Exploring the Road to Web3 Game Guilds
Key Findings:
- In the early stages, the basic functions of Web3 game guilds mainly focused on farming and player acquisition. They are mainly reflected in their grant programs and market promotion.
- During the transition period, game guilds were exploring their respective advantages. For example, YGG chose to focus more on the game electronic sports (esports) mode, while GuildFi leaned towards playing the role of infrastructure.
- The industrial upgrade of Web3 game guilds is reflected in the following three aspects:
- The tendency to an organized development and commercialization of esports, which is also spawning additional industries such as live streaming and changing the way players watch matches.
- Investment and project incubation are developing towards specialization, and game guilds are more engaged in game development.
- The development and large-scale adoption of data management tools and other infrastructure.
4. Embedding guilds into Web3 games is an innovative model worth exploring, which will solve the problem of the lack of intelligent decentralized internal management tools in traditional game guilds.
The 2022 Qatar World Cup showcased its sponsor, Coinbase, to the world, and linked Web3 with the world’s mainstream athletic projects. Electronic sports are seen as a sports project that reaches the “athletic” level of electronic game competitions and is recognized by more and more institutional organizations. Meanwhile, it may only be a matter of time before the Web3 game industry enters the mainstream stage of electronic sports. In September 2022, Sky Mavis held three electronic sports world championships with a total prize of 1 million AXS tokens. Game guilds also participated in these bidding activities. Chris Gonsalves, CEO of Community Gaming, believes that “these bidding activities can provide more social experience. Organizing these activities is beneficial for the community to create more value.”
In traditional games, game guilds are organizational structures within the game made up of like-minded players, who also have a means of communication outside of the game. Many members of game guilds work out of “love” and enthusiasm and voluntarily take on their responsibilities to help the guild establish a corporate-like operating system. As the game market becomes more competitive, some game developers have turned their attention to game guilds with stronger vertical attributes among players. From then on, game guilds began to move towards commercialization, and the relationship between guild leaders and members changed from simple brotherhood to relatively pure interest. In addition, if a game stops or goes bankrupt, the traditional game guild and the assets they accumulated during the operation process will lose their value. However, these shortcomings that appeared in traditional game guilds have been well improved after the emergence of Web3 guilds.
The Primary Focus of Early Web3 Game Guilds: Gold Farming and Player Acquisition
Early Web3 game guilds primarily focused on gold farming and player acquisition. Web3 game guilds also inherited some traditional game guild functions, such as economics, coaching, and marketing. Grant programs and market promotion were the basic functions of early Web3 game guilds. They effectively addressed the problems of high economic barriers to entry for ordinary Web2 players and the difficulty of learning blockchain game knowledge, and helped game projects increase exposure.
Grant Programs
Grant programs significantly reduced the economic barriers to entry into Web3 games, making it possible for players to play games without NFTs or tokens. Web3 game guilds lend NFTs or tokens to players by providing “P2E grant programs”, thereby reducing the player’s entry cost. At the same time, players can also earn profits by playing games, but they need to share a certain percentage of their profits with the guild. After the guild receives profits, they will be redistributed, such as purchasing higher-level NFTs to continue lending to players or rewarding members who contribute to the guild. In addition, some guilds also provide coaching services for novice players. For example, GuildFi has recruited more than 30 coaches to provide game guidance for players.
Market Promotion
Market promotion is one of the basic functions of early Web3 game guilds to recruit more players. Promoting games on social media platforms is the most common way for Web3 game guilds to market the games. The documentary “Play-to-Earn: NFT Games in the Philippines” produced by Yield Guild Games (YGG) is also a very effective marketing method, which tells the story of a small village in the Philippines earning cryptocurrency income through the NFT game “Axie Infinity” during the COVID-19 pandemic. It shows how the “play-to-earn” game model creates new “employment” and “production” methods for players in the absence of job opportunities and restrictions on their productive activities.
Transitional Period for Web3 Game Guilds: A Case Study
Starting from the second half of 2021, the overall decline in the value of cryptocurrencies to a certain extent affected the Web3 gaming field. The emergence of popular projects such as Binaryx, RAC, Farmers World, and CryptoMines briefly pushed the explosion of the blockchain gaming ecosystem. However, these games had experienced a revenue cliff-life drop appearing in December. Even the former “P2E king” Axie Infinity couldn’t withstand the pressure of the bear market. As of December 6, 2022, SLP had dropped by 94.54% from its historical high in 2021 (November 7th). Previously, most guilds had a high dependency on popular blockchain games and provided players with diversified grant services. However, after the token prices fell, the income that players and retail investors could obtain from the games decreased, and the assets of game guilds were also severely damaged. More and more large game guilds, such as YGG, started to move away from the grant model. Web3 game guilds are at a turning point, seeking a suitable path for transformation to complete the industrial upgrade of their guilds.
The transitional Web3 game guilds have far surpassed the influence of early Web3 game guilds on games. They not only organize players to participate in activities within the game but also form their own industrial advantages outside the game. As one of the earlier guilds, YGG and GuildFi have successfully accumulated a solid player base in the main game of Axie Infinity. During the transitional period, YGG chose to develop towards game esports, while GuildFi moved towards game incubators and game companies, focusing on investment in games, NFTs, and the interconnected Web3 ecosystem of the community.
Exploring Esports in YGG
YGG was once one of the most brilliant game guilds in Southeast Asia and gained its fame from the success of Axie Infinity. YGG was also the founder of the grant system for guilds. During the transitional period, YGG mainly explored the means of player participation and gradually moved away from the grant model to game esports.
- YGG holds game-related events and tournaments. YGG collaborated with REVV Racing to launch the REVV Racing YGG Cup.
- YGG established its own elite team in Axie Infinity and F1 Delta Time, participating in multiple competitive events, such as the Axie Infinity Retreat (AIR), the Lunacian Grants League esports tournament, and the Galaxy Cup.
- YGG provides more opportunities for its guild’s esports players to play to their strengths. For example, YGG and YGG Elite’s esports players collaborate to develop live streaming education. YGG Elite’s esports player Kousei has participated in more than 20 live streaming education events for Axie Infinity games organized by the YGG community.
GuildFi Ecosystem Incubation
GuildFi is the largest gaming guild in Thailand. Unlike YGG, GuildFi is trying to upgrade the industry by acting as infrastructure. Therefore, its investment and construction in game infrastructure are a relatively unique presence in the entire gaming guild industry. GuildFi has created a dedicated engine for players to discover and access information, which can help them maximize their rewards while minimizing the time spent. GuildFi’s ecosystem is mainly composed of game centers and zones.
GuildFi’s Game Center enhances the gaming experience for guild players in three ways:
- GuildFi ID provides players with a convenient gatepass. Players need to register for a GuildFi ID to enter the guild, and registered players can access other products in the GuildFi ecosystem. According to GuildFi’s official disclosure, GuildFi ID embeds a ranking system that tracks all the achievements and footsteps of players in the ecosystem.
- Proof-of-Play rewards guild players. Players earn GXP by participating in guild activities (including completing tasks in the Quests section, playing games, participating in grant programs, and using GuildFi features) to accumulate experience points and obtain more rewards. It is worth mentioning that these rewards apply to anyone who has registered for a GuildFi ID, regardless of whether they have joined a GuildFi guild.3）Exploration (including game exploration and guild exploration) improves the efficiency of player-to-economy (P2E). Game exploration refers to GuildFi labeling games as P2E, Free, requiring NFT ownership to enter, MMORPG, and other tags, making it easier for players to select games. As GuildFi can access player data, it emphasizes the ability to anticipate the amount of income that a certain game can bring to players per hour in the future. Guild exploration refers to GuildFi providing a grant program that integrates data from the GuildFi funding pool, cooperative guild network, and connected NFT assets. Players can choose a suitable guild based on their own preferences and the grant situation in each game.
- Exploration (including game exploration and guild exploration) improves the efficiency of player-to-economy (P2E). Game exploration refers to GuildFi labeling games as P2E, Free, requiring NFT ownership to enter, MMORPG, and other tags, making it easier for players to select games. As GuildFi can access player data, it emphasizes the ability to anticipate the amount of income that a certain game can bring to players per hour in the future. Guild exploration refers to GuildFi providing a grant program that integrates data from the GuildFi funding pool, cooperative guild network, and connected NFT assets. Players can choose a suitable guild based on their own preferences and the grant situation in each game.
Zones can be regarded as a commercial specialized engine, which is not only open to GuildFi guild members but also to other guilds or organizations. For example, GaaS (Guild-as-Service) is a feature in Zones that serves organizations that want to establish a guild but do not want to participate in management. GuildFi can help them create an automated management guild.
The Path of Industrial Upgrading for Web3 Gaming Guilds
The upgrade of the Web3 gaming guild industry can be reflected in providing players with more diversified ways of gaming experiences, conducting more scalable investment management, and providing tools that can be widely adopted.
The Organizational and Commercial Development of Gaming Esports Spurs Additional Industries
When esports develops to a certain scale, it will inevitably move towards organization and commercialization. This can be shown in team competitions between guilds, sponsoring global mainstream esports events, and other related industries. The resulting effect is the commercialization of esports and the birth of other related industries.
Commercialization mainly manifests in advertising revenue that esports teams bring to the guilds, and sponsorships provided by brands for esports teams. In 2021 and 2022, cryptocurrency companies including Coinbase and Unipass participated in sponsoring esports teams and leagues, and the number of Web3 gaming tournaments is constantly increasing.
The birth of other related industries first manifested in the emergence of Web3 esports live streaming. Web3 esports events are gradually moving towards fixed, periodic, and large-scale tournaments. Axie Infinity held a 3v3 championship, while Hooga Gaming will restart the Galaxy Cup and hold events according to the frequency of weekly, monthly, and annual tournaments. More and more game developers will collaborate with guilds to hold gaming esports tournaments to increase the exposure of the game, attract players, and increase player activity. More importantly, large-scale events are easier to cultivate anchors and give rise to esports live streaming platforms. Through live streaming, more users can learn about the game and attract potential players to join.
The viewing methods of esports competitions are also quietly changing with the scale of esports events. Blizzard’s “Call of Duty” league held a viewing event for an esports competition in the metaverse game Decentraland, which is a new attempt at cross-game interaction. Perhaps there will be more examples of this in the future.
Investment and Project Incubation Are Moving Towards Specialization
Investment has always been a function of the guild, but in the early stages when gold farming was the main focus, the investment aspect of the guild was not taken seriously. Such situation changed during the guild’s transformation period. As gold farming was gradually abandoned, the investment function of the guild and post-investment management began to receive attention.
The investment of game guilds is gradually moving towards the characteristics of professional investment institutions. At present, GuildFi is a good example of this. GuildFi’s investment portfolio has begun to diversify, not only investing in games themselves but also investing in infrastructure as the “foundation” for building the Web3 ecosystem. GuildFi also participates in game design and operation in post-investment management. Data shows that as of the end of March 2022, GuildFi’s reserves reached 140 million US dollars. In addition to investing in various Web3 games, it has also added game operation services for games such as Big Time, Thetan Arena, Sandbox, and Nyan Heroes.
From GuildFi’s investment and project incubation development model, we can see that investment is still a blue ocean for Web3 game guilds. Web3 game guilds have a unique advantage due to their large player base. First of all, if a guild invests in a game project, the guild’s members are also potential players of that game. The problem of game player acquisition is directly solved. Secondly, players within the guild usually have a certain level of game skills and Web3 knowledge (even novice players, the guild will take on the responsibility of educating them), these players are more sensitive to the game and have a higher probability of providing feasible suggestions for game play design. Even during the game testing phase, the guild can choose players with excellent data to participate in testing and ask for useful feedback.
Development and Large-scale Adoption of Data Management Tools and Other Infrastructure
In the transitional process, some guilds may focus on developing modular management tools for intelligent player data management, such as GuildFi and Blockchain Space mentioned in the previous text. In the future, these guilds can leverage their accumulated player base and industry reputation to promote these tools to a broader market, making them widely adopted and providing new paradigms for data applications in the industry.
GuildFi has developed a successful minimum viable product (MVP), which is Axie Infinity’s most popular grant management tool, as well as one of the most advanced Axie tools on the market. The tool features grant management, game state, leaderboard, card browser, and PvP simulation. It has been successfully applied in hundreds of guilds in Southeast Asia.
In terms of intelligent management, Blockchain Space has also developed an automated task management system that can quickly and efficiently distribute and manage tasks, effectively improving the operational management efficiency of guilds. The automated task management system can to some extent avoid the situation where guild leaders abuse their power for personal gain, or where guild members are divided due to unfair distribution of benefits. In terms of automatically generating key data indicators, Blockchain Space claims to be able to provide game data analysis across guilds, such as providing guild banking services. Based on player performance records, it can help players automatically match suitable financial solutions. Academy robots can help players record their daily and weekly income, while helping guild managers manage funds.
As Web3 games continue to evolve and new player groups join, these data management tools will become essential infrastructure for guild management and scaling effects, and will certainly be widely adopted in the industry to form industrial advantages.
Embedded Guilds as an Innovative Path for Web3 Game Communities
In addition to the various transitional paths practiced by Web3 game guilds mentioned earlier, we have also discovered that some Web3 game projects are creating a new mode. Such mode borrows from the tradition of Web2 games’ embedded guilds, embeds guild functions in Web3 games, and incorporates third-party Web3 game guild smart contract management tools for internal guild management.
Embedded game guilds are very common in traditional games. Some embedded guilds usually organize player teams to fight game instances, and the guild also provides communication to make emotional communication between players more intimate, game item trading more convenient, and help form a free market for players. For example, in “World of Warcraft”, players can establish their own guild by clicking on the guard NPC in the game, purchasing the registration form, and completing the registration steps. In some specific gameplay, only guild members can form a team to defeat bosses in a raid to unlock and obtain rewards for that gameplay.
However, the purpose of players in guilds in traditional games is very pure. They want to cooperate better in the game and maybe just gather to unlock higher-level gameplay and obtain rare rewards. But because the guild lacks intelligent management tools, it can lead to low management efficiency and even some disputes.
At present, most Web3 player communication relies on the official game community or Web3 game guild on third-party platforms. But through our imagination, embedded Web3 game guilds can solve the problem of lacking decentralized intelligent internal management tools in traditional game guilds.
Players establish DAO organizations through game mechanisms and use smart contracts to manage the internal guild. Taking the example of Web3 MMORPG MetaCene, they have created a new form of embedded Web3 game guild. The embedded guild function of MetaCene is envisioned to use DAO tools for internal management. Similar to World of Warcraft, the operation of the organization will also establish various positions. However, unlike the embedded guild in World of Warcraft, the function of the MetaCene guild will embed smart contracts into the management process for convenient and efficient management. The smart contract account of the guild allows each member to see the details of asset flow, eliminating centralized corruption issues; rebates can be written into the smart contract, and new players recommended to join can directly receive system rewards in their wallets. A portion of MetaCene guild’s income will be deducted from the game consumption of guild players in a certain proportion through a smart contract, directly deposited into the guild’s wallet, and then the guild DAO organization will decide the redistribution of resources.
In MetaCene’s vision, they may integrate the embedded game guild and the core gameplay of the game in the future, allowing guild members to have the rights to unlock advanced gameplay and rewards and even directly participate in game governance.
Conclusion
Under the influence of the cold wave in the cryptocurrency market, various industries are seeking transformation. The performance of game guilds is particularly outstanding. From advocating P2E in the gold farming mode in the early days, to gradually introducing some mainstream game systems into Web3, Web3 game guilds are also beginning to focus on the broader Web3 ecosystem construction. We are gradually seeing more and more shadows of successful traditional game modes in this emerging industry, such as esports and live streaming. The forward-looking transformation and innovation of top guilds may bring more inspiration to this industry.
As game practitioners, we will engage in deeper thinking. The continuous upgrading and iteration of guilds will also push game development forward. We no longer simply advocate how much profit a game can bring to players, but increasingly emphasize gameplay. After all, the fundamental criterion for judging a game is whether it is “fun” or not. Observant Web3 enthusiasts may notice that more and more games are highlighting gameplay, fairness, and player character growth. This is thanks to the experiences of many players in game guilds who try different games and summarize their experiences.
Therefore, when we discuss the industrial upgrading of Web3 game guilds, we should discover some overarching themes-what players really need is to be able to play games wholeheartedly, and what the market needs is for all components of the game industry chain to cooperate and form a complete Web3 game ecosystem.
About MixMarvel DAO Venture
MixMarvel DAO Venture is a decentralized investment organization that unites builders and investors from the Web2 and Web3 worlds. Concentrating on pioneering Web3 applications, tools, and infrastructures, MixMarvel DAO Venture empowers Web3 ecosystem constructors through financial support and consulting services. It comprises a diverse portfolio of GameFi, Metaverse, Web3 engine, and infrastructure projects.
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