Thread by @3bodycapital

1/ The world of video games is about to get swept off its feet, as the rise of the #PlayToEarn model, brought to the mainstream by @AxieInfinity, charts a new path for ALL game developers, threatening conventional business models.

threebody.capital/blog/2021/7/30…

2/ For studios like $ATVI, the decision to acquire @king_games was a boon to their revenue and cashflow, acting as a stabiliser to overall earnings, providing a stable base to offset the seasonality that previously characterised most video games businesses.

3/ Monetising the casual gamer was easy money, although as the "loot box controversy" showed, applying Pay-to-win on AAA games isn't a good idea, for various reasons. Engaging gameplay, storylines, music and graphics make a game, not just "winning".
tomsguide.com/uk/us/what-are…

4/ The arrival of #PlayToEarn makes things ever more tricky for incumbents. For a start, the casual gamer now has to ask why they are paying to play, when they can play to earn instead? The impact on monetisation strategies going forward could be profound.

5/ More importantly, there won't be much of an alternative - with #PlayToEarn dominating the market Zeitgeist, @AxieInfinity is just the first of many games that will be generously VC-funded to provide player incentives.

6/ After all, who wouldn't want to be invested in a game that annualises income of north of US$1.2bn/year, while just being an Alpha release? More than 3m Axies have been bred, held by almost 800k accounts (and many more players). The model works - and it's time to replicate.

7/ Of course, there is a huge difference between a semi-casual game (not to mention its #metaverse potential) and a AAA MMORPG, with cutting edge graphics, right?

8/ Well, it's not hard to imagine a version of #WorldOfWarcraft that has a #PlayToEarn mechanism in place, allowing players who are time-rich and cash-poor to exchange their time (doing raids and grinds) for money (by selling their proceeds).

9/ The hurdle isn't that insurmountable. Games like @illuviumio already promise to deliver AAA grade graphics in a #PlayToEarn environment, leveraging @UnrealEngine for positively unreal graphics.

10/ #PlayToEarn is pandora's box, and once opened, it's hard to pack it all back and pretend none of this ever happened. Capital will flow towards funding this model, which puts us once again at a fascinating junction: what happens when #crypto models meet traditional business?

11/ We believe this is a seminal moment in time, when incumbent developers, from industry giants like @Activision @Blizzard and @EA, to independent studios like @CDPROJEKTRED, have to decide whether to co-opt #PlayToEarn into their business models, or pass it off as a fad.

12/ For us, seeing the profound change this has made (great documentary by @PlayToEarn_) for the Philippines, as well as the enabling work of player guilds like @yieldguild by @gabusch, tells us that this isn't going away.

13/ This disruption is not limited to only casual gaming, but ALL gaming. It's not often a new business model is born. But as has always been our view, the rise of #crypto is disruptive to ALL business models. We end on this iconic tweet by @balajis.

https://twitter.com/balajis/status/1385572764485001221

14/ Credits to @AxieChat for the highly informative podcast that allowed us to do our research, as well as @MaxBrand99 for the most detailed Axie Infinity charts and data on the internet. /end