ABCDE Investment Research Partner LaoBai: Four Possible Paths for the Next Generation of Gamefi

Author: LaoBai, ABCDE Investment Research Partner

This article is organized by ChainCatcher from LaoBai. Please indicate the original source when reprinting.

Written on the day World of Warcraft shuts down, it feels quite fitting. I will talk about World of Warcraft separately at the end of the article, as I am one of the first batch of players since its open beta in 2004. Seeing it shut down is indeed quite poignant.

In 2019, Vitalik Buterin mentioned that finance and gaming would be the first two scenarios for blockchain to take off. Anyone who deeply understands this statement would not have missed out on DeFi Summer and likely would have made significant gains from Axie and Stepn. Unfortunately, I am not that person, but the industry has a high level of recognition for this statement.

Even in a bear market, there are still countless projects working on blockchain games. Everyone is seeking better ways to combine games with blockchain beyond the simple and crude Play2Earn model seen after AXIE and Stepn. After reviewing a bunch of first and second-tier games, I categorize the next phase of GameFi attempts into four paths.

1. AAA Format

Represented by Big Time, many well-known domestic studios are also moving into this track. The logic of this path is that the Play2Earn model leans too much towards Earn and not enough towards Play, so they attempt to create an experience closer to Web2 games, simply moving the in-game economic system onto the blockchain.

The difficulty of this path lies in the fact that such games appear "heavy" for blockchain, as they essentially represent a chain transformation of traditional games. Given that Steam releases tens of thousands of games each year, creating a game that approaches the experience of a Web2-level game still faces thousands of competitors, making it hard to ensure that players are genuinely attracted by how "fun" it is. Nevertheless, this path in the GameFi field should have the highest playability.

2. Casual Social Games

Represented by Townstar, there are currently some better improved games with superior playability and design. The logic of this path is that blockchain is not suitable for heavy games but is more appropriate for lightweight social games, providing an option for those who enjoy casual games like Happy Farm on their phones every day. While the gaming experience and entry barriers are close to Web2, the crops you grow or steal can be partially monetized through blockchain.

The challenge of this path is that the logic of stealing crops and farming is already in decline in Web2, and the core of such casual games is essentially social. The current sparse daily active users in Web3 may not support the gaming social track, and whether it can attract players from Web2 in a low-barrier manner will be crucial.

3. Semi-Native Blockchain Games

Represented by DeFi Kingdom and the recently popular Bored Ape Dookey Dash, DigiDaigaku and similar games can also be categorized in this track.

The logic of this path is to expand gameplay based on the current blockchain infrastructure, such as DeFi Kingdom, which first turned DeFi into a game style and then added real game elements like PVP. Dookey Dash started with the NFT of monkeys, combined with APE tokens, and expanded the community through suspense, mystery, and marketing, using Pass cards and mini-games. DigiDaigaku is expected to follow a similar path in the future.

The challenge of this path is that the slogan of DeFi Kingdom, "On-chain Dream Journey," attempts to offset or slow down the death spiral through a complex ecosystem, which is quite difficult and slow in progress.

Moreover, the NFT-based gaming style of monkeys only applies to a few super blue-chip NFTs, making the team extremely important, with requirements for IP, marketing, and business development capabilities even exceeding the quality of the game itself. Nevertheless, this path's Crypto Native style far surpasses the first two paths. Our circle values native elements quite highly.

4. Native Blockchain Games

Represented by Dark Forest, Opcraft, Curio, and Topology can all be categorized in this track.

The logic of this path is that all game logic is 100% on-chain in the form of smart contracts, creating a true on-chain autonomous world that has surpassed the scope of GameFi. Its purpose is to provide players or participants with an experience completely different from traditional Web2, one that can only be obtained in the blockchain world. If the first three paths can be considered Web2.5, then this path is the only one that can be called "true Web3.0."

For example, Dark Forest uses ZK to hide coordinates while allowing players to develop their own plugins. OpCraft is an on-chain "Minecraft," where every river, blade of grass, and snow on the mountaintop exists on-chain. Curio designed on-chain diplomatic contracts within the game, enforcing "human cooperative relationships" through contracts, while Topology is developing a fighting game that allows players to put their designed actions on-chain, dubbed "On-chain Iron Fist."

The challenge of this path lies in the current immaturity of infrastructure and the high entry barriers. Just ask how many people around you have really played Dark Forest, and you'll see that the first impression of such purely on-chain games or worlds for most "players" is basically - what is this? How do you play? It looks like graphics and effects from 20 years ago…

Overall, it feels somewhat like the ZK technology you saw in 2018. You know it's impressive and is the future, but you don't know when it will be widely adopted. ZK, which started being researched in 2018, only truly entered the starting phase in 2023. Similarly, Ethereum in 2014 made everyone feel that smart contracts were the future, but it wasn't until the DeFi Summer of 2020 that it truly found its suitable scenarios.

Finally, the shutdown of World of Warcraft reminds me of something. I can't say I'm a heavy user of WoW, but I was definitely among the earliest users and a loyal fan of all Blizzard games. I played the most of Diablo, StarCraft, and War3: The Frozen Throne, and I still play Overwatch every night.

What does the shutdown make me think of? It’s that many people, especially many girls, often cannot understand why boys are so obsessed with gaming, especially with MMORPGs like Legend and World of Warcraft. But in my view, they miss out on a very interesting and magical life experience.

In my opinion, the pursuit of happiness is human nature. There are many forms of happiness. One type is relatively short-lived and stimulating, with dopamine being released quickly and in large amounts, such as when the coins you bought suddenly surge today, or when an extra zero is added to your total assets. Or when you have an exhilarating basketball game or win a fiercely contested Dota match, you will feel this way.

Another type is stable and lasting happiness, released slowly, more related to endorphins rather than dopamine, filling the heart with tranquility and joy, bringing a sense of happiness, such as good social relationships, harmonious family life, and the satisfaction and confidence gained from achievements in studies and career.

World of Warcraft offers something between the two. Players immersed in it can experience a stable release of dopamine and endorphins that is not overwhelming but feels comfortable. More importantly, this experience can last 5-10 hours a day with almost no decline. This "immersion and focus," driven by a moderate, long-lasting, and stable combination of dopamine and endorphins, is an experience that you cannot buy with any amount of money later on.

This stable and continuous "immersion and focus" is not as grand or long-term as a life goal, nor as stimulating and fleeting as a game or win/lose scenario. Those who have not truly experienced it find it hard to understand, making it something that can only be "understood but not explained." In my view, the only experience that can compete with this in the same track is spending a day on a date with a girl you truly admire.

"For the Horde!!!"