Capital fervently supports chain game guilds: a monthly salary of 7,000 one day, and receiving millions in investment the next second

Source: Chain New (ID: ChinaBlockchainNews) Original
Author | Fang Qinyu
This type of gaming guild promotes economic activity in multiple virtual economies by helping players enter the game and providing profitable strategy combinations.
Blockchain games will not only continue to drive the global sales volume of NFTs but will also promote the development of new economic organizations, such as blockchain gaming guilds, by creating new economic opportunities. These gaming guilds help players enter the game and provide profitable strategy combinations, driving economic activity in multiple virtual economies.

A large number of "play-to-earn" blockchain games, which have been in preparation for a year, will flood the market by the end of the year. With the prosperity of blockchain games, emerging blockchain games urgently need users to enter, and the importance of gaming guilds is becoming more prominent.

According to incomplete statistics from Chain New, since July, 10 blockchain gaming guilds have announced financing, with well-known investment institutions such as A16Z, Animoca Brands, and Pantera Capital competing to get involved.

"One day I was earning 7,000 a month, and the next second I had a million-dollar investment." After leaving a blockchain company, Xiao Hui discussed his plans to start a GameFi-related game studio with others and received many investment offers. "They didn't ask what the project was; they just asked if I wanted to take their investment. I was already too scared to accept the money."

However, the current policies regarding blockchain games in China are still unclear, and the crackdown on virtual currency trading has been ongoing and tightening. The token-related transactions involved in blockchain games can easily contradict current policies and laws, posing risks for ordinary blockchain game players, gaming guilds, and capital alike.

1. $200 Million Rush to Invest in Blockchain Gaming Guilds

"If we can build a community for blockchain game players, it must be better than working on a blockchain game project." said Ms. Mi, the operations manager of a blockchain game project. It is understood that the development team Ms. Mi is currently with is targeting Southeast Asian users. The team originally focused on public chain development but began to lay out blockchain games in February this year, anticipating their popularity, and plans to create a replica of Axie Infinity as their first blockchain game project.

Well-known games like Axie Infinity and The Sandbox went live around 2018, and after two to three years of iteration, updates, and brewing, they gradually reached a leading market position. Ms. Mi's team started later and has been working overtime since the project launched, hoping to launch by the end of this year.

"In terms of user operations, we have contacted several player communities for cooperation to drive players to play our game." Ms. Mi stated that the newly launched blockchain game has a strong demand for player communities, and gaming guilds are a key focus for blockchain game developers.

Xiao Hui left a blockchain media company and, at a friend's invitation, is preparing to return to his hometown to start a business. "A few friends plan to pool some money to start a blockchain game studio. The labor cost in my hometown is low; you can hire someone for just 3,000 yuan."

During his student years, Xiao Hui was keen on organizing guilds in traditional online games like "Three Kingdoms: The Land of the Rising Sun." At that time, he systematically helped guilds cultivate new players, but Xiao Hui admitted that he didn't do it for profit but to enhance the gaming experience.

"One day I was earning 7,000 a month, and the next second I had a million-dollar investment." Xiao Hui lamented that after leaving his job and discussing his plans to start a GameFi-related game studio, he received many investment offers. "They didn't ask what the project was; they just asked if I wanted to take their investment. I was already too scared to accept the money."

Gaming guilds have long been pursued by capital abroad.

According to incomplete statistics from Chain New, since July this year, 20 gaming guilds have appeared in media reports, with 10 claiming to have secured financing. These blockchain gaming guilds primarily target the Southeast Asian market, with total financing exceeding $200 million.

Among these financing cases, Merit Circle has announced the largest known financing amount, completing a $100 million financing through the Balancer Labs Liquidity Bootstrapping Pool (a blockchain-specific fundraising method). It had previously raised $4.5 million in seed funding from venture capital firms.

Zebedee is the second-largest project in terms of financing, having secured $11.5 million in new funding, which it claims will be used to expand its gaming plans. Unlike other blockchain gaming guilds, Zebedee primarily supports players entering the Bitcoin play-to-earn gaming world through technical means.

Both of these gaming guilds' latest round of financing lists include Animoca Brands, which is also an early investor in the largest gaming guild, Yield Guild Games. Animoca Brands is a game development company that has gained fame for its layout in the blockchain gaming sector and has received investments from Jack Ma's family wealth management fund and Sequoia China.

2. Who Will Be the Benchmark for Operating Blockchain Gaming Guilds?

Blockchain gaming guilds are typically formed under the following circumstances:

• Players organize spontaneously;
• There is funding behind them to organize and guide players systematically;
• Player communities initiated by game publishers, such as Yooshi Metaverse, which is a community initiated by the publisher of its namesake game to bring users to the game and achieve player ownership economic governance;

Yield Guild Games (YGG) is currently the leader among blockchain gaming guilds, belonging to the second category by origin. Its founder, Gabby Dizon, has extensive resources in the gaming industry, having served as the president of the Philippine Game Developers Association from 2007 to 2009 and as CEO and co-founder of the Philippine mobile game company Altitude Games since 2014 (which developed Battle Racers on Decentraland and Mushroom Mandia on Sandbox).

Gabby Dizon has publicly stated that he was an early fan of Axie Infinity. The COVID-19 pandemic caused unemployment rates in the Philippines to soar to 40%, and players in the Philippines began to earn money by playing games, prompting him to establish a blockchain gaming guild.

YGG was initially set up to serve players of Axie Infinity, with its "scholarship program" being an important component. Players must recharge when they start playing Axie Infinity because they need three Axies (little spirits) to begin the game, which must be purchased from the market. As the price of Axies continues to rise, some players can no longer afford to play the game, as it requires at least $1,000 to start. The "scholarship program" allows YGG to rent out its Axies to players who want to start playing Axie Infinity, sharing the income generated from the game: players receive 70%, the guild receives 10%, and the community manager receives 20%.

The community manager of YGG is responsible for promoting the game and managing players within the player group, allowing YGG not to manage players directly. Community managers are often existing members recruited from the community.

"YGG needs a large workforce to cover, essentially committing a lot of human resources to the project, along with early investments in the project. This is not something everyone can imitate," said Xiu Sang, one of the founders of the TSA blockchain gaming guild, to Chain New.

Today, YGG is not only focused on Axie Infinity; it also has activities in well-known blockchain games like The Sandbox and F1 Delta Time. The guild generates profits through rental programs, economic activities of in-game assets, holding various game NFTs, and early equity investments in blockchain games. As an early investment institution in YGG, Delphi Digital publicly shared the reasons for its investment in YGG:

Not only does it invest in more early-stage blockchain game projects, but its gaming treasury mechanism has the potential to provide asset agency services for gamers or investors, with the upcoming subDAO and liquidity pools equivalent to indices and super indices. This is something currently hard to find in other guilds;

As the guild matures, it serves as a powerful catalyst for broader ecosystem development by providing developers with useful insights collected from seasoned player communities;

YGG's funds will effectively become a shadow fund for productive NFTs.

Currently, blockchain gaming guilds face serious homogenization issues, and the operational models of leading gaming guilds are not significantly differentiated.

The blockchain gaming guild BlackPool is often compared to YGG. BlackPool's founder, Julien Bouteloup, is an advisor to YGG. This guild claims to have richer quantitative trading methods and currently holds slightly more NFT assets than YGG, but its AUM (Assets Under Management) is smaller than YGG. The guild primarily focuses on the football game Sorare on Ethereum, and its iterative development is lagging behind YGG.

Next is Merit Circle, which previously mentioned securing $100 million in financing. This project was launched by the founder of the Axie 420 scholarship program and incubated by Flow Ventures, also receiving investment from Yield Guild Games.

Merit Circle claims to be a revolutionary community organization, but its structure is currently highly similar to YGG. The difference is that Merit Circle emphasizes a community autonomy structure, with each community corresponding to different blockchain games, ultimately controlled by the super community of Merit Circle, while Yield Guild Games allows its future different blockchain game communities to issue their governance tokens.

3. The Rise of Domestic Blockchain Gaming Guilds

Xiu Sang, one of the founders of the TSA blockchain gaming guild, stated that domestic blockchain gaming guilds are just starting out, and the more serious issue than homogenization is the disparity in quality. "There are some guilds emerging that players need to be cautious about and carefully identify. YGG is currently the best operational model for blockchain gaming guilds I have seen, and no other model has emerged that can surpass YGG. I believe following cannot surpass."

The popularity of blockchain gaming guilds has also created new opportunities for domestic players. These players can not only earn money by playing games but can also become KOLs by guiding other users in blockchain games (due to the high entry barrier) or even start their own businesses.

Xiu Sang is currently writing a business plan for the guild. The TSA community was spontaneously organized by a group of players in May this year as a Chinese blockchain gaming guild. "Now domestic investment institutions are very willing to invest in blockchain gaming guilds, even in blockchain game studios."

"The establishment of our guild is somewhat influenced by the relationship between Axie Infinity and YGG. The guild is elite-managed, with no mandatory restrictions on members. Games like Axie Infinity have relatively high operating costs for us, so we mainly focus on earlier blockchain game projects, which requires our team to have stronger investment research attributes. We provide game strategies and reports to the community, allowing community members to decide whether to participate." Xiu Sang introduced that their guild currently consists of 30 core members and uses its own funds to invest in and test early blockchain games.

"I believe the biggest risk in operating a blockchain gaming guild comes from the project party's manipulative operations, which is similar to traditional games. The core competitiveness of an excellent blockchain gaming guild should be mutual assistance and trust. Trust is the most important because the guild provides auxiliary tools for a game. How to make community members willing to use these auxiliary tools is a challenge, as assets are at stake. It is equally important for the guild to trust that community members will not act maliciously, as community members could also abscond with the guild's assets or damage its reputation. This issue has not yet surfaced, but on a larger scale, it could become a terrifying problem in the future," Xiu Sang analyzed.

In addition to asset security risks, China's strict crackdown on virtual currency trading policies and laws also brings uncertainty to the development of domestic blockchain players and gaming guilds. Since blockchain games involve token-related economic models, if they are directed at Chinese citizens, they may violate the relevant regulations and laws prohibiting virtual currency trading issued by ten ministries.

This is an unavoidable risk for capital and individuals looking to participate in blockchain games.