Building a free to play to earn game - The story of Axie Infinity

Transcript

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all right I came again great so welcome everyone thank you all for coming to the axe infinity play to earn presentation that I have here my name is Alexander I'm one of the cofounders of axe e infinity and for those of you have no idea about what we're making well every ax e is a unique digital pet like a year C 721 type of token that can be used in multiple games the most expensive one of which has sold for over fifteen thousand dollars and we're using aetherium for ownership of these game characters

so far we've released a few games breeding games similar to both crypto kiddies as we have had an idol battle game which we released early on in in the middle of 2018 which has now actually been sunset due to well we put a lot of the gameplay on chain which didn't really make a lot of sense from our user experience and now we are releasing a new card battle game which is available in our for now playable both on Android and iOS if you own axis so about the company was found at all early on in 2018 we were a 25 man team based out of the Ho Chi Minh City in

Vietnam I'm the regional but I've moved and changed my life to Ho Chi Minh City some time ago we've sold game characters like axis and virtual Lance were a little bit over 1.3 million dollars so far and our players have traded for about 1.4 million dollars on our own in-house marketplace but ax infinity is a lot more than just these numbers so we're creating actually a community around these game characters and then focused a lot on that since the beginning of the game so our players are artists who make amazing art that you can see behind me they create digital art and also physical are

which they've actually sent to our office they also make games on top of these permissionless assets so it took a little bit of time but we actually realized that due to the permissionless nature of non fungible tokens it's actually perfect for multiverses and the ability to use axes or use entities in multiple games so we saw this happen quite early and this really was an interesting development and actually it led to a lot of the sign choices later on in actually infinity there also fans who make their own leagues in our game so they make the axe elite for example which is a community made effort and now also lately they've created their own guild inside the game

which is called team leaky which is very an interesting thing to see so early but best of all they're diehard fans who even take ax e infinity tattoos and this is something that you can't really buy for money and this is also why we've been able to partner with some of the biggest companies that are actually working within the blockchain space right now so I'm telling you this because distribution of games is very important and when we're partnering with for example Kakao we're making a Clayton Doctrine which I'm not sure if you guys are familiar with but has a lot of usage in Korea means that we can reach a lot of users there once the game has reached a polished state same goes for HTC and

now lately Samsung actually used ax infinity as one of their poster trials in their recent aetherium SDK which they released a blog post about and of course maker Dowell who are sponsoring various tournaments inside the game and we're integrating die in multiple ways so for example the item that you can see here oh there it is behind me is a specific item that you could only get if you had a CDP open and you have drawn some die from that CDP then you were able to claim an item for a specific time so the most like the most difficult one to get you actually have to have a CDP open with over $15,000 drawn from it and what these companies realize is that making a

block change right now is very very hard I mentioned a little bit of the team we were based we are based in Ho Chi Minh City but our key strength is that we are we have engineers who have backgrounds from Google and PayPal and really understand how you can how important it is to connect the blockchain to actually the games if you can't actually do that then well you don't have a chance to succeed and we've seen multiple games fail at this when it comes to incentive alignment so one of the important things about when you're making a book chain game is how do you align the incentives between the players and the developers our growth lead Jeff is background from Yale with the focus on central banking and monetary theory and me well over the

past 15 years I've played at the highest international levels in Warcraft 3 Dora and Auditor so together really understands what it takes to succeed in this nascent space we found product market fit within the crypto space and our goal now is actually to move ahead and make the market bigger for everyone but a little bit of how we met so far this is a cryptic ad of course you all know this one our team actually met playing crypto kitties which is pretty interesting and a lot of people don't really understand how that happened well they're really strengths about crypto kitties was the

fact that there was such a great community that actually gathered around that product it wasn't really much of a game but the ability that the amount of people that gathered and wanted to build something on top of this was truly astounding so we met playing a game but felt like something else was missing how can we take these game assets and use them to the next level so that's how actually infinity actually was was formed and that's why I actually changed my life moved to Vietnam and then guess what happened well great the scourge as you guys are probably all familiar with early on in 2018 there was a massive amount of hype about all these centralized applications different kind of games everyone was going to become a

millionaire a lot of hype and then while they pretty much died out a lot of people they really didn't know how to make games and the addressable market was much smaller than people actually thought but what actually leads to the Scourge well this is where it gets interesting I've borrowed this graph from Union Square Ventures which is the infrastructure and app cycle and how it actually keeps going and this is actually where we are right now so the infrastructure of course was at a point where you aren't whenever you try to pushing for something you get shut down by the infrastructure which is basically the blockchain this again led to a lot of vc is actually losing faith a lot of

investors losing faith into what was happening inside the blockchain a gaming space because although the money was then again flowing into the protocols all these etherium killers all the people who actually thought that they would capture all the value at the protocol level we believe in actually infinity and in other dots that a lot of the valley will actually be captured at the top level at the protocol at the application level but early on in the middle of 2018 nobody actually realized that because they didn't really know how to design good tokens and align incentives and I think this is really a big key for why we have this massive scourge and a massive amount of projects that were going out of business because

if you only have coins that don't really make much sense so you have this product where you have a token which actually is not even tied into the product at all it's supposed to be this payment currency or something it doesn't really make much sense at all at least in my opinion so then we start looking at product market fit I said a lot of products had actually lost its way they didn't find product market fit but what about the rest of the decentralized application space well d-file of course last year one of the really massive hits with over 1 billion dollars in lost value I would say we recently happen as you all know without

adult product market fit at least within when you look at the amount of volume so ok ok they might have it what about the gambling and gaming labs well for down spin stock are pretty much the same amount of users for a really really long time now about two to three thousand it's a very easy use case a very easy thing to see well you can have when everything is on Shane things are transparent so it makes sense to put gambling on the chain but it's not really enough to actually get to these millions of users that we need to have so what about games well crypto kitties first now my crypto Heroes is without a doubt the leading bait not bacon but beaten of of games

Japanese game very much Japanese they have about 3000 4000 users every day but it's not exactly great not exactly the millions of users that we need to succeed we need to make the market the addressable market bigger so I think we all agree that there hasn't really been a breakout a game yet so what's next well a new hope Darwinism at work washed out all well not all but almost all of the bad projects at this time and we can really start seeing that the project's who actually managed to get the funding who managed to actually build a solid token economy in some way well they are starting to to kind of make something

tangible make something fun which of course is what games are all about so in acts II let's see if this [Music] and actually this is our and actually this is our mobile new mobile card game application as you can see this is an adventure mode where I'm going to be playing against some monsters here so our focus in 2020 is actually polishing this game making sure that it makes sense not only from an economic perspective but that the game is actually attractive so that we can start targeting a mainstream audience and that

well since we released it it's still not available for play to earn the only way you can play this game right now is still if you need to own axes you need to have meta mask you need to have all that stuff but once we are ready we're gonna activate free-to-play access and at that point the game is hopefully going to be exploding everywhere but before that we need to polish it and we need to reduce the friction in this talk I don't have too much about the technical aspects of what's happening at inside blockchain games but in short I'm gonna address it a little bit Ethier doesn't really work well for games the only thing that actually works for games in etherion is the ownership of very expensive assets

so if you're a game developer and you have let's say some assets that are worth maybe $20,000 then yes it makes sense to actually use the Tyrian for ownership but if you want to scale it you need to use layer two kind of solution like for example optimistic roll-up loom network which we have deployed our land assets on and they're automatic near scale and then star pair who are looking into some really amazing options but this is what it takes to actually go mainstream but the most important thing is of course making a very fun game and once you've actually addressed these interesting things like the scalability and also making a fun game that means that you can finally start addressing a

huge market so the mobile games market is actually sixty eight point five billion growing 10% every year and now I'm not even talking about eSports or anything of the light this is only mobile games well when you look at the top space or the gaming space in general according to that radar there is there are between 10,000 and 20,000 actually in gamers who are playing every month this is so small and actually we have about a thousand monthly active users which gives us between a nine percent nine percent and 10 percent market share so the growth potential is pretty massive and our players well the average spending client the average spend for a mobile game is actually 17 dollars every

year's every year our players spend 200 so it's clear that the ownership of game items and assets make people not only care more but they also spend more money when they are playing games so how can we actually break through to the mainstream in my opinion it's all about the benefits that the blockchain brings not all the amazing features not everything that a lot of like a lot of technical people want to talk about like oh you can do all these transactions no no that's not what it's about of course the ownership of the game assets is the most important thing because if you don't even have that and you're just pretty much a normal game and then you have the aligned incentives basically what's happening in the normal

gaming industry is that players are being abused by the game companies so game companies they try to squeeze you for as much money as they can and then you sit and you have a pretty bad feeling after you're finished in a blockchain type of game where the incentives are aligned correctly it means that when you were spending money you can actually extract that money back in some sort or you are actually happy when you are spending the money just by the illusion of being able to to sell it and this is also something that I'm sure a lot of people will disagree with me but I don't think that immutability is the most important thing for blockchain games transparency as long as you have transparency of transactions that is probably enough as I said the theorem well the cost of a transactions doesn't

really make much sense if you have let's say thousand game items that people are going to transfer among each other but as long as you have the transparency of the blockchain of some kind of blockchain that's verified by maybe I don't know it can even be a consortium chain then that should probably be enough for most players unless the assets are worth a whole lot of money but what happens then if you let's say if you use consortium chain or you move all the assets to something like a layer 2 or even layer or something that's not connected to a theorem at all you lose all the really cool things composability of game assets and by that I mean you can actually interact with a broader ecosystem of decentralized financial applications that is available on

theorem right now so our players are actually doing this today if you play the new AXI infinity card battle game like you just saw you can today farm in-game items like small love potions an oxidized which has been sponsored by maker tau and then you can trade them directly on eunice WAP trustless Lee and then exit into Fiat if you want to or interact with other applications this is something that's never been possible in games before if you wanted to trade your game items or if let's say that you spent five thousand hours playing World of Warcraft you finish playing that game Blizzard owns the game Titans you don't have anything to say about that in actually infinity and in all the

blockchain games in the future you will be able to monetize your time and own your digital identity freely and this means well as we can see here this is a screenshot from our recent leaderboard we're now running tournaments we're not running after dead seasonal tournaments so every two weeks there is a new season running and the winners of that season they get a die reward so they are incentivized to keep playing all the time and there's also random drops whenever they're playing the game so in this play to earn a scenario where let's say we have a thousand players how can we and we have let's say 1500 die but we want to deliver to these players well I

mean that's great because then there is something for these players to actually earn it's very suitable for small communities because you can actually do some hype you can spread the word about the play to earn and it's a great way to get the initial data for your game so if you guys are making any kind of games I suggest finding all the sponsors or dropping some kind of token as long as these tokens are not from a part I should say because your players will look to you for guidance the bad thing of course is that it's time-consuming to find these deals business development with other companies is hard you need them to understand the benefits that a blockchain game I can actually bring and most of all it does not scale well so well 1500 died over a thousand players

at least there is something the game gain $1500 you have 100,000 players well it's not so attractive if so to say the chances of finding any die there is amazingly low so how can we make this actually more sustainable and this is where it gets really interesting if you guys are considering making a game or just curious about how games are being developed and play to earn we believe that making a sustainable play to earn is all about the economy and the economic situation that your guys are creating so there has to be some kind of game as a service so players need to be able to spend money inside your game so basically in our game they spend money on or they will be able to spend money on in-app purchases like axes and land

which we've already shown you but we have a lot of revenue from and then cosmetics buying for example if you want to increase some leveling of various things tournaments if you want to buy into tournaments some kind of consumables crafting new items and then minting new assets but to actually avoid like let's say if you have a token like let's say you have a currency type of token and this token is going to be fluctuating in value this is something that new players actually don't want at all nobody actually wants that if you want to pay in something you want to make sure that it's stable so I suggest pricing things stable in stable currency and then tying out to USD and of course since you are building a game in both in on the crypto space you can accept

crypto and also field but the interesting part happens here all the revenue that's flowing into this ecosystem should actually be shared with the people who are owning the token inside your game so if you are making a game and you issue tokens players can actually find this token if they play the game or if they create art if they create games on top of your game for example so this might sound a little bit counterintuitive because why would you share the upside with your community why would you actually do that it doesn't really make sense but when it's so hard to succeed that's the opportunity this is where we can actually disrupt the bigger companies by opening up the

business model with the people who are contributing value to your network that means that you can build enormous amounts of engagement enormous amounts of retention because people actually love your product because they have some skin in the game this is proven already from just n of tees and this is not what we want to do with a fungible asset the reason why we haven't done this before is because it didn't really make much sense you actually need to have a product in the bottom that works so that you can have this circular economy with sinks basically that people are spending money so as an example if I spend money on buying a new AXI it costs me five die then that die is going to be delivered to all the players if I spend five

Bitcoin that Bitcoin is going to be delivered to all the players who are staking and holding our token and in the end all of this is going to end up into a more virtual world kind of aspect so I'm sure you guys are familiar with the central and maybe some new space crypto voxels on all of these projects that are building virtual worlds on top of it here and right now what's up of I should say the blockchain because the theorem is not exactly where everything is happening but a lot of it these companies believe in an approach where you're building a framework and then you are paying companies to build games on top of that framework in acts infinity our approach is a little bit

different we want to provide an amazing game to make sure that people find this universe so by making the first amazing like mobile game they come into the universe they play the games that we have available and then discover the virtual world aspect of what we are creating and at that point we can also make a map editor we can also make SDKs and we will make it so that people can make games using these non fungible permissionless assets and this is something that well we have a lot of faith in because we've seen it already happened in the game and if we then also have the incentives aligned so that these guys who are making games on top of the platform making let's say a game that has 100,000 users while they

get tokens and yet and then do revenue sharing with our platform too so there's been a lot of talk about a decentralized autonomous organization and in my opinion this is the way to go for games as well if you can open up the business model open up the governance model make sure that the people who are actually playing your game are the ones who are benefiting not only the people who are investors even though they should also benefit it needs to be more fair and I believe a decentralized well organization at first because making a game is so hard you need some kind of guidance you need a ship captain to be completely fair someone who sets the course who says that this is what we're

gonna do at the start and then well progressive decentralization so if you start very decentralized like we for example did in our game then probably it will not go too well because this is not something that players actually want they want a fun experience with the benefits of the blockchain and once you get there that's when you can actually start to decentralize things more and more and that includes the governance of the platform other you are creating so yeah that's it for me today I'm not sure how much time I guess I have some time for questions if there is any any one minutes for questions mm-hmm oh yeah yeah first of all thank you guys for

building this amazing amazing project I love it so a long time I'm aware of it but I I'm playing so thank you I like it and yeah I wanted to ask you the same question I asked to a guy earlier I was using the loom network since I'm a holder of the coin like what's your experience using it and like if you can just share something about your experience with the luma network yes you also mentioned it right sure so for those of you who are not familiar I didn't mention too much of it not logistic but we were actually one of the first project who deployed lands and items on Lu Network and that was early on in in in 20 and 19 for a land sale so

far it's actually worked pretty well there has been some ups and downs I mean it's possible to deploy stuff on loom right now if you're a new game developer whether or not that is the right choice I'm not completely sure right now there has been some news among the CEO actually resigned from Luton Network a few months ago which is not that bullish so I can say that we're looking into different options also for AXI nothing is 100% confirmed but I think it would be wrong to say that that blue might be the best choice right now but it certainly works but something more like a deploying on the EVM type of chain and then being more open to kind of porting over to something else that

might be better in the future which probably is probably the right choice so I actually think that there is nothing that suits the developer's needs right now in the way that we need it maybe in six to nine months I mean we already said that but sadly it's it's just like things take so long in this space to get there all right so then I think I'm done thank you [Applause] I'll take that

hi your next speaker that's cool have this microphone