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Earn while playing (P2E): Monetization of time, financialization of games

In the past 50 years, the game industry has undergone tremendous changes.

From "The King of Fighters 97" in the game hall - pay-to-play to "Glory of the King" on mobile phones - free-to-play play, and now GameFi's - earn while playing (play- to-earn), it is unthinkable to look forward at every turning point.

Looking at the history of the game industry, regardless of paid games or free games, the relationship between games and users has always been one-sided. That is, only developers or game owners can get financial benefits, while players can only have fun and continue to consume.

At the beginning of April 2021, the launch of Axie Infinity (Axie) self-sidechain Ronin solved two major challenges of the Ethereum network: high transaction fees and low latency, which reduced the cost of cultivation.

Since then, Axie has experienced explosive growth, with daily active users increasing from 38,000 at the end of April to 252,000 within 2 months. Axie has become the most trafficked Dapp on Ethereum, and Axie has also become the most traded NFT series ever.

With the explosive growth of traffic, Axie generated more than 800 million US dollars in revenue in the third quarter, and the total protocol revenue in the past 180 days has also surpassed OpenSea, second only to Ethereum.

On the other side, a documentary titled "Play and Earn (P2E): NFT Games in the Philippines" is also fueling the flames. More than 430,000 hits quickly detonated the viral spread on social networks. The story of a P2E game changing the lives of Filipino people is hotly discussed around the world .

In the camera, in the Philippines, where the unemployment rate is as high as 40%, playing Axie has become a viable alternative source of income, even higher than the Philippine minimum wage. Single moms in front of the camera, college grads who can't find work, and elderly couples who run small convenience stores have all changed their lives playing Axie.

Off-camera, Yield Guild Game (YGG) provides Axie gamers with one-stop services from recruitment, training and NFT loans, so that people who could not reach the threshold (without 3 Axies) can also participate in Axie Infinity.

As long as there is a network, a wallet and basic equipment, plus the training of the YGG community, qualified players can monetize their time, and once the game can generate income, the relationship between the game and the player is no longer one-sided.

Looking back at the development of the game industry, it is not new to make money from games, but the concept of turning players into investors in P2E games has indeed ushered in a new era of games.

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Guild 1.0: P2E Capital, Project, Player Aggregation YGG

As a new P2E role, YGG was established in October 2020. After more than a year of development, it has maintained a leading position in player scale, project cooperation, capital investment, and market recognition.

In the P2E game ecosystem, YGG dismantled the functions of the original game publishers and distributors to a certain extent.

While building relationships with Axie players and training them on how to play P2E games, how to make money, and how to use cryptocurrencies, YGG is like a bridge between players and Axie, lowering the threshold for user participation and gathering core P2E users.

On the other hand, YGG directly invests in the seeds of P2E project parties to help the project increase traffic exposure, and YGG will also go deep into the P2E game economic system to recruit and train players, hold competitions, and promote games, organically combining P2E projects with precise players.

At the same time, YGG has been working hard to expand the P2E ecosystem. The YGG investment department has also purchased a large number of assets from potential P2E games to maximize the value of NFT assets in the virtual world and P2E games.

With the influx of a large number of new players, YGG has also completed three rounds of financing in half a year: the seed round ($1.325 million), the A round ($4 million) and the pre-IDO ($4.6 million). The leading investment institutions include Delphi Digital, BITKRAFT, A16z, and dozens of institutions have raised a total of $22.4 million.

The investment agency Delphi Digital stated the reason for investing in YGG: YGG has the opportunity to organize and coordinate activities in the fast-growing encrypted game environment, and by doing so, YGG will optimize the return on time and money investment.

The partner of A16Z also said: YGG is the central position of P2E. This new model has profoundly changed the economic model of the game. More value generated by the game is enjoyed by players and the community, rather than exclusively by the game platform.

At 22:00 on July 27, 2021, the YGG token IDO will be officially launched, and 25 million YGG tokens will be sold out within 31 seconds. The total amount of funds raised this time is as high as 12.496 million USDC.

The release of tokens by YGG means that YGG has officially transformed from a game guild into a DAO organization. So far, YGG has quickly completed capitalization in just 9 months. Since the establishment of DAO, YGG has pressed the accelerator button to gather capital, projects, and players together to create the world's largest virtual world economy.

Up to now, YGG has disclosed a total of two asset and financial reports (July and September). As Axie’s most successful encrypted game guild, YGG held 26,438 Axies in September, an increase of 46.2% compared to July.

In September, the YGG treasury held a total of 814,812,378 USD in tokens and 17,616,712 USD in NFT assets. Tokens increased by 206.8% compared to July, and NFT increased by 174.9% compared to July.

Not only asset growth, but YGG has also made arrangements for many well-known or potential P2E projects. According to data in September, YGG has invested in 14 blockchain games. In the past two months, it has added 11 new game partnerships such as BigTime and Sipher.

YGG’s income mainly comes from P2E investment income, operating and leasing NFTs, and holding YGG tokens is like a P2E index fund that generates income. YGG token holders have continued to grow from 1,345 after IDO to 11,900 currently. YGG's Discord community members have also increased from 19,546 in June to more than 94,497 at present. Both internal community players and external currency holders continue to grow. YGG has gradually developed into the largest community of interests in the P2E ecosystem.

However, the Guild model does not have high barriers. Since the second half of 2021, the new Guild has sprung up with financing, and institutions are looking forward to the birth of the next "YGG".

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Guild 2.0: Three Circles, Four Trends

Peter Thiel said in "From 0 to 1": The reasons for business success are different: every monopoly company obtains a monopoly position by solving a unique problem; and the reasons for business failure are the same: they cannot escape competition.

After YGG exploded, a total of more than 20 Guilds have received financing or acquired a wide range of P2E user groups. Although the management and operation of each Guilds are very different, how to build a P2E community of interests is something that every Guild needs to consider core.

• Since the second half of 2021, Guild has also been evolving rapidly. From the perspective of market value, Guild's competition has initially been divided into three circles:

• After YGG (US$400 million), Merit Circle (US$200 million) and GuildFi (US$100 million) have gradually formed the first echelon competition;

• GGG, Unix, Pathdao, BlackainSpace, RainMaker, Crypto Gaming United, AAG Ventures, 99StarZ, BlackPool, which have just been listed, are also building moats in multiple dimensions;

Avocado Guild, Ancient8, MGG, 0xAdventure, Polemos, L2Y are silently lurking unlisted.

Although there are different resources and backgrounds, the overall evolution of Guild has its own characteristics. From the perspective of the overall trend, the Guild ecology evolves rapidly in four directions:

game diversification

Although Axie is still the main source of income for YGG in its early stages. But YGG is also gradually diversifying its games, investing in NFT assets of different games. Up to now, YGG has reached investment or partnership in more than 30 games.

Merit Circle, GuildFi, and GGG also cooperate extensively with high-quality P2E games. Although many projects have not yet launched, judging from the speed of project cooperation, each Guild still hopes to capture the next "Axie" as soon as possible.

player localization

Looking back at the development of Axie, most Axie players come from low-income areas, and the primary motivation of the players is to make money. As the Philippine launch of Axie games, YGG ushered in explosive growth together with local players.

In early December, YGG SEA, a subDAO under YGG, raised US$15 million through two rounds of financing to drive the adoption of Play-to-Earn games in Southeast Asia.

GuildFi has a strong mass base in Thailand, GGG is the core driving force of P2E games in Vietnam, Merit Circle has more than 1,200 Scholar in Europe, Asia, Africa and South America, Pathdao is increasing the number of P2E active players in Malaysia and Indonesia, and more Guild is building localization Promote the large-scale growth of P2E users.

Tool Modularity

Whether it is Guild-as-Service (Gaas) of GuildFi, Guild Verification Tool of Rainmaker, or MGG Lending Protocol of Metagame Guild.

The newly evolved Guild disassembles the problems that players may encounter or the threshold of participation in each step, and makes it into a modular tool to maximize the player's income and reduce the threshold of participation. Provide a wider range of value-added services for P2E players, games and investors.

Intelligent management

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Summarize

Summarize

After YGG, Guilds have ushered in a large-scale evolution since the second half of 2021. Some Guilds focus on larger-scale investment and return rates, some Guilds provide a wider range of value-added services for P2E players, games and investors, and some Guilds focus on In terms of localization and expansion of user scale, it is the exploration in different directions that allows the P2E ecosystem to see more possibilities of Guild 2.0.

The future has come, but the distribution is uneven. In another parallel world, the metaverse created by the P2E ecosystem has the potential to shape the largest human labor market in the future. In the future, there will be more than one Guild winning, gathering large-scale labor to migrate to the metaverse .AC Capital ResearchNote: original source