Riding The Summer Waves
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The post-XRP excitement ended up being short lived. The market pulled back following the initial jubilation, but ETH CC and PlayGG helped keep the sad thoughts away. Meanwhile there was plenty to digest in the gaming space:
- Axie Infinity introduced character progression through AXP
- OpenSea released Deals, a p2p NFT swapping feature
- Activision Blizzard looks set to allow players to brings assets from MW2 to CoD 2023
- Ubisoft proved it can erase user accounts
- EA will allow female and male players on the same teams in FC 24
- Creatives fight back against unregulated AI usage
Let’s dive in!
Sky Mavis Introduces Player Progression in Axie Infinity
The iconic play-to-earn title will now have experience points AXP, that players will be able to use to upgrade parts of their Axies. AXP will be Axie bound, so there won’t be another tradable token on the market.
The feature is important because it shows Sky Mavis trying to capitalize on the Tamagotchi vision of the early web3 gaming projects. It will allow Axie progression and hopefully inspire attachment (hello IKEA effect) in gamers.
Early web3 games with breeding mechanics suffer from oversupply, and vertical progression could be part of the solution. As the Axie Infinity IP gets proliferated through more games, the ability to improve an Axie may become integral to the ecosystem.
OpenSea Unveils Deals for P2P NFT Swaps
Real card trading finally comes to the web3 space. Anyone who played Pokemon, Yu-Gi-Oh, or Magic The Gathering, remembers that trading mostly involved playground deals where cards were exchanged between players.
The swapping functionality enables gamers to trade in and out of collections without needing to sell NFTs, which could reduce pressure on those floundering floor levels. Moreover it will allow gamers to evolve their collections through the art of the deal.
I expect other exchanges to integrate the feature, and with the new Google Play policies, a UX/UI friendly dedicated trading application may not be far away. Let’s see how collectors, gamers and traders respond.
Activision Blizzard Expected to Allow Assets to Move Between Titles
The recent survey on CoD’s twitter page suggests gamers will be able to carry over their MW2 assets to the CoD 2023. This is naturally a welcomed feature, and should reduce churn, something that Activision Blizzard must be looking at after MAU dropped to 92M.
Asset interoperability/omniportability is simultaneously one of the key features of the web3 stack and one of the most hotly debated topics in the gaming community. Many believe that you cannot transfer assets between games without compromising a game’s logical integrity.
However, carry over between titles of the same franchise could be a nice short-term compromise between the different camps. It will also make it a bit tougher for web3 proponents to explain the benefits of web3, to those who wonder what can you do with web3 that you cannot do without it.
Ubisoft Underscores The Meaning of Account Ownership
It recently came to light that Ubisoft can suspend and wipe out accounts for inactivity. The harm in that may not be immediately apparent. However, it is a stark reminder that publishers can always delete all alter accounts, based on their own arbitrary standards.
Another similar reminder was served with Riot coming after the Recon Bolt application forcing it to shut down. In a centralized paradigm, publishers have ultimate control over both the primary gaming ecosystem and third party developer activity.
Web3 enables true gamer ownership and offers radical transparency that creates a foundation for a vibrant third party ecosystem. The more data is on-chain or in some distributed storage venue the more independent development can occur.
EA Stands Firm on Female And Male PlayersPlaying Together in FC 24
49% of gamers in the US are female, and female gamers are a vital part of global gamer engagement and spending. Nevertheless, female friendly gamer content is still not a big focus for studios and community toxicity is still a problem. EA is looking to address this in FC 24.
Similarly ranked female and male players should have the same in-game performance, which raises questions around simulation realism. Nevertheless, having both female and male characters together on the field may make the experience more inclusive.
However, toxicity is a real concern. One of the reasons popular multiplayer games limit player communication to emoticons is the challenge of moderating the community. AI may help with that. For example, GGWP recently raised $10M for an AI-powered moderation platform.
Conflicts Around AI Usage Mount in The Gaming Space
Fran Drescher is unlikely to be this reality’s version of Sarah Connor, but the SAG-AFTRA strike continues. Creatives are looking for fair compensation and protections in the wake of AI advancements.
With AI tools encroaching on the work of creatives like Greg Rutkowski and the visual side, and pushing into audio with platforms like PlusMusic.ai, tensions are bound to rise. With mods already experimenting with personality substitution, creatives are feeling threatened.
It is clear that AI technology is not going away, and will only grow in prevalence. So it is important to establish ground rules for it, and at least try to self regulate like UKIE is trying with loot boxes. Until then, I expect more resistance strikes like the “Glorbo” spoof.
This wraps it up for this entry. As always, if you are working on something exciting in the web3 gaming space, or are a traditional gaming team looking to explore the possibilities, don’t hesitate to reach out to any of us at Sanctor Capital. Have a great rest of your week!
Ilya Abugov (@AbugovIlya)
Disclaimer: This commentary is not investment advice. It does not purport to include any recommendation as to any particular investment, transaction or investment strategy, or any recommendation to buy or sell any investment. It does not reflect any attempt to effect any transactions or render any investment advice.
This post is solely for informational and entertainment purposes. It is inherently limited and does not purport to be a complete discussion of the issues presented or the risks involved. Readers should seek their own independent legal, tax, accounting, and investment advice from professional advisors. The views reflected in this commentary are subject to change at any time without notice.
