You’ve seen it before. An incredibly talented game creator joins forces with a first-class studio and promises to create a wonderful gaming experience based on the most powerful machines in the industry. But here’s what happens: It’s paired with dubious shitcoin that comes out long before a bit of gameplay drops.
In the not-so-distant past, the mainstream media might have been referring to the booming cryptocurrency market – but since the price of Bored Ape is still in the clouds, we will respect what it is: the monkey race. Along with market volatility, Metaverse missionaries still argue that Web3 finance will revolutionize the way games generate revenue. I’ll call BS.
The focus now is not on new revenue-generating models. The only thing that these symbol increases are demanding is the idea of capital formation – not revenue generation. Though tempting, the monkey race has quickly deceived some of our smartest founders into believing that they should raise insignificant amounts of money from tokens printed out of thin air, as a flawed substitute for real money-making policies.
We are ready for a change of mindset. The important question is: how can we make the high-stakes, overwhelming Web3 Metaverse project work – for players, founders and investors?
Connected: Blockchain games take over the mainstream
Route # 1: Understanding is exciting
Everyone is doing well in the monkey race, financially speaking. From the main smart deal platform to experimental DeFi protocols to the next Axie Infinity copycat, the monkey market beautifully justifies the idea that there are really no shit mines – just shit prices.
For a clearer picture, travel with me through the bargaining chip into the heart of venture capital cryptocurrencies, where shiny new metaverse and game projects flow incessantly into mailboxes. Links to movie trailers, Unreal Engine mockups, and complex “symbol economics explanations” abound, pushing their demands to raise millions for simple futures contracts to adequately prepare their token promotions and initial public offerings.
Game opening day, you ask? Maybe this is a “small game” planned for the third quarter, or a huge triple A presentation in the middle of 2023. What about what kind of tool the symbol will have on the first day? Well, you can gamble them for more tokens, and they might even give you access to the game’s first NFT sale. Sometimes they even advertise useless tools and management symbols – which justifies their existence because the big daddy change agreed to register them in just a few months.
This may sound like an exaggeration, and I wish it were. However, these are the most worrying realities facing the current landscape of token promotions in the middle of the bull – sorry, monkey market. They capture short-term interest without a sustainable future development plan. These pitches capture moments – but not the right perspective and business model needed for the future of games.
Connected: Metaverse-as-a-service will be the foundation of the next Internet era of Web3
Route # 2: Building to last
The GameFi iconic landscape is incredibly fragmented. While early liquidity is tempting, premature token launch has serious risks. The balancing act of creating sticky iconography and effective game design actually offers a narrower focus on project icons: user engagement and retention, not pure revenue generation.
Final optimization problems? Maximize further user retention and participation in each project key issued, subject to some form of current Web3 revenue and user community.
You do not immediately need your own project key to monetize your application. Symbols are simply the exchange of assets that your virtual world creates and sells. If your Web3 game can not operate on an already floating, volatile icon or, worse, a well-connected stable, then your game is in trouble. Try again!
Instead, accumulate enough private capital to easily get through a trial run. In beta, work with your smart deal platform of your choice to integrate your native icon and stablecoin of your choice into your game. Start keeping track of your core game loops and major revenue streams.
Think of yourself as a data scientist! Is there any user behavior that you know is definitely fun but still goes bad? Is it such a valuable loop that maybe a subsidy can get things started? Is currency fluctuation something your users avoid? Where do your most enthusiastic users come from? How many unpaid workers are in developing countries? How many consumers are looking for the next hippie social hangout? How many whales are running auctions through the roof?
Finally, you must design your icon to motivate users to stay in your world. For example, just like with foreign currencies, you could offer a consumer discount when paying with your own project key – but you price your digital products in USD. You could also use a layered Treasury risk policy, where you accept the USD (and equivalent), L1 or L2 of your choice and your project logo. This ensures that you have a large, current audience that is immediately ready to participate in your world. It also helps protect you during cryptographic and macroeconomic downturns, and the excess can be used to reward investors and users without putting sales pressure on your token – among other huge benefits.
Connected: How blockchain games create an entire economy on top of their gameplay: Report
The most important thing you can do as a game creator in Web3 is to focus on improving your game. Symbols can not make your game – but they can break it.
Set the right priorities for a sustainable GameFi future
The unique value of game and metaverse applications is not the symbol they distribute. Project value is created by revenue that, in the long run, is generated by unique digital assets in the game. When these NFT-based assets are owned, experienced and understood by society, value builds and builds – otherwise it is said, society’s reluctance to sell increases.
I’m excited for the day when this model will be unchanged – because that means we’ll be closer to the best Web3 games we’ve ever seen. Instead of the market rewarding short-term bags, we’ll see superior gameplay and icons packed into one long-term gaming ecosystem.
Activity, retention and then revenue generation. Optimize for those items, in that order. Choose the right path.
This article does not include investment advice or advice. Every investment and business involves risk and readers should do their own research when making a decision.
The views, thoughts and opinions expressed herein are the sole responsibility of the authors and do not necessarily reflect or represent the views and opinions of the Cointelegraph.
Alex Ye leads Republic Crypto’s first research, investment and symbol economics strategy – helping to secure and promote progressive projects for Republic Crypto’s consulting portfolio. Prior to Republic Crypto, Alex ran fintech and blockchain investments at ZZ Capital, cryptocurrency research at Top Tier Capital Partners’ $ 7 billion venture capital fund, and at the University of Chicago’s alma mater.
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