Gala Games, a blockchain games startup created by Zynga cofounder Eric Schiermeyer, cut a little-noticed but very interesting promotional deal this week with Brave, the maker of the privacy-focused Brave Software web browser. And their deal shows a path for how blockchain-based game companies can survive and even thrive as they wait for their big audiences and big hits to come.
Blockchain games have a chicken-and-egg problem. They have cool technology — the transparent and secure distributed ledger technology behind tokens and cryptocurrencies — that makes them more appealing for gamers. But they are also so new that most gamers don’t understand how they work, and so they have small audiences. But those audiences are enthusiastic and they spend a lot of money. The result is that they could siphon off some of the biggest spenders and savviest gamers, and become profitable as a niche until the day comes when larger audiences see their value and better blockchain games come along. The challenge is to create blockchain games that are simple to play and can ultimately drive huge audiences in the long run.
That’s the situation that Gala Games finds itself in now, albeit early in that chain of theoretical events. At Zynga, Schiermeyer was a proponent of casual games that could appeal to everyone, such as Zynga Poker. At Gala Games, his team including lead game designer Michael McCarthy created a FarmVille-like game, Townstar, with the added twist of blockchain support. And now they’re creating a fantasy role-playing game called Mirandus. Those games are built on the Gala Network, a platform that uses blockchain to identify the assets in games that players own themselves. In the games, you can buy and sell assets and reap financial benefits via the game’s Non-Fungible Tokens (NFTs), which are connected to the Ethereum blockchain. After connecting with an Ethereum wallet, players in Townstar can harvest crops, build a house, and build a city. Players can purchase items in the game with Bitcoin or Ethereum. And because blockchain can identify the one-of-a-kind items, the players can own the items they buy.
These may sound like simple games that have been done before. But Eric Schiermeyer, CEO of Gala Games, said in an interview with GamesBeat that the Townstar game has made his company profitable, even with its staff of 14 people. Townstar has a leaderboard where players compete to get rewards, and that has been motivating players to engage with the game and stick with it.
Brave Software, meanwhile, was started by Mozilla cofounder Brendan Eich in 2016 and it makes the Brave browser. It has 22.6 million monthly active users who take advantage of its privacy-friendly and advertising-wary web browser. The free browser strips out ads from content and replaces the ads with its own privacy-friendly ads that don’t have ad tracking. It shares the replacement ad revenues with the publishers of the content.
Since Brave doesn’t store data on users, the users get a private, speedier Web experience with much longer battery life because the ads don’t slow it down and drain the battery. Brave Software says publishers increase their revenue share, and the replacement ads generate better conversion. If users opt into privacy-respecting ads, they are rewarded with Basic Attention Tokens (BAT), an ERC20 token built on top of Ethereum. The users can redeem or use the tokens to tip or contribute to over 975,000 verified publishers and other content creators. For the users, it’s like getting paid to surf the web.
In the collaboration with Gala Games, the companies will collaborate on Mirandus, which is a fantasy RPG set in a world ruled by five player-monarchs. Gala Games will accept the BAT (tokens) for all purchases of Mirandus shop deeds, and it kicked off the event this week by giving players a 25% discount for using BAT. Additionally, Gala Games and Brave are issuing a limited-edition crystal with engraved claim codes to receive Non-Fungible Tokens (NFTs), or one-of-a-kind tokens.
“As the leading privacy and blockchain browser, Brave brings a new level of usability and agency to a mainstream audience,” said Luke Mulks, director of business development at Brave, in an email to GamesBeat. “We see this opportunity to bring blockchain gaming to our audience and provide a new use case for Brave Rewards users to spend the BAT they earn from viewing Brave Ads in the Gala Games platform.”
The Brave Swag Store will also be featuring limited-edition shirts with Mirandus characters as part of the promotion. Gala Games will promote Brave as their recommended blockchain gaming browser, with both teams collaborating on additional BAT integration and utility for gamers through the partnership. And Brave needs a big hit — something like FarmVille and what that meant to Facebook — so that more people will be willing to use its browser and so it can make more than a dent against rival browsers like Chrome, Edge, Internet Explorer, Safari, Opera, and Firefox.
Brave sees the partnership with Gala Games as the beginning of a long term journey to bring the benefits of ownership that blockchain gaming brings to gaming.
“Blockchain Gaming takes the gaming experience that billions enjoy and introduces additional new blockchain innovations in non-fungible tokens and decentralized finance to bring gaming to a whole new level with the privacy and security benefits that Brave brings by default,” Mulks said. “Brave looks forward to additional collaboration with Gala and bringing more deeply integrated gaming features into the Brave platform. ”
In Mirandus, player ownership of in-game assets will be a central mechanic, with players being able to hold land deeds which allow them to claim parts of the wilderness and set up holdfasts ranging from small farms to cities. Mirandus players hold deeds in the form of ERC-1155 Non-Fungible Tokens (NFTs) on the Ethereum blockchain, providing a new level of ownership for game deeds and assets. The first deeds for Mirandus were sold on the Gala Games platform in $GALA only, and the partnership with Brave expands the purchases to BAT.
Shop deeds can be placed within cities, and will enable users to craft and sell items to players. Every city needs a blacksmith, a potion shop, a temple, lodging, and any number of other small proprietors. In addition to shops, users can also deploy fields and crops within Farming and Ranching Hamlets and Villages. In game, players have freedom of choice. They can set out into the wilderness alone to try their fortunes against the monsters of the deep woods and dungeons, join with one of the monarchs to serve as a knight in their court, or set up shop in one of the five great cities of the realm.
Schiermeyer said that Gala Games is trying to give Mirandus the “world’s most complex simulated economy,” where players can make a living trading in-game assets and using cryptocurrency such as BAT or $GALA to generate real value from the game.
Schiermeyer said that Mirandus will take the learnings from Townstar into a different genre of games. And players can take what they bought in Townstar and use it if they want, and if it is applicable, in Mirandus.
“There is quite a large black hole out there where players are dumping billions and billions and billions of dollars into every year,” said McCarthy, in an interview. “As a developer, it feels far more like the right thing to do. If someone spends a lot of money in your game, they should actually own that piece of content they paid for.”
And once players get a taste of ownership, they may not want to go back to the old way.
“If there were two games that were out there, and they’re both fairly similar, and one of them lets you own content, and one of them doesn’t, which one would a player play?” said Jason Brink, chief marketing officer, in an interview. “They would all play the one that lets you own the content. All things being equal.”
Some players have stopped playing because they know they’re getting ripped off with free-to-play games, McCarthy said.
“Imagine going to a toy store. And before you can even enter the toy store, you have to sign a terms of service agreement that states that at any point, the toy store can decide to come to your house and take the toy away from your kid,” said Schiermeyer. “Whenever they felt like it. That is a state which we’re in right now. If I gave my account on Call of Duty to a friend, they could decide to ban me. And it happens all the time.”
Leaving the app stores
Mirandus is also going to be different because it won’t be available on the app stores. It is based on HTML5, the lingua franca of the web, and so it will be available as an instantly playable web game. Such web games don’t always have the greatest graphics, but the tech has been improving over time. And they allow developers and players to avoid paying the “tax” of the 30% platform fees collected by Apple and Google Play.
“You have to pay that 30% tax,” Schiermeyer said. “But the browser is going to be a place where you’re going to see a lot more high-quality game experiences. And I think this is the very beginning. The technologies available for the browser right now are pretty amazing. And with bandwidth becoming more ubiquitous with 5G, it’s going to be easier to deliver these experiences outside of the app stores.”
Gala Games has created its own NFT token and its own cryptocurrency wallet for it, where players can buy more tokens and store what they’ve purchased. Players can use their own ERC20 wallets if they already have them. And so far, the results are good.
“We try to make it as easy for the users as we can,” said Brink.
Players are using more than a million tokens a month already in Townstar. The game, which is still in beta testing, has about 1,000 daily active users, and they’re spending enough money so that the company is profitable, Schiermeyer said. That’s no small achievement, since Gala Games has 14 people on staff.
No more whales?
The profitability means that even though the game has a small audience, that audience is incentivized to be active. They are engaging with the game and spending their money, even though it is a small game.
“One of the important things about connecting with Brave is that, in the blockchain space, it’s not always about mass,” Schiermeyer said. “It’s about a balance between mass and impact. And people who use Brave have a tendency to be more deeply embedded in the blockchain space. And what we see as we grow is this seesaw between user acquisition of gamers and user acquisition of blockchain people. And Brave allows us to access the type of people who are very heavily engaged in the blockchain space while allowing us to help them grow by bringing more gamers directly to their platform.”
Those small numbers of players have made the game profitable. If that lasts, that may mean that Gala Games has stumbled upon the right users. By comparison, free-to-play games are broken, according to experts like Kevin Chou, founder of Kabam, and more recently Forte and Rally.io. Chou has noted that only 2% of free-to-play gamers will buy anything in a game, and companies have to spend a lot of money on user acquisition in order to find those “whales” who are willing to pay.
“The beautiful thing about what we’re doing is that everything that we do is in alignment with everyone who participates,” said Schiermeyer. “In the free to play game world, the game developers are fundamentally at odds with game players. They are creating paywalls. They’re going to be pinching the experience to the point where it’s so frustrating that a player can’t progress. But the way it works in blockchain games is that we benefit just as much as the players benefit if the things that we create become more valuable. So we want to see that epic sword be worth more money later on than it is today. We know we’ve held some of those back in our treasury and we can sell them off at a higher price later. So we’re not actually gonna be working against the player. That frees us to move back to the way games used to be developed, where you make the most fun experience possible for people. And, and it’s purely the most ethical way to make games.”
The deal with Brave helps Schiermeyer find even more of those valuable paying users since blockchain enthusiasts seem to be the sort who are willing to spend money on blockchain games and experiment with new types of models. Schiermeyer said his company may become a publisher, allowing others to use its platform to create their own blockchain games. And he said the company is in talks with triple-A game companies. The success of being profitable with such a small number of users is not to say that the company isn’t trying for the mass market. Rather, it makes the road to the mass market less painful.
“For a really long time, blockchain has been extremely inaccessible to people,” Schiermeyer said. “And when blockchain developers make games, they have a tendency to make games from the perspective of a blockchain developer, which means they typically make crappy games. What we do coming from the perspective of game developers who interface with the blockchain, we’re able to provide users the functionality while minimizing the pain and suffering and onboarding process that they would typically encounter. And so approaching things from that direction, it makes it a lot easier to bring more users on. Building for the mass is something that is critical that we are focusing on.”
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