Discover more from Skill Tree by 0xKepler
Skill Tree #12 - March 26
Researching player spending in mobile games, Epic Games plans, principles for on-chain games, and more
This week I’ll try out a new structure to the newsletter, putting more focus on general education rather than current news headlines.
Let me know what you think in the replies or Twitter DMs.
🔥 Insight of the week
An analysis of player spending in mobile games was published in the journal “Games: Research and Practice“. Find the full report here.
The researchers identified 4 main patterns of revenue distributions in mobile games: uniform, sub-pareto, quasi-pareto, and hyper-pareto. Uniform distribution means spenders invest approximately similar amounts in IAP while in hyper-pareto distributions a small subset of players is responsible for most of the revenue.
definition of pareto: 20% of individuals generate 80% of outcomes
In hyper-pareto distributions, the top 10% of spenders account for 78% of total spending. The top 1% for 39%.
Analysing the top 1% spenders further, researchers found significant differences between genres. Social casino games are an absolute outlier in median spending and IQR. RPG and strategy games all seems to have a high spending depth (looking at the max of the range).
IQR: interquartile range; the range of spending of the most average spenders within the top 1%. Difference between the 75th and 25th percentiles
Analysing the top 1% spenders by revenue distribution, we can see that quasi- and hyper-pareto games monetize whales effectively.
This observation holds up in overall the revenue stats. While only ~12% of games used hyper-pareto monetization tactics, they accounted for ~42% of all revenue. Targeting whales in monetization drives revenue
Data set: Revenue distribution in microtransaction-based mobile games using a transactional dataset of $4.7B in in-game spending drawn from 69,144,363 players of 2,873 mobile games over the course of 624 days. Data was provided by Unity from its IAP engine. sample: all iOS mobile games that implement Unity’s IAP engine that had at least 1,000 individual spenders in the testing period (Aug 1 2020 - April 16 2022)
🧵 Twitter threads
An open-source project to show how to make a generative AI driven game [🔗 Link]
The future of NFT marketplaces: Community-owned marketplaces [🔗 Link]
📚 Blog posts
Principles for building on-chain games [🔗 Link]
Financialized assets are part of on-chain games. Financialization can only be managed, not prevented. This requires new skills and learnings.
As games introduce monetary incentives, game design needs to be somewhat complex as all trivial tasks will be automated. This means new game design challenges. On the other hand, it will drive innovation. Game mechanics should be non-trivial mysteries that require intellectual work and can never be solved completely. One option are PvP mechanics.
DAOs goal is to turn a profit-driven game into a positive sum game, seeking to increase the profits of the majority. But others will only build these structures on top your game if it’s immutable.
Ponzinomics don’t work because no players wants to be exit liquidity.
It’s not about the quantity of players, but their quality (GDP of the game). Also, on-chain games will be quite complex and blockchains still face scalability issues, reducing the targhet group.
a16z announces upcoming startup school for gaming founders starting in May. The course will cover in 6 weeks how to build a games company including: business of a gaming startup, building a game, hiring, fundraising, live ops, and future trends [🔗 Link]
🎙️ Videos & Podcasts
Epic Games presents its vision for the future, detailing the next steps on the road to creating the Metaverse which they expect to take them until the end of this decade. Watch the full “State of Unreal” from GDC here. [🔗 Twitter announcement]
3 pillars: content creation, monetization, distribution
Content creation: Epic is bringing the Unreal editor to Fortnite to supercharge UGC creation. The public beta is live now. Is this the new Roblox?
Monetization: Creators get rewarded for their published content based on engagement. Engagement payouts proportionally distribute 40% of the net revenue from Fortnite’s Item Shop and most real-money Fortnite purchases to eligible creators, opening up a new monetization stream for UGC creators.
Distribution: Later this year, Epic will bring together all its marketplaces into a unified offering - “Fab“. Creators can find, publish, and share digital assets for use in creating digital experiences (not just games) and keep 88% of their revenue. Digital assets includes 3D models, materials, sound, VFX, MetaHumans, and more; supporting all engines, all metaverse-inspired games.
Talking about MetaHumans: MetaHuman Animator is bringing AAA-level facial animation to indie studios and UGC creators.
Using AI to build smarter NPCs [🔗 Link]
Sony files new patent for cross-platform NFT trading [🔗 Link]
Players would be able to transfer in-game assets between devices, sometimes even cross-generationally (from PS4 to PS5) and to products outside the Sony ecosystem. The patent also explains how NFTs can be used for achievements.
CCP Games, the makers of Eve Online, raise $40m led by a16z, to build a web3 game [🔗 Link]
According to Venturebeat, the new game will use smart contracts to allow for persistence, composability, and open 3rd-party development
Immutable announces partnership with Polygon, including building a zkEVM chain and a joint 9-figure fund for games [🔗 Link]
I wrote a short analysis here
Deadrop opens Alpha snapshot 5. Players can buy a tower key for early access.
Microsoft may get the go from regulators to acquire Activision Blizzard. UK’s CMA doesn’t see a substantial lessening of competition in console gaming services. However, there are more concerns are about the cloud gaming market. [🔗 Link]
I’m personally most interested in the fresh breath this could bring to the mobile app store market. Microsoft and Epic Games are planning to release their own app stores, while regulators seek to reduce the control of Apple and Google. But, I also have the thesis that another path might be more successful as explained before.
Unity adds AI assistant to its engine [🔗 Link]
Aavegotchi announces the upcoming launch of Gotchichain, powered by Polygon Supernets [🔗 Link]
Magic Eden launches NFT marketplace for games [🔗 Link]
MapleStory is coming to Polygon [🔗 Link]
Pirate Nation is coming to Arbitrum Nova [🔗 Link]
Sequence partners with web3 game publisher Fenix Games for all-in-one web3 dev stack and wallet [🔗 Link]
🕵️ New projects
Lyra The Game | NFT based creature collecting game
Shardbound | Multiplayer collectible tactics game coming to Immutable
I’ll be around for ETH Tokyo. If you want to meet up, DM me on Twitter