sunk investment in it in the past). And 2. The mind projection fallacy trap (in which one believes that his view of the world reflects the truth of the world, and one projects his own feelings onto the real world).

Today, gamers will be influenced by new technologies and new economic models, and will increasingly seek engagement, transparency and creative freedom. The old way of getting customers may not work anymore. In the early days, any game had a predictable life cycle, starting with launch, winding down, and finally closing down. Throughout the game, the player's sense of engagement is almost zero.

However, blockchain games are very different. The community has a strong sense of participation through the incentive of tokens, and can influence the development process of the game through governance tokens. As long as the community wants to develop the game, the game will continue to develop. We are currently observing the beginning of a new generation of games driven by a new token economy.

A new generation of gamers will be play-to-earn instead of pay-to-earn, and these Games will be Gamified Economy instead of Economy in Games.

The significance of chain games can not only make the blockchain industry take off, but also change the rules of traditional games. Its inherent continuity will further reduce the user threshold, the community and the game is more tightly bound together, which is more important, it will be able to provide a means of all games stakeholders (investors, producers, developers, distributors, gamers) can be in this way from the key to the game and economic success of mutual benefit. This alignment of interests will allow unexpected economies of scale in the gaming market and ultimately change the rules of the game.

A brief history of blockchain gaming

Stage 1:2012-2017 -- from SatoshiDice to Crypto Kitties -- the earliest model of chain games

In a sense, the development of blockchain has driven the development of on-chain games. Back in 2012, three years after the birth of Bitcoin, the first bitcoin-based chain game -- SatoshiDice was born. Created by Eric Voorhees on Bitcointalk, the game involves betting on the size of bitcoin's blockchain.

The game, which at one point accounted for half of all bitcoin transactions in 2012, was eventually sold in 2013 for 120,000 BTC, worth about $11 million at the time. SatoshiDice's popularity quickly waned as bitcoin removed its zero-confirmation mechanism and network congestion.

Between 2012 and 2017, there were many copies of Satoshi's dice, but these games were not accepted by the public due to the simple model and high commission fees. In the years that followed, casino-type games were created on the new public chain, but none lasted long.

The 2017 digital currency bull market also saw the first breakout game on Ethereum, Crypto Kitties. Crypto Kitties is a game for raising, breeding, and trading kittens on the Ethereum chain. The game not only set a record of 4,833 ETH transactions in a single day, but also caused severe congestion on the Ethereum network at the time.

Crypto Is a very landmark game. On the one hand, CryptoKitties show people the great potential of ethereum ecosystem, that ethereum has more scenarios and Spaces to try beyond token financing; CryptoKitties, on the other hand, provide a template for many blockchain games. Cryptokitties were the original inspiration for Axie Inifity's 2021 hit game.

In addition, the popularity of CryptoKitties has drawn attention to the building of blockchain gaming communities and crypto culture.

Stage 2:2018-2019 -- Sinking Communities and casino games lost in history -- FOMO3D/BRC/EGT

After 17 years of madness, many blockchain DApp applications and games have started to land in 2018. Many traditional game teams have also entered the blockchain space. Some of the next big hits, such as Gods Unchained and Axie Infinity, were released in 2018.

The most famous game of 2018 is FOMO 3D, a money board game. One play of the game, "the last bidder gets 48% of the prize pool", attracted 11,000 ETH in the bonus pool and a tenfold increase in active users in just three days during the bear market. A month later, someone took advantage of the rules on ethereum block packaging to dramatically increase Gas rates and took more than 10,000 Ethereum by maliciously blocking the ethereum network for three minutes.

Because be in bear market stage, simple rough gambling can attract entrance more. The new public chain EOS and wave field is also the result of gambling with the baton. There was a pixel painting game called EOS PixelMaster in the EOS Ecosystem, where players could use EOS to buy pixels in their positions to paint. Pixels on the canvas can be traded and overwritten by other players, but each time a pixel changes hands, it incurs a premium of 1.35 times.

At the same time, the canvas will run a 24-hour countdown. When the countdown is over, the player who draws the last pixel will receive all EOS in the prize pool. Meanwhile, the canvas cannot be raised any further, and the work will be permanently recorded on the EOS blockchain. However, due to the design of the game mechanics and the nature of the money board, the game only became popular for a short time.

Cryptopunk's contemporaneous Pixel game EOS Pixel

Due to the high threshold for creating an EOS account, coupled with the declining currency price, many players are unable to experience or unwilling to participate deeply in the EOS ecosystem, thus limiting the development of EOS eco-chain games.

By October, 2018, various dApps in the market began to gradually become the mainstream. Last Trip is a puzzle game, Tronman is a multiplayer game, Tronfun is a pixel game, and so on, but it's mostly casino games. In the rapid development stage of Tron DApp, tron officially held a DApp development competition to attract developers and start-up teams with a prize of millions of dollars. In this stage, blockchain games are less playable and have relatively simple gameplay, making it difficult to engage users consistently.

In 2019, there were two explosive games in the blockchain world, one was Bell Chain BRC and the other was Egret EGT. The popularity of these two games mainly comes from their clever capital plate design and secondary market price increase, once the follow-up capital entry is weak, this mode will not last.

Bell Chain is a gaming ecosystem; There are three themed games on the platform: Super Rich, Super Soldier and Universal City. The main feature of the three games is that they are "fully automatic", which allows users to earn money by simply charging up. The specific gameplay of Super Rich is that players use ETH to buy virtual shops in the game. Every day, the shops will generate a certain amount of BRC, namely The flat Nt dollar of Bell Chain, and THE BRC can be traded in the secondary market.

In order to stabilize the price of BRC, the project party of Bell Chain will buy back and destroy BRC with ETH recharged by new players. In essence, it is a mode of subsidizing early players with new money. Once the speed of new funds slows down and the secondary market performs poor, the project party will collapse. To further reduce the pressure on BRC, Bell Chain has released two new games. In Super Soldier, players can recharge their BRC in the game to buy bullets to fight monsters, and monsters are rewarded with a random number of BRC when defeated.

In addition, in Universal City and Super Rich, there is no need to recharge ethereum, only you need to buy the corresponding amount of BRC in the secondary market to exchange for diamonds, to buy the corresponding landmark to generate the corresponding BRC. In addition, by means of direct marketing and pyramid selling, and the dazzling performance of the secondary market, bell chain once attracted many players to enter.

But in the middle of 2019, due to the phenomenon of unable to withdraw coins in the China Currency Exchange and the slowdown of new admission funds, the mode of capital plate can not continue to maintain, so as to crash.

An ecological game on the Bell Chain, a virtual shop purchased with ETH

EGT (egret) plays similarly. However, The original purpose of Egret is to create HTML5 game engine for blockchain, and the team also enjoys a certain reputation in the domestic mobile game industry. In May 2019, EGT independently developed and launched a real estate game with MLM (Multi-level information Network Marketing).

Early players of the game earn a fixed passive return of 1% per day on their EGT token investments, a whopping 360% annualized. The gameplay of the game is not much new, from the invitation mechanism is still a fund plate mode of play. This game has three levels of invitation process, respectively "boss", "entrepreneur", "tycoon". To become a "boss," a user must invite three accounts, each with a balance of at least 48000USDT; To be an entrepreneur, you must invite three bosses; In order to become a "big business", three "entrepreneurs" must be invited. Any player can earn 10% of the "mining" bonus from the next level of registered users. EGT also had a brilliant performance in the secondary market, but with the continuous decrease of new funds, EGT gradually disappeared.

Stage 3: From the second half of 2019 to now -- the theme of metasexes is opened, P2E mode initiated by Axie is combined with NFT and chain games

The recent rise of NFT and the development of AR/VR have further contributed to the explosion of metadverse projects. Most current metasurverse games are more like open platforms that allow users to create freely. Minecraft, is open source level, users can change to the source level, on the one hand, users can actively explore the creation of large-scale game volume, on the other hand, in order to build complex works but raise the threshold of participation of users.

In block chain has more of this project is to visit the exhibition, the universe, for example, hold NFT users generate natural demand to show off their hand NFT (most at present is still collectibles art category), use the adornment of land or space, social attribute, as the next generation of social personality, although there is a potential entry, but this kind of game scene is generally slightly rough, Interaction is simple and playability is extremely low compared to traditional games. At the same time, due to the content running on distributed nodes, the game load time and frequent lag, seriously affecting the continuity of the game.

We felt that since it was an open world, rich user-generated content was key, and that "hidden playable content" would be a breakthrough in the design of the metasverse project. There was no goal quest, users could explore, but they could also touch mechanisms to get hidden quests. Whether it's Tron (1982), Ultima (2010), Ready Player One (2018) or Out of Control (this year), the metasurses depicted with Easter eggs and hidden quests have a direct impact on how long users stay on the platform.

Here are some of the highlights we can expect to see from the metasverse project:

1. The world is constantly evolving on its own, and NPCS have side stories (AI);

2. Immersion (3D/4D, VR/AR);

3. There are rules that satisfy the player's desire to explore, hidden playable content (UGC/PGC).

In 2019, The main character of Death Stranding, created by Hideo Kojima (who was the prophet before the game was officially released due to COVID-19), Sam travels across the continent alone as a delivery man in order to reconnect everyone.

Also, players can enjoy the infrastructure built by other players in the game. Even if it's just delivery, there's nothing monotonous about the actionable content and the rich details and Settings buried in it. The solitude of mountains and rivers in the background of the game, coupled with BGM from The Icelandic band, creates a sense of immersion even without VR glasses, which shows the importance of setting the background of the game content and logical details. We believe that the current project platform has many chain universe may be in the future, like the early will now connect LAN gradually and become a global Internet, users may like Sam on multiple platforms of hidden task, to build a true without borders without access to the outside world.

You may not be able to imagine Minecraft and Loblus merging together, but. Cryptovoxels  With & have spent Decentraland  The walls of the city can be penetrated.

Death Stranding creates a world that allows players to explore nature naturally.

When it comes to the hottest blockchain game of 2021, it's Axie Infinity. This is a good combination of DeFi and NFT and token model blockchain game. The game's founding team claims to be one of the earliest crypto users. Axie is an Ethereum-based decentralized turn-based game inspired by Pokemon and Crypto cats that allows players to breed, fight and trade NFT animals called Axies; Its governance token is AXS, which launched Binance on October 27, 2020. The player who holds the governance coin also has the right to vote on decisions related to the game platform.

In terms of the game's design mechanics, Axie makes three modal innovations compared to traditional games:

1. P2E: Earn while playing. As long as you participate, you will be rewarded.

2. In-game asset confirmation and P2P exchange market encourage players to cherish new assets generated in the game;

3. Fair design of game mechanism, various types of Axie have the attribute of complementing each other, and there is no saving money to crush other recharge players & NBSP;

Axie successfully analyzed

Axie's success is a result of many accidental factors. In our view, there are mainly the following points:

1. A new economic incentive model for P2E

As mentioned above, P2E (Play to Earn) provides players with a new economic incentive model compared to the Free to Play (Free to Play) model of traditional games. To make money in a chain game, you don't need to have great game skills or hand speed, you just need to take the time to play and complete tasks. In a sense, playing chain games is also proof of work, and with the token economy and NFT design in it, playing games can become a new kind of work.

2. There is an inherent need for games in Axie's exploding market

According to the analysis of the official website traffic of Axie Infinity, the traffic in Southeast Asia, especially in the Philippines, has a very obvious growth rate. At the same time, the Philippines itself is a market where players spend a lot of money on games. In addition, Axie Infinity provides a kind of inclusive finance with very low entry threshold, and this kind of inclusive finance is presented in the form of gamification.

Analyze the traffic sources of Axie from Similarweb

3. Community operators and gold producers behind chain games

The high percentage of Filipino gamers is in some sense closely related to YGG. YGG, a Filipino gaming association and one of the early pioneers of the concept of playing P2E on the go, brings players together and enables them to "monetize" their time in the game and monetize it.

During the regional lockdown last year, when the unemployment rate in the Philippines was as high as 40 percent and many people lost their jobs, P2E has become a way for local players to earn a living. This background makes the Philippines the place where the YGG model has officially grown. YGG often chooses rural communities in Southeast Asia, where employment opportunities are limited but the Internet is widespread, and the income from playing games can even reach two or three times the local minimum wage.

Players in the Philippines have made a lot of money from Axie Infinity by earning replacement coins, while the guild can help different games to increase user numbers. In some countries in Southeast Asia, many people play games for six hours a day and earn more than $500 a week, far more than a normal job. See the P2E documentary in 2021 for more details.

In a sense, YGG is like a meta-universe "work aggregation platform."

Axie gave birth to gold miners like YGG, on the other hand, YGG also made Axie popular. At present, a chain of recruitment, training and game lending based on YGG union has been formed:

For AxieInfinity, a "popular project", YGG specifically proposed an Axie Scholarship project. For the players who apply for this Scholarship, the manager will assign three Axie to them as a team. This group of players entered the game with almost no upfront costs, and the borrowed three Axie became their initial production tools in the game and began earning SLP tokens in the game. After the main group of players has a certain amount of SLP tokens, they can ask the administrator to cash them. The union administrator can start the smart contract to recover these tokens. The income is carried out according to the proportion of 70% share of players, 20% share of managers and 10% share of YGG.

YGG also encourages investors to invest in studios and players can pledge their limited game assets on YGG's platform to other players who want to use it. In a sense, YGG will develop towards a comprehensive platform of blockchain game assets + gold mining studio + game investment institution.

4. Axie has a senior team with strong links and game resources, and is especially willing to interact with the community on the front line

The CEO of Axie is Trung Thanh Nguyen and CTO Andy Ho are both veteran programmers who have reached the ACM-ICPC Finals in Russia and Morocco in 2014 and 2015, respectively. Before starting Axie, Trung founded a Vietnamese e-commerce company called Lozi at the age of 19 and raised $10 million. Axie's CTO previously interned at Google and Paypal and worked at Anduin Transactions for many years.

Axie's COO Aleksander Leonard Larsen is responsible for all of Axie's business connections and also serves as secretary of the Blockchain Gaming Alliance Committee. He was previously ranked in the Top 200 professional players in Europe in Warcraft II and represented the Norwegian national team in Warcraft III and II. Overall, the core team has experience in entrepreneurship, working in large Internet companies, and operating in the game industry.

At the same time, Axie's team is well versed in how blockchain works. The Axie founding team is constantly interacting with users and potential users in social communities, On Twitter and in Discord. Previously, I met Aleksander at EthParis in 19. Aleksander is also the spokesperson of Axie and almost wears cute pet pendant of Axie all over her body. The founding team's approachable attitude and the speed with which they responded to any questions brought the community together far more than any other GameFi project.

Judging from twitter, Discord, and AMA's in the Telegram groups, the Axie founding team was very willing to spend time in the community and listen to the community's dynamic feedback on the product.

5. The promotion of incubators and exchanges, and multiple hot spots such as Ronin wallet on the online Ethereum side chain

As can be seen from the official website of Axie, Axie's business docking capability is unmatched by other project parties. First of all, Axie has a good relationship with major exchanges. CZ's Twitter has more than once mentioned that Axie is the leading GameFi project in Binance Ecology. Second, Delphi Digital helped Axie incubate, improving its economic model and distribution approach. In the circle, Axie's products are also highly recognized by Aave and Kyber Network.

Axie's official website includes cooperative exchanges, investment institutions, blockchain project parties and traditional companies

The most important one, and one of the most overlooked, is this. Axie Infinity has been following Ethereum's lead since its inception and has contributed to its ecosystem. Axie has developed its own Ethereum side-chain Ronin wallet for its blockchain games. By moving the primary operations from Ethereum to the app chain, the cost to users was reduced by several orders of magnitude and the response time significantly increased.

Ronin's wallet integrates a payment gateway, which significantly lowers the barrier to entry. By deploying the app chain, Axie Infinity saw explosive growth in user numbers between April and June, with daily active users (DAUs) jumping from 38,000 at the end of April to 252,000 at the end of June.

In the NFT and & have spent OpenSea  Axie's revenue topped the ethereum ecosystem even before it exploded.

Axie's revenue status at the beginning of July

In the summer of 2021, Axie became the brightest star in GameFi. Because Axie's explosive fire also gave birth to a lot of imitation disks, but the lack of the factors of the right time, the right place and the right people will be difficult to catch up with or even surpass Axie Infinity.

The future of GameFi

The rise of chain tourism is a magnificent history, we are glad to be here to witness the development of chain tourism.

The present moment, even if most of the universe project, though still exist experience, playability of the disadvantages of low, even if a lot of people can participate in the main purpose of the chain to swim or speculative money, but with the development of the block chain technology and players for a free, transparent, high participation platform demand has increased, the emergence of new economic model and game tokens, incentive, Blockchain games will also become more diverse, and many DAOs' organizations and unions will contribute to the ecosystem.

Looking back at the history of linked games and with the launch of several exciting linked games next year, we believe that the market has moved beyond pure speculation. In the long term, we are bullish on Gamified Economy and look forward to seeing more games integrating DeFi, NFT and new concepts. Fully open the new door of the metaverse.

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