NewsFlash Articles Data Fundraising BlockBeats Pro

From Free mint to new blue chip in the bear market, what is the origin of the recently popular DigiDaigaku?

DeBox研究院

Read this article in 30 Minutes

The only way out of the current P2E model that is bound to enter a death spiral is to allow players to Play to Buy.

Original title: "From Free mint to new blue chip in the bear market! What is the origin of the recently popular DigiDaigaku?"

Original author: 0xDy, DeBox Research Institute

Since June, NFT has gradually entered the cold winter bear market, and the price of NFT blue chips and OpenSea trading volume have experienced a sharp decline. But recently, a project called Digi Daigaku has ignited the NFT circle. From Free Mint to the current floor price of 15.4ETH (when the author wrote this article), everyone is surprised and curious about this strange and unique project. How did a Free mint NFT take the lead in OpenSea trading volume in the bear market, and even the floor price has far exceeded blue chip projects such as Azuki and Doodle? Today, let's take a good look at this project with everyone.

Figure 1 OpenSea’s daily trading volume list on August 30

I. Project background

First of all, there is such an introduction on Digi Daigaku’s OpenSea page: “DigiDaigaku is a collection of 2022 unique characters developed by Limit Break, a company founded by world-famous game designers Gabriel Leydon and Halbert Nakagawa.” It explains that the company that issued it is Limit Break, and the two founders of the company are very famous game designers Gabriel Leydon and Halbert Nakagawa.

Figure 2 Digi Daigaku’s OpenSea page

Speaking of the two founders, Gabriel Leydon (CEO) and Halbert Nakagawa (CTO) co-founded the famous mobile game company Machine Zone in 2008 before establishing Limit Break, and released a number of well-known mobile games, such as Game of War: Fire Age, Mobile Strike, and Final Fantasy XV: A New Empire. The company has also become the highest-grossing mobile game manufacturer in the United States with these overseas hit games, and ranked 36th in the Fortune magazine's 2016 unicorn list with a valuation of US$3.1 billion.

Limit Break, the company behind Digi Daigaku, can be found on LinkedIn as a small company that was just founded in 2021 and is located in Parker, Utah, USA. According to Gabriel's disclosure in ama, the current size of their team is about 40 people, and most of them are from the previous Machine Zone. From this, it can be seen that the two founders hope to jump from the traditional game industry to the web3.0 game field to continue their business.

On the day when the author wrote this article, Limit Break's official Twitter announced a blockbuster news that they have raised $200 million through two rounds of financing, and the financing lineup is quite luxurious: Josh Buckley, Paradigm and Standard Crypto led the investment, and FTX, Coinbase, Positive Sum, Shervinator and Anthos Capital participated in the investment. At the same time, the article revealed that Limit Break will continue to develop its game business in the web3.0 field. It can be seen that Digi Daigaku NFT will be its first step into the web3 game industry. It is rare to see such a huge amount of financing in a bear market like a stagnant water, but it also indirectly shows that VC institutions are extremely optimistic about the two founders and their previous experience in the traditional game industry.

2. Review of Digi Daigaku’s Release History

Digi Daigaku was launched on August 9th in a stealth launch and free mint form. There was no publicity before, except that Gabriel released the mint page on his Twitter. As the background of the project was slowly uncovered, it reached Extreme FOMO Level on Nansen and was quickly sold out.

Figure 3 Nansen NFT Mints data on August 10

After that, the price of Digi Daigaku began to soar, and the floor price exceeded 1ETH in a few days. On August 23, Gabriel announced on Twitter that he would airdrop to each holder, which brought the price of Digi Daigaku to more than 3E. Then came the big news of $200 million in financing, which made its price soar like a rocket to more than 15E!

Figure 4 Digi Daigaku trading price trend in the past week Data: NFT Nerd

From Free mint to 15E, Digi Daigaku has become the most dazzling "golden dog" in the NFT bear market. While missing out on the opportunity, everyone can't help but wonder: Why is such an awesome project team and a project with a well-known institutional investment background so low-key in its first step into NFT? After further understanding the project and its team background, perhaps we can find the answer from it.

3. How Digi Daigaku will change the GameFi field

Although Digi Daigaku has not revealed any details related to the game, we don’t know whether the game they are going to create is related to their NFT two-dimensional art style. But there is no doubt that Limit Break came to web3 to make games.

Of the two founders, compared to Halbert Nakagawa, who is low-key and has not posted a tweet, Gabriel Leydon is obviously more representative of Digi Daigaku’s style and spirit.

Figure 5 Gabriel Leydon’s Twitter homepage

Looking through Gabriel's resume, you will find that this outstanding boss has been working in the game industry for more than 20 years. Before founding Machine Zone, he worked at Atari, Tsunami Visual Technologies and Global VR. He is best at making and designing free games (Free to Play), and has never been involved in console games. At the same time, he also attaches great importance to marketing. His company spends a lot of money on marketing every year. For example, in 2014, it spent a total of about 400 million US dollars on the advertising budget for "Game of War: Fire Age".

For veteran gamers, they all understand that "free is the most expensive." Like Tencent and Valve, Machine Zone, founded by Gabriel, also understands this truth. In just eleven years, Machine Zone launched three free to play games that have long dominated the overseas mobile game revenue list, including Game of War: Fire Age, Mobile Strike, and Final Fantasy XV: A New Empire. They have been at the top of the iOS APP Store for six consecutive years and finally made a lot of money, with cumulative profits exceeding 5 billion US dollars.

Figure 6 Profit trend of Machine Zone at its peak

As the founder of one of the most successful free game manufacturers overseas, Gabriel naturally has his own experience in attracting game players to spend. When it comes to the phenomenon that many well-known series of NFTs in the NFT circle are sold at sky-high prices, Gabriel said it is not uncommon. He believes that everyone has their own way of spending, and this phenomenon also occurs in free games. For example, more than a decade ago, there were players who were willing to spend exorbitant prices to buy virtual assets in games.

As for his views on web3 and blockchain games, he said: The technology is new in the web3 field, and the way things work is new, which is very exciting. However, there is not much innovation in the behavior of players and virtual game assets in the blockchain, which is very disappointing. This is also the reason why he decided to start Limit Break and enter the web3 field.

Gabriel first heard about blockchain games because of the popular "Axie Infinity" at the time. The Play to Earn model allows NFT to have more empowerment possibilities, and also allows the blockchain game field to gradually prosper. However, Gabriel also gradually saw the drawbacks of this model. Play to earn is actually Play to sell, cashing out the rewards earned in the game (Earn) through selling (Sell). If everyone plays this game to sell, then in the end, this game will have nothing but a bunch of sellers left. For the current P2E model that is bound to enter a death spiral, the only way to break the game is to allow players to Play to Buy.

Here, Gabriel also pointed out the pain points of the current GameFi model. A successful game must have a balanced and healthy bilateral economy, that is, some people are willing to sell game props, while others are willing to buy game props. Players who really love playing games buy in-game props to enhance their gaming experience and have fun, while players who want to make money sell game props to cash out. However, the current gamefi project is full of players who want to sell their money as soon as they make money, which causes the balance to always tilt to one side. If you can make a game that players are happy to spend, then you can succeed in gamefi. And these are exactly what Gabriel Leydon, who has many years of experience in free to play games, is good at.

Admittedly, the current Gamefi is still like DeFi in the guise of a game. Most of the good chain games can only reach the level of web games at most, while Fi is more like a Ponzi scheme, using a dual-token model, using the parent currency to purchase assets, generating sub-coins as income, and constantly attracting new people to enter the market to resist the selling pressure brought by play to sell. In the end, the dual-token economic model slowly enters a death spiral as the fresh blood decreases.

Gabriel also revealed some of his own experiences and views on how to change the current situation of GameFi. He believes that when you evaluate a web3 game, you should think about whether the game is fun enough to make players want to spend money, and whether the project has a plan to stimulate players to spend money. In addition to shaping the game's strong playability and fun, it is also extremely important to grasp the players' consumption psychology. "Recharging makes you stronger" is a truth that all online game players understand. For this reason, there are countless big guys who spend sky-high prices in well-known online games such as "Fantasy Westward Journey" and "Against the Cold Water". However, Gabriel pointed out that the reason for these players' consumption is not to become an invincible killer, but to become a ruler. They enjoy the power of making decisions in the game and the dependence of other players on them for help. This is not a pay to win, but more like a pay to judge. It can be seen that Gabriel knows the psychology of gamers who are willing to pay, and we have reason to believe that his next work can still create extremely good profits.

Finally, although Digi Daigaku is a series of 2022 ACG "wives" art works, Gabriel said they are not making a ACG game. After all, their team is famous for making MMO (massively multiplayer online) games.

Fourth, Free to Own - a new model that Digi Daigaku wants to bring

Gabriel is not trying to copy his hugely successful Free to Play model in web2 to web3. On the contrary, Gabriel said that entering web3 represents the end of the Free to Play model, and he will start a new era of Free to Own mode in web3. So what is "Free to Own"? This explanation first appeared in the tweet that Limit Break received 200 million in financing.

Figure 7 Digi Daigaku parent company Limit Break's explanation of Free to Own

This model also explains why Digi Daigaku uses the price of Free Mint for launch. Gabriel believes that free to mint can avoid fans' concerns about rugpull. At the same time, through free mint, holders will also become the best advocates of the upcoming game, allowing fans to spontaneously promote the game virally. For gamers, a blockchain game that starts with free mint is so attractive that Gabriel hopes this model can eliminate the two game models of Free to Play and NFT pre-sale.

Indeed, compared to the chain game startup model that pre-sells thousands or tens of thousands of NFTs before the game is officially launched to make a fortune, Free to Own will make players who are waiting and watching feel more at ease. After all, in the blockchain world, there are many projects that make a quick buck and run away. However, this model may not be friendly to unknown game studios. In this way, they may not be able to obtain sufficient startup funds in the short term. At the same time, because the number of NFTs on sale is limited, the F2O model can only allow thousands or tens of thousands of people who participate in the early stage to enjoy benefits and airdrops. Players who enter later still have to pay an entry fee, and the entry fee for popular projects like Digi Daigaku is even more expensive. As the game becomes more popular, its scarcity will also raise the price of NFT itself and subsequent airdrops, further raising the entry threshold for players. This may be a relatively large obstacle for a game project that is determined to reach hundreds of thousands or even millions of users.

In addition, is Free to Own really a new model?

In fact, although Digi Daigaku is the first project to propose the concept of Free to Own, they are not the first project to adopt this method in essence. According to Gabriel's definition of F2O, there have been many NFT sales methods that meet the rules of Free to Own. For example, the previously extremely popular ill pooo it NFT project, based on the meme attribute of ruthlessly mocking other NFT projects, opened free mint and sold out. After that, this project, which seemed to be a meme dog, carried out a series of dazzling operations, including launching a destruction mechanism, airdropping shit sticks, launching shitcoin, opening synthetic shit beasts, airdropping cleaners, opening land lotteries, and releasing mobile games... Its variety and fast update speed made a group of NFT players call it conscience. And all this may be obtained just because you accidentally minted a pile of shit...

Figure 8 Detailed poster of ill poop it NFT project

Perhaps unlike Digi Daigaku, which was born with a silver spoon in its mouth, the ill poop it project attracted attention through its meme attributes, and then relied on innovative gameplay and high-frequency updates to expand its influence and finally stand out. But they all took the Free to Own path. After digging out the essence behind this model, it can be found that this model is not very innovative and subversive, but it is only because of the word coined by Gabriel Leydon that everyone talks about it. The new term Free to Own has also caused a lot of discussion in the circle, and everyone is actively expressing their views on this model. Even CZ, the former richest man in China and founder of Binance, shared his views on Twitter.

Figure 9 CZ expresses his views on Free to Own on Twitter

In general, Free to Own means that a blockchain game is launched by free minting NFTs, allowing players to obtain them for free, and then continuously airdropping subsequent game assets and props to NFT holders. This model can dispel players' concerns about whether the project will be a rugpull and gain a certain fan base. The project party can still obtain royalties through the transaction of NFTs between players. Analysis of past cases has proved that whether it is a project led by a star team like Digi Daigaku and well-funded, or a "local dog" from a meme like ill poop it, as long as it is equipped with a suitable marketing strategy, it can be successful.

In this Digi Daigaku, Gabriel Leydon's claim of subversion and innovation is more like artificially creating fomo emotions and raising the floor price by making up words and cooperating with major good news, completing a grand publicity and earning enough attention. The marketing rhythm and method design are perfect, which directly reflects Gabriel's marketing ability and grasp of human nature. This will also become a classic marketing case for future projects with resources and marketing capabilities to refer to when entering the web3 field. Therefore, I think there is no need to argue endlessly about this word. The focus should be on the subsequent marketing strategy and the games launched. After all, the most important thing about blockchain games is the game product itself.

Figure 10 The #F2O tag can be seen everywhere in Gabriel Leydon’s Twitter

V. Digi Daigaku’s ambition

Careful people will find that in September last year, Gabriel Leydon began to publicly recruit outstanding game designers on Twitter. But what many people don’t know is that Digi Daigaku’s parent company Limit Break has been working hard for a whole year. So much so that Gabriel excitedly announced on Twitter Space after the NFT was released that the team had been waiting for this moment all year, announcing to the world that they would make a big splash in web3.

Figure 11 Gabriel recruited game designers on Twitter last September.

According to the original plan, Gabriel wanted to work at Machine Zone until retirement. But after seeing "Axie Infinity", he was deeply attracted to the new world of blockchain games and found that this was where he really wanted to do things. Then he resolutely brought in some of the original people from Machine Zone to start Limit Break.

"I have already made three top 1 games in the world of web2. When I came to the world of web3, my goal was very clear. I still want to make top 1 games, and not just in web3, but to make its influence popular outside this circle." This is the ambition that Gabriel showed to everyone in Space. Gabriel also said that at present, the game they made on web3 is the best one he has ever made. At the same time, they have a lot of exciting news to release one after another, which is the result of their silent efforts for a whole year.

Although Digi Daigaku has not yet disclosed any information about the game product, based on Machine Zone's previous works and Gabriel Leydon's views on web3, I personally predict that Digi Daigaku's game design this time will focus on the following two aspects:

The core gameplay and temptation of Pay to Judge. It was mentioned earlier that in order to break the fate of the P2E death spiral, we must find a way to make players go to Play to Buy. In order to break the situation, Gabriel Leydon will definitely make a fuss about this point, and at the same time, this is also his previous advantage in the web2 game industry.

What role does NFT play in the game. Gabriel Leydon once said: Game NFT should be universal in all games. The reason why blockchain games are different from web2 games is that the decentralized nature of blockchain and the interoperability of NFTs break the absolute control of traditional game companies over virtual assets and game rules. After all, Vitalik V turned to blockchain because Blizzard made a major change to the soul siphon skill of the warlock in World of Warcraft. The functions and positioning of the blockchain game NFTs we see now are still not much different from the virtual assets in traditional games, which is also a point that Gabriel is more disappointed with the current blockchain game industry. In the future, we hope to see Digi Daigaku's innovation in this regard.

Blockchain games have always been a track with great potential that everyone is optimistic about. However, with the decline of chain games such as BNX and Raca after the new year, the chain game industry has stagnated. Recently, Bayc's parent company Yuga Lab announced the release of the metaverse land project OtherSide to enter the game industry, and everyone has rekindled hope for chain games. So this time, I am very happy that another project with great potential can stand out and write a new chapter in the GameFi field!

VI. Conclusion

If you use one sentence to describe the Digi Daigaku project, it is: "The top boss in the Web2 game field, with huge financing from top institutions, the team has devoted itself to polishing the project for a whole year, and issued an NFT from free mint to 15E, determined to create a web3 NO.1 game." This also explains why it can rise to such a high price. After all, who can look at such a project and not fomo?

The story of Digi Daigaku has just begun, and we look forward to it bringing us more surprises!