The Wolves DAO Files #27: Web3 Gaming IPs
Are Web3 incentives the unlock to super-scaling Gaming IPs?
A New Era
Over recent years, the entertainment landscape has undergone a profound transformation. Social media, particularly platforms like TikTok, has revolutionized how people engage with entertainment. Mobile devices have become increasingly immersive, and gaming's role has expanded significantly.
Crucially, media and entertainment are now converging with gaming at their core. It's not solely about playing games; it's about building communities, storytelling, and deep emotional connections with characters. The fusion of gaming with various media forms is exemplified by the rising trend of gaming-based TV shows like Arcane, The Last of Us, and Cyperpunk: Edgerunners.
Gaming-first companies will dominate the new super IPs.
In the context of Web3, this presents a unique opportunity for gaming brands to explore new avenues for growth. Our discussion delves into the essential elements of building successful IPs, the potential unlocked by Web3, and the challenges inherent in pursuing the IP route in this evolving entertainment landscape.
The Success Formula for Gaming IPs
With a few exceptions, the process of building a successful IP doesn't differ significantly between Web2 and Web3; the core principles remain consistent. Consequently, we'll initially approach this topic from a traditional perspective.
A Flagship Product
The critical element for the success of an IP is a high-quality flagship product. Users should have an experience beyond mere consumption – it should engage them to the point where they're compelled to discuss, watch, read, write, or even think about the product.
Games are particularly suited to becoming successful IPs because outstanding ones offer not just a few hours or even a few dozen hours of entertainment, but potentially hundreds of hours. Investing such a substantial amount of time into a product that consistently delivers meaningful entertainment naturally leads players to engage with the IP on a deeper level, extending beyond the boundaries of the game itself.
So basically, just make a good ass game, get lots of players, and the IP will build itself.
Community
Passionate enthusiasts often foster the emergence of (sub)communities centered around a product. These dedicated fans actively seek out platforms where they can share their game experiences, exchange ideas, and indulge in fantasies with fellow like-minded individuals. Before the rise of community-management platforms like Discord, these communities were primarily driven by the enthusiasm of the fans themselves.
What these modern platforms enable is studios being able to manage the continuation of engagement well beyond the confines of the in-game experience in an effective manner. This extended engagement has the potential to catalyze potent network effects, which, in turn, contribute to the overall growth of the ecosystem.
It’s about leveraging your super fans to boost your channels without burning your budget on ads.
Here's a simplified cause-and-effect chain illustrating how these effects may manifest:
More, and out-of-game engagement > Player grouping > Higher Retention > Evangelism > Increased brand awareness > Game growth > Community growth.
Harnessing the enthusiasm of these dedicated "super fans" to essentially transform them into a cost-effective marketing engine can significantly impact the expansion of an IP. From the standpoint of a studio, this endeavor necessitates a solid foundation and robust community management practices.
Strong Characters
Every IP requires a narrative with relatable and compelling personalities that individuals can connect with personally. Connection fosters a greater likelihood of investment and engagement with the product.
While not all games necessitate a rich story or intriguing characters, in those that do, these characters can extend beyond the confines of the game itself.
One question that I've heard being raised in the past is "Can we imagine fans cosplaying as our characters?"
Similarly, you could ask if other games would be likely to integrate characters from your universe.
Captivating characters can generate dedicated subcommunities, and the loyalty they inspire can lead individuals to follow these characters across various media and platforms.
Character branding isn’t about chasing attention; it’s about igniting love for your brand.
~David Horvath
Distinct Art Style
The accessibility of generative AI has grown significantly in the past one to two years, allowing anyone with a (mobile) device and an internet connection to create ‘quality’ art. Widespread accessibility to these tools underscores the growing importance of establishing a distinct art style.
A well-defined art style serves to cultivate brand recognition, enhance brand equity, and contribute to greater customer loyalty and word-of-mouth promotion.
As an illustration, many Supercell games employ a poly and boxy aesthetic with straightforward color gradients, a style originally inspired by Clash of Clans. This consistency in art style creates a high level of familiarity throughout their game portfolio, and Supercell frequently repurposes characters across different games, with the barbarian being one of their most recognizable figures.
Cross-Media Hooks
In today's landscape, the ability of a game's IP to expand across various mediums significantly influences its discovery and growth. Consequently, games must excel in employing a diverse media strategy, with a primary focus on videos.
I think you first have to think of cross-media. It has to infiltrate various mediums from gaming to various social channels, to videos
Both short- and long-form videos act as the initial entry point for games in people’s minds, guiding the audience toward more specialized channels such as articles, Steam pages, or demos. The transition from this first stage to the next requires a compelling hook. Initially, this hook arises from gameplay, blending familiarity and novelty. Additionally, it hinges on whether video content, whether original or derivative, can recreate that same appeal, enticing the audience to delve deeper into the game.
Moreover, a cross-media approach leverages the power of synergy, engaging existing audiences on multiple levels to craft a more comprehensive narrative around the IP. Shows, movies, comics, collectibles, and interrelated game experiences deepen fans' attachment to the characters and story.
The Difference of Web3: Co-Building
In comparing IP building between Web2 and Web3, a crucial distinction emerges: co-ownership. Transforming core communities from passive consumers, as in Web2, to active co-builders in Web3.
More of "we've built this" as opposed to just "I consume this".
Through incentivizing contributions and granting core communities co-ownership stakes in the IP, the interests of both the studio and the players/creators align. The success of the IP benefits both parties.
A fusion of user-generated content (UGC) and community ownership empowers members to shape the IP's world, lore, and values, fostering a profound connection. Furthermore, it spawns diverse sub-communities and opens doors to cross-media growth avenues.
When you feel like you're a part of the IP yourself, it makes it much more enticing to play and engage.
While Web3 doesn't inherently offer a head start compared to Web2, it wields substantial influence over IP scalability through its integrated UGC tools and shared ownership. However, to activate the Web3 growth engine, studios still require the 'X Factor'—that unique element that inspires and captivates players, compelling them to craft experiences atop the original product.
Web3 Examples
Web3 studios are exploring various growth strategies in their quest to become the next super IP. These approaches encompass cross-media expansion, phygital integration, shared IP rights, revenue-sharing models, and more. Here are some of some of the most prominent examples and strategies driving their growth.
Parallel
Parallel has strategically embraced a cross-media approach right from the start, encompassing comics, movies, physical cards, and collectibles. This strategy is rooted in the success of traditional online Trading Card Games (TCGs) like Yu-Gi-Oh!, Hearthstone, and Magic: The Gathering, which have thrived due to their strong intellectual properties.
Parallel's diverse range of media channels enables fans to forge deeper connections with the game's characters and narratives. Moreover, since TCGs are often considered less accessible, Parallel's IP-building approach aims to attract a broader, mainstream audience and guide them towards more extensive and immersive experiences within Parallel’s games.
Pixelmon
Pixelmon chose a conventional Web3 path, wherein owners of their Genesis NFT collection are entitled to a share of the IP rights known as the 'right-of-game’. The arrangement has two key components. First, NFT holders receive a portion of in-game earnings generated through microtransactions and in-app purchases (IAPs) related to their specific NFTs.
Secondly, these royalty rights extend beyond the Pixelmon game itself, enabling NFT holders to earn a percentage when specific characters are featured in merchandise, comic books, and other games. Aiming to align incentives and motivate NFT holders to expand the Pixelmon brand across various domains, creating numerous opportunities to boost recognition of the Pixelmon IP.
Similarly, the Bored Ape Yacht Club's IP-sharing model has inspired multiple community-driven initiatives. However, it's crucial to note that the underlying IP must already have some degree of success for holders to fully benefit from building upon it.
Infinigods
Infingods is on a mission to construct an ecosystem of casual mobile games, unified through its NFT collection and characterized by a unique art style inspired by mythological beings.
In an interview with Business Insider, one of the studio's owners highlighted the reasoning behind their IP-building strategy:
Global Appeal: Leveraging well-known mythological figures like Zeus and Poseidon allows the studio to target a global audience. Mythological lore is widespread across the planet, making it relatable to people from diverse cultural backgrounds.
Endless Creative Potential: The rich tapestry of mythological stories provides the studio with an extensive catalog of characters, including gods, heroes, and monsters, offering endless opportunities for IP expansion.
Efficient Art and Storytelling: Drawing from mythological themes enables the studio to create art and stories more rapidly. This aligns with their strategy of agile development, emphasizing quick releases and learning from failures.
Infingods' strategy revolves around developing user-friendly, low-development-intensive games designed to capture a broad audience swiftly. Consequently, this opens multiple avenues to showcase Infinigods' IP to millions of people and achieve rapid scaling. However, it's worth noting that the use of mythological figures, while rich in potential, can also pose challenges related to standing out in a crowded media landscape where such figures are prevalent.
Grapes
The Grapes follows a similar strategy to Infinigods by building an ecosystem of casual games interconnected by their intellectual property (IP) and NFT collection. The studio does have broader cross-media plans, including animated series, merchandise, and licensing, but gaming remains their primary focus.
A more significant differentiator sets The Grapes apart and likely contributes to their greater success: a revenue-sharing mechanism for NFT holders. This innovation generated substantial anticipation leading up to their ICO and substantially boosted floor prices.
Offering NFT holders a direct stake in the studio's growth proves to be an enticing proposition, fostering a high Word of Mouth (WoM) factor and jumpstarting the development of their IP.
FOAD
FOAD adopted a unique approach distinct from other Web3 projects by venturing into Fortnite. Leveraging Fortnite's extensive player base, Web3 games like FOAD can tap into existing communities and introduce their IP to a broader audience.
But an intriguing question arises: can success within Fortnite translate into cross-media expansion, gathering social media followers, and potentially driving downloads of the original game for these Web3 projects?
It does have clear benefits, such as enhanced engagement with existing communities, leading to a positive effect on the WoM factor. Moreover, Fortnite creations enjoy heightened marketability and accessibility compared to introducing players to entirely new games.
Building a Fortnite experience also holds cost advantages. A small team can develop a map in as little as 3-4 months, minimizing development expenses. However, achieving success in this space is challenging, as many standout experiences are crafted by established creators, with occasional exceptions like Blade Ball. Nevertheless, building a Fortnite world can prove worthwhile, thanks to its revenue potential which can further fuel the development of the main game.
AOFVerse
AOFVerse is a studio that understands the significance of crafting a narrative around its characters right from the start. Employing a TikTok-focused strategy, the studio has managed to amass substantial followings for their universe's characters, boasting around 4 million followers.
AOFVerse’s videos are made to appeal to a mainstream audience. Typical videos from the 'Frog Pikeman' account feature short animations centered on relatable or trending topics, often encouraging users to tag each other to create viral effects. This approach incorporates an accessible and 'cute' art style, reminiscent of what Pudgy Penguins does on TikTok.
Thus far, this strategy has proven effective in building a dedicated audience and community on the platform. However, an interesting question looms: while these videos have not mentioned AOFVerse's flagship game, Army of Fortune, or showcased its gameplay, could a bridge be established to harness their TikTok following as a valuable user acquisition channel? This remains to be seen.
Conclusion
In this dynamic entertainment era shaped by social media and platforms like TikTok, gaming's role is growing significantly. It's not just about playing games anymore; it's about building communities, connecting with stories and characters, and engaging with gaming-centric media like TV shows. This shift presents new avenues for Web3 gaming brands to explore, with this article uncovering the essentials of building successful IPs, whether in Web2 or Web3. These include having a standout flagship product, nurturing passionate communities, creating compelling characters, forging a distinct art style, and employing cross-media strategies.
Web3 introduces co-ownership, aligning the interests of studios and players/creators, fostering shared benefits from IP success. Various Web3 studios are innovating with strategies like cross-media expansion, shared IP rights, revenue-sharing with NFT holders, and ecosystem development. While Web3 doesn't inherently grant an advantage over Web2 in IP building, it empowers IPs to scale using built-in UGC tools and shared ownership.
Special Thanks to
Eetherway, Animositas, Slayer, Dalteco, Loki the Bird, Arto, Cavalorn, StoicJay, and Freaz7 for actively contributing to the discussion and providing valuable insights.
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Disclaimer
None of this is financial or legal advice.