Written by Bonk
- Yuga Labs airdropped ApeCoin to BAYC holders while announcing its plans for a metaverse.
- The company previously acquired CryptoPunks and Meebit IP, and according to a leaked pitch deck, is building an app store-like marketplace powered by ApeCoin where users can create games and characters.
- There are many risks associated with the new venture, but Yuga Labs has laid down the stepping stones that may lead to success when executed correctly.
ApeCoin made its debut last week and became the most traded token on the Ethereum network. The token was airdropped to holders of BAYC and its derivative NFTs shortly after its creators, Yuga Labs, announced their partnership with Animoca Brands. With the release of the token, a pitch deck was leaked, showing future plans of the company, which included creating a “MetaRPG” to solve the siloed nature of current metaverses. The company seems to be rather confident in its new venture, as seen from one of its slides from the leaked pitch deck: “If we build it they will come.”
On the contrary to Yuga Labs’ conviction, a recent survey from the Game Developers Conference found that 70% of game developers were not interested in NFTs. Not to mention the overwhelming negativity from gamers, which caused some developers to backtrack their plans to implement blockchain technology. The negative reception from the community is not even mild; strong language is often accompanied to express the community’s frustration with NFTs in gaming. So what is there to gain from flirting with the idea?
Yuga Labs seems to have a different approach. According to the leaked pitch deck, the company is aiming for an app store-like marketplace where users will use ApeCoin to make purchases. The company claims that the NFT community is the best audience for its metaverse as "They’re already living Web3 and experimenting with alternative-currencies."
The founders of BAYC are promoting their product to a loyal community of enthusiasts rather than expanding the user segment. The recent purchase made to acquire the IP for CryptoPunks and Meebits also shows a glimpse of the company’s intent to capture the crypto market.
Furthermore, Yuga revealed its plan to build a Software Development Kit "that allows collections, creators, and developers to build for any community who wants it.", stating that the SDK can be used for game development and creating characters, skins, digital clothing, and gear.
Yet, owning strong IP does not equate to success in the larger market. Ubisoft, EA, and Square Enix all received harsh criticism from the gaming community simply for showing interest in NFTs. It is a well-known fact that gamers hate the idea of unfinished, overhyped, cash-grabbing games that only benefit the developers. So, naturally, the idea of NFTs, which is perceived as a vehicle of financialization, will face strong criticism.
Nothing Matters But the Game
But again, when observed closely, one can come to the conclusion that gamers don’t actually hate financialization. One of the longest-lasting games with a robust and dedicated community, CS: GO, is a skill-based game whose business model evolves around loot box mechanics. Players absolutely love it when they spend hundreds and thousands of dollars to earn a unique skin.
The problem with NFTs is not the application of financial incentives; it is more about the game itself. If not all, most professional gaming leagues are skill-based games like CS: GO, League of Legends, Dota 2, which are all free-to-play. When a game is challenging and brings a sense of achievement through competition or progress in game levels, users are more than happy to purchase in-game items and even take it to another level and do it for life.
The games mentioned above may not be critically acclaimed by gaming connoisseurs, but they still have their own selling point, and they sell big. The problem with blockchain gaming is the value proposition, which emphasizes financial incentives only. A good game with financial incentives might be able to penetrate the market.
Chang Hyun-kuk, the CEO of the game developer WeMade, recently stated that they want to make Play-and-Earn games instead of Play-to-Earn games. As MIR 4 attracted millions of users and created a buzz in the P2E scene, it was also met with harsh criticism for the same reason: not fun, only crypto farming. Although the game became a mega hit, lessons were learned.
Master Chef in Need
It doesn’t take a genius to figure out how all of this works; it is somewhat obvious, but somehow blockchain gaming is failing to convince the hardcore community. Will the founders of the Bored Apes find success in turning blockchain gaming into something interesting? Yuga Labs is entering the scene with a strong community, infamous IP, and layers of partnerships that include celebrity BAYC hodlers, a16z, and Animoca Brands. However, good ingredients don’t make the best dish; a great chef is all it takes.