WEMADE 3Q22 Earnings Release: Will Mainnet Launch Enable First-Mover Advantage in P2E Despite the Growing Loss?

Sun Lee
Research Analyst/
Nov 23, 2022
Translated by elcreto


1. Introduction

2. 3Q22 Financials

3. WEMIX Platform: Performance Numbers

4. WEMADE’s Strong Commitment to Blockchain

5. Challenges Facing WEMADE

6. Drivers of 4Q Performance: Anipang and MIR M

7. Concluding Thoughts



1. Introduction

The meteoric rise of MIR4 Global in 2021 has turned WEMADE into the world’s P2E pioneer. Its success signified the potential of P2E games, prompting a rush of South Korean game companies looking to get a jump on the market. WEMIX seems to remain deeply committed to blockchain games and has launched the WEMIX mainnet on Oct 20. In this publication, we take a dive into how WEMADE builds a blockchain ecosystem and why it goes all in on blockchain gaming—alongside the 3Q22 performance numbers just in today.

2. 3Q22 Financials

According to WEMADE’s 3Q22 earnings released on Oct 26, 2022, WEMADE reported a revenue of KRW 108.3B (+71% YoY, -1% QoQ), operating income of -28.0B won (turning negative), and net income of -88.5B won (turning negative). The results showed that while the operating loss has narrowed, net loss has widened further. This is due to a quarter-on-quarter increase in its loss from: i) contraction in revenue caused by the decelerating growth rate of WEMADE’s existing games and ii) loss from valuation and liquidation of financial assets measured at FVPL (Fair Value through Profit or Loss).

3. WEMIX Platform: Performance Numbers

1) QoQ Decline in Revenue

As of 3Q 2022, WEMIX Platform’s revenue sits at KRW 570M, down 34% from a quarter earlier. With 7.74M WEMIX during the same period, the biggest drag was the 52% decline in the volume of trades on WEMIX DEX, which takes up the largest proportion in its revenue.

Largely, the major causes of such decline are considered to be: i) a drop in the price of Hydra, which dominated the 3Q in-game token trades and ii) a severe shortage in the number of users in most of the games in the platform—except for MIR4—that led to a slump in the trading volume of in-game tokens.

Over the same period, the total value of NFTs traded stood at ~4.6M WEMIX, holding up strong despite a QoQ slide.

2) 17 Games in Service, 32 More to Come Aboard

WEMIX has spearheaded the P2E market since the rollout of MIR4 Global on Aug 26, 2021. With three more games onboarded in 3Q 2022, the number of games on the platform now adds up to 17.

While WEMIX outpaces domestic peers in terms of the number of games and genres, it also lags behind other mega developers in the sense that its games rely on existing IPs and its partners are small to medium game developers without a killer IP. The trend of the Monthly Active Users (MAUs) of WEMIX Wallet and DEX is reflected of this. The ailing crypto market and diminishing number of newly onboarded games have resulted in a 54% and 75% QoQ plunge in WEMIX Wallet and DEX MAU in 3Q22, sitting at 590k and 200k, respectively.

3) Ongoing Platform Upgrade: Mainnet Launched in the Face of Crypto Winter

WEMIX has stuck to platform upgrade despite the so-called “crypto winter,” where the market has been stubbornly bearish. The October 20th launch of WEMIX 3.0 mainnet was immediately followed by the rollout of stablecoin WEMIX$ and DeFi service Wemix.fi on the 22nd.

A) WEMIX Mainnet: Signaling Enhanced Token Utility

Mainnet Launch Showcasing Its Confidence in Killer Content

In our previous article about WEMIX 3.0, we dwelled on the possible drivers behind the launch of an independent mainnet, which marked a departure from Klaytn. It looked as though WEMIX deployed its own mainnet in attempts to: i) turn business model expansion into maximized profit, ii) expedite the process of securing killer content, and iii) lay the groundwork for WEMIX token on its path towards becoming the key currency.

As was strikingly illustrated by the collapse of Terra in Apr 2022, a single killer dapp can be so influential that it could go as far as to make or break the entire chain. WEMIX’s confidence in the success of its own mainnet seems largely derived from its flagship dapp, MIR4 Global.

A Mainnet Launched as a Hard Fork of Ethereum

Launching a mainnet on a blockchain is not as daunting as it may seem. Already, a myriad of mainnet codes is open to the public in the form of open source, and mainnets are providing SDKs to support appchains, reducing the hassles involved in building a mainnet. Seemingly, WEMIX chose to go with a hard fork of Ethereum, rather than build a mainnet in the form of an appchain, as it had already been running dapps on the EVM-compatible Klaytn blockchain.

WEMIX 3.0 was launched by forking go-Ethereum version 1.10.16, and applying the London Hard Fork. Similarly to other chains hard forked from Ethereum, like BNB chain, WEMIX seeks to ensure scalability by limiting the number of nodes to 40 and to fortify security by introducing a dynamic gas fee mechanism where gas fees move in sync with the demand for the network.

Improvements: Token Utility and Tokenomics

WEMIX token used to be a utility token, but with the launch of WEMIX 3.0, it became a mainnet token, significantly increasing its utility, including as a means to pay the transaction fees. Tokenomics also saw an improvement since the WEMIX 3.0 mainnet introduced a burn mechanism like EIP-1559. Usually, WEMIX token inflation rate hovered around 3% before the arrival of a burn mechanism, but WEMIX 3.0 may whip up more transactions for the mainnet, subduing inflation moving forward.

B) WEMIX Dollar and DeFi

WEMIX stands to leverage WEMIX token and WEMIX Dollar (WEMIX$) as the two fundamental pillars for the growth of its DeFi ecosystem. The platform introduced WEMIX$ since the price of WEMIX token, the primary token used in token transactions in the game, was not pegged to a certain price, making it hard to estimate USD price of the in-game token.

WEMIX Dollar Employing a Hybrid Form

WEMIX Dollar is, in a sense, a hybrid stablecoin—a mixture of crypto-backed stablecoin and algorithmic stablecoin—in that it not only is pegged 1:1 to the U.S. dollar using USDC as collateral, but offers arbitrage opportunities (Check out Complete Summary of Stablecoins for more information). This is because WEMIX$ is a stable coin with 100% collateralized USDC reserved in the treasury but, at the same time, will algorithmically mint more WEMIX$ upon upward/downward price actions as the ecosystem expands over time. Say, for instance, a rising demand for WEMIX$ puts the price at $1.1, the 0.1WEMIX$ surplus will be provided to WEMIX token holders who participate in staking. To date, $11.37M worth of WEMIX$ has been issued.

Building a DeFi Ecosystem of its Own

WEMIX is building its own DeFi ecosystem and has launched swap and staking services. Release of a lending service and its own bridge is slated for 4Q 2022.

Why WEMIX$ Instead of USDC?

Then why did WEMIX choose to employ WEMIX$ instead of USDC, a USD-pegged stablecoin proven stable so far. Seemingly, the reasons are: 1) WEMIX’s private chain is not one of those blockchains that support USDC and 2) WEMIX’s own stablecoin may build a linkage between the value of WEMIX token and the value of the WEMIX$-driven ecosystem.


Based on the Neith Protocol, NILE is a platform that allows users to create, activate, and manage DAO projects for the WEMIX 3.0 ecosystem. Nile has unveiled an NFT collection, London Underground Station 264, and one of its 40 node council partners, WONDER DAO.

4. WEMADE’s Strong Commitment to Blockchain

Quite contrary to other game companies testing blockchain simply to not lag behind, WEMADE is committing a sizable amount of funds and talents to building a blockchain ecosystem. Leveraging KRW 230B raised from cashing out WEMIX tokens in 4Q 2021, it is making investments in technology infrastructure, increasing blockchain-related hiring and launching its own mainnet.

One might wonder why. The answer may be found in WEMADE’s vision of building a metaverse born out of a fusion of game and blockchain and its belief that blockchain games will become one of the prevailing game paradigms. While tokens and NFTs to represent ownership are key to a blockchain project, WEMADE has experience in leveraging tokens and NFTs to grow the user base of its game.

Does Blockchain Help Grow User Base? The Answer Is Yes.

After it fused blockchain into MIR4 Global, WEMADE saw the number of concurrent users surpass 1.3M at its peak and hit 100k on an international gaming platform, STEAM, landing a roaring success for MIR IP. Such record came in for the first time since the Legend of MIR2 hit 800k concurrent users in 2005, which had been certified by the Guinness Book of Records as the world’s largest number of concurrent users.

Crossing the 1 million mark in concurrent users is every company’s dream in the game industry. The mega-success of MIR4 Global highlighted the fact that blockchain had won the company a larger user base than its previous non-blockchain games.

Does Blockchain Extend a Game’s Lifecycle? Not Applicable.

Once the Web3 adoption allows the ownership of an item to be transferred to users, the lock-in effect is expected to set in, securing more users for the game and in turn, extending the lifecycle of a game. But this has not been the case for WEMADE as yet. Though it saw a bump in the number of servers and token price right after the release of the Rise of Stars (ROS) in Feb 2022 and Yulgang Global in Apr 2022, the number of players remains minuscule at the moment.

Is Blockchain a Revenue Booster? Not Applicable

Though WEMADE reported a 100% bump in revenue in 4Q 2021, hitting KRW 85.3B, the number was driven by newly released games, whereas adoption of blockchain is not considered one of the drivers.

Blockchain Adoption Stands to Yield a Breakthrough for WEMADE

WEMADE had been operating at a loss in the absence of a leading IP until the blockchain game won it a significant user base—which seems to explain its relentless pursuit of blockchain implementations.

WEMADE’s decision can also be attributed to the changes in devices that have resulted in a colossal shift in the market landscape. Neowiz, for example, had led the online gaming market up until 2013, after which failure in securing an edge over mobile games sent it tumbling into a slump. A loss had been sustained from 2015 to 2020 until WEMADE raised a lot of funds in 2021 by cashing out WEMIX tokens. This stands in contrast to big game companies that kept posting strong earnings. As each transition, from consoles to PCs and from PCs to mobile devices, has thrown the gaming market into an upheaval, WEMADE appears to be seeking an upper hand in blockchain gaming, which it believes the next big thing will be.

5. Challenges Facing WEMADE

1) The Groundwork for Building Its Own Mainnet

Running mainnet may not be as easy as it might seem. Building and maintaining a sizable ecosystem entail much work—including not only infrastructure, such as wallets and explorer, but DeFi and NFT ecosystem. (Check out What Constitutes a Mainnet? An In-Depth Look Inside the Building Blocks for more information).

Handling them all on its own may further complicate and delay the process.

2) Security Issues Arising from Bridging

WEMIX provides a multichain bridge, allowing users to transfer their tokens. The multichain bridge issues assets using a lock-and-mint mechanism and has external validators verify the issuance of assets. Many of the bridges have constantly been plagued by loopholes in smart contracts and hacks manipulating their centralized operation, fueling concerns about security. At this point when WEMADE has just built its own mainnet, it has no other safer options than to rely on bridges to allow tokens to be transferred to other mainnets, which points to the area of concern that needs to be addressed—the infrastructure.

3) Attracting a Larger User Base with New Titles

Gone are the good old days when simply adding a P2E feature guaranteed a success. As mentioned earlier in this report, except MIR4 Global, the user base of all its games is minuscule, making further user onboarding inevitable.

6. Drivers of 4Q Performance: Anipang and MIR M

After all, WEMIX platform’s revenue comes from fees charged for trades, which is why user onboarding is critical. There is an anticipation that the release of Anipang (casual game) and MIR M (MMORPG), its game titles set to be launched in 4Q this year, will help onboard more users onto WEMIX platform.

Anipang: Tapping One of the Most Downloaded Casual Games to Boost User Base

As of 2021, the hyper-casual game genre hit 15 billion downloads, taking up ~33% of the total mobile game downloads. Although not the most profitable, hyper casual games attract the most users.

Anipang is a casual game that topped 20 million downloads with domestic users alone. Its meteoric rise in popularity was propelled by the advantages that it is a puzzle game many have been familiar with from the very early stages and takes no more than a minute to play.

With the release of Anipang Match and Anipang Blast slated for the end of this year, WEMIX will likely be able to fast onboard users onto its platform through the intellectual property of a breakout title. Further, the low barrier to entry of the games will allow users unfamiliar with P2E blockchain games to start playing with ease.

MIR M Global: Leveraging a MIR IP-Based MMORPG to Maximize User Lock-in

The number of MIR 4 Global’s concurrent users remains high at 300k. MMORPG’s life cycle, in general, is longer than casual games. This is because an MMORPG tends to offer various pieces of content, keep deploying updates, and allow users to add earnings models as they grow their characters. This explains why the success of MIR M Global, the MMORPG version of the MIR IP, is expected to lock more users within the platform.

7. Concluding Thoughts

In this report, we speculated on why WEMADE adopted blockchain technology and ecosystem and what game genres to look out for. Even at this point when concerns like volatility of in-game tokens have let doubts seep into the market over the success of blockchain games, WEMADE is pushing ahead with investment in a blockchain open platform as it envisions it as the way forward. MIR4 Global seems to have heralded a new opportunity for the platform business, and WEMADE looks determined to keep its focus on it. As the company is one of the earliest movers in blockchain gaming among South Korean game companies, whether it manages to overcome the growing pains, create a thriving ecosystem, and eventually come back into the spotlight in the P2E market seems to warrant our attention.


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