Author: YBB Capital Researcher Zeke

Introduction

This article is some casual chat during the market's downtime, requiring a certain level of understanding of the traditional gaming market. You can treat this article as a diary or a stream of consciousness; these are just my superficial thoughts on GameFi after playing "Black Myth: Wukong," as well as my views on the future of this sector.

1. The 81 Challenges of Game Science

In just three days, the game sold over ten million copies, peaked at over 2.35 million concurrent players on Steam, saw multiple brand collaborations selling like hotcakes, was featured in national media interviews multiple times, and several game locations offered lifetime free access based on game completion records. The 1986 version of "Journey to the West" has over 4 million views on YouTube. These are just some of the news highlights since the launch of "Black Myth: Wukong." If you don't play single-player games, it might be hard to grasp the significance of some of these data points. Let me give a simpler example: in terms of sales and player online data within just seven days, this game is roughly equivalent to the national football team reaching the semifinals in the World Cup, with room for improvement.

Indeed, this success is also driven by various factors outside of gaming. However, at the end of the day, it still boils down to the game's quality. From my personal experience, while "Black Myth: Wukong" may not be absolutely perfect, it is undoubtedly unprecedented in the context of domestic AAA games and is certainly capable of competing with the top ARPGs from global game developers. Therefore, what lingers after playing is more a sense of emotion and reflection. The challenges faced by game science are far greater than those encountered by game developers in our circle, but why has there been no breakthrough player in GameFi since the decline of the P2E era?

To understand this, perhaps we can start with my memories of game science. In the summer of 2013, the hottest games in internet cafes were "League of Legends" and "CrossFire." As a regular at a black internet café near my school, the sounds I heard most often were "Welcome to Summoner's Rift" and "Fire In The Hole." Interestingly, one day I suddenly heard some familiar sounds mixed with ancient-style BGM and the sounds of sticks and swords clashing. I asked what they were playing, and they replied, "You don't know? It's 'Doubattle God'!"

This game was undoubtedly a leader among MMORPGs at the time, and I still have a vivid impression of the situation. After all, in a black internet café that only had two hours of school lunch break during peak hours, nearly a quarter of the people were playing a game filled with various storylines, which was quite rare. However, this trend came quickly and left just as fast. A few months later, I rarely heard those clashing sounds again. I also asked some of them why they no longer played "Doubattle God," and the responses were mostly the same: it wasn't fun anymore, and they couldn't afford to spend that much money. After that, no one mentioned the game again.

Six or seven years later, a monkey, transformed from an old man's voice into a golden cicada, appeared, signaling a change in the domestic single-player game circle. I became curious about which big company would take on such a thankless task, and the result was shocking: Game Science? A studio of about 30 people? You have to know that developing games of the same level often involves over 3,000 people (like "Red Dead Redemption 2"), and the most competitive Japanese single-player studios, such as FS Corp, the developers of "Elden Ring," have nearly 200-300 people, most of whom have ten to twenty years of experience in single-player game development. Digging deeper, I saw that familiar yet strange name, Feng Ji, the chief planner of "Doubattle God." After learning about the story behind this producer, I suddenly understood how much unyielding spirit was contained in the last line of the first promotional video for "Black Myth: Wukong," "After the White Bone, walk the Journey to the West again" (as "Doubattle God" began to decline after the third chapter, the White Bone chapter).

In 2009, online games were basically dominated by RPGs, with "World of Warcraft," "Journey," "Legend," "Fantasy Westward Journey," and "Bloodshed Jianghu" being regulars in internet cafés of that era. The internet-addicted youth of the 80s and 90s grew up alongside these familiar IPs. As the most lucrative game type, Tencent, which was thriving at the time, couldn't even get a piece of the pie, so the AGE engine was urgently brought out.

So who would make the game? At that time, Feng Ji, who was not yet 30, was entrusted with this heavy responsibility as the chief planner of the game. "Doubattle God" had an invincible start, with Tencent pouring in resources to create CG and meticulously crafted game levels, making the game a huge success. However, Feng Ji and the production team made what I consider a fatal mistake: instead of focusing on online gaming, they aimed for a single-player experience and placed too much emphasis on quality.

As an MMORPG, having only three chapters of content was simply too little, and the polishing took too much time, leading to insufficient commercialization. Feng Ji understood games, but he didn't understand capital; "Doubattle God" was well-received but failed commercially. After exhausting all content, to maintain player activity and meet Tencent's KPI requirements, a large amount of repetitive gameplay from Korean games (like map running, sects, and repetitive dungeons) was crammed into the game. Unfortunately, this move not only failed to extend the game's lifespan but also caused a catastrophic collapse in reputation. The final outcome for "Doubattle God" was that Tencent replaced the operation team, implanted a large number of pay-to-win systems that affected game balance, and it died amidst a chorus of player complaints.

Among the players at that time, a very classic saying circulated, corresponding to the end of the previous paragraph: "After the White Bone, there is no more Journey to the West."

After that, Feng Ji made a self-deprecating short film, taking a few core members and art planner Yang Qi to fly away. In simple terms, the story of making "Doubattle God" is about a group of young people with dreams of gaming being brutally confronted by reality. However, the subsequent story is quite fulfilling; everyone knows that fourteen years after the release of "Doubattle God," this group of "young people" finally succeeded in obtaining the true scriptures (it also took Tang Seng fourteen years to obtain the scriptures in "Journey to the West").

2. The Extreme Pursuit of Certain Things is Also a Golden Hoop

Knowing shame and then being brave is a spirit that is extremely lacking in our circle. We always feel that GameFi is unsuccessful because economics is not perfect enough, the game format is not right, the blockchain is too complex, and the barriers to entry are too high. There is a particular obsession with things outside of the game, yet few pay attention to the game itself.

2.1 The Premise of Financialization is Players Willing to Pay

I have always considered myself to understand games to some extent. I started playing Game Boy at the age of seven, from the 2D era's black-and-white "Pokémon," "Kirby," and "Zelda," to the rise of esports games and now the end of the console era, I have always been a part of it. I have played almost all games that have gained some popularity, and most of them I have played reasonably well. However, even so, I rarely talk about GameFi proactively; I have always felt that my understanding of GameFi cannot compare to any other track in Web3.

GameFi is a product that leaves me feeling perplexed. As a pre-investor, I receive at least three or four GameFi project decks (business plans) every month, with 80% to 90% of the content focused on economics, token distribution, the scale of the gaming industry, and what guarantees blockchain technology can provide, while the part about the game itself is minimal, and some even lack a demo.

They give me the impression that they seem to understand finance but not much about games. The essence of a successful game is simple: it’s fun. Over-financialization is actually an anti-player and anti-project behavior (provided that the game is taken seriously).

You might tell me how glorious the chain games of the P2E era were, but in my view, that was a victory for Ponzi schemes, not for GameFi. Many insiders once cheered for the entry NFTs of chain games like "Stepn" and "Farmer World," which often cost five or even six figures in RMB. But this actually isolates real game users; over 95% of online games, even those with a point card system, have a free entry barrier. Traditional players are not without the ability to pay; they only pay for emotions, passion, and a sense of achievement.

The Dragon Lore in "CSGO," the Dragon Blind in "League of Legends," the cloak in early "PUBG," and the ghost tiger in "World of Warcraft" are all expensive purchases, but they do not change any attributes of the player's character in the game, and some cannot even be resold. In this era, the business logic of top games has always been simple: if you can make players happy and release dopamine, they will spend money like crazy, and most of them don’t even have an economic model. Once a game introduces tokens and NFTs that affect balance, it becomes very complicated. Let's start with the simplest point.

For example, if a project party sincerely wants to develop a large-scale chain game, they must consider both tokens and NFTs simultaneously, which forces the game to undergo frequent updates and improvements. We just mentioned the value issue of the former; if the price is too high, it will deter new players, and if the price collapses, the community will collapse. Tokens and NFTs also contradict the latter; game development costs far more than we imagine. After exhausting early financing, tokens and NFTs will become the only economic support for subsequent version updates. Selling tokens equals leading the community into a death spiral or abandoning the original intention and cashing out. Another option is to create a bunch of new NFTs and sell them, but the motivation to attract players to buy can only be rarer, more profitable, and more powerful NFTs than the early ones.

So, doesn't this indirectly slap the early NFT buyers or even the Web2.5 model in the face? Even if they survive the new version's development period, how will they compensate for the huge pitfalls brought by these NFTs? Ultimately, falling into death is just a matter of inevitability; the late stage of "Doubattle God" is also a reflection of this situation.

Thus, GameFi feels more like different types of mines, each with different rules, but essentially, they all involve buying a shovel, going to the mine every day to work, and digging until the mine collapses. This situation is still prevalent today. Speaking of which, let's talk about something slightly more complex. The discussions within the circle about GameFi are still keen on "mine rules," and recently there has been talk about ServerFi, but it feels like everyone thinks that with ServerFi, they have found some "mine rule" that can keep the mine balanced forever.

After entering the AAA era, GameFi has indeed become richer in elements and more playable. Large-scale chain games can indeed have more complex economic designs. In 2023, I also tried to understand the so-called game economics, but in fact, any kind of economics requires a player base to support it (without a player base, it is impossible to generate revenue out of thin air; economic design can only constrain different participating roles), otherwise, it will evolve into a game between players and project parties.

Introducing complex economics may not necessarily make the game fun; in most cases, it may even be the beginning of a collapse. If you have a certain understanding of traditional MMORPGs, you should not find it difficult to understand how challenging it is to find a balance between the faucet and the sink. Designing a complex game economy is not easier than governing a small country. After reviewing a large number of MMORPGs regarding game economy design, I actually found only one successful example that has maintained itself for many years—"Fantasy Westward Journey," but its player registration number exceeds 100 million (close to the total population of Japan), and the complexity of its game elements and design is something that not only GameFi cannot learn from, but even Web2 has very few successful replicators.

The crypto world is also a utilitarian one; as long as it can make money, all rules, designs, and loopholes in the game will be repeatedly studied, and collapse often happens in an instant. To maintain balance, rules must be constantly updated, and this kind of capricious behavior is a slap in the face of decentralization. "Mine rules" have never been the most important; the significance that blockchain brings to games is actually very simple: to make the ownership of digital assets and the economic system fairer and more transparent, and it can also provide opportunities for bottom-up game developers. However, blockchain cannot change the essence of things, nor should it turn everything upside down.

2.2 AAA Games

After the decline of P2E, GameFi has basically split into two directions: AAA-level chain games focusing on playability and On Chain Games focusing on fairness and aligning with the spirit of Autonomous Worlds. Let's first talk about the former. Although I also look forward to a breakout AAA game in GameFi, AAA may not be suitable for this circle. I say this not to completely deny this type of game; I believe there will be successful AAA masterpieces in the future of GameFi, but currently, it is difficult to break out of the circle. From a commercial perspective, AAA games are already a rather niche game type in Web2, and even more so in Web3.

We first need to understand the definition of AAA: a lot of money (Alotofmoney), a lot of resources (Alotofresources), a lot of time (Alotoftime). As for how much is "a lot," there has never been an accurate definition. By my standards, this type of project represents the highest standard in the industry; failing even once could lead to a top global game company’s downfall. Blockchain is bottom-up, and essentially, these two are very incompatible, yet the current development path of GameFi has an inexplicable obsession with AAA.

AAA means creating grand, visually stunning games, but it does not directly equate to being fun. In the blockchain world, AAA chain games raising funds through pre-sale NFTs is basically a default behavior, but at this point, the game is often not even a half-finished product, and the future relies entirely on gambling and imagination. Once it fails, the ones who pay the price are not the project parties but thousands of retail investors and VCs.

A game with a development cost of over 100 million yuan needs to form a virtuous cycle, and based on the conversion rates of normal online game paying players (low conversion rate: less than 1%, medium conversion rate: 1% to 3%, high conversion rate: 3% to 5%), it requires at least hundreds of thousands of players to enter. Whether this round of AAA chain games can achieve such performance, I believe it should not be difficult for everyone to realize (the number of Web3 players in 2024 has decreased sixfold compared to 2023, currently under 1 million), and the vast majority of them will fall into the situations described above, becoming mines that ultimately collapse.

Given the current situation, the entire business logic from top to bottom in the circle is basically impossible to form a closed loop; making AAA chain games feels more like trying to raise money from both VCs and retail investors. If someone is truly dedicated to this path and wants to be the breakthrough player, I hope you won't let utilitarianism erase your original intention. Games are inherently very tangible entertainment products; they can never fool real players. I also hope that the story of game science can encourage everyone to obtain the true scriptures in this restless circle.

2.3 On Chain Games

On Chain Games can also be referred to as full-chain games, autonomous worlds, pure Web3 chain games, or halal games. This is a concept that has existed for a long time but only became popular last year. However, to this day, it is rarely mentioned. From a decentralized perspective, there is actually nothing wrong with this path of full-chain games. As mentioned earlier, Web 2.5 games have various methods to break decentralization, and the purest fairness can only be entrusted to code.

However, from other perspectives, this concept is full of flaws. For example, is the significance of game playability really less than fairness and permanence? If all rules are completely on-chain, how can tokens avoid crashing if vulnerabilities appear? If every action requires gas and signatures, can it really be called a game? At this stage, full-chain games can only meet the needs of niche groups. Similar to the earlier SocialFi, would you use a social platform without content? Although there are many solutions to these problems today, most are still imperfect, and the launch of this concept may have to wait for the next round.

3. The Wind Rises from the End of the Green Rush, Waves Form Between the Subtle Ripples

Blockchain is not limited to running games, and the financialization of games does not necessarily have to be online chain games. Outside of Web3, there are actually many bottom-up game creators; they may be students in universities, self-taught enthusiasts, or middle-aged game developers recently laid off from big companies. They may not be able to create miracles like "Black Myth: Wukong," but there can be countless types, carriers, and gameplay for games, and independent games are often their chosen direction.

What they lack is actually a very small amount of funding. Blockchain itself is a very good crowdfunding platform, and building an economic system around this group focused on independent games has always been an idea in my mind. The circle is too eager for quick success, while outside, there is a group of people who maintain their passion. If you are interested in this idea, you can check out some documentaries, such as "Solo" by Modian and "More Than Games" by Senna Film, which is both a positive and potentially profitable endeavor.

The specific implementation process may not be so rigorous, so let me briefly outline my thoughts. Although there are many launchpad platforms for games in the crypto space, most still revolve around online games, and the crowdfunding methods are mostly through NFT sales. Ultimately, even if the game succeeds, the returns for players remain minimal. Independent single-player games have the advantages of quick production and low costs. They can crowdfund by releasing demos of certain levels, which can also help build an exclusive community before the game's release, allowing enthusiasts and stakeholders to contribute their efforts to improve game details.

Crowdfunding NFTs can be divided into multiple categories. For example, the lowest tier NFTs could grant the right to play the game in the future, while higher tiers could offer skin upgrades, and even higher ones could provide a share of the game's future income. The release of crowdfunding funds could be determined by votes from NFT holders. For instance, when additional production funds are needed, previous production conditions, relevant demos, and videos could be shared, and funds would be released only after the community reviews the overall quality.

If a game's demo performs well, the corresponding higher-tier NFTs will also increase in value. Once this logic matures, the platform can attempt to launch crowdfunding for larger games. Here’s an additional story: the funding for the birth of "Black Myth: Wukong" actually came from independent mobile games led by Feng Ji. The greatest things in blockchain also emerge from dark corners, and independent games can also be very successful.

4. Paving the Way Through Difficulties, Setting Off Again After Overcoming Challenges

Finally, I would like to share a reflection from Feng Ji two months before the launch of "Black Myth: Wukong."

"During the development of 'Black Myth: Wukong,' most of the decisions I made can be simplified into three words—'Let's try it.'

Try what others did flawlessly ten years ago, while we have always struggled to grasp.

Try to engage in discussions that are exciting and exhilarating, yet the actual quality is awkwardly off the charts.

Try to boast in the promotional video with a demo, only to find that the actual performance is poor or the gameplay is quite dull.

Try to invest a lot of time in trial and error due to overconfidence or momentary inspiration, only to hit walls repeatedly, with everything looking beautiful.

The black monkey may be too lucky; from its inception, it has been full of challenges, naturally not without regrets.

When I finished the script for the first promotional video, I had no idea how to turn this video into a playable level.

When I completed the first level for internal testing, I had no idea how much it would cost to turn the entire story into such levels.

Even with what seemed like a complete story, I still didn't know what it meant to make it stable, smooth, compatible with different software and hardware platforms, and in multiple languages, and to release physical versions and discs.

Not knowing is good.

Since we chose to dance in the wilderness, we should embrace the fear and anxiety brought by uncertainty. Because behind fear and anxiety, there is also the surprise of satisfying curiosity and the joy of self-awareness.

In this unknown fog, our only guide is to ask ourselves more, to ask every team member if what we are doing now is something we understand, recognize, and love as users ourselves.

Are there others in the world who have faced the challenges we are currently facing? Even if no one has done it before, can we do it?

If the answers to the above are all affirmative, then it is certainly worth a try.

Just like in the tenth year of game science, we decided to self-publish for the first time, set the price for the first time, launch on consoles for the first time, create physical versions for the first time, and promote globally for the first time… all based on this kind of self-questioning and answering.

Let’s try it; it won’t kill us."