My Honest Take On Crypto Gaming- ($AXIE, $GOD, $MGOD)

Blockchain gaming. What is the honest take on blockchain gaming right now? Is it full of opportunities still or are there a lot of dangers that are present because it's been a year since Axie Infinity took off, blew open the gates and flooded everyone with the immense opportunities that is blockchain gaming. That's why in this video we're going to be very honest and candid. We're going to take a look at just going back to the basics. What are the unique opportunities presented by blockchain gaming? We're also going to do a post-mortem analysis. I think this is quite key to analyze past trends to see why Axie Infinity worked and also we're going to compare it to a game that launched at the same time as well as Axie Infinity. We're going to compare it to Gods Unchained and we're going to take a look at why that didn't work so well. Why Axie Infinity took off to the billions of dollars of market cap, whilst Gods Unchained is still struggling to maintain more than 100 active users per day. We're also going to take out a look at opportunities to continue to watch out for. I think this trend is going to be strong for the next 5, 10, 20 years actually. We're at the start of blockchain gaming, not at the end, but at the same time there are many dangers to avoid. Anyways, if you guys enjoy content like this, make sure you click the subscribe button down below. Share this video out as well, especially right now. I think a lot of people are confused about what makes a good blockchain game and of course make sure you click the like button too because why not, right? Let's start getting the terms right and getting the key features of blockchain gaming right first. So first of all, what's good about blockchain gaming and number one, first and foremost, it's the metaverse. I know Facebook's got an infinite education on that, I'm not going to extend on it too much, but it's just a simple idea that items can cross both platforms and other games. This means you can be playing a mobile game and have the same items, same experience, same characters in a PC game or Mac game. And at the same time, it can cross platforms too, whether you're on PlayStation or you're going to go on Facebook and play, you can kind of cross those platforms because well, at the end of the day, a public blockchain is public and anyone, including Facebook, Microsoft, Google, they all have access to the same amount of information. This by itself is extremely revolutionary in a sense that it allows people to both connect together, but it also allows for a lot of marketing opportunities. Being able to use one item in one game and then transfer that into another will allow and decrease the cost of acquisition because users just want to move across, right? So user acquisition costs will decrease. Next up, one of the biggest advantages and I'll also list this as a very big disadvantage is item trading and marketplace. With blockchain gaming items can just be traded like fat. I mean, the whole Bitcoin blockchain is built around trading and transferring value. Now on top of that, with Ethereum, there's now smart contracts and GameFi, you can instantly sell items and even fractionized items. This is trivial and there's a million marketplaces to do so already. So this solves a lot of the issues about item trading in video games. However, there is one key disadvantage as well. With item trading being so easy, it becomes one of the core pillars of the game automatically. And this is something that game developers really need to watch out for. And one of the videos that explains this very well is Diablo 3. Because if you ever played Diablo 3 and looked at any of the postmortems, a lot of the analysis is on the fact that when Diablo 3 launched, item trading actually killed Diablo 3. Blizzard made it extremely easy for players to trade items, unlike in Diablo 2. And the ease of trade made it extremely easy to just pay to win and beat the game. And with that, it kind of killed the luster of the game. People were playing medieval eBay instead of killing monsters and they weren't having fun playing medieval eBay, right? So this is one of the things that we have to watch out for in the blockchain space. Next up, we have land ownership tax digital rights management. I'm putting this all into one. This is all kind of your passive income. Now, a lot of of it started with man at the central land and it talked about land ownership. And then people start exploring, you know, what can land owners get on top of it? Can they take, say, for example, an event is being hosted on virtual land. Can, are they have, do they have the rights to ticketing costs, a percentage of the ticket costs, or maybe if they own a particular stage of a game, do they own the rights to some of the income that's made in this property? So this is not completely new games like Eve online. They have corporations and corporations can set up tax, but what blockchain does is this makes it a lot more both tradable and much more accessible for everyone that's not in the game to even speculate on items. We see now with Axie, a lot of people who didn't even play Axie started investing and buying Axies very early to take part of that ecosystem or take that AXS token as well. So I think this is going to be huge. This of course does hinge on, you know, is this a security or not? I'm not going to discuss this in this episode, but I think there's a lot of thought about digital rights, taxation, and ownership that is completely game changing in this landscape. And I think as soon as we continue this discussion, it's going to lead to some amazing results. Lastly, one of the key advantages is play to earn. I mean, this is being shoved down everyone's throats right now. I'm not going to explain too much about this, but I do think that the idea where people in third world countries that can potentially earn extra money, income, playing a video game, it was a very key driving force in both the success of Axie and future and will be the driving force for a lot of games to come. So now that we identified the key features of blockchain gaming, let's take our knowledge to some practice. Let's take a look at some existing games, why they worked and of course, why some games didn't work. The most important of course is Axie Infinity. It was the one that blew up the doors and allowed people to enter the space because it was a billion dollar cap coin. It made more than a thousand X to early investors. And this was kind of the flagship of what is blockchain gaming at its current point. Now, why did it work? I think one of the key reasons and a lot of people that don't mention is that Axie really used a tried and tested breeding formula. This really came from CryptoKitties. It was kind of the prototype of a game. It's really just an NFT card trading system based on breeding. But Axie Infinity took these concepts of breeding these kitties to the next level. They added a lot more depth and complexity to these Axies. So you can breed with different body parts and they come with different cards. So there was a lot more depth and a lot more gameplay in this breeding system. Speaking of breeding as well, Axie also introduced a secondary token. So this is the smooth love potion, the SLP. And SLP essentially was required to breed Axies. This is a very different shape. The big change from CryptoKitties. CryptoKitties required Ethereum, but Axies required a secondary token. Now, this economy of the secondary token is extremely important because of the supply, the limited supply of the SLP. It meant that it was impossible to flood the market with more and more Axies because the rate of producing SLP was limited and hence the rate of breeding were also limited. So this meant that this brought the value of overall Axies up overall as more and more players joined the game, which really extended the life cycle of the game by a lot. And lastly, scholarships. This was really a side effect of the way people logged into Axie. They logged in via QR code. So what people did was they started sharing those QR codes to let other players play and kind of farm that account whilst they were offline. This created systems where people will offer scholarships up to 60, 70 people to play different accounts, farm those accounts and make passive income. So this really brought more and more people into the game because it allowed people to mentor other players to play Axie because they needed to get the best yield, right? They're financially motivated to teach other players how to play and to let them kind of get the best yield and then they split the profits at the end. And if we actually take a look at Axie, it doesn't look groundbreaking. I mean, the graphics are very simple. It's very clean and it didn't require too much of this, you know, it's not even 3D. It's very much a 2D game with very simple graphics and very simple to produce art. And I think this is one of the biggest reasons why Axies was successful. It didn't deviate too much from a tried and tested formula. It really focused on what was core and they were able to rapidly develop when they came to production. However, that being said, with the way Axie is going right now, there's definitely some problems. One of them is the high cost of entry. Right now when we play video games, even if you look at triple A games, people are roughly paying $69 for, say, a PlayStation 5 game right now. And that's what people are expecting to pay for triple A. However, if you look at Axie, it doesn't really, it's not really a triple A title. It doesn't, it's pretty much an indie title at this point. And the cost of entry could be up in the thousands of dollars. As a result, most people aren't really paying to play the game just by itself. They're looking to make a profit. They're buying these Axies so they can either farm SLP to make a profit or they're buying Axies so they can breed more Axies so they can flip it for a profit in the future. Now, this is quite a problematic thought. If people are just only going into the game to make money, if that was the own sole purpose, and the only way to make money is so more people down the road can buy your Axies, the game will continuously need more and more people to come in to buy the Axies that are being breeded and produced at this current rate. Otherwise, Axie prices will fall drastically, leading to a collapse of a pyramid structure. Now, is this the end of Axie? I don't think so, because there's still many tricks up the sleeves of these developers. For example, they can introduce Fusion, which would be a consumption, a higher consumption on Axies. Also, there's always this talk of version 2 coming out for Axie Infinity, ways to extend the game. Now let's compare Axie to another game that launched at a similar time, but didn't work as well, which is Gods Unchained. And if you actually look at the interface and look at how beautiful Gods Unchained is, Gods Unchained looks AAA. It looks bloody fantastic. And in fact, it received a lot more funding than Axie. Axie raised less than $1 million when it was raised during the bear market. And Gods Unchained, they took over more than $10 million. That's 10 times the difference in funding. And of course, the art quality is just superb in Gods Unchained, but they did not enjoy the success of Axie Infinity. So why is that? And one of the key reasons here is gameplay. If you look at it, Gods Unchained is a direct copy of Hearthstone. And in many of the criticisms, especially during launch, were that a lot of the cards played exactly like Hearthstone. They were just not... even like the the numbers, the defense and attacks were the same. So this is a big problem. And this will always plague blockchain gaming. If there's no gaming innovations in a video game or in a blockchain video game, it's not going to work because people are always going to be able to go to the next alternative. Next is trading killed the game. And this wouldn't make sense to a lot of people. It would if you just watched this video, but this is a prime example of how trading is great, but at the same time, it could be the doom of a game. If you look at these trading card games, right, it started off with Magic the Gathering and then it evolved into Hearthstone. And Hearthstone did something smart. They said, you know what? Trading might be fun, but we're going to turn it off because these cards are the main source of monetization. If they let players to trade cards, these card prices will continue to go down and it'll be raised to the bottom. Or conversely, if you wanted to really make money on trading cards in the future and taking a 5%, then these cards will be ridiculously expensive. They cannot be in the price or in the small price range of maybe like $10, $20 per card. They'll have to be thousands of dollars for the developer to continuously make money. So that's a lot of talking on Gods Unchained. But of course, it's not completely dead for this project. In true blockchain fashion, Gods Unchained launched their own token. So they have a second chance now with their token launch, more money raised, more money to play around with, more communities to build. So I guess that's the lesson in blockchain. If things don't go super well, launch a token and it will always save things or at least extend things. And it gives early investors an opportunity to exit. So they're not as angry at you, right? So, you know, kill two birds with one stone. There's also expansion packs. So, you know, hopefully they'll find some way to fix what they're doing there. Now down to what I'm looking for. So learn. So knowing this, what am I looking for? So first of all, teams are able to rapidly innovate and build. I think this is extremely important because we're looking for new types of gameplay. We're looking for new innovations here. So being able to build quickly and kind of efficiently, even maybe dirtily is important. Next up, I'm also looking for multiplayer and social features. This is very important because blockchain people love showing off. It's pretty much proven in the NFT trading space. People are willing to pay for JPEGs because well, they can kind of flash your JPEGs and flop them. So multiplayer and social features are extremely important here. Now, I didn't want to show too hard in the video. I thought this would be analysis of games overall, but I do want to put some things in context. And I do want to talk about a game that recently kind of encapsulates a lot of the stuff that I've been discussing, which is Metagods. So Metagods, they're kind of like this 8-bit shooter game, kind of reminiscent of this 8-bit graphics of the past retro games. But what they're doing is in a modern setting because they're allowing multiple players to play together. It's a MMO type game and you combine together to shoot down bosses. Now, this is exciting for two reasons. One, because well, retro is awesome. But second of all, is because of the social aspect I was talking about. They're really pushing this concept of social gaming where you can invite anyone via Discord link or Twitter link to join into that game. You know, technology is so good right now that you can pretty much click a link, join a game, even without downloading much of the game, you can just preload it. So being able to be very social, interact, play. And of course, because the game is 8-bit, it gives the team a lot of time and ability to innovate on the gameplay and focus on that rather than just pure graphics. So anyways, I thought that was kind of a good mention here. I've been following their progress a lot and I definitely want to see more games like this where the gameplay is the kind of front and center of everything rather than, you know, graphics. Anyways. Okay. Now talking about all the good stuff, there are a lot of bad stuff to watch out for, some things to avoid in this space. Now, the number one thing I think to avoid is bad tokenomics. So this is the design of a token. A lot of times because these projects they raised in private and presale and private and presale people got discounts on their coins. This is going to be problems in for the future. If these private presale investors decide to dump their tokens. Now, bad token design, um, two kind of criteria is to watch out for our identify here is either no cliff or short vesting. So a lot of times if there's no cliff and maybe like a short vesting. So let's say if the schedule is three months or half a year where these tokens get released very, very quickly, that creates a huge cell pressure potential and it can cause this token to dive and to drain like very quickly over like a year. So that's not great for the community. It's not great for anyone. And that's one of the biggest risks to watch out for in this space, especially if you find out projects that have no cliff or no or very short vesting periods. The other thing to watch out for our trailer games, which a game just kind of relies on trailer and not explaining too much about what the gameplay actually is, or the gameplay, the trailer looks fantastic. And eventually this game might not look just as good because you know, in the game engine preview versus the trailer PV is going to be very different. Now, how do you decide if a trailer game game is a trailer game or not? Well, the unfortunate part is that it does take time because you need to team to show itself and game development may take two, three, four years to even show any results. This is quite different. I think that should be the concluding thought of this video is that game development takes a lot longer than what people normally think it does. A lot of times this is because game companies, they only release information about a game once it's almost near completed development. So gamers have this kind of diluted perception that games take half a year or one year to produce when in reality, it might've taken five, six years of hard, grueling work. And yeah, they just did the marketing closer to the end. I hope this video was also helpful in giving you guys some insight into what makes a good game and what doesn't make a good game. I think a lot of times it's definitely not the graphics, even though it's the first thing that people kind of are drawn to for a game. It actually takes a lot of new ones and a lot of time to actually figure out what is good. So anyways, that's the end of this video. I hope you guys found it useful. If you guys have any comments and thoughts about video games and the gaming space, leave them down below. I'd love to hear them and I would love to share more of my experience as well. So if you guys have any kind of particular areas for me to examine as well, leave that down in the comment section. I'd love to do that for you guys too. So guys, thank you guys so much for watching this video. I'll see you in the next one.