Translated by elcreto

Contents

1. Introduction

2. Why Has XLGAMES Brought Blockchain to ArcheWorld?

3. How Does Blockchain Work in ArcheWorld?

4. Xangle Analytics: Tracing ArcheWorld’s Milestones

5. Risks

6. Conclusion

1. Introduction

The massive success of Mir4 Global has been met with a volley of announcements of the launch of blockchain games from the largest game companies in South Korea. On Sep 1, 2022, XLGAMES debuted its first-ever blockchain game ArcheWorld. ArcheWorld is a PC MMORPG XLGAMES developed based on its breakout title ArcheAge. The game was hyped even before the launch, fueled by news that Jake Song, the CEO of XLGAMES who’s often referred to as the father of MMORPG, had participated in the development and that it was the first-ever game to be onboarded to BORA. This article speculates on why XLGAMES released a blockchain game, how blockchain works in the game, and how far it has come a month after launch.

2. Why Has XLGAMES Brought Blockchain to ArcheWorld?

Blockchain, the Best Fit for MMORPG Games in Handling the Delicacy of Ownership

By its nature, user contribution is critical to MMORPG. Unlike other game genres where users consume what’s mostly provided by the game company, MMORPG requires users’ gameplay to expand and complete its content. ArcheAge is a popular sandbox MMORPG where the game company partly offers content, i.e., quests, and the users expand the game by turning their housing, farming, and trading activities into content and interacting with other users with the content. It is only fair that users be recognized as contributors, rather than merely as consumers, and be entitled to their fair share of rewards for their contribution.

ArcheWorld stands to do just that by incorporating NFTs into the game: it intends to recognize the contribution of the users by transferring the ownership of the assets, items, and characters, which used to be exclusively the company’s. Because the ownership of the NFTs in the game is recorded on the blockchain and transparently disclosed, users can securely trade in-game assets and make earnings they deserve.

The ownership of the in-game assets builds a sense of belonging, turning users into a steady contributor to the ecosystem and ultimately the success of the game. Further, unlike the existing game assets that are accessible for a specific period of time and strictly bound to a single game, NFT game assets transcend the boundaries of ecosystems and are tradable across different ecosystems and preserved permanently. These merits incentivize existing users to stick to the game and help onboard new users to the game, facilitating the growth of the ecosystem. Blockchain is cut out for the tasks of boosting and expanding a game’s ecosystem, providing a perfect context for how ArcheWorld came into being.

3. How Does Blockchain Work in ArcheWorld?

An MMORPG Built on the BORA Blockchain

ArcheWorld runs on the BORA chain, a Klaytn layer 2 solution. Due to technological limitations, immediate execution and recording of all in-game transactions on the BORA chain are impossible—and hence, a service chain (sidechain) comes into play. Only the outbound transfer of BSLT, the in-game token, from the ArcheWorld ecosystem to wallets, for instance, is recorded in the BORA chain.

Key Pillars: NFTs and In-Game Tokens

ArcheWorld introduced in-game tokens to turn major in-game assets (i.e., land), items, and characters into NFTs, returning the ownership to users and making them freely tradable between users. Put another way, the NFTs and in-game tokens are allowing ArcheWorld users to participate in the in-game economy to make earnings.

1) NFTs: Giving Back to Users What’s Users’

For now, XLGAMES acknowledges only the ownership of ArcheWorld Land and Fandom Card. ArcheWorld Land is a fundamental building block of ArcheWorld’s all-important housing system. Owning it allows a user to construct a building, which is key to production activities i.e., manufacturing, farming, and ranching and to lease the land to other users to collect rent (BSLT). On the other hand, despite the priority on benefits, such as collaboration opportunities with the BORA Governance Council, the merit of holding the Fandom Card NFT is limited as profits can hardly be expected.

Since the NFT transactions should be recorded on the BORA chain, they are traded on exchanges in the BORA Portal or on external exchanges like OpenSea—as bridge token tBORA within BORA Portal and WKLAY on OpenSea.

2) In-Game Tokens: Enabling Economic Activities

ArcheWorld added in-game token Blue Salt (hereinafter “BSLT”) as a means of exchange to promote vibrant transactions between users. Users can either purchase items with BSLT from an in-game exchange or earn BSLT by selling items to other users. This way, BSLT empowers users to engage in economic activities, who otherwise would have to settle for no more than the gameplay itself. Moreover, BSLT is not just an in-game currency: DEXs in the BORA Portal link BSLT to the real economy (BSLT → tBORA → BORA → Cash), allowing users to earn through gameplay.

4. Xangle Analytics: Tracing ArcheWorld’s Milestones

A month after the official release, Xangle Analytics turned up ArcheWorld’s performance numbers—the number of wallets (users), NFT trading volume, and BSLT price.

1) Uptrend of Wallets

The size of the user base is a telling indicator of a game’s performance. Although the number of users has not been disclosed yet, the user base of ArcheWorld seems quite solid given the recent announcement of installation of an additional server. Since the game’s launch, the numbers of daily active and unique BORA addresses—which convey the trends of Daily Active Users (DAU) and Newly Registered Users (NRU)—have trended upwards.

• As of Sep 2022, there were approximately 860 daily active wallets, up 46%, 146%, and 76% respectively from 590 in Jun, 350 in Jul, and 490 in Aug.
• As of Oct 4 2022, there were approximately 72,000 unique BORA addresses, up by 6,000 from 66,000 as of Aug 31, prior to the game’s launch.

Compared to Other Web3 Games, Less Are Looking for Financial Gains

Besides the fact that the number of users extrapolated from the number of BORA wallets looks positive, the nature of the core user base is worth noting. Unlike previous games, blockchain games have users who seek not only fun but earnings as well. Games with a majority of users looking for financial gains are bound to collapse once profitability starts to falter, as it would only trigger a significant churn of users who would find no incentive to stay.

Because Web3 games generally focus more on Earn than Play, the percentage of users looking for lucrative opportunities is higher than that of game aficionados. 50% of the users of Axie Infinity, which used to be at the forefront of the craze for P2E games, had responded that they had played game to make money—which indeed was suggesting considerable implications, seeing that most have left the ecosystem, putting even game’s survival at risk.

After a short-lived boom, many Web3 games are now on the wane. ArcheWorld, on the other hand, is a different story. At the core of ArcheWorld’s foundation lie the IPs of ArcheAge, whose fanbase is already substantial, making it highly probable that ArcheWorld brings the existing users of ArcheAge on board. A Google Trends analysis hammers this home: it shows spikes in interest in ArcheWorld, primarily in countries where ArcheAge made a hit–namely, South Korea, North America, Russia, and the EU. While most users in lower-income countries in Southeast Asia and South America opt for Web3 games for earnings, ArcheWorld is expected to have a larger user base that is genuinely interested in the game itself, rather than as a means of living. Put simply, the lesser the number of users looking for handsome returns, the higher the sustainability of the game, minimizing the impact of user churn on the ecosystem.

2) Solid NFT Trading Volume

ArcheWorld’s NFT trading volume is a telling indicator that allows us to fathom the growth of the NFTs, one of the key pillars that prop up the game. Since ArcheWorld Land NFTs were initially minted on May 23, the trading volume—which had already been on the uptrend even before the launch of ArcheWorld—peaked at a daily trading volume of 203,000 KLAY on Sep 16 (which equates to $35,500 as of Oct 12) and has recently been on a downtrend.

• As of Oct 12, 2022, ArcheWorld Land’s all-time trading volume is 4.7M KLAY (equivalent to $786,000).
• The highest daily trading volume was on May 27, recording 207,000 KLAY (equivalent to $36,000). It achieved the second highest daily trading volume on Sep 16 with 203,000 KLAY (equivalent to $35,400).

ArcheWorld Land NFT took the no. 1 spot on OpenSea based on the trading volume of Klaytn-based collections, leading the pack. The 4% drop in its trading volume is significantly dwarfed by drastic plunges in other major Klaytn projects, such as BELLYGOM (-84%), PUUVILLA (-60%), and Sunmiya (-41%). By successfully shielding itself against from a painful nosedive, ArcheWorld Land NFT is demonstrating its edge in navigating a grueling downturn in the NFT market.

3) BSLT Showing Relatively Stable Price Movement

As discussed above, Axie Infinity, the prominent pioneer that excited the world with a massively popular P2E game, once hit 2,6M daily active users (DAU). Now, after a fatal crash in the price of the AXS token led to a crippling user churn, the project is currently facing a make-or-break moment. Since the ups and downs in the token price have a direct repercussion on the ecosystem, keeping BSLT’s price stable will remain key to ArcheWorld’s sustainability.

Having not been listed, the precise trajectory of BSLT’s price is not yet available. But a recent news article indicated that BSLT started at $0.045, peaked at $0.89, and is currently hovering around $0.4, keeping a relatively stable movement ($0.38, $0.42, and $0.43 on Oct 13, 14, and 17 respectively).

5. Risk Factor Assessment

Blockchain Games Are Still in Transition

ArcheWorld ventured into blockchain to boost and expand the ecosystem. So our question here should be: is blockchain delivering on that promise? I guess the answer is, we’ll have to wait and see.

Currently, ArcheWorld does not acknowledge users’ rights to in-game assets that users acquire and foster on their own by playing the game, citing reasons that turning every in-game asset into NFT may hold it legally accountable under the gaming laws and that it may confuse users. The ownership is reserved only for the purchasers of certain properties (i.e., land) sold by the company, and the use of and rights to the properties are restricted to the ArcheWorld ecosystem. This profoundly deviates from what the game initially envisioned with blockchain—to put the ownership of in-game assets back into the hands of users.

ArcheWorld’s whitepaper laid out its plan to turn the entire content (in-game assets) into NFTs, as well as its vision to allow users to decide what assets to mint into NFTs and whether to use such ArcheWorld assets in third party games. Over time, we’ll have to wait and see if the game delivers on its vision and if this, in turn, translates into the growth and expansion of the ecosystem.

At Stake: Stability of BSLT 

The two fundamental pillars of ArcheWorld’s economic ecosystem are Archeum and BSLT. Archeum is a staple user can earn by playing the game, required for character progression, item manufacture, and building upgrades. Archeum can be swapped into BSLT and can eventually be encashed through a process of BSLT → tBORA → BORA. If users who find the game boring stop using Archeum in the game and keep swapping Archeum into BSLT solely for the purpose of encashment, it will bring downward pressure on the price of BSLT. In this sense, it seems safe to say that the value of BSLT is entirely dependent on the fun of the game.

Though the user-related performance of ArcheWorld has not been available (i.e., retention rate) and thus, an objective assessment of the level of fun ArcheWorld’s users are having may be hard to come by, the upward-sloping trendline of the number of wallets (no. of users) and the trading volume of ArcheWorld Land hint at its performance. XLGAMES said in a recent interview that their users’ appetite for character and gear progression is substantial. It also added that it has already seen many users who had initially been only after money without considering investment at all gradually growing to like it and end up investing.

ArcheWorld also intends to increase the value of BSLT by: i) limiting the supply of BSLT for each Server Group to 1% of the total supply, ii) reducing the circulating supply through BSLT staking and offering rewards through in-game necessities, i.e., labor, and iii) providing multiple channels, i.e., mini games, where BSLT can be spent.

Moving forward, maximizing the fun with a steady stream of content updates and keeping the value of BSLT stable with the mechanism above will remain critical to ArcheWorld’s success.  

6. Final Thoughts

ArcheWorld’s Journey Ahead Warrants Anticipation

Quite contrary to the doldrums in the crypto market, ArcheWorld has seen exciting achievements. Most likely, the paramount drivers behind this may have been the high-quality artistry, masterfully plotted universe, and various pieces of content derived from ArcheAge IP, which ultimately enabled both Play and Earn. This clearly marks a departure from previous P2E games that used to focus on Earn than Play.

Released on Sep 1, 2022, ArcheWorld has been out there for only about 50 days. Since in such a fledgling state, ArcheWorld’s path forward in achieving sustainability through redistribution of ownership, scalable ecosystem, and retention of token value warrants our attention.

Navigating Regulatory Challenges and Lowering Entry Barrier for New Users

As has been the case for all blockchain games, there are mountains to cross: i) South Korea currently bans blockchain games on grounds of speculative nature and ii) complexity involved in onboarding, such as wallet creation/connection, NFT purchase, and asset transfer, acts as a barrier to most new users who are not familiar with the blockchain setting.

These obviously add a drag on ArcheWorld’s success and thus, require solution if it is to go even further and bring users from traditional games. Recently, there’s been positive news that approval for P2E was discussed during the state administration inspection of the Culture, Sports and Tourism Committee of South Korea’s National Assembly held on Oct 13, 2022, hinting at a possible approval for P2E games. Once the approval is granted, P2E games will soon be able to leverage stable, undisturbed connection and gaming, paving the way for a broader user base, vibrant ecosystem, and expansion.