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5 tips for launching in a crowded web3 gaming market

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Scarlet Ibis feeding among Laughing Gulls; web3 standiing out crowd
Image Credits: Chelsea Sampson (opens in a new window) / Getty Images

Corey Wilton

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Corey Wilton is the co-founder and CEO of Mirai Labs, the gaming studio behind Pegaxy.

The first wave of the play-to-earn (P2E) gaming boom seems to be coming to an end. There are still plenty of blockchain studios staging successful multimillion-dollar raises around the globe, but competition for funds has tightened to the point where only standout projects are winning backers.

With great strategy more important than ever, here are a few tried-and-true steps you can take that will help set you apart when you’re seeking capital and preparing for liftoff.

Leverage experience in the traditional gaming studio sphere

The blockchain gaming market is full of builders who are experienced in crypto but haven’t built traditional games.

I’m a prime example. Pegaxy was the first game I worked on and the first I launched. Like many other web3 games of its time, its mechanics and graphics were fairly basic at the start. But while simplicity was fine with the web3 gaming crowd, it has become increasingly clear that P2E will need to attract traditional Web 2.0 gamers if it is to scale, and these gamers demand much more. To please this demographic, builders will need games that have it all: superb graphics, strong mechanics and rich lore.

That’s why a founding team that pairs an understanding of web3 fundamentals with experience in building and monetizing Web 2.0 games for mobile, desktop and console platforms will set you apart in this market.

It’s also why, after Pegaxy was launched, we founded Mirai Labs. We wanted to assemble an expert team to build games that appeal to the traditional gaming community.

Develop a clear, straightforward monetization strategy

Most traditional P2E games have fairly simple revenue models that rely on users buying and holding the token that serves as the in-game currency.

This means that when large groups join and play a game at once, token prices and revenues rise in tandem. But when market conditions change — or when players just lose interest in a game — there can be a mass exodus of users. This is bad for revenue and can be catastrophic for token prices. Therefore, building a game that succeeds in the long term means developing monetization strategies that can weather market ebbs and flows, those that couple the best of web3 tech with proven Web 2.0 revenue models.

You can see evidence of this shift toward Web 2.0 monetization in our journey at Mirai Labs. At its peak, Pegaxy had more than a million registered users and 200,000 daily active users (DAU), which was reflected in the token price. Now, Mirai Labs is focused on free-to-play monetization strategies that work well in Web 2.0. Broadening the revenue base provides better security in any market condition.

Use careful language when you talk about web3 tech

VCs are wary of builders trying to capitalize on trends. And web3 happens to be very trendy at the moment.

Therefore, being strategic about how you talk about web3 tech in relation to your game is crucial. Rather than just talking about how hot the market is, focus on why your particular game is uniquely positioned to succeed. Why are people going to play it, and — more importantly — how is it going to make money?

You need to be able to convince prospective investors that you have a solid, thought-through plan of action. You can have the best team and the best game, but without a solid monetization strategy, those mean little.

Make sure you raise enough to survive the worst-case scenario

In the early days of web3 gaming, there were so many users clamoring to play that games didn’t need much to succeed. Now that the industry is maturing, you’re going to need to be prepared for all situations, including the possibility that your first few products will fail.

Therefore, VCs need to see evidence that you’ve taken the worst-case scenario into account. Forecast your financials as far out as possible, with rough patches factored in: What kinds of resources will you need if market conditions become unfavorable? What if the developer talent pool dries up? What if your first launch is unsuccessful? Having too much money is never a problem, but having too little can be disastrous.

It’s also important to remember that it will take you significantly longer to create a game that will appeal to Web 2.0 gamers. While ultra-simple web3 games can be churned out in a matter of months, traditional games can take three to four years to develop.

Don’t expect your token to act as the core fundraising vehicle

In a bull market, you can sell tokens to VCs like there’s no tomorrow, but in a bear market, investors demand more. They will be much more likely to seek equity in your company than to accept tokens.

The only exception to this may be token warrant-style raises, where investors have the right to ​​claim a certain percentage of tokens issued at launch.

In conclusion

The days when P2E games all but guaranteed success are past us. Investors, and players, are now looking for games and studios that create high-quality products.

When you’re planning your launch, invest time in finding people who can build great games supported by strong, clear monetization strategies. With a firm foundation built on these principles, raising money and attracting players will both become infinitely easier — in good markets and when things take a turn for the worse.

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