Key Points (TL;DR)
- Com2uS Group had great gaming IPs and a rapidly growing Web3.0 business but was hit hard by the Luna incident and decided to build their own, independent mainnet, XPLA.
- XPLA has its own technological differentiation from the Cosmos-based mainnet, but current metrics show that it is still in the early stages compared to the global mainnet.
- Nevertheless, many are excited about the future of XPLA due to the unique challenge and pioneering DNA of the Com2uS Group, their proven game IPs and global reach.
- XPLA is in the process of realizing P2O with three core economic models.
- Four popular IPs have recently been onboarded a balanced mix of dApps and services are being built within the ecosystem.
- By positioning itself as a content-specific chain, XPLA hopes to create a transparent and fair ecosystem while giving many users a reason to use the blockchain.
Key Chart 1. XPLA Ecosystem Summary Map
Key Chart 2. Com2uS Group Organizational Chart (partial)
Key Chart 3. Com2uS Group
Inthe previous article (link), we concluded that gaming is likely to be a trigger for the mass adoption of blockchain due to its large market size, active investment by game companies, and user characteristics that are well suited to blockchain. In this article, XPLA will be discussed as a representative example of an ecosystem where game companies are participating as core partners and examine the journey that blockchain projects built by traditional game companies have taken so far, the path they need to take, and the points they are looking forward to in the future.
II. XPLA’s History and Present
1. XPLA’s Past, C2X
In 2021, mobile gaming powerhouse Com2uS Group announced its intention to build an open blockchain gaming platform (C2X). After seeing the potential of a P2E game called Axie Infinity, the company decided to jump on the bandwagon.
Since its inception, C2X has been highly anticipated by the industry. Com2uS Group, the market leader in mobile gaming, entered Web3 with a proven track record of innovation during the industry’s paradigm shift from PC gaming to mobile gaming. Com2uS and Com2uS Holdings supplied proven games to the C2X platform, and Com2uS oversaw creating the platform based on the know-how of successfully operating HIVE, a game platform with 100 million annual active users, for seven years. In addition, Terraform Labs, a developer of the Terra Chain, and Hashed, Korea’s top crypto venture capital, participated as advisors. The platform’s creators and game content producers were a dream team, and the gathering of top experts in the crypto industry at the time was enough to attract attention from the industry.
In March 22, C2X raised $25 million in a private round at a valuation of $500 million. The round was led by FTX Ventures, JumpCrypto, and Animoca Brands, with participation from VCs including Hashed, Terra, and Galaxy Interactive. The C2X ecosystem grew rapidly, meeting the expectations of investors. Four popular games were onboarded to the C2X platform in just three months, starting with Summoner’s War: Hundred Years War. The ecosystem quickly built the necessary infrastructure services, including an IEO on FTX, the second largest exchange in the world at the time, a quick listing on multiple exchanges to improve accessibility for users, and the creation of the C2X NFT Marketplace (now X-Planet) and its own wallet called C2X Station.
The C2X project seemed to be on a roll, but in May 2022, Terra crashed. Like other projects launched on the Terra chain, the C2X ecosystem took a significant hit, but within three months, it was reborn as XPLA, with a new mainnet built on Cosmos.
Figure 1. Three Months Into the C2X Ecosystem
Figure 2. Platform Ecosystem Components
Figure 3. C2X Private Round Investors(announced 22.03)
2. XPLA’s Current Status
1) The Decision to Build Their Own Mainnet
XPLA set the goal of ‘building a digital media content center in the Web3 era’. There are several reasons why C2X decided to build its own mainnet instead of building services on top of major mainnets such as Ethereum and Polygon.
First, it was necessary to build the mainnet underlying the blockchain project independently to secure independence and create an environment that is not affected by external factors, and second, there was no game-specific mainnet that provides a seamless service environment for the high-level games and content held by the Com2uS Group. Third, the number of users from operating on a global mainnet was very small compared to the number of users Com2uS Group already had, so the effect of acquiring new users was minimal, and finally, they believed the number of developers they had was sufficient to catch up to these other mainnets. When developing and operating a blockchain mainnet, it is important to secure development manpower, and the Com2uS Group had already accumulated development know-how, and therefore were able to quickly deploy the mainnet.
2) Technical Features of the XPLA Chain
XPLA is a blockchain network focused on digital media content developed by a team with over 20 years of experience in the gaming and entertainment industry, and the mainnet was created by a team that understands the game and game builder ecosystem best. XPLA uses the Cosmos SDK to achieve interoperability with various chains through the Cosmos Inter-Blockchain Communication protocol (IBC).
Cosmos IBC is characterized by the fact that each blockchain can make independent decisions while enabling information and asset movement with other chains through the TCP/IP protocol, just as PCs using different devices and S/W can send and receive information through packets, thus securing both scalability and governance. The main advantage is that it can maintain its own direction as a game-centered entertainment chain rather than a general-purpose chain like Ethereum, while still being able to scale with other chains.
XPLA also secured compatibility with the Ethereum network in February this year with the Ethereum Virtual Machine (EVM). Ethereum has the world’s largest developer community and the vast majority of dApps (80% of all dApps) and users are powered by Ethereum, so early compatibility with the Ethereum network was necessary for the globalization of the mainnet. XPLA’s unique technical features include the XPLA Alternative Transaction Protocol (XATP) and Adaptive Token Standards. XATP is a technology that allows users or partners to pay mainnet fees with the app’s own token instead of XPLA tokens, improving the user experience for users and partners. Adaptive Token Standards is a technology that allows NFTs to change their properties even after they are issued, and we are building a technology that allows NFTs to be used flexibly in games and content areas.
Figure 4. Cosmos IBC AppChain Map
Figure 5. Architecture of the XPLA Chain
Figure 6. XPLA Chain Features
3) XPLA as a Mainnet Ecosystem
Mainnet refers to a blockchain network that independently constitutes an ecosystem away from existing platforms. It is a smart contract platform that provides scalability, security, and transparency to dApps running on the network by performing functions such as consensus mechanisms between nodes, signature methods, data generation and management.
To activate this independent ecosystem called a mainnet, infrastructure services such as belly data, oracles, wallets, developer tools, DEX, bridges, and financial protocols must be in place, and various applications and services must be continuously onboarded to give users a reason to use the mainnet. Even the most technologically advanced and well-equipped mainnet is useless if no one uses it.
XPLA celebrated its one-year anniversary in August of last year with the creation of its genesis block. As a chain with a strong focus on gaming, ten games with proven popularity on Web2 have been onboarded, and a proposal to increase the number of validators from 40 to 80 has been passed, further strengthening the security and decentralization of the network. In addition to gaming, we’ve also seen modestly significant results for the network’s utility through workmanship on M2E projects and the monetized advertising platform xPlayz.
Going forward, this report will focus on the capabilities of XPLA’s core partner, the Com2uS Group, and the games onboarded and whether XPLA, which has onboarded not only games but also various dApps such as M2E and advertising platforms, will be able to achieve its catchphrase of being a “game-centric entertainment specialty chain that provides glorious content experiences.”
Figure 7. XPLA’s One-Year Metrics
Figure 8. XPLA’s Mainnet Activation Strategy
Figure 9. Mainnet-Specific Essentials (1)
Figure 10. Mainnet-Specific Essentials (2)
Figure 11. XPLA Ecosystem Summary Table (23.08.18)
III. XPLA, A Gaming-Focused Chain with Brilliant Content Delivery and Experiences
The XPLA ecosystem includes 14 traditional gaming companies and over 50 partners that supply games. Among them, Com2uS and Com2uS Holdings play the most central role in the XPLA ecosystem.
Com2uS Holdings is the rebranded company of GAMEVIL, known for the GAMEVIL Baseball Superstar Series, and was founded by Song Byung-jun, the first president of the Seoul National University entrepreneurship club, Venture. GAMEVIL first made its presence felt in mobile gaming with the release of ‘NOM’ in 2003, followed by ‘GAMEVIL Baseball Superstar Series’ and ‘Zenonia’, establishing itself as one of the two leaders in mobile gaming alongside Com2uS.
Starting with the success of Minigame Heaven, Com2uS also hit mobile games such as Super Action Hero, Korea’s first mobile MMORPG, Aimo, and Inotia Chronicles, and firmly established itself as a leader in the mobile game market.
In 2013, GAMEVIL acquired the shares of Com2uS, forming the outline of the current Com2uS Group. The capabilities of Com2uS Holdings, Com2uS, and Com2uS Platforms (together, the Com2uS Group, or Com2uS) in driving the XPLA ecosystem include the following.
Figure 12. Com2uS Group Organizational Chart (partial)
1. What Differentiates XPLA?
1) Com2uS’s Challenge-Loving, Pioneering DNA
From its inception to the present day, Com2uS has experienced three major breakthroughs.
The first is the success achieved during the paradigm shift from the PC online era to the mobile game era in the 2000s. Com2uS launched the first mobile game service in Korea in 1998, developed the world’s first Java game for mobile phones the following year, and was the first to introduce freemium in mobile games, pioneering new paths through continuous challenges and establishing itself as a leader in the global mobile game industry.
The second is their success during the transition from regular cell phones to smartphones. From the beginning of the market formation, Com2uS has secured many smartphone game lineups through active investments such as personnel expansion and service network expansion, and as a result, the company has successfully transitioned into a smartphone game company, with smartphone game sales accounting for more than 99% since 2014.
The third is strategic M&A, such as GAMEVIL’s acquisition of Com2uS. Despite market concerns, the two companies merged into a single affiliate and succeeded in cost efficiency through unified marketing channels and strengthening business capabilities through securing global IP. Since then, they have successfully made a number of strategic investments and M&As, including global game developers such as Out of the Park Developments GmbH (OOTP), media content companies such as Wysiwyg Studios and SM Entertainment, and Web3 companies such as Coinone and Hypercomic, to evolve into a comprehensive content producer beyond games.
2) Global Market Capabilities
Since the early 2000s, Com2uS has been challenging overseas markets, and now more than 70% of its sales are generated overseas. Through the global open market, Com2uS games are available in more than 160 countries around the world and are highly recognized by overseas operators such as Apple and Google, as well as global game media. Representative examples include Summoner’s War, MLB 9 Innings, Com2uS Professional Baseball, and Ace Fishing.
3) Game Portfolio Optimized for Web3 Onboarding
While it is common for global mobile game companies to rely heavily on a single game, Com2uS has a balanced portfolio across multiple genres. Following the success of social networking game (SNG) Tiny Farm, Com2uS showed its strength in sports games (SPGs) with the success of Professional Baseball, Golf Star, and Ace Fishing. The subsequent RPG, Summoner’s War, grossed over $3 trillion in cumulative global sales, demonstrating the company’s development and box office capabilities across multiple genres.
Com2uS’s main IPs run primarily on PC and mobile, rather than consoles, and are often categorized as casual and midcore games from a playtime perspective. In particular, the SPG and RPG genres have longer lifecycles and higher average revenue per user (ARPU) than other genres, which is favorable for stable and continuous economic system design.
4) Expertise in Game Platform Operations
Com2uS has been successfully operating the game platform Hive since long before XPLA. Hive is a specialized game platform that provides various tools required for game services, from game production to operation and big data analysis. More than 50 games are serviced through Hive, with a cumulative total of 1 billion downloads worldwide, more than 100 million annual active users, and more than 4 million DAUs.
Hive provides essential push, payment, data analytics, and authentication capabilities for gaming services. It supports 16 languages, covering the primary languages of 80% of the world’s population, and is compatible with all major global platforms, including Apple, Google, Facebook, WeChat, and Line.
Game developers who want to onboard onto XPLA have the advantage of receiving support related to end-to-end solutions such as SDKs supported by Hive, reducing the time and cost of game development and allowing them to focus on the fun of the game.
5) Cautious and Seasoned Operations Honed Through Trial and Error
XPLA’s succession of major landmines from Luna to FTX has made it unique in the industry in several ways. First, despite being one of the affected projects in the FTX crisis, XPLA raised approximately $7 million (approx. KRW 9.1 billion) in relief funds through the Relief Fund Support program, the first in the blockchain industry to support victims, and spared no effort to support ecosystem participants such as individual holders through incident identification, damage investigation, cross-verification, and international legal review.
Another unique feature is the advanced internal control system in line with global auditing standards. Despite the fact that there are no legal obligations to establish an internal control system due to the lack of clear accounting standards for virtual assets, the company has established a more transparent and reliable process through internal control consulting from a global top-tier external audit firm.
Figure 13. Categorizing Games (1)
Figure 14. Categorizing Games (2)
Figure 15. XPLA Chain Strengths and Differentiators
2. P2O(Play to Own)
XPLA has learned from the failures of P2E in the past and has come up with a new model called P2O (Play to Own), which is being applied to ten onboarding games.
The problem with previous P2E games was that many people focused on monetization rather than gaming, and most of the acquired in-game goods were converted into stablecoins or fiat currencies outside the game, causing the value of in-game goods to decline. XPLA’s proposed P2O is a system that guarantees ownership while encouraging game lovers to invest time and resources to produce valuable game items, which are then distributed and consumed within the game. In other words, it is a model for ensuring true ownership of gamers while protecting the value of in-game goods.
XPLA has devised the following three separate economic systems to realize P2O:
1) DRAS(Dynamic Reward Allocation System): This is a system that rewards users in proportion to their rank, i.e., their gameplay time, effort, and, depending on the game, their skill. For example, in Minigame Heaven, you need to stay at the top of the top leagues every week to earn Sun Chips, which can be exchanged for XPLA. Due to the nature of Minigame Heaven, long play time does not necessarily mean that you can get a lot of Sun Chips, and you need to have a certain level of skill.
2) GGR(Gameplay Gated Rewards): This is a system where only core gamers with high loyalty can participate and earn rewards through activities such as in-game auctions and core content. For example, in Summoners War: Chronicles, only users who have achieved a certain level in the game can use the Mileage Shop, and only they can change to XPLA through intermediate goods.
3) DTCS(Dynamic Token Conversion System): This is a device to stabilize the value of in-game tokens. It is a system that sets a fixed rate for exchanging in-game goods to $XPLA tokens and a floating rate for exchanging $XPLA tokens to in-game goods, minimizing fluctuations in the value of goods and managing inflation while connecting the environment inside and outside the game. For example, in the case of Minigame Heaven, the conversion of Sunchips to $XPLA is 100:1, but the conversion of $XPLA to Sunchips changes depending on the environment outside and inside the game. In the case of Summoners War: Chronicles, we are also controlling the withdrawal pressure of rewards earned through gameplay by limiting the number of miles that can be earned with free “Rahild”.
Figure 16. Problems with Existing P2E
Figure 17. Three Systems to Solve Existing Problems
Figure 18. Flowchart of the Three Self-Contained Economic Systems
3. Three Games Recently Onboarded to XPLA and Their Tokenomics Systems
1) Minigame Heaven: Mini Games, Fun to the Max
Minigame Heaven is a casual game that allows players to easily play 14 different mini games with a single touch and has accumulated 19 million downloads. It inherited the graphics and character design of its predecessor to provide familiarity to existing fans, while strengthening the competition system based on the number of medals and user community elements to provide freshness. Within four days of its release, the game was ranked #1 on both major app stores and reached 1 million downloads within seven days. From the very beginning, GS25 convenience stores and snacks were integrated into the game to target the younger generation.
2) Summoner’s War: Chronicles
Summoners War: Chronicles is an MMORPG game that shares the world of Com2uS’s mega-hit Summoners War, which has accumulated 200 million downloads and $3 trillion in revenue. Summoners War: Chronicles offers dungeons, party play, PVP, and other content based on summoner combination combat. Loyal users who have played for a certain amount of time can exchange in-game goods acquired by playing core content (GGR system) for XPLA through in-game intermediate goods and bridge tokens. (DTCS system)
3) Ace Fishing: Crew
Ace Fishing: Crew is a collectible sports game based on the “Ace Fishing” IP, which has recorded 70 million global downloads. Players can collect a total of 54 characters and fish in new areas by leveling up through gameplay and completing daily challenges. Both Web2 and Web3 versions are available, and the Web3 version can be redeemed for $XPLA like other games.
Figure 19. Minigame Party
Figure 20. Minigame “Turn Around” In-Game Screen
Figure 21. Tokenomics in 3 Recent Games Onboarded to XPLA
Figure 22. Tokenomics in Minigame Heaven
Figure 23. Tokenomics in Summoners War: Chronicles
Figure 24. Tokenomics in Ace Fishing: Crew
4. XPLA’s Main dApps and Services
xPlayz is a Web3 advertising platform that shares ad revenue with participants developed by ZENAAD. Unlike existing ad platforms where platforms and publishers monopolize ad revenue, xPlayz allows users to earn ad revenue as well. Users earn $XPLA based on activities such as watching ads or completing missions during gameplay. Advertisers can achieve higher advertising efficiency based on user information provided by xPlayz. For publishers, it is a scalable system that provides rewards to users and higher advertising efficiency to advertisers, making both stakeholders more valuable. xPlayz can also be utilized in conjunction with games and other dApps in XPLA, so synergies can be expected.
WalkMining is the first M2E service on the XPLA Mainnet. It lowers the barrier to entry for users by enabling them to immediately earn profits without initial investment such as NFTs. To date, it has over 1 billion steps and over 4 million in-app game plays. Recently, the company has hinted at a collaboration with Binance Gift Cards, and it’s trying something new.
Figure 25. xPlayz Ecosystem Structure
Figure 26. WalkMining
3) XPLA GAMES WALLET
XPLA GAMES WALLET is a wallet dedicated to game currency and items in the XPLA ecosystem, available on AOS, IOS, and Chrome extensions. It allows you to swap in-game currency earned by playing games on XPLA GAMES into $XPLA, or swap different currency between games into the currency of the desired game. In addition, each in-game NFT can be minted inside the WALLET, and the NFT transfer function between players is also provided.
4) XPLA Game Launcher
XPLA GAMES’ Game Launcher system is a decentralized governance program that allows users to participate in the onboarding decisions of new games. Users can view detailed information (game information, playthrough videos, beta testing, etc.) about the game they wish to launch and express their support for the onboarding by purchasing a game fan card before the game is onboarded. By participating in this process, they will be able to enjoy game-related benefits by holding the Fan Card, which is issued as an NFT.
Similar to the past paradigm shift from PC to mobile, which we discussed in a previous article (link), if there is indeed a paradigm shift from Web2 to Web3, the competition among global players in the Web3 market will enter a new phase. Com2uS Group is leading the mobile game industry and is positioning itself as a comprehensive content company that crosses Web2 and Web3, including infrastructure, media, entertainment, and webtoon, beyond games.
XPLA is in the process of realizing true ownership in a ‘P2O’ model, and will eventually position itself as a ‘game-centric comprehensive content chain that provides glorious content experiences’. To achieve this, XPLA will be required to change its role from a service provider that unilaterally provides games to a platform provider that devolves more power to the community and creates a transparent game ecosystem.
In the rapidly changing Web3 market, XPLA hopes to successfully position itself as a content-specific chain based on the challenging spirit and pioneering DNA of its core partner, Com2uS Group, and develop into a transparent and fair ecosystem while giving many users a reason to use blockchain.