How Pixels built one of the largest web3 games

Transcript

is crypto gaming ready to onboard the next billion on chain in March the crypto gaming Market hit alltime highs in traffic pixels the leading crypto game had 16 million visits to their website in March alone and over 1.6 million monthly active accounts and we're still early in the bull run I mean retail is very quiet our Spidey senses are tingling over at milk Road the Milkman is feeling good about web3 gaming and we want to make sure you're informed and ready to capitalize So today we're joined by Luke barowski founder and CEO of pixels which is the largest web 3 game by daily active users in today's fascinating interview we

discussed the web 3 growth engine that enables game creators to create new forms of incentive design and user acquisition through token distribution why pixels moved from polygon to Ronin and the impact of that decision the current state of pixel's tokenomics last month they distributed 17 million tokens and had about 8 million locked up so there's a 9 million gap that luk and his team are working to close in order to build a sustainable token and Luke's big bet on play to earn and the future of gaming which might come sooner than most people realize gmgm welcomed to milroad radio the easiest path to get smarter about crypto I'm Jay Hamilton your host

and I'm believe that onchain is the next online this is the opportunity and we're here to guide you to capitalize on it gmgm Luke welcome to milk Road radio thanks for having me man super stoked to have you bro a very excited because fixels is just one of the leading games on chain and also gaming is finally maybe having its moment we're seeing all-time highs across web 3 gaming obviously in line with the whole crypto Market Market on the rise I want to start with I heard you say on a an interview recently that building a web three game is 40% the game and 60% everything else what is that like to be

trying to build something where only 40% of what you're doing is really your game and the everything else and what are those everything else yeah I mean I take a look at a lot of the web 2 Giants in the space right now and it's funny because some people may I even know the company names of these Web Two Giants it's like scope is kind of the one that's really been like attracting my attention lately theyve bu the game Monopoly go Monopoly go has made something like2 billion do in Revenue in the last like 10 months something insane like that like people don't understand how big this company is and how well it's monetizing and scopely what they're famous for is getting extremely data driven on how they develop games and how they build them how they do use their acquisition and how they do monetization

and that growth engine is why they're so competitive you play Monopoly go I'm not going to say a bad game it's a good game but it's like it's not that crazy right it's Monopoly in like a more casual setting at the end of the day right and but I see web 3 gaming a lot of the times people really over complicate games they're they're very ambitious right web 3 is an interesting spot because some people were building out web 3 games because it was easier to fundraise for the dream game they wanted to build right but what I'm most interested in web 3 gaming is how you can use web 3 to grow games in new ways that you couldn't do in web 2 so I love games I grew up playing RuneScape but my interest inside of this space really lie in a new form of game mization a new

form of gaming user acquisition that's just not possible inside of web 2 Gaming so that's a lot of the stuff that we've been experimenting with and also to other people building out web 3 games getting a web 3 game out and running that's a great accomplishment all the stuff after you have a live web 3 game is insane what you have to do with web 3 live Ops it's 10x harder in basically every single category because when there starts to create we have incentive structure inside an ecosystem people are going to try to break it so if you build a nice little farming game inside a web 2 you're probably not gonna have people trying to hack it you're not gonna have people trying to break it every single day you're not gonna have people try to like break any incentive structure you have bought the game all this kind of

stuff too so building W through game it also brings on a lot of new responsibilities that you don't necessarily normally deal with inside of web 2 and it creates a lot of other challenging to you but it's fun because once you start to crack these you see some really interesting growth channels that are highly competitive against web 2 games like really what our goal here at pixels is to completely disrupt the free-to-play gaming industry we think there's a really interesting opportunity for a gaming company to come in with this new type of user acquisition model that doesn't exist inside of web 2 it's actually like hyper competitive against web 2 and there's a chance to take a lot of market share away from these free-to-play companies or at least build out the next generation of what gaming looks like you know gaming set an

evolution um going to our ades like purchasing consoles at your home buying games then mobile and free to play and we think this is the next duration of that play to earn it's a dirty word but we love it and we think that there's a huge future in it and we think it's G be the future of you know how games actually acquire users I love what you focus on user acquisition as the big opportunity with onchain I just want to talk quickly though like is the struggle worth it I and I know the answer already obviously but you bring up a lot of points right like this is not easy in comparison to there's a much easier path if you're a gaming company you go build a web 2 game and you don't think about

tokenomics and you don't think about regulation and you don't think about getting hacked and all this value creation and how you manage that and how you keep your community safe and yada yada yada yada so do you feel like it's worth it it's really interesting to me and I love how hard it is and that's why I'm building in the space I could have been doing a lot of things with my life and I like to be in this space because of how challenging it is and because of how much it pushes me now this is not a space for the weak harded because it's really easy to get toward out and there are insane challenges that happen on like a weekly cadence I've gotten to the point where I just laugh whenever there's this like crazy Black Swan event because it happens so often now where

it's not even like a stressor to me it's just like okay that's what we're dealing with this week we'll have something probably just as crazy next week too but yeah there will be some fun stories to tell in a couple years because the stuff you deal with in this Stace is insane but yeah that's part of the fun too that's why it's interesting for me in particular building here too because because of how hard it is to build there's so much blue ocean in front of us you'll also run into a lot of things inside of the space you're like wow I was somebody not built some of this stuff yet it's one of the spaces where you still have to build a lot of your own Tech and infrastructure but because of this also it's again like total Green Field where there's no Playbook there's

no rules it's besides all the rules but besides all the onchain rules or the lack of onchain rules and regulation right now like when it comes to actually like figuring out how you make it in this world there really is no Playbook or rules to that and that's the fun thing to me when you start to like if you were to build a web two game company it's in a really interesting spot right now where you know you have to compete with like the likes of scopely or zingo who are Masters at Performance Marketing and monetization side of gains like their game games are honestly just math equations at this point their games like they have people that love working on games their companies but like on the top exact level it's literally just numbers to them and you know there's no harder Soul or fun in that right so

we're at a spot where it's crazy it's really hard and challenging but there's a lot of find in it for that reason let's talk about the growth engine because we kind of keep coming back to that being one of the main differences between a web two game versus a web 3 game is the growth engine that blockchain enables the incentive structures that it enables the user acquisition platforms or Playbook that it that enables that really don't exist in web to can you talk to us about how you guys at pixels think about that growth engine and maybe compare it to web 2 if you'd like yeah so how web 2 games tend to grow is they tend to do

Performance Marketing what they'll do is they'll get a pretty good idea on the top level of who they want to advertise too based on you know different research that they've done about their game like you know they come in with this idea like we're building this game for moms in the US and you know they'll start running ads targeting these types of people and then they'll basically find to in every single funnel from when you first see the ad to like sending it to you again to when you click on the ad open the game then all the way to when you finally spend money inside of the game and that is a lot of the work that these companies have been putting in for the last 10 years essentially becoming master is fine-tuning these strategies and web 3 is interesting is our thesis here at pixels is that it grows in the

complete opposite way rather than a top down approach like Performance Marketing really it's a Bottoms Up approach where you build with community and you find ways to help your community help you grow and that's where for us the token comes into play really how we like to view tokens is more like a user acquisition budget that we get every single month and our goal with the token is basically find the best users inside of our ecosystem who we think are going to help the ecosystem grow in the most positive outcome and for us when we think about positive outcome we think about you know traditional gaming metrics we think about monetization side of the game we think about daily active users we think about retention but really it's our job to kind of figure out what to do with all these tokens and how they create the

best outcome with these tokens so there's a lot of depth and Nuance that comes with that essentially you almost have to do like Performance Marketing on your own users that's why we call the aut approach instead where what we have to do is we have to actually have a very deep understanding of who our best users are and who we should be giving rewards to because if you just give like a flat reward structure this is when all the web three you know troubles start to come in where you'll start to get people attacking it bing it CYO attackers or you'll just get like a group of users don't actually care about your game even if you were like do 100% bot prevention detection and you just had like not very smart incentive design you'd get like a pretty unhappy group of users who are just

coming game to extract and leave and no one leaves in a good position that way so what we like to do is we like to do a lot of the work of like actually finding out who likes our game and who gets enjoy it out of our game and then that's the kind of music that we actually want to be rewarding and we want to create kind of incentive structures to help you go and through this journey as well too like for example you might not have checked out a game initially but you know maybe a little incentive to like start playing is what you needed to like get into the game to start liking it so that's how we view a lot of this Tech and there's so much depth and Nuance there when it comes to actually figure out user identification the segmentation

what rewards to get people like the right ratio of rewards to get different types of people but that's kind of the tech that we're building out that's when I talk about growth engine that's what we're thinking about I love how you think about the approach it from a a standard business mindset which is okay this is an expense to the business user acquisition always is and typically that expense in a web 2 game or in a traditional casual game goes into Performance Marketing like you said and you have you know a CMO who has a CAC and it's just like hey here's here's your CAC and here's who you're targeting and just pump it out and then raise a whole bunch of capital in order to do that because you have to grow really fast and obviously what comes along with raising capital and investors and now

you're even going more into sort of pushing away from being part of your community and you're building for the most profit as quick as possible you know Build It Up IPO or sell it so it does this model it makes a difference not just in how you're thinking about this expense being a user acquisition expense in terms of the token it also makes a difference on the way you build your company and build your game I know you talk Lots about building in public and building with the community how have you guys gone about that and how do you think about that yeah because web 3 is in such an interesting spot where nobody really knows what's going to work still nobody knows the type of gameplay that works best in web 3 nobody knows what the features in web 3 are that like

actually Mak sense we have taken a build of public approach so we released a game much earlier than any web2 developer would ever release a game and we released it to our community and we started off with a pretty bad version of the game but with our community the game's gotten better and better so we spent like over two years of this now where we've been basically doing updates every single week getting feedback from the community and kind of learning and understanding what kind of Futures they like feates they don't it's been us experimenting itating a ton too so we did not build like traditional game Studio we built a lot more like a startup comined with the game Studio model and for us it's worked I don't think this is pro that works for everybody this is what's worked for us it's not easy at

times because sometimes release something and it doesn't work and then it's not always the best community sentiment but that's also for us the journey that we think that we need to go on to actually figure out like what in web 3 actually makes sense like what needs to be onchain or offchain like what features in web 3 actually provide more value to the users versus or just kind of vaporware you don't really know these things until you go out and try them so yeah we've been taking a lot of risk with this kind of stuff but it's paid off in our mind because we've gotten a way faster speed of iteration we' learned a ton of lessons and the product is in a lot better A spot because of that so there's still a really long way to go if you can come and join pixels like after this watching

this you'll still see that it still feels a little early stage but that's for us all right because yeah we have an Envision to all of this but it's also kind of a living breathing thing that the community gets to build with us too so yeah there's all sorts of benefits to that not just beyond like speed of iteration but also like we literally have users that have been playing this game for two years almost every single day and they've kind of gotten to like be a part of the game development too that adds a really interesting part to the whole mechanic or the whole component with us in our community as well where our users are actually like a very active part of the development they feel like they help us make decisions because they really do and it adds like a really cool Dynamic the whole game as

well yeah there's definitely a difference that I think quite frankly I think the whole world is missing this right now is the power of ownership it changes the Goodwill that you have towards a brand you really do approach it differently you're not just because we're all community members of Brands any brand that you buy you're technically a Community member of that you might follow them you might you know subscribe to their email list or something like that but it doesn't mean that you feel like an owner maybe in the same way that a stockholder would although it's slightly different but this idea is something that I think it's so powerful if you can harness the

community right the challenging part is as you said it doesn't work for everybody because it's a lot more work when you're building with the community you have to build the systems and the structures to communicate with them to participate in that and that often buries companies because they're like oh gosh I can't I can't handle it especially when every day on Twitter there's you know every time you put a tweet TW how many people are bashing you and saying something completely on a left field that has nothing to do with your Tweet but they're just an angry Community member who has a bone to pick with you or something like that like it's a it comes back to sort of what we started at it is a lot more work but the struggle can be worth it anyways I'm curious you mentioned play to earn is a

a dirty word but you talk about you know you have a vision for pixels and where you're going how does play to earn fit into that Vision what is the vision and maybe if you could reframe our view of play to earn maybe a lot of us are seeing it as a dirty thing because of some past projects that have made it so but it I don't think it needs to be so may help us reframe and understand the way you think about play to earn yeah I think honestly our framing lately is I think we want to be the play to earn company because we think there's a ton of potential there yeah but like to think about a lot is it's really easy to criticize somebody who came before you before you actually go and step in their shoes and build something yourself and

play the earn was one of those things that was popular for us from like the first generation of web 3 gaming essentially and yeah the first iteration of it didn't really work out so then I think there was this shift in the space for a long time where people just assumed you know people tried it it'll never come fruition it was a nice experiment now we'll move on but instead we kind of approached it as okay well yeah that iteration of play Ear didn't work but is there a way that it could and what does it look like if it does work so the core thesis here is we have two companies they spend tens of millions of dollars a month on user acquisition if we don't need to spend that money on user acquisition and instead we figure out a different way to

reward users or get users inside of our ecosystem why can't we give out some of the like user acquisition power that we would have back to our users and if we do do that is there a way that actually makes this still sustainable in the long run as well so what we think about a lot when we think about the sustainability of play to earn is you know you still need in the long run that ecosystem spend you to make a game that people want to pay money for to play just like you would build a freetop playay game that some people want to pay to it's optional in any free to-play game it's optional right but some people actually do enjoy it putting their time and their money into a game rather than like all their time sorry and that's an option for people in our ecosystem too in the long

run as well so instead of us going and paying all this money to acquire free-to-play users because typically in like a game economy or like a game like this not all the users monetized only about like two to 5% in a free-to-play game typically monetize but the rest of the users inside that ecosystem are actually still valuable users typically players monetize inside of a game because there's some element of like competition amongst other users that they want to get Edge on or they want to like get some social status things like this so these other players inside of the ecosystem are actually completely necessary for these other players who want to monetize to actually monetize inside of the ecosystem so we think a lot about basically creating systems

that kind of reward both of these types of users and create follows to both these users too the other thing that we like to think about a lot too and stuff that we're about to start implementing is essentially rewards for getting further and further through the game sometimes you know you just need like a little push to get to that next part of game progression where it unlocks a lot more gameplay your game experience is better and having like a little carrot on the end of a stick in front of you to actually like get to that next level get to that next Milestone you know that might actually lead to higher conversion rates in the long run for some of the things we're trying to implement too now there's this whole other really interesting side of things we can start to do with um like incentivized app

installs things like this too we give out like a little bit of a token incentive to go install like a new casual game that we were to create for example we have like really great distribution of funnels where we could pretty easily do that in the future as well it opens up a ton of options then all of this is at no direct cost it's through Tok incentives so that's cool unlock with all of this super cool can you take us through what's the traditional onboarding you've got I think you got 16 million users in March visits in March is that correct 1.6 million yeah top level domain like if you were to like Google pixels and go to like pixels. XYZ there were 160 million to that website they converted about like 10% of those into like

monthly users and then we monetized about like 10% of that so there's 160,000 active VIP members so these VIP members are paying about like 10 US Dollars and pixel a month for this membership into the game and locks extra perks inside of the game and yeah we're about to start experimenting with even gaining some of the earnings behind this VIP battle pass as well too but yeah overall the user base is like quite healthy right now this an exciting spot to be in and amazing incredible numbers that you guys have chiev show out to you and your whole team what are you seeing is the typical Journey that most people come in with the mindset of I'm gonna make some pixel here and that's why I'm playing like do they come in with that earned

mindset so they're coming because they're getting an incentive what is that incentive look like or are most people come in because they're like hey this looks like a cool fun game I just want to play it what's the typical user Journey yeah there's a whole host of different users inside of the ecosystem and that's a lot of what we're thinking about when we think about creating incentive structures because there's different types of users that play different roles inside of the ecosystem and too much of one Persona is never good if you only had a game of Wales you only created incentives to bring in Wales You' maybe have like a 10,000 da game it's not a very exciting ecosystem and probably like caps out if you only create incentives for free to-play players game doesn't monetize if you only create incentives for play to earn

players players who just that the earn motivation that's not sustainable either so really what you need is a mix of these types of users and favorite quote ever is show me the incentives of show you the outcome like really what this comes down to is the incentive design so if you create incentive structures that only cater towards people who want to only extract in the game that's probably not going to be a very sustainable ecosystem but what's great inside the pixels right now is we have different types of users and there are users who just like the game and they just want to farm and they just want to like go and socialize out with friends too so I would say those are the users that we want to start creating more incentives to like convert into the long run and

that's the kind of user that's probably like the ideal user in the long run too but yeah there's like a different mix someone's coming in just with the earn liation it's not necessarily a bad thing we actually kind of lean into that a little bit but the issue is like you can't have your entire user base be like that either I mean again it comes back to this is the struggle worth it on chain gaming is it's just not it's not simple but the opportunity is large obviously a big part just to finish up the conversation around this growth engine a big part of user acquisition also comes down to distribution and distribution really comes down to the blockchain that you build on you guys moved from polygon to Ronin can you talk to us a little bit about how you think about uh which blockchain you're

building on as a founder and what it's been like to move over to Ronin and maybe compare polygon to Ronin yeah us moving to Ronin was the single biggest Difference Maker in the Journey of pixels by like 10 to 100x without Ronin we would not be where we're at now and we owe a lot to them it's been like a great Mutual relationship and I love that team I have so much respect for all the founders there and it's a super super smart team but yeah one of the biggest issues inside the web 3 games is the cold start problem and basically like filling in the initial Network because in order for any to work you need a network to have a network effect to you know actually do the things you want to do inside of web 3 gaming right and for a long time before we moved over

the around in we were getting a lot of advice from people in web 3 gaming who actually had never released or built a web 3 game there's a lot of figure ads in the space still that you know actually don't have the experience of actually shipping a live web three game and it just wasn't very helpful actually talking meeting with the ran team the makers of axi infinity the only web three game that actually reached any meaningful scale yeah it was really refreshing because the amount of mentorship and advice we been able to get from them is priceless they have stopped us from making so many mistakes that they've already tried again the issues that come with having a live web three game Community Building cyber prevention all this kind of stuff it's very genre specific inside of web through gaming really web two people

don't have experience with this stuff so really the only people you can get these lessons from are the people have been building it here before and it's not understated how valuable that is so yeah when we're thinking about chains and what advice I give to other Founders or people building the space is like one think about distribution like another ecosystem I think that's great is based because they probably have distribution right they have like a amazing potential F between coinbase base and you know that might be a great place for a lot of people to be building on too but yeah think about distribution like is the chain that you're building on actually going to be helping you get new users because really how I view the chain to like consumer app relationship should be more like publisher to game or like publisher to app relationship where you

know there should be an Al lot incentive between both parties to help both ecosystems grow we're still so early in a space where we both should want to help each other grow and yeah I it's funny because like in the bare Market that wasn't really the mindset behind a lot of these chains yeah they want to do like top level BD with like all these web two partners totally left and yeah they weren't really thinking about growing the web 3 native communities I think that's how this space grows I think web 3 Grows by web 3 experiences becoming better and Hyper competitive against web 2 experiences rather than the top down approach kind up like bringing in the web te Partners yeah well especially right now when as you've said there's no Playbook

right there's no game that you can point to and be like yeah that is the playbook for an onchain game and I don't think there I mean we actually want to talk about how you guys have this ultimate Vision to build a platform and build pixels the game so we get to that in a minute what that means is you need to build right now very much for the current users not for the users of I mean we saw it in the last Bull Run how many large IP Brands entered the space thinking they would build whether it be a game or whatever it was an nft collection or something thinking they would build and all the users would just come and you realize how quickly do your users even care about on chain do they want that you

know and if they don't value that then doesn't matter and you know Starbucks left and all these different Enterprise companies are you know they're taking off because they're just not seeing the return yet and that's where you need that more startup mindset yeah I mean I think the question people should be asking is like what is the web 3 actually doing for me because why go through the pain and suffering of ADD web 3 if it's not actually doing anything for you if you're just saying it's web 3 to have it be web 3 like is it actually providing tangible value to me or my users and is it so much value it's like 10x compared to anything web 2 that's like irresistible to do it basically do you think every game should be on chain eventually I don't think fully on chain completely matters to be

completely honest I think there's a genre of game that is fully on chain that makes sense but having a game fully onchain also brings in a lot of issues too like there so much easier to b a fully onchain game because by Nature a fully onchain game kind of has to be bable because that's how you interact with the game right so I think like a genre of like autonomous worlds or like some kind of like speculation type game like I think that makes a lot of sense to be fully on chain and I think there's G be some interesting stuff that pops around that or like esport type thing I've seen some people make like this mix of like gamble f with like spectator sports it's interesting not what I would be building but I think there's like room for stuff like that we had a lot

more on chain at one point we had like basically every single iname action on chain like one day it broke and our users didn't even notice and that kind of was a wakeup call where it's like okay no one actually cares in our community if everything is fully on chain there's like a few tand things they care about but like having everything on chain wasn't so important them very interesting and that's something that yeah you you could only learn that by building the way that you're building okay I want to talk about your business model for a second here tell us about you mentioned earlier uh you to walked us through these conversion rates this is super interesting tell us a little bit about give us an overview of the business model and if you're comfortable telling

us are you guys profitable right now how are things looking at this current moment yes so what I'll say right now is we're more concerned with the mission of seeing if we can make play there and work than anything else that's our main kpi so for us what that looks like is can we create an ecosystem in the long run that has net pixel spend every single L and that might mean still Distributing back some that pixel in form of like more UA but really that's we're kind of working towards so we're at a like decent starting point not completely sure the exact exact numbers but it looks like in the last 30 days we've either had like sped or locked up about like 7 million pixel and then we gave out about like 16 million pixels so

there's still a deficit of about 9 million pixel that we need to make up but that actually seems pretty reasonable for us to get there and that's kind of the end goal essentially like can we start to token used as much as it's getting distributed back to the users and we too that to me that's the real unlock so you know that's the main focus over the next however long it takes yeah yeah ideal timeline is like 12 months essentially but in order to do that there's a lot of stuff that needs to happen we need to basically find two a reward system make sure that we're like more efficient with reward distributions we're giving it to users who are more likely to be using it in the long run we need to start introducing like new mization inside of the game as well too right now for

example like really the only thing that you can spend pixel on is the VIP pass then like right do in some pets every now and then we'll start to introduce more monetization that feel is more like a free-to-play game what you don't want to do is Cap wh spend and right now like if people wanted to spend more in the game they can't really do that so we'll start introducing more of the free-to-play modelization mechanics inside of the game as well too and see what that does there's like a few things to work in there the idea is like we want to vertically scale we want to figure it out inside of this game and then you know once we have a good idea a vertical scale we like get that deficit a bit smaller then it's also starting to do horizontal scaling too start to take

some of these same UA methods that we have and you know plug them in other games as well yeah you perfectly queuing up my next question here is I want to talk about pixels the capsule pixels the game excuse me versus pixels the platform H how do you think about that and are are there other games that are being built on the platform right now or is it just pixels and what's sort of the vision and the maybe get an idea of the timelines yeah yeah we're just not planting the seeds of other games that we'll be releasing so I would say the timeline around that is like six to 12 months before you start something else from us but yeah the idea is we're building out a lot of core Tech around you know user segmentation incentive design rewards

and you know also the attribution with that too like things that will allow us to effectively analyze like how effed reward that we gave to a user was and that affected that and once we have some of this built we can start to bring it into other games that we build out too that's something start to get really interesting for us so the idea is like prove it vertically and go Al will you be a single publisher where you're only publishing your own games or would you allow others to come in and would you open source your platform and allow others to use it or would you have some sort of business model where they pay you a fee how does that look do you think yeah we've even had like initial conversations with other games like what it would look like if they used the

pixel token right be honest I think our best shot right now is because we just have so many of these skills and almost like this Insider knowledge of building web 3 games out right now it's easier for us to build our own games than coach somebody else on what they need to do to succeed in the space right now like I would honestly rather just go acquisition route than publisher route have it all under our umbrella in Tech yeah yeah yeah really interesting it's amazing to me to hear you say you've been working on this for a few years now and you're already one of the smartest in the room around web three gaming and I know you're not tuning your own horn when you say that I'm going to give you the credit here I just always think it's amazing in our space how fast things

move and to step back and realize you're like holy [ __ ] like we've only been doing this for a few years but we're probably the leaders because nobody else has been doing this for that long I mean yeah sure axi is probably the one that's been going on for a little bit longer but it really always points out to me the opportunity in this space is massive and for anybody that's listening if you're thinking about building on chain you might feel like oh I'm too late to the party all the big players already here no no no we're just getting started the opportunity is massive and there is as you said the beginning episode there's so much open ocean that's just available to anybody who wants to jump in and get in this yeah there is a lot of room for new entrances SP say it's

funny because you saw these games get funded like two or three years ago on the bull rod where are they that's interesting because like yeah you would have thought that you're a little bit late but the reality is like a lot of people that got funing before they're never going to enter the market so it's honestly even like a better time to start entering now too ifes thing if you think that there's some Merit in what we're saying about web 3 gaming I welcome more people and I it's more people to balance ideas off of it's like not a very competitive space right now so there's some fun stuff with that too where most of the founders like they all work together uh you I'm talking like most other web three gaming foundaries right now we're like more than happy to share what we find with other games

because yeah the space getting better and more legitimate helps us all makes look better like we're all pretty sick of scan projects and Bad actors in the space we just want to see better quality games in the space because yeah just helps all of us that there's more quality out there Amen brother amen preach it's what it's what we want here too at mil road so I appreciate that okay I want to talk about tokenomics for a minute I've heard you say before that a lot of people launch tokens too early because it's easy but building out the tokon nomics right is the hard part what why do you think people launch tokens too early and what are your thoughts around how you should approach

tokenomics yeah I mean it's the same thing with why people were launching nfts before they had any road mapap any product like sometimes yeah people see an opportunity and that's when the grip starts to come out so yeah right now it's the token meta and like web free gaming tokens are even like a new meta now too so you're G see some more Bad actors come into the space which is the unfortunate part about this space where some of these people probably never have an intention to build a good legic game which is yeah really hard to say that but there's probably people like that out there and people need to be careful with this kind of stuff but also even just like if there are good intentions like stuff just happens too yeah you might have the perfect road map but

actually executing all the road map is not so easy that's like the normal thing with anything new or anything Innovative right like people fail and you need to give some people Grace if they fail because there are a lot of people that legitimately tried and it's like it's completely understandable things to work out pixels almost didn't work out a couple times like that's just how things go it hasn't always been smooth sailing for us there are a lot of people that didn't believe in us for a very long time even not that long ago like six seven months ago we were having a really hard time getting people to believe in what we were doing funny now but yeah that's how it goes right so one of the really challenging parts of this space is how much you're impacted by the markets and things that are external

things that are completely out of your control you know six seven months ago we were still in the bare Market we were coming out of the bar market and things were coming up but the sentiment was definitely still there you know now sentiment is strong again and that impacts you so much so it's I I don't envy you having to manage that as well I mean I always love the line that running a onchain business is like running a public company and running a startup at the same time it's so true because you just have way more things to think about than a typical startup would have I want to talk a little bit about your tokenomics I know you spent a lot of you've spent a lot of time thinking about tokenomics you built out tokenomics early with Barry you sort of

had like this test run with Barry what are the key factors when you think about your tokenomics that you're aiming to achieve yeah so the economics are important and the game design is important too what we found is actually simplifying tokenomics makes it 100 times easier and more manageable and the more complicated it is then the less likely is see really for me tokenomics it's not so complicated there's two things I think about when I think about tokenomics now it's one how are we Distributing the token and then two what's it do what's it do Z it's an in-game currency and it's kind of a into like a hard currency inside of a game like Kash Clans where gets you like premium upgrades it like speeds up build

times it's like not required for gameplay but it makes gameplay better and then like if you build a game that monetizes like a webu game but use token like you know you have that part figured out right you need a fun game that uses the token and you have one half the equation already done so then two the distribution side again simpler this is better like we in Barry had like the token very tightly integrated into like the game Loop we had as a soft currency that met the way that we had to control the token was like through all these crazy things like changing crop growth times and like the amount of energy crop used and like this kind of stuff for we're just like let's make this so much simpler have set the pixel that we give out every single month we just figure

out who to give it to so yeah that's a lot of us new system of the task for that we created where the uh amount of pixel we get to distribute back to users same every single month and then really it's up to us to like basically distribute it the most efficient way which basically means just figuring out who our best users are give easier said than done I'm sure I want to talk about your thoughts on some other some of your competitors whether they be onchain games or web 2 games I know you follow zingga really closely obviously Behemoth and one of the leaders in the Casual gaming space What are you paying attention to in gaming right now who are you paying attention to who are you learning from on the web

two side I am really obsessed with scopely lately and like I am always a huge fan of zingo's origin story too and their approach to company building Zing was really inspirational to me where you know they kind of like a new method of growing games obviously usz utilizing Facebook and social and you know they started by really putting time in energy in the one game yville was the one that like really took off I think that was actually their second game though but yeah they like built a couple games really early on they spent like a lot of time on their first couple of games learning basically the best user acquisition strategies learning like the fine-tuning of like retention optimization all this kind of stuff like basically figuring out their own growth strategies and then also building out

like engine when they actually used their engine in like multiple games as well too and they started building tons of games they started acting like a b like almost sure too but like that journey to company building SP like pretty inspirational because I think that's how you make it work even like our case too you got focus on like your core value ad for the early stages um focus on one game don't get too distracted then once you start to crack some stuff that's when you start to scale other games as well too and then scop is a behemoth and like everything they do I think is amazing when it comes to the user acquisition side and kind of the science behind how to make a gaming business actually work as best as it can it's really interesting stuff what they do there and just their approach to like

how they decide what games to move forward with how they view use their acquisition how they view monetization there's a lot that you can learn from them there there can also obviously be some criticisms of how they you know make games too but yeah you can't argue with the business behind it it's very effective yeah don't throw the baby out with the bath water so to speak there's lots to learn from the incumbents even though they might not be on chain okay before we wrap up here just want to ask what are your thoughts on where gaming is right now on Chain versus where it might be towards the end of this bull run and we don't need to give a time frame to to that but you know where it might be in the next 6 12 18 months because I think we've all talked so much

about and I say we I mean every everybody that's been in the crypto space for a while about gaming you know hey it's going to have its moment I feel like the last Bull Run I talked about gaming being the biggest thing that was going to on board people and I was wrong it wasn't the biggest thing yet and it feels like gaming is now at an inflection point it's growing at rapid Pace on chain where do you see it now and where do you think it'll be yeah so gaming in general is in a trickier spot than most people realize when it comes to the wet two side of things where really there's only a few incumbents they're actually doing inside of web 2 Gaming and it's the scop Le the zingos they're monetizing well new games in smaller studios are actually very very

difficult time do a lot of changes in ad tracking specifically on iPhones the 18t changes it's just made it economics free to play gaming actually extremely difficult so web 3 gaming web 2 Gaming I think are going be a lot more intertwined because web 3 gaming is finally this new user acquisition model that kind of disrupts the web two games so I know where we're at I kind of you know talk about that but I think you know where I'm seeing where pixels is I think we're still like about like 12 to like 18 months from like true disruption uh one of those industry Giants there's still a lot of work that we need to do to actually pull off but we're trying to pull off and if we do then there's some really interesting stop but yeah I think web3 gaming is going to be just gaming

at some point I still say web3 gaming I'm getting feedback that maybe it's not the right way they call it I like to know if you need to like lead in with like the crypto parts of crypto gaming or web 3 gaming like honestly I think play the Earth is the Primitive here that is the most appealing and like the thing that matters most to me that's the new user acquisition method essentially how do you grow Bottoms Up and disrupt industry like that but yeah I mean I think it's a future gaming I think it's where lot of gaming like it's the next Evolution after fre the play is going to be knowing where we're at we're doing a lot of interesting stuff right now it's a really good start we still have a lot of work to do on our end and I know that

they're we're kind of early entrance in the market still right so there might be some games that pop up in the meantime between us too it will still continue to grow but I don't think we start taking like significant Revenue share away from like these Giants until a little bit yeah it's interesting take Luke just incredible to hear your thoughts thank you so much for sharing with us today before we wrap and let you go I just want to give you a chance to tell our users where they can play pixels if they're not already playing it any ways that they can follow you or follow the team and get involved in everything you guys are up to yeah I mean go check out our website pixels. XYZ or you can go to play. pixels. XYZ to jump in you don't need the crypto wal to sign up but yeah

we're on the roing Chain if you want to follow us on Twitter that's where we do a lot of our messaging we do weekly amas we hang out with the community a ton our Twitter is pixels online or our Discord server is actually quite Lively too it's discord.gg pixels sweet we'll put all the links that you just mentioned in the show notes as well so everybody can get involved in pixels Luke thanks so much for joining us today it's been an absolute pleasure excited to watch the progress of pixels I think uh that disruption that you mentioned is coming for sure and web3 gaming will just it'll just be gaming in the future so I look forward to that day well yeah thanks so much for having me man this is a good

one awesome have a good one everybody thanks for listening in thank you for listening to milk Road radio the easiest path to get smarter about crypto if you like this episode share it and hit subscribe or follow so you don't miss out on the next one there's also a link in the description to our free 5minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game then we'll leave a link to milk Road Pro as well your number one resource to help you invest successfully in crypto one final note this podcast is for educational purposes only and nothing we say is financial advice crypto is risky so you should never invest more than you're willing to lose thank you friends and we'll see you

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