Alameda Research, Galaxy Digital, and Republic Crypto have partnered up to launch an investment consortium called NG+. It will bring traditional gaming studios and developers to Web3. The executives of these companies acknowledged that token economics is an area of need as the gaming industry continues to lean into blockchain-based solutions and revenue. NG+ will ensure that experienced game developers have the support they need to step into Web3.
Sam Englebardt, the co-founder and partner at Galaxy Digital, highlighted that business models have to evolve alongside technology that powers the creation and enjoyment of video games. He said a few things will remain constant and fundamental to the enduring success of a game. This is the quality of the gameplay and the game developers’ creative vision.
Richard Kim, the general partner at Galaxy Interactive, recognized the fact that creative talent in gaming is at an all-time high. However, most experienced developers are hesitating to build crypto games. This reluctance is because of the near-term speculation that the first inning of play-to-earn content has exhibited. Kim says that most crypto games are missing the ability to convert and retain a large base of payers.
There is too much focus on play-to-earn and no consideration on sustainable demand. Kim noted that this is causing a decline in in-game token prices. An example is Axie Infinity’s in-game digital currency SLP, which has crashed from $0.40 in April 2021 to a mere $0.02. Kim said the shift to “play and earn” is a disingenuous formulation as it ignores the payer side of the equation.
The executive believes that real sustainability depends on “pay-to-win-to-win” models. In this model, the player is willing to pay for tokens to apply their skills in the hope of earning a bigger share of the network’s rewards. The best way to go forward is by giving players free tokens.