I wanted to share some thoughts on the gaming industry as a whole – including crypto gaming.
As usual, disclaimer: those are solely my thoughts, not financial advice, and are limited to what I know.
I’m always keen on learning, should anything be wrong.
As usual, disclaimer: those are solely my thoughts, not financial advice, and are limited to what I know.
I’m always keen on learning, should anything be wrong.
As everyone have seen, there was a massive activity this year in terms of deals, does this come as a surprise?
For those who paid attention: probably not.
Indeed, 2021 was a record year: 67 transactions for a total of 80.4B$.
For those who paid attention: probably not.
Indeed, 2021 was a record year: 67 transactions for a total of 80.4B$.
The most notable purchases were Zenimax (Bethesda) by Microsoft for 7.5B$, Moonton Technology (Mobile Legends creators) by Bytedance and Codemasters by EA for 1.2B$
2021 also saw some big IPOs, namely Krafton (South Korea Market) and BiliBili (Hong Kong Market).
The former saw a -34,75% LTD performance, while the latter saw a -80,90% performance.
The former saw a -34,75% LTD performance, while the latter saw a -80,90% performance.
I am not a stocks expert by any means, so I’m not going to pretend I know *exactly* why this happened – but we can think of many reasons such as initial over-hype/valuation, legal issues for both companies in key markets (PUBG/India ban, BiliBili/China etc.)
2021 was also the year where P2E/GameFi started to make waves, with some success stories such as Axie Infinity, and DeFi Kingdoms.
Earlier in the cycle I was asking the question “can P2E stand on its own during a bear market?”
Earlier in the cycle I was asking the question “can P2E stand on its own during a bear market?”
Well, if we consider we’re in a bear market since December, the question is simply no, let’s look at data from DappRadar for 3 of the most successful games.
Users/Volume/TX are down rather bigly on all fronts from the highs of last summer/fall
Users/Volume/TX are down rather bigly on all fronts from the highs of last summer/fall
In terms of token value, let’s see how far from ATH each of the power tokens are: $SPS is -89,6%, $JEWEL is -81,4% and $AXS is -71,8%. For the sake of comparison: $BTC is -43,6%, $ETH is -47,3% and $SOL -68,8%.
Yep, they took a beating.
Yep, they took a beating.
Is it only due to the market? I also think that there was an over-hype, over-exposition, and a lot of games have under-delivered.
At the end of the day, games need to provide value and be fun – otherwise people will leave when there are better financial incentives elsewhere.
At the end of the day, games need to provide value and be fun – otherwise people will leave when there are better financial incentives elsewhere.
In terms of other big P2E/NFT/Gaming news of late 2021: AAA studios trying their hand at it and gamers being super mad at it. I’ve already made my point on this topic but I invite you to read what tradgaming players & press had to say about Ubisoft Quartz, Team 17 NFTs...
Now onto 2022. This beginning of the year has been kinda nuts: Take Two acquired Zynga for 13B$, Sony got Bungie for 3.6B$ and finally Microsoft got Activision Blizzard for a whopping 69B$ (nice).
This slew of acquisitions left everyone stunned, especially the last one which blind-sided everyone. The Verge had a nice read-up on how this deal came to be:
Read exactly how Microsoft’s $68.7 billion deal for Activision Blizzard came together
theverge.com
Read exactly how Microsoft’s $68.7 billion deal for Activision Blizzard came together
theverge.com
As a reminder, ATVI is still deeply embroiled in issues pertaining to workplace toxicity, plus games not faring as well as before – which had an impact on stock price.
My take is that it is necessary in an industry to go through consolidation. These kinds of M&A allow for innovation, better product quality, synergies & cost-saving.
Here are 2 excellent reads on the matter:
HBR: The Consolidation Curve (hbr.org)
SuperJoost: Three decades of games industry consolidation (superjoost.substack.com)
HBR: The Consolidation Curve (hbr.org)
SuperJoost: Three decades of games industry consolidation (superjoost.substack.com)
After a quarter of the year already over what can we expect this year in both tradgaming and blockchain gaming (or is it web3 gaming?).
Here are some random thoughts from my side, and we’ll see what sticks.
Here are some random thoughts from my side, and we’ll see what sticks.
1.Consolidation will continue.
2.Everyone will still try to get a share of this metaverse pie without understanding it. I agree with Lord Gaben here btw : pcgamer.com
3.Gaming companies will need to expand out of traditional games to survive
2.Everyone will still try to get a share of this metaverse pie without understanding it. I agree with Lord Gaben here btw : pcgamer.com
3.Gaming companies will need to expand out of traditional games to survive
4.Microsoft and Sony will take their battle on the subscription domain (as a reminder, MS owns 2689 studios, and Sony has a solid line-up of first/2nd party games, and purchased Bungie)
7.If AAA studios can’t make it through their own IPs they’ll invest in successful web3 companies, or straight up buy some.
8.Blockchain games will have to change their approach if they want to have better churn-rates.
8.Blockchain games will have to change their approach if they want to have better churn-rates.
9.Blockchain games will start to use AA/AAA techniques in terms of comms/marketing.
10.More hypercasual games will turn towards P2E/P&E.
11.Tokenomics of games will drastically change to become more sustainable and not be the sole attractive point for gamers.
10.More hypercasual games will turn towards P2E/P&E.
11.Tokenomics of games will drastically change to become more sustainable and not be the sole attractive point for gamers.
12.Consolidation of guilds, and DAOs. Too many of them are trying to get a piece of the cake and it’s not doable.
13.Esports, but on the blockchain. (I’m half-kidding, not sure how they’ll do it, but I’m sure they’ll find a way lol)
13.Esports, but on the blockchain. (I’m half-kidding, not sure how they’ll do it, but I’m sure they’ll find a way lol)
I’m still bullish on Aurory, Treeverse, DFK, but also Ascenders. (Yes, I’m literally shilling my bags, but again, I invest in what I believe in).
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Thanks for reading !
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Thanks for reading !
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