IOSG: GameFi Dead? We did a crypto game ecosystem map

原文标题：《 IOSG Weekly Brief ｜GameFi 已死？我们做了一个加密游戏全生态产业图 》

Original article by Fiona, IOSG Ventures

We are currently in the process of shifting our focus from Infra to user, and the reasons are as follows:

1) As DeFi and GameFi thrived in the past, the infrastructure is relatively ripe for building vertical apps;

2) A lot of developers are building apps like Verticals DeFi/GameFi/SocialFi to acquire users, but the user base is very small. Therefore, the future needs to think about how to acquire users and maintain high retention.

GameFi is a pretty big ecosystem, not just games and studios. Below, we'll give a clearer picture of GameFi's audience and its value flow from a user perspective.

In the grand scheme of things, GameFi is made up of 8 parts -- client aggregator, game, multi-game platform/publisher, liquidity provider/financial instrument, blockchain solution provider, game engine, developer/studio, and chain. Based on Steam's classification of games and the mobile Games category ranked by revenue, we've come up with five categories and 11 sub-categories for specific games to cover the current crypto genre.

Let's take a closer look at these categories with the industry overview below:

Source: IOSG Ventures

chain

It is an interesting new trend for GameFi projects to migrate or be copied onto new chains, as was the case with DeFi in the past. Currently BSC/ETH/Polygon/Wax is the leader in the GameFi space, with over 80% of on-chain games deployed on them. Meanwhile Arbitrum and zkSync are ambitious new challengers. For example, Arbitrum's Beacon, an action rogue-like game, has garnered a lot of attention after hitting 21,000 DAUs in less than a month. Tevaera, which is active on zkSync, is an arcade action game that was one of the first to be released on its main network.

Game engine

Before game engines, game developers had to write code from scratch again and again, and had to go through the game code line by line. But they can't run and test anytime. But soon, developers realized that much of the code could be reused, including the graphic material. This will help optimize the development process and save development time. So game developers gradually began to integrate the code and assets needed for a game into one set of development tools, and this is how game engines emerged.

Most games today, both Web 2 and Web 3, are built on Unity and virtual engines. Like the virtual engine developed by Epic Games, several Web 3 game studios, such as Planetarium Labs and Lattice, are developing their own Web 3 game engines to enable developers to write complex game logic and interactive content.

Blockchain solution provider

When the gameplay is designed, the developer or publisher needs to integrate blockchain technology into the game, which includes selection of on-chain partners, embeddable wallets, NFT minting and marketplaces, compliant solutions, and SDKS/apis or other services built for the token economy and management. As players grow, their needs become more diverse. And with the addition of traditional game companies, the demand will be even higher. Because most traditional game builders don't know much about blockchain, they struggle with blockchain integration and economic model design.

We break it down into eight industry types based on the different services that solution providers provide to game developers or publishers.

One-stop service providers: They typically have the most comprehensive blockchain integration technology stack and provide related services to developers and publishers. Forte, for example, includes almost all of the above features and helps offload blockchain technology work from 3A game studios to help them transition to blockchain games.

Web 3 Integration SDK: Basically includes most of the Web 3 development frameworks and tools. They separate out a suite of games specifically for games built on blockchain. For example, Thirdweb provides the Unity SDK, which provides off-the-shelf contracts such as Market, NFT pledge and airdrop.

Studio SDK: Services provided by game studios, including Bigtime's Open Loot, Horizon's (skyweaver) Sequence, etc. They use their experience to help Web 2 developers and games get to market. Open Loot is also providing marketing support, payment support, integrated game analytics, and more.

System simulation: Popular in game design, especially in Web 3 games, because of the importance of economic cycles to Web 3 games. Maintain a healthy game economy by simulating, testing, and monitoring gamefi systems. Currently, more than 20 Web 3 games cooperate with Machinations and are announced on their official website.

Certified vendors: Use their Unity and virtual engine SDKS to engage players, reduce friction and reduce learning costs for players to accelerate blockchain's mainstream audience. Data  

API vendors: Build web2 and/or web3 databases and allow developers to read and write user data in real time, such as exporting analytics to websites and applications, creating in-game leaderboards, exporting wallet addresses to whitelists, etc.

On/Off Ramps: Allows developers to integrate their SDKS to buy and sell cryptocurrencies in games without having to worry about KYC.

Marketing/consulting services: including tokenomics design support, branding services, etc.

Multiple game platforms/publishers

They are a genre of to-C game publishers (some of which are also developers) that offer different types of games to players. Gala, Sandbox and TreasureDAO are leaders in this field. TreasureDAO is building a decentralized gaming platform and publishing platform that has a community of more than 100,000 players and is the number one gaming and NFT ecosystem on Arbitrum. Such platforms can build an infrastructure and ecosystem to meet the needs of independent developers, and form economies by accumulating player activity. It is not affected by the short cycles of a single game, and therefore has greater ecosystem resilience.

Liquidity/financial instruments

Financial instruments include lending, leasing, investment derivatives, union services, markets, etc. But most of the services are still in the early stages, as each game has its own separate financial model and the requirements for the services are not clear. For example, lease agreements are not difficult to set up compared to loan agreements, so there are a lot of projects in this area. But the need for this service is often questioned for several reasons:

1. Big game studios build their own rental systems (which are easy to build), while smaller games have a shorter lifespan and a smaller meaningful user base to support rental needs;

2. Many games are trying to lower the barrier of entry for mainstream users, so in-game NFTs are becoming cheaper and cheaper;

3. Most rental agreements require the use of an escrow account to lease NFTs, but this must be approved and acknowledged by the game. Otherwise, NFTs will not be allowed into the game, adding to the difficulty of this business.

game

Based on Steam's breakdown and top grossing mobile game genres, we've come up with five categories and 11 subcategories to cover current crypto games. (See the glossary at the bottom of the article for definitions of each type.)

RPG: MMorPGs, Team Battle. For example, Bigtime is one of the first MMorPGs to land the fastest. Players earn nft and tokens by forming a team of 6 to do quests in the dungeon. It has the largest community of Web 3 players, with over 400,000 members in Discord.

Strategy: Cards, board & Auto Combat, real-time Strategy and Tower Defense, Grand & 4X, DeFi & Gambling. Illuvium, for example, is laying out and launching a series of tightly knit, interoperable games, one of which is an open-world adventure with an automatic combat core.

Simulation: Farming, Space & Science Fiction, Life & Leisure & The casino. Castaways, for example, is a fishing game where you drift across the sea to find islands, gather resources, and fish for survival. It gained huge traffic two months ago, with more than 70,000 daily active accounts.

Action: Shooting, fighting and other action games. ev.io, for example, is a very popular FPS (first-person shooter) game with 1.3 million visitors in April 2022 (average 550,000 in the most recent quarter).

Sports: For example, MixMob: Racer 1 is a very special card combat racing game developed by game veterans who have worked on FIFA, Halo, Battlefield and more.

Over the past two years, the most popular types of Web 2 games (mobile), according to data.ai and SensorTower, are: RPGS, strategy games, action games, simulation games, and sports games.

To give you a concrete example, Rise of Kingdoms is the top spending game of 2021. It plays similarly to Rise of Kingdoms and is part of the RTS subgenre of the strategy category. Lineage M, a multiplayer online role-playing game, came in second. The others are: Fate/Grand Order (team battle RPG, Japanese fantasy style), Slotomania (Casino, simulation), Homescapes & Candy Crush (games, casual), PUBG (Shoot-outs, action), Monster Strike (team Combat RPG), Professional Baseball Spirits A (sports), Roblox (sandbox, simulation).

Our logic is that if a genre doesn't appeal to players in the traditional gaming world, it's much more challenging for it to succeed in the context of Web 3. Given this fact, Web 3 games can capture the Web 2 gaming market by improving the player experience, creating an effective secondary market for items, introducing a more attractive and healthy economy, and allowing new content creators to join the ecosystem.

Client aggregator

Aside from viewers, GameFi's audience falls into three main categories, from reward-driven to fun-driven.

Web 3 Users (cryptocurrency natives)

Web 3 Gamers (cryptocurrency native gamers)

Web 2 Users (traditional gamers)

There are currently 400,000 active addresses in Web 3 games (source:The flow of capital and talent behind Web3 GamesStill small compared to the 3 billion people who play traditional games. In order to engage traditional gamers, client-side aggregators are essential to provide a seamless experience. There are eight types of aggregators:

P2E Guild/Scholarship: Led by YGG and its Daos, this genre has become very popular due to the rise of Axie Infinity.

Esports/Tournaments: Some guilds have found that the scholarship model may not be profitable in the future and have instead established tournaments for esports and gaming. This is very early in Web 3, but it is mature and common in the traditional gaming world.

Incubators: Everyrealm, for example, is incubating game-related businesses, including The Row, Fantasy Islands, and Narcos. Metaverse, and Hometopia. It also runs Bedlam, an esports guild and competition platform, and manages a portfolio that includes holdings in more than 30 platforms and more than 4,000 gaming assets.

Launchpad: IGO and INO for players or investors to participate in games. It is a gathering place for players to interact with the game and the meta-universe, as players usually need to purchase NFT to access the game.

Player Credentials: A unified Web 3 gamer identity to maintain their reputation across games and experiences, driving cross-game interaction and high player retention.

Content/Community: Group gamers into groups and provide them with services such as content distributors, streaming services, Kols or communities, education, etc.

Thanks to TJ Kawamura (Co-founder at Everyrealm), Alex Qin (Founder at Ubiloan), Alex Liu (Game Studio Advisor), And Yele Bademosi (Founder at Metaverse Magna) for the strong support and valuable comments.

Technical terms:  

RPG: An RPG is a role-playing game in which each participant plays a character, usually in a fantasy or science fiction setting, and players interact in an imaginary world of the game.

Mmorpgs: Massively multiplayer online role-playing games that can be played online simultaneously by a large number of players.

Team Battle: In this type of game, players can take on multiple roles, or be the commander of a team.

Strategy: In strategy games, players are not restricted, and their autonomous decision-making ability has a great impact on the outcome of the game.

Card & Board & Autobattler: A card game is any game, whether traditional or specific, that uses playing cards as a core element.

Board games: (such as checkers, chess, or backgammon) are played by placing or moving pieces on the board.

Autobattler Game: Autobattler games often have chess-like elements, where players place their characters on grid-like battlefields during the preparation phase and then fight against the opposing team's characters without any direct input from the player.

RTS and Tower Defense: Real-time strategy games allow all players to play in "real time" at the same time, allowing players to participate in competitive economic activities and gain an advantage by managing limited resources to expand multiple game elements. In tower defense, players need to use strategy to build towers to defeat enemies.

Grand & 4X: Mega games are the most complex strategy games, taking into account politics, economics, war, diplomacy, etc.

4X games (Explore, Expand, Exploit, Exterminate) are games in which players have a wide range of control over their empire, including war, research, agriculture, and government.

DeFi & Gambling: This is a category specially listed by the author, the core of which is the Gambling strategy with simple game.

A game is a game that mimics the activities the player will see in the real world.

Farming: A farming simulation in which players enjoy the growth and experience of farming.

Space & Sci-fi: A genre that takes self-invention, imagination, and narrative to the extreme. Science fiction pushes our present reality across the ocean to explore the logical end point of human endeavor.

Life & Hypercasual & Casino: Lifestyle games are any type of game in which the hobby itself takes the form of a deep mastery of it. Super casual games are lightweight, instant-playable games that are often played over and over because the sessions are short and fun.

Casino Game: A casino game is a type of game in which players use chip Gambling on various possible random outcomes or combinations.

Action: is a fast-paced type of game that typically focuses on movement, combat, hand-eye coordination, and reaction time. Shooter: The point of the game is to use the weapons you have to defeat the enemy.

Fighting & Other action: Combat & Other action games require the player to control an on-screen character and engage in close combat with an opponent.

Sports: Sports games simulate practice and competition in traditional sports.    

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