two & a half gamers session #7 - Is Axie infinity dead? LTV in crypto gaming & web3 UA/marketing

[Music] GM friends uh this is no gaming podcast 2 and half Gamers session number seven we are discussing latest news fun stuff and and dring some knowledge this one is actually special because we have a special guest so uh my name is uh M Lan I'm the host but we have The Usual Suspects here Felix braberg yaku and the special guest is Nico ver hey man welcome Hey man welcome everybody and let's do the let's do it like this so Felix you know uh we know you are keen on doing the intro so let's start with you and uh then we will have a quick round of intros thank you for that beautiful Handover Ma and pleasure to have you here Nico uh I'm Felix braberg uh I'm the director of ad monetization at network network is a company that

recently got bought by Forte a crypto company cool yeah I can continue so name's Jacob or yakob uh currently head of monetization at trite uh freet toplay company from tare Finland and been working here in the gaming industry for like last six seven years on mainly freet toplay gaming side but also did a VR game so been there done that nice niik how about yourself should I go yeah so um I'm Nico I am um an investor in crypto gaming VC at bitra by day and then I also host a podcast another one where you know yeah I got to know M where he came and talked about UA um he he threw around all of these acronyms that I didn't know what was going on uh but I learned a lot and now you know when people say um arpu and these types of things I can actually I know what's going on so um I've yeah uh

super super happy to be here ready to jam talk a bit of crypto because that's um what I'm mostly interested in and what I'm mostly looking at as well nice yeah and then uh well my name mat ler I'm well the independent UA consultant working on free toplay games but also now dipping into the crypto gaming as well so uh definitely want to learn more and uh as the greeting at the beginning uh you know um suggested we are now going to talk about the crypto games and blockchain gaming as nfts crypto and blockchain gaming are feeling the the headlines you know we're now wondering like what's what's happening with the crypto because we are definitely not at the peak as uh we were at the beginning of well November 2021 now let's uh let's look at what's uh what's happening in uh you know at the end of the February 2022 so yakob I know you are definitely very keen on this discing everything uh

regarding crypto and you are our own crypto skeptic here so yeah I'm I'm usually skeptic with everything so it doesn't matter yeah that's that's very true yeah let's start by saying that uh most of the stuff that's currently flowing around in the internet and that's been pretty much the starting point of this whole thing I would say was done there somewhere in November where axi was like hitting the infection point about its virality and people pretty much talking on the internet about know all the time there was this excellent uh deep dive done by navic that pretty much was the 101 article to go to do anything crypto gaming related but I guess times are slowly changing and yeah that's the frame of this current discussion that we want to have a fresh look and see what's currently happening so let me just start by saying that currently even the buzzword I think is changing and I hear it from most of my friends already that let's not call it play to earn now and let's call it play and earn and some those even going to the extent that

let's call it play to own only because I guess the main main point here is that the sustainability of axi economy as laid out in the research is pretty much fulfilling the propy of not being sustainable on the financial side of course uh if I get it right and like usually when we try to estimate the game success or game current states we go on a penny sensor Tower any other analytics but that's not possible for crypto games but what's possible if I get the right is to go on like d rer like um the Central app applications rather and yeah go ahead sorry ja or Jr Mr Jr just a quick Interruption like is the is this side the that rather like um with the real data everything is like can we compare that to EP or Sor Tower or is it like more accurate actually um I think from from the blockchain side it is more accurate knows exactly everything that's happing

on blockchain side that said um there are a lot of crypto games who are not fully on chain okay um which makes it hard to calculate right if if you look at the numbers from axi um I think in in in August or in September they were saying they had two and a half million daily active users or monthly active users um but the number of active wallets was was was lower okay um and so there's you know there's what's happening on the blockchain and then there's what's happening within the game and so um that radar is theoretically 100% correct about everything that's happening on the blockchain because you know that's a single sour can we go under the assumption that in order to play a Infinity you need to own the cats so you need to be a wallet axis calls them cats cats for simplification I'm sure there's a lot of people who who who are who are tilting right now um I think um I think through the scholarship model this actually changes so would you say that in the graph that that we're currently looking at the dep right there uh the whole scholarship of the player base which is

I I I guess the number was like around 70% they are not counted in I don't know I don't know exactly um I don't know the the exact details what I assume is and this could be wrong that um a lot of people who are Scholars do have because there's there's so you need a wallet to retrieve your um SLP your your winnings right um and so but I think you can play the game as a scholar without having connected your wallet where your SLP accumulates within the game okay but how do you get the the X then as a scholer I mean as a scholar it is it's actually someone else's ax yeah so it doesn't it doesn't come onto your own wallet so you don't need the wallets because otherwise it would be yours whatever is in your wallet is yours yeah because on the Assumption of looking at the charts like there's pretty much a nose dive for last month on the graph based on the users and the transactions of course the volume is also like hitting uh I guess that's also thanks to

the fact that I think it was already reported somewhere around November where the like minimum Filipino wage uh pretty much was higher than the current axi gain per hour so we already passed that a lot of time uh a lot of time passed from that point already so I would guess it's normal that people are pretty much leaving after that Peak but yeah the question is if if it's actually like the graph is saying because the graph is pretty much saying that users halfed in last month yeah and honestly like it would surprise me if it actually happened um and as you rightly said in the beginning I think the narrative is changing from play to earn to play and earn um and and so I mean this is something I've been thinking about a lot and and maybe we can go deeper into that a little bit later in to this episode it is you know can you have a game where a significant amount of your player base actually makes a living wage by playing your game that's a question and and if so what is that significant amount right can you have 5% could it be 20% 30% um I don't

know it will depend on on the money going in the value being created Etc um and so the way I look at it now is I think the narrative that axi itself is also pushing changes from come here and earn money and and earn a living and we are actually you know helping people pay their rent and I think the narrative has changed to come play a game it's a fun game and yeah you can actually make a bit of money by playing it and with an emphasis on yeah that's what the the new hire already mentioned in the blog we get to the article about the other example I wanted to point here is pretty much tetan Arena which was the other like game mentioned a lot of times it's it has this kind of a different funnel where you can download the game normally on stores you can play it's free to-play layer pretty much where you don't earn anything and somehow if you go on their website you can find about about the crypto layer and buy the heroes there but looking at the data and and this is the this is the thing that I know from a panny because I was looking their data the the revenue and the downloads both

nose Dives and and they are pretty much nowhere when they were before so from the epy side of things which I guess covers just a free-to-play economy it seems the game's dying but from the dep Raider data it seems the game's already dead by January for some there's like zero user zero volume zero transactions people are already discussing on the Reddit that it's a rack pool or a fraud in in cepto BR terms so don't know what's happening there but yeah it's kind of different picture than the like discourse that you can see on Lincoln or wherever where people are talking about crypto and I think it should be established here that like this has move on forward because as we go like further in the notes uh yeah let's go let's talk like in detail about Philip's article Philip BL the new hire from yantic of course coming into skym Zaki Infinity where he pretty much said honestly in the article I think it's a really good one because I don't think so there's some kind of PR spin or anything he just States the facts which is I think not the supercell supercell

article yeah where where I quote we will not be optimizing our game or experiences to drive short-term returns as it's simply not sustainable where he directly goes into example that we just cannot sustain a game where you go in $5 and out $6 it's not possible and then we will focus on creating a balanced game economy with proper sources and sync just like non blockchains g games have done for years which to me implies that the game is kind of leaning more into the free to play Space now or let's say at least the game design Paradigm uh but biggest problem I still have with it is that it still had that funnel friction that those other games don't have like you still need to buy the axes you still need to go through the whole wallet process of course we're not even talking about the whole scholarship program now because like what I think the what scholarship program did in itself is it solved the problem of this initial friction with this kind of a temporary

solution but for me this doesn't seems to be like a Way Forward even because I remember like listening to some of the games like four or three months ago when they are pretty much building the scholarship programs into the game design of the game but I don't think so like this will fly going forward why you don't think so because this assumes that they are the only ones that's that are able to kind of solve the constraint of this big friction the games themselves but as as I look throughout the market more and more games are pretty much jumping on the thing that they don't have the crypto is the first thing that you interact with in the game so if we take let's say some new games being announced by come to us or net marble both of those already have their um mobile clients on mobile stores with possibility of pre-registration even axi saying that they will do their free-to-play game which will have axes that are not nfts so I guess long term this problem

will be solved by the game themselves not as something like a gaming guild or like a third party solution like yeah look it seems to me it seems to me like the like the problem when we were struggling within the VR space like because that was also some kind of a par analog to this where everybody was making VR controllers and everybody wanted to make it this way that way different and so on and and then suddenly Oculus made their own VR controls and every other control was just obsolete from that point on Nico do you mind me asking actually because you have quite an interesting view on the kind of crypto space like right now would you say you personally are more excited about uh playing like play to earn um like play to own or play and earn like what's the most exciting things you're currently seeing for me honestly like these are different names for the same thing in a way I don't see a difference between those is just you know people it's it's like where the emphasis lies um in the end I look at web 3 so the Innovation

for me that web 3 brings to gaming as it does to in general the internet is it adds a native economic value transfer layer on top of what we didn't have before the internet right 10 years ago if I sent you an email with something in it you had it and I had it there was no way no way to enforce scarcity there was no way to transfer value through internet and so there were a lot of solutions built for that uh which rely on traditional Financial infrastructure um and so that is changing thanks to blockchain and so the way I see it um when it comes to games what I get excited about is that um you know when you play a game you by being in that game when it's a multiplayer game you add value to that game right if if you grind a lot of material that are annoying and hard to grind and you sell them to someone you add value right that person did not have to grind for that material and so that way you adding value to that game and so for me what what I get excited about is is the fact that blockchain game adds

this value layer which you know makes players able to capture the value that they bring inside a game um and I think this Paradigm will make it so that you know a lot of new games will get developed new types of games so I think that a lot of the you know hate for blockchain games from traditional gaming people comes from they're looking at the games right now and they're like yeah but what would blockchain add to these games and of course you're you're trying to slap a new technology on an existing you know thing that already works right so there's going to be new types of games that are designed for this technology with this technology natively integrated um where players will be able to capture the value that they bring and um yeah that's what get gets me excited and and I love my job because I get to talk to the people who are you know attempting to do this um and then hopefully support the ones who are actually going to be doing I think also whoa who me to Jr I mean I know you know

breathe we also want to discuss some things I just uh I know also from a different perspective you know because because like the The free-to-play Gamers or developers are you know a bit uh worried about the block blockchain gaming but also like there's the other way around like they also like everybody says like okay well the freet to-play model that's cancer that's really bad for players because you know you play you dedicate time you pay there and you get nothing in return in play in you know blockchain games you can actually earn money and whatever like come on yeah I was like if if if you would slap blockchain on existing play to earn or sorry freet toplay games it wouldn't change anything right I think the only thing it might potentially solve um would be that it might find a way to circumvent the App Store fees where you basically reduce the friction where you know again I'm always thinking about you know value creation and who captures

what part of the value and what I I can see a world where you know instead of having to give 30% of the revenue created away to you know Apple um the publisher would keep let's say 90% And 10% would be redistributed back to the players and there's only a fraction that goes to to an app store um that's a world that I can see where you know blockchain facilitates or helps or adds value to that would be amazing world but you know like if you have this kind of this type of um solution in the game then App Store will ban your game immediately and then buy also true buy your 90% you will get you will have 0% and and you know you'll be a bit sad as well as a developer yeah I think the the play to earn play to own play and earn currently pretty much reflects the amount of financial expectations that we see there currently as we pretty much lower the expectations we get to the to the point because like play to on sounds pretty good to me like I I was listening

to the gods unchain developer and like application for let's say TCG because I was also playing like a physical TCG a Pokemon game and it's it's really good and I think it's it's great thing that for instance I remember the hex TCG game uh when it shut down anyway and like you know those cards are gone pretty much so I guess even when the Cent would shut down wouldn't do much with the NTS even though in blockchain but still you have at least something or you know people could rebuild the game if they want can trade them yeah you can still trade them of course yeah so there's definitely some application but currently I guess after some of the forart that's been on the market especially from Ubisoft side like slapping it in a like random game from the portfolio doesn't doesn't really bold well for the over around industry of course because they don't add any value to actually those nfts y I have a question for you do you consider axi a failed game uh I wouldn't consider the failed game I still

consider it like one of the Pioneers in in the whole space and I think like it's an amazing project like all respect to the team but the problem is that what happened I wouldn't say was anticipated by the team itself like they didn't even wanted to create this this type of like layer play to play to I think the scholarship system and and pretty much the whole spin with play to earn was a side effect not only about like the game design but also the corona environment that we were living in and I think at some point it kind of get pretty much bigger than the team's plan and and as you can see like the economy was not designed to sustain that because if people are just grinding SLP in order to cash it out on the market they're just adding into the economy and it's pretty much an infinite source of like accumulation because you cannot even breed axis that that fast even though they increase the breeding costs and like try to pretty much get out of a lot of resources out of the economy they they they couldn't but I guess that just tells the the story of that this was not

intended with the game so I think axi is like the Pioneer that that brings its pretty much you know neck to the table saying that like we're trying and we're doing this way I think that's great but the problem is that uh a lot of things happened that weren't even expected so I would say it's not a failed game but it's not a game that's going to have like a you know like imagine something of a MySpace versus Facebook so Myspace happened before it had it you know advantages disadvantage but in the end a better product got over it so I think that's what will happen eventually that more and more that we get into these like nuances of crypto crypto games and the design that's needed in order to operate them we just eventually arrive with a better product and players's going to switch Yeah but the thing is was Facebook a better product or there was a lot of hype and a lot of people jumped right in that's you know so you you don't know that you don't know can I uh y can I I'm going to

disagree with you so for me there's a world where looking back axi actually the axi sky M team they made all the right decisions and they did everything right and it's I agree that things you know got out of hand faster than they expected and they would have never you know expected this um but if you hear them speak about the game they see the current game as like an alpha or maybe a like a beta version um where it's it's still in development right they're still figuring things out and um I think you know looking back there is a world where they say look we you know we build up with the hype we got to an insane Peak and then we crashed like the the economy crashed and a lot of people got I like I want to say hurt right because you you invest in axes and and then the value goes down because the earning power in SLP goes down um but like the number like the hundreds of thousands of players day like they managed to on board onto one like blockchain in general right that set up a wallet that

learn how to like buy buy ether from an exchange and purchase something on chain and and like um like accept transactions that stuff and then also onto their now R their own ecosystem side chain right they now have millions millions might be in exageration but a lot of Wallets on on their their own chain um and so for me there's a world in retrospect actually was like okay look we didn't expect that to happen but in the end like if we would do it again we would do um everything the exact same way because in the end like they have a huge number of players that have wallets that own axes that know how things work and you know if you look at what they're building now and and their Ambitions at least I'm not saying they're going to be able to successfully execute on on all of their Ambitions um I mean they theyve they already have the player base in the community um and so in my so I I made a bold prediction about this for me at the end of this year I expect Sky Mavis or axi Infinity still to be the most successful crypto game out there because they already have you know the the the

whole Community a lot of players um who are willing to you know who have the assets and just want to play are you are you able to comment on any of those Ambitions that's guy May um I think they' have been public about that right I think the the the way I look at it and this is me you know I used to be a huge fan of Warcraft 3 and they had like custom maps where you could do like power defenses and all that kind of fun stuff was yeah I mean those were the days that that and r skape man I have fun fun memories anyway um apparently I recently listened to um Alexander who is their uh coo he was on the invest like the best podcast and he was talking about you know their ax land gameplay and they want to make like you know you own a piece of land and then you can deploy a mini game sort of thing on top of that um and so again huge Ambitions a lot to execute on not sure if that's going to be successful but I mean so I'm saying I don't think there's a more than

50% chance that axi is g to be the most successful game out there I think that if I had to pick one game or team I pick them that's basically my argument I know that their CEO was on the Constructor of fun and I think Mishka was interviewing him and he said six months ago look um the game is far from being finished so we are not even in the in the middle of the development and now we look we have plenty of uh players High everything so uh there's a lot of things that that are going to happen in the game so yeah let's see yeah like one thing I could out here is that basically uh bu successful I would Define it as usual as we do here in like the free to play Space let's say which is making re we do hear making Revenue pretty much because I still think there's going to be a game which will be the better product that will'll just make much more Revenue which I guess will be a free-to-play game with the proper crypto layer on top of it that will just be combined free to

play and crypto Revenue bigger but they are making revenues they're making 4.2% out noing they're not making revenues of course they're making shitload of Revenue what I'm saying is that there will be probably a better product in the market because gaming Market moves so fast and like just just an example remember where there was pubg and all the r was about pubg then comes epic with their game that they release after 5 years they couldn't make anything out of it and two months they converted it into fortnite and fortnite is now what it is so that that's usually how gaming industry operates yeah but you know uh let's let's get back back to the to the blockchain actually and like uh how does the friction look like because you know for me I am having a very big problems even connecting a wallet and buying an XE so I'm always looking for some other games that are actually you know making this diretion definitely uh lower than than what's in

XI so uh is there any any good example that um that is out there already maybe let's go through like the possibilities that are currently on the market so let's say the first one is the one that's I would say would be represented by axi meaning that you first need to connect the wallet you need to transfer currency into ethereum or running or whatever some something there in order to buy the game crypto assets and then you can start a play game which is pretty much the biggest fun currently it's only browser or PC only uh then if we move a little bit forward there's the games that are having their mobile client on the stores that is kind of hidden with the crypto layer and then if you are able to somehow get the notion that they are also crypto-based Gamers it impli it's implied in the game itself you go on their website and then there you connect the wallet and get the assets and then they connected to your game client I've seen this other game called Sky Weaver from Horizon blockchain games where they literally have just a two click connection or

creation of your wallet with your Gmail account on the stores itself which I still don't know why it's even there if the store says that like against blockchain functionality but it's in Early Access and it's there it's a TCG game and as I said like this is the smoothest one I got ever and I was able to do it they are running on polygon of course and then the last one is the one where I think we're heading for where there's a combined free-to-play internal in-game economy combined with a free like crypto layer on top of it which I guess means that you download the game normally you even play it without knowing about any crypto and at some point you get into action or interaction with crypto layer of the economy which probably even shouldn't be optional because if it really needs to make an impact and be valuable it needs to you know make be a part of the core game Loop and then uh yeah we're going into pretty much Uncharted Territory here because question is how sto stores will then allow it if you are even able to maintain your mobile game client on the stores how's the revenue counted how's

you know the whole model pretty much will work currently I guess the games that are representing this category are chromatic Souls AFK rate from come to us they announced already that they're going to make their nft drop next month in March and then there's the golden boys game from net marble pretty much same category and of course axi origin uh the free-to-play game that axi sky is doing where they said that first round of axis will be no no nft and then you slowly get get into the crypto a of the game mhm yeah okay yeah the the the one extra bonus category uh that I would say is represented by anim mocha is the crazy defense Heroes which actually is getting like a really big proud of numbers there with the users and their transaction where they pretty much took an old game from their portfolio and added crypto functionality into it and currently as I see the numbers of their dep Raider it's going up Bol on a penny Bol on dep Raider so so there's also this possibility but I don't see this

that much yet in the market that 3 two one apple is going to ban it immediately there you go there you have the the crazy yeah because I still don't know like what's even allowed then like can you do these things it you know exactly is it it's too big and then we ban it like you know I think um important to address I think when we're discussing these types of things is different levels of crypto inside a game um cuz things can go from you know the the I think you know the the the latest games that you said where you know there is you don't need a wallet or at least you don't think you need a wallet um and it could be that at that point like a game everything happens on the servers of the game itself and then you have the possibility if you want to take your assets that you have and Export them to a wallet that you then own and so that game could call itself a crypto game um but you know it can be super user friendly because there's no actually

there's nothing happening on the blockchain until up to the point where the player actually chooses to export their assets their nfts or their tokens onto the blockchain um and and that is so that's like one end of the spectrum and then the whole opposite end of the spectrum is blockchain or all chain games um where literally every move so basically the game is the back end of the game happens on the blockchain and what the game studio so the the game Studio does two things so one they design smart contracts that represents the back end of the game and then they provide a very simple uh thin layer of front end that you can usually run in your browser that then interacts with you know the back end on on the blockchain um and so there every move everything you do gets recorded because the one single source of Truth is the blockchain um and so that is a super like deep integration and so for me calling both crypto games you know there we need more new on because otherwise it's comparison right yeah but if I if I understood correctly

putting everything on blockchain pretty much gets you killed in the gas Fe later depends um I agree like if you do that on eth um which some games do right you have games like wolf game um games like the Crypt the Crypt is one people should check out um you know if if if you ever listen to the metacost I'm a huge fan of loot loot nfts um like maybe we should keep that for another because I I can rent on that you know for hours um but anyway so there's there's games that are fully onchain where you need an nft to like rate a dungeon and stuff like that um and um I mean the so the idea of course is you cannot have a game where every move that you make costs like something like meaningful right in the Crypt for example I believe every move costed like you know 15 in gas F I believe or maybe 15 to 3030 in gas fees but then obviously like you didn't do like 20 moves right you maybe rated one two or three and I think some people one person did 12 dungeons um and and that's

Max so so you basically your move is I rate this dungeon successful not yeah exactly it's David's game um and um so David Amore the company's called playment shout out um anyway they um and so I agree gas fees horrible and and so this is not sustainable right uh the only people doing this are actually people that for who the 15 EUR worth of gas fees the e that they bought initially you know that was sense right they're the ones who invested early and and and and so anyway um but I live or at least the way I look at this is I think in you know five or maybe even less maybe in in in one and a half two years um gas fees will be fractions of sense that's that's what I believe compl otherwise we won't move anywhere yeah yes we have to oh yes we have to and and I agree and I think technically it's it's possible right it's it's just there's this of you know the less decentralized your chain is the

more the transaction uh processing power it can have and so you know we will have you know certain chains that are more decentralized with higher transaction fees less decentralized lower transaction fees uh different Technologies for different use cases some of them might have um you know High small actions per minute as in you know you don't need to write long things into the blockchain but you do a lot of movements or a lot of transactions and then others will be spe like specifically designed for lower number of transactions per second or per minute whatever but with more changes where I what happen like I know you submit let's say like uh a new like it's might might be a city management games where you you know you list all of the the things you want to do you want to you know have villagers do that and that and whatever um and you just submitted all at once stuff like that okay exciting future that too deep I'm sorry sorry this is amazing exactly the thing we want to talk about yeah because I do like all this

topic I don't what I don't like is all these um crypto guys uh shouting about like oh this is amazing web 3 allowed us to do anything in the world like yeah this this this didn't exist in web 2 seriously how is that even possible like there was one guy who hired um a community manager on Discord from their community and uh he said like okay I was able to do it in like one day this is web three it couldn't be possible in web too like hey guy like come on did you ever hear about like the Freelancers and you know other types of jobs like come on this the only thing I'm uh a bit you know agitated about okay let let's let's move on I guess uh yeah let's talk about more of these challenges so UA yay love it that's my go ahead m start start rent I there is actually no

rent I as I said like uh on the metacast I still believe there's just like very similar um actions that we can do it's just like with different names and uh and phrases so basically in freet to play there's the influencer marketing and uh in in the blockchain what I recently found out there's the key K in marketing which is key opinion leaders market like it's the same thing come on it's the same thing so uh I still believe the UA I know uh we need to be careful about how how we measure stuff and uh and basically there are different uh Avenues how to um direct users into the game so you know browser of course but then you have if you have the mobile client that's super easy we already doing that with you with normal UA on on Facebook Google or wherever else the Discord and and growing the community

that's slightly different but as we discuss it's like not the UA per se but it's a growth or marketing like um managers so it's all about the growing the game and the community there is the just the one one part of of the all activities so I think um there are different stages here with the with the blockchain games basically before the game is even you know launched like you still need to build the community which reminds me more like an triaa game where you just build a community share the development uh notes here and there showing up to the you know all the assets beforehand and every every time there is something new created which is very similar to what we are looking at uh with with blockchain games as soon as there is some kind of like prototype or anything that's uh playable then um you just promote someone from the community send them to the you know to test the the playable build which is also you

know called the soft launch in the freeo play Space so there are very very big similarities between each other just you know slightly different how do you see the attribution going here yeah the thing is uh this is something that we already tried to figure out when we were uh sending players uh at pixel Federation to our web portal because we had like multiple um domains there subdomains and everything and there was always always a big problem between um the cross domain attribution and crossplatform even attribution so you know there are some like Google analytics and other analytic solutions that can help you with that and also if you have the web and the browser and everything that's happening there you have Facebook pixels and everything you know you can just track a lot of stuff just nobody talks about it that's the thing and concern it's very similar concerning the revenue coming from crypto itself would you say would there be any problem of putting into the RAS

formula yeah well no idea honestly uh but you know uh where like from where the revenue is coming from right so you can parir it you know you have the wallets and the IDS so uh if if the transaction is happening then you can definitely do that I'm not saying it's it's going to be easy or if it's easy but still of course like I'm not trying to attribute the Marketplace Revenue I'm trying to attribute players that go on your website and buy your nfts from there pretty much and together with their in game client but like mark my words can I um can I add of course sorry go ahead man I know I was going to say like I wanted to suggest another and and yakob will will like this uh suggest another way in which blockchain gaming will make things just more complex than they might maybe need to be um so you know you just talked about Revenue attribution um I think the concept of Revenue will also start shifting so if you look at axi um

you know and we be talked about axis's Revenue so axi takes a Marketplace fee I think it's 4.25% on every transaction that happens in their Marketplace um and that's supposedly their revenue but the game so the company um Sky Mavis they own a ton of AXS tokens and those AXS tokens also increased in value yeah now decreased obviously right you're absolutely right but but my point is that um I'm actually looking at certain games that don't have a Marketplace fee they don't take a fee on transactions their whole uh the way they're going to make money is by carefully designing the economy to own the token that is actually utility within the game that is essential within the game and they expect so the value of that token to keep increasing and then they can either you know do sales to to generate cash to to be able to avort stuff um and so you

know at that point you know how are you going to calculate revenue for Revenue attribution um and so I I made the case that um within the world of web 3 I think the three most in demand professions will be one blockchain developers two um Community managers or Community Builders and then three uh game economists because I think toomics designers is already AZ word yes but but just general because the thing is and also made a tweet about this um the moment you can use a token that illustrates the value of a company or network for something you cannot compare one with the other so let me give you an example imagine that if you held or if you owned a share of Apple the company you would get a 10% discount but when you B bought an iPhone imagine if that was was the case I mean and and it it would change like you couldn't compare that to you know um uh a a uh share of of another company that is not within

that industry right um and so I think you know that they're calculating the value of something given the complexity of what happens when you have actually value in something that also has utility within a game um becomes very complex but that also means that the whole value of the company is pretty much uh at Mercy of the free market economy at all times yes which is the case in in stock market right now right Felix what was your thought no I was essentially going to tell you Matthew that mark my words like when we hit a critical mass of uh you know blockchain games there will be guaranteed someone who makes you know in app like Network for crypto games so you can actually probably do you know UA through in-game ads as well at some point it's just a matter of fact when you hit a critical mass of games I guarantee you'll be able to do that as well of course and also there is uh there is this uh other possibility that's uh what I think X is trying to do

is build a free-to-play game drive a lot of traffic there and then send that traffic from free-to-play uh game to your web browser to your other crypto places where you can actually earn money that's uh just one uh type of the or one uh one funnel you can use fortnite is doing that currently they even said that during the trial uh when they were showing their metrics that the mobile clients are pretty much driving Revenue into console and PC so people people who play mobile have like higher chance of buying something on PC and console there you go makes sense yeah so you know UA blockchain amazing maybe maybe let's skip this into the like actual thing we were talking which is the whole business model of like a actual thing do do you mean like UA is not an actual thing come no no feel free to continue UA this is the like I would say for me the

biggest question of them all because usually uh when I'm designing anything in the game currently in free to play monetization equals game design for me and even the terms that I keep hearing around the industry that like yeah game economies and toomics like for me it seems like we're just piling more stuff and more expertise on the game designers or product people for me it's the same same person anyway that you just need to pretty much take this into account when you're designing these otherwise it won't work same as like monetization freet to-play game won't work if you don't design it from the startup and you just duct tape it on top of it same with ad spot in iips so what would you think currently would be the like at least some kind of estimate that the current let's say New Generation crypto freeo play whatever we call it hybrid game would make based on the revenue like we talk about the that of course there's the possibility like you said Nico that the team can just live on the I guess it's it's a like matter of like a having value in the treasury that appreciates and like goes up and pretty much te leaves on team team leaves on top of

that or if there's like a possibility to do some kind of like more stable kind of Revenue or even subscription wise or something in that matter because how I see it currently so there's there's the possibility to get iip and ad revenue from the freet to-play economy let's say or the the the base layer and then we have the marketplace fees or the direct sales of the nfts or cryptocurrency if we control that so there's like four sources that I see currently being the the whole thing do we see anything else in the P like how do you think the whole py will then looks like it's a it's a hard question because I don't know if like how I currently see it I don't think so living just on the marketplace fees is sustainable that that's like too small of an amount to to live live through if if we if we want to live in the same assumption that most of the budget of the expenses of a game company goes to marketing because then the UA basically

yeah because then we are under assumption that the organic growth is the one that's driving the company with only yeah please stop the organic growth these like these two words next to each other organic growth doesn't exist let's trigger mat even more this doesn't exist come on stop see now like if you have a like random top 50 freet to-play game 80% of the budget or 90% of the budget of the whole team is driving towards UA or marketing so how how a crypto business model would pretty much deal with this notion because currently I see like this is this is the problem I see with scaling the whole model currently because it's okay to scale it in the current environment of course and that's that's okay but the question is if you want to scale it to the to the degree and even like continuously scale it because a lot of of games uh don't have a problem to have this kind of a global

lch hype period that they live for like half a year or or pretty much they even live forever it's not a problem but the question is that they're not growing continuously because if we take let's say something like I don't know Empires and puzles AFK Arena or some of the big games in the top 30 top 50 uh they'll scale to some let's say critical mass when they hit the ceiling on UA and on the CPI LTV formula being I don't know 20 million 30 million a month or something like when they hit their margin and then they remain there for some time and then they downscale because the game is usually sounds seted and Company moves to another game so how this would look like in the long term within the crypto industry or let's say crypto game model because if I if I see correctly stop stop stop I want to hear what n has to say on that yeah exactly so you you asked like 20 questions and if there is like a small pause where we think about like how to answer those you just start

again yeah it's pretty much burning in my head he's Unstoppable burning whenever I hear about the business model okay yob give me like a one sentence question because I don't know what how do you think a crypto game will deal with UA or the growth of their user base user I um I recently read a interesting article mate I think I sent it to to you by Eric sufor about where he says that in the end all companies go towards um or all all types of games converge towards the UA that we currently see in free topl that's the case that he they wanted to make um I can see that happening for sure um and and happening within crypto games for sure um that said I also think that you know a current free to play game is like relatively closed entity it might be

like a live Ops game or living game where they keep content um games as service thank you I think there's potential um but I'm not 100% that this is going to happen there's potential for blockchain games to be kind of like Eternal in a way where like one for example um a blockchain game that is fully onchain the one I you know described earlier these are actually so there's no like these Live Forever by definition well they these live as long as the blockchain lives and so game V1 if if a game V2 comes out and that is a set of new smart contracts the game creators can actually stop not stop anyone from playing the original version of the game funnily enough so because it's it's just there um and so what I think could happen is that you know blockchain games have the potential to become like really like really big and ever evolving where you know they keep they keep growing um

and so I can see a world where and and sorry I'm really not fully answering your question I'm sorry for that just because I don't have the answer I I I see a world where you know they have um ecosystems like for example axi that just are almost like Eternal in a way where you know you have the axi infinity current game right but then you would have you know new games out of off of that and then people would stop playing the initial game but there's because of the community and how they're you know involved and invested in the game because they own the tokens and the axes and the assets um they want to find a way to make this this work and to find new new games within that ecosystem and so you could say you could see um axi almost as you know marvel where you know marvel doesn't Sunset if that makes sense right there's always new content created it's like it's a world and there's more stuff happening within that world and if you're within that world just stay within that world and I don't know it's it's I think it's going to bring forth like a Paradigm Shift um and that will I don't know how that would

answer your question but that's that's how I see I see this I see this as you're saying like as an example with Skyrim where you have like a 10-year-old game that's being pro up by the moding community and still feels fresh something like that yeah go ahead fix sorry yes yeah Nico are you expecting kind of ltvs in crypto games to be a lot higher than in free topl or a lot lower I think a lot higher for sure yeah um I think games through because games until now were by definition a hobby because there wasn't really money involved and also not a way to start earning money um or at least not legally um or officially through the game and I expect that Paradigm to shift moving forward where you know instead of seeing it as an expense spending money in a game could be seen as as an investment and I mean I see this happening with me right um look like I'll I'll go to the shop and like look for the cheapest food but you know spend ,000 on a freaking photo on on the internet right yeah your

n Gallery is just full of everything basically full of full of terrible stuff and rug plls I know thanks man no but I mean it's it's it's because you really own the thing I think things that the the mindset of players will shift and and the fact that it's not an expense but something you could potentially sell either for the same amount maybe for more and in worst case for Less um and I think that will increase the willingness to pay of people and like investing money into the the games is actually you know a very good retention mechanic because obviously now if like you said uh during one metacast like what you asked me about the day 90 retention of ax infinity and then we found out like it's like a work retention because they just like going to work every day yeah yeah that's that's nice that's true yeah all right Mr yakob any any any anything else because you know you're unst no I can continue if we can keep up oh God I I

can return yeah let's talk about that last comment and mat said like when you invest into the game because that's also one of the other burning questions in my head where the nft design itself or let's say the crypto Air Design usually in the free-to-play model it works like that that you pretty much defend your market share with the investment that players already sunk into your game because let's say people play a lot of match three games because it's normally by the design of their games that if you run out of lives on on one game you switch to the other game and it's completely possible that you spending all of those but if we take some midcore RPG games or other games that are pretty much much more demanding on your time and also wallet you don't have time to to interact with multiple of those so if a new game comes on the Block you really really really need to justify the switch because you lose all that value all that progress and the game needs to really kick it to be better so if I understand correctly or let's say in the current spaces I see it what would be what would be pretty much holding the players in in

their current game if as you said like if they can pretty much sell the value that they added to their progression and then pretty much all their progress that they did in the game immediately and transfer that progress into the had the Head Start in the new game because that that's that's in the end is the interoperability that I see being possible but in the end this would crash or tank the previous gamees economy um I think fundamentally within web 3 as in other games the most fun games will always do best um and and now with this I'd like to introduce A New Concept um which was coined by paky McCormick and he called it the funtier um and it is taking together fun and Frontier and so what I think will play out is um you'll have two a you have two axes you know you have a graph with two axes and there's going to be fun on one axis and earning potential on the other

axis and there's going to be a frontier like this where you know the more fun a game is the less earning potential it will have or and when I say a game I actually mean it could be a game but it could also be a part of a game the subpart of a game because actually the the way I see a lot of sustainable um games evolve is in asymmetric gameplay where there's a bunch of responsibilities within the game some people are mining ore some people are enchanting then other people are actually you know battling and fighting and so the least fun activities will have higher earning potential because less people will want to do that and if it's carefully balanced I think you know those will have a higher earning potential and then other game or other parts of the game that have you know that are more fun will have less earning potential because more people are are wanting to do that and so to answer your question I think that's um there's going to be a bunch of games and part of the game on that on that you know fun fun tier and I think individual players will make decisions about you

know one what they're good at um what they're what they enjoy doing and then also like how much they want to earn for their time and something like that and that's I think what's going to drive the the um the the switching between games and I think new games will drive the frontier upward so there's going to be new games that offer more fun for the same amount of earning power and then you'll see switches and and you'll see adjustments made um and that's kind of how I see this evolve so basically if uh if like uh half of the players of like C Infinity now you know cashes out everything and then moves on to to other game that can up the whole game basically right because they're like transaction volume decreases everything just decreases and if like a whole like player count just leaves power to the players yeah that's that's the question like what happens then like the game dies I think it depends it depends on on how many players are stilling in because if you assume that that stream is is

steady and fixed and obviously you can't do that but if you just assume that for a bit let's say there's you know 10,000 players a day who want to start playing axi so there's actually like constant demand for new axis and so if if the if if suddenly players stop playing then the supply of SLP which is needed to breed axis actually goes down which will increase the price of SLP and of axes because the supply goes down demand stays the same and so suddenly the the the you know the potential earning potential so it's going to go up in terms of earning power for the same fund yeah um and and I think that's that's how that would play I think it's going to you know it's not going to be not fun anymore it's still going to be fun if it's a good game even though people will leave or the economy will crash so what pretty much niik said there that like if the fun part Never Dies like if you want to play the game and relax like the economy won't I guess it it won't if it's designed in a way that it won't crash itself because sometimes crashing the economy can also crash the fun part what we seen with let's say diablo

auction house where going on the auction house was basically better than playing the game and you are saying that because you are the PED of Exile fan so you know P Exel has it great they reset their economy every three months it wouldn't work otherwise so I'll um I'll I'll um I'm looking at a game which builds Path of Exile but then uh on chain or not on chain but uh with crypto elements so I'll definitely you know share that with you um once they're going more more public um I was going to say something but I sorry I interrupted you no no worries p p Exile economy is like a great great example of how to run things because they their currencies all have intrinsic value because they're all crafting materials so there's always demand for them and they know that they cannot really run the thing like one thing is that the new mechanics bring brings new flavor to the game and they they live on these kind of player spikes during each

three three months where people come in they run the new content and then they leave and then they come back like there's I I I know that there's no such thing in the industry but they exactly leave on this and the spikes are getting bigger actually so the game's growing and and the other thing is that also they have their they weren't doing this before they have their standard league but they don't care about the economy in the standard leag that much because it's so unbalanced and so you know around or pretty much flagged by Bots or anything else that there's pretty much running there nobody M it doesn't matter because the new mechanic when the league runs is only the temporary league so everybody just switches there and and the system works great actually but they know that they won't probably ever add the the auction house the one similar to Diablo because they don't want to actively facilitate the trading because they would run into the same problem so they they they know that the trading is really bad you can do it but you need to go through like a lot of player friction and everything and get scammed of times but it works but they won't facilitate it because they would

know that they would run into the same problems that you uploaded yeah all right so I think we have like one last topic so I mean we have like 10 more minutes so let's uh Let's do let's do it let's do it let's let's talk about the nfts because I mean uh that's my favorite thing I don't own any NFD you don't own a single one but uh not a single one not yet I'm going to transfer you on after this call yeah okay well then I will shut up I'll leave you to leave you to it yeah nfts this for me also this is like a really interesting topic because usually you don't really operate with something that needs to be needs to at least preserve value long term in any game game economy because inflation actually is a great tool in game designers toolkit that you when you want to add new content into game usually the old content is a sacrifice of that inflation like best example will be

World of Warcraft expansions like I remember really really well the stories when the burning Crusade would hit in and the guy in like blue or green gear on 62 would pretty much steam roll over you when you were full epics on 60 still and that that's how they do it and it's a great window of opportunity for new players to jump in and pretty much get on the track with the whole game and not fight against people that are out for the last 3 years and and power crib is pretty much a gameplay mechanic that people use in order to progress into games so even more and more that I see the current crypto space I guess it will become some kind of a normal way of things of having destroyable nfts or nfts that are not permanent let's say the current implementation that I saw within crypto Raiders even tetan Arena have their Heroes that they have some kind of internal energy I think that's a good thing because I guess more than we go to this kind kind of level of not inflated expectations within like play to own it it seems like completely

normal to me then that yeah I can but wait wait wait wait wait wait so you you purchase or like pay a lot of money or invest a lot of money for an nft and then it's it destroys after you use but you it brings you value in the process for instance you trade the energy with an engagement and fund and get the cryptocurrency in return okay all right that that's how the sense that's even how the model with like people would buy the new Heroes then they would Farm the cryptocurrency with it and when they were hitting this kind of a sweet spot of an energy they would sell them on the market so so so they would be still be able to sell them but they would have the profit which creates even more speculation in that case yeah probably okay that's why okay I love it but it seems to me it seems to like it be go ahead ni sorry no I was going to say I mean speculation is still uh the name of the game within

crypto right I think no one denies that um except for maybe hardcore crypto Bros who were like no everyone plays this game for fun it's amazing look at the community man um this is you know by the nft um anyway so I think apart from those dudes um every like people realize that the why we've we're seeing such insane prices is pure speculative um and it's not sustainable would you say uh the speculation part of crypto games right now is his biggest threat currently is it the biggest fun biggest threat bigest threat to like wild skate ad option yeah I think it's um it's definitely it's definitely not good right the fact that um you know the industry is seen you know I think a lot of hate from traditional Gamers and maybe also game developers comes from the fact that there's so much speculation and there's so many you know crypto Bros who are in their bags and so many Rook pulls so many scams um and and the problem is

that these things are to be expected right in the beginning I said you know blockchain is adding a value layer onto of the internet and the internet was already the wild west and now you give people the tools to freaking you know transport value over that thing so you can be sure that there's like large sets especially within the nft not necessarily gaming world but also in the gaming World U there's a lot of scams and there's going to be a lot of scams and there's a lot of speculation and um you know my expectation is that more than 99% of current nfts um will be worth less in the long run that's that's my expectation same with with games in general um uh but I think you know that doesn't and so that's why I think it's it's a bad thing for adoption because it's it gives a negative perception but honestly like I I'm less I'm not bothered by it because I think it's inevitable right as we said there there's Bad actors out there there's people who just want to make a quick buck and they're going to find the tools and use that um and so I think you know it's it's it's negative it's it's not

helping um but I don't consider it the biggest threat I think you know bigger threats um I personally believe that massive crypto adoption is inevitable um it's matter of time and I think the biggest threats and when I say threats I think you know what's going to make this take longer than it would otherwise do is probably a regulation um and I don't think you know speculation is is necessarily bad thing I mean look at right axi I think a lot of people got into axi kind of out of speculation um and it actually made the you know the um adoption faster ironically true very true oh man this was amazing this was so great so great I would love to thank you all guys for for this session full of crypto um knowledge I would say German yeah German very good so So yeah thank you very much guys and thank you very much uh to our listeners

as well don't don't forget to subscribe on our YouTube channels or these four uh beautiful faces are going to be there in a very short amount of time and then uh yeah talk to you next week thank you much guys byebye bye everyone thanks cheers play to earn pay play to or whatever [Music]