Oct 2022#Opinion#GameFi#NFT

Launching a GameFi project?Here’s how not to go belly up

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Authors

Vladislav Kovshik

Vladislav Kovshik

Consultant, Product Development

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11 min

Before we get to our GameFi business, let me be direct with you. 

Almost every blockchain founder thinks that their project is the best in the market. You must have heard a startup team say something along the lines of, ‘We are the best because we are better’. This unfounded optimism about one’s product leads to sad results: in 90% (if not in 98%) of cases the project doesn’t just fail — it can’t even enter the market. The founders don’t have enough money to bootstrap it and external investors aren’t eager to sign a check. 

We’re seeing the same thing in the Web3 industry. The market is overheated, with dozens of projects launching every day - all promising to solve all your pains, help you earn money, make 20x — all this with a 100% certainty, simply because the founders are convinced of the product. 

GameFi in particular has become a victim of this can-do attitude. Once the hype train left the station, the market was suddenly overwhelmed by thousands of copycat projects. GameFi was starting to look like the cloning facility from Star Wars Episode 1. 

There are exceptions, of course: lots of projects that can add real value to the industry and have already found their product/market fit. However, the many issues they face in the fundraising stage prevent them from realizing their potential. 

This isn’t our topic today, but my first bit of alpha will have to do with investments. BDC’s brilliant Marketing Strategy Director Roman Aliev has prepared a simple checklist that will help you understand how prepared your project is for a private or public fundraising round (an IDO/INO/IMO/IGO…). Don’t rush: check if you are ready first. 

And now let’s turn to the main subject of this article.

Marketing is the key element of any startup strategy. Even if your product already has traction, you won’t be able to scale and expand to other GEOs without marketing. 

At BDC, we’ve conducted research, audits, and analysis for dozens of GameFi projects. We managed to identify a set of winning market techniques that helped them achieve success — techniques that I will share with you.

Disclaimer: this article isn’t a ready go-to-market strategy for your product. It’s just an arsenal of battle-tested tactical elements that you can leverage to improve your strategy. 

Onboard new audiences — but don’t forget to encourage the core users

Of course, product positioning should be the center of any promotion strategy. But it’s even more important to understand the target audience. 

An example: you’re planning an initial sale of in-game NFTs. Who should the target buyers be? Most will probably say that it’s those who want to make a good ROI — because selling NFTs to them will give you the money you need to attract more users. 

Unfortunately, this tactic is the fastest way to kill the project. Making some money quickly feels nice, but only loyal users can bring you a lot of money — and it’s a lot of money that you want, isn’t it?

So how do you attract and retain loyal users? This requires a close collaboration between the product and marketing teams. 

Let me stress one thing: spending lots of money can’t deliver long-term results on its own. It seems like an easy solution: rewarding users for any action, hosting a never-ending series of giveaways and contests with USDT prizes, purchasing more and more traffic. But what for?

These people will play your NFT game (as long as you pay them to do so), but what will this lead to? We’ve seen it all before: for example, one top-10 GameFi project originally launched with a completely different product and quickly dumped $100k into user acquisition. They did reach $550k in in-game transaction volume (as per DappRadar), but then the game’s popularity began to drop fast and hard. The team had to pivot in order to retain the user base. 

Pivoting didn’t mean creating another game. They launched a whole platform — only this time they didn’t repeat the mistake of mindlessly spending money to increase the user numbers. 

Marketing should never have attracting new users as its sole goal. The way to success is through the core audience you already have. 

Let’s talk actionable steps now. 

Organize airdrops and contests — but instead of cash, reward the winners with in-game NFTs. Incentivize them to try the product for themselves. 

Compare these two contests: one has 50 USDT as a prize, while the other has an NFT character. What will the winner of the first one get? Some money. And the second? An opportunity to earn money in the future — but the most important part is that they will also get to test the product and become part of the ecosystem. The second winner will eventually earn you money. Isn’t this obvious?

A popular activity is a creative community contest. For example, you can ask users to share their ideas for a new character. This keeps the followers engaged and connected to each other. 

However, the best thing you can do for a user as a thank-you for participating is to create an actual character or in-game item based on their suggestions. Your followers will love taking part in contests where they can make a real impact on the project; and from your part, this is a way to show that you care. 

Referral systems also work very well in GameFi. Let your users invite new followers in exchange for small gifts — for example, in-game NFTs for those who bring in most referrals. 

An interesting case study is Arc8, which launched a token mining dApp before the game release. The dApp featured a referral system: users could earn an extra 20% for each friend they invited. As a result, 1.5 million people installed the dApp before the platform officially launched. 

Ambassadors. How do you find good ambassadors — and how do you use them efficiently? This could be a topic for a separate article, but here I will say that it’s among Tier-1 projects that we see the most powerful technique: exclusive content. Instead of buying paid shills from influencers, imagine that you onboard a leading GameFi influencer to create weekly videos for your blog. This content won’t appear in their only channel — only yours. 

And what if those videos are actual game streams? This is like getting Keanu Reeves into your shooter — oh wait, has someone done this already?

Also, remember that your rivals can become your friends. You have similar target user profiles, so organizing joint contests on Discord will help both audiences learn about both products. With time, this can even grow into a much larger partnership. 

Content marketing as an onboarding tool

A good product not only provides utility for the end user but encourages them to get fully immersed in it. 

Ask yourself: what do you value most about a crypto game? What’s the most valuable element?

The most obvious answer is that any GameFi project is an opportunity for end users to earn money — and it is true on a certain level. But what can help a project achieve lasting popularity? A detailed lore, immersion, engagement with the imaginary world of the game — these are the things that will keep the players coming back, invite friends, create content about the game, and eagerly share it. 

What would happen if Web2 games focused uniquely on monetary rewards for users. If a source of passive income was the only thing attracting players, the whole GameDev industry would get devalued and lose its audience. 

That’s why founders should create crypto games aimed at users whose sole goal is to make money in a very young market (as Web3 is out of the embryonic stage but still a newborn). By doing so, GameFi teams will inevitably build primitive, creatively impotent games. 

You may give early users a chance to reap the initial financial benefit, but they won’t get anything or real value — and soon leave you for another game, and then another. Such money-driven users will never become your Core audience. The market is evolving very fast, and players become more demanding by the day. 

Try asking your audience what the no.1 problem in the GameFi market is right now. 8 out 10 will probably name the poor quality of most games: they aren’t interesting to play. 

Do some research, check some GitBooks and White Papers — and you’ll be shocked at how cheap they look. If GameFi is to achieve global adoption, it should look up to the top-ranked Web2 games — and they wouldn’t allow themselves to release such cheaply made products or documentation. 

This is why lore, content, and storytelling are so crucial. You need to learn to broadcast your game’s story and lore the way Blizzard and other majors do it. 

Make sure that your every blog post and article help immerse the readers in a world where they will want to stay. After all, content marketing is one of the cheapest and most viral types of marketing. 

And by the way, don’t forget to host AMA sessions: the bigger your community, the more updates and info it expects to get from you. 

In-game activities and collaborations

From a product specialist’s point of view, this is the primary marketing technique. In-game events, seasonal updates, new collaborations, and fresh content all help to improve a project’s product metrics. 

I’ll repeat: how much money you’ll make will depend on user retention. It’s not a one-time inflow of players that brings success but being able to satisfy the core audience throughout their life cycle. 

This is confirmed by the practice of Tier-1 projects, which never leave the users without updates for too long. 

It’s simple, really: look at what Web2 Games-as-a-Service do. Regularly introduce new seasons (for example, quarterly quests or design shake-ups), organize events timed with the  key festivities and, most importantly, take the audience’s interests into account. 

For example, you can look into how projects form guilds within the community and make them compete. For example, you could assign each player to one of several planets (depending on the event and game theme) and launch a quest where they have to obtain certain information. The prizes should be in-game items: this will help users feel more comfortable within the game’s environment. 

Don’t forget to write about the event results on social media and mark important dates together with the community: make them feel that they are part of something great. 

I should also talk about collaborations — perhaps not the most obvious but a very successful way to attract new users. 

Collabs come in different types:

  • Launching an NFT collection together with an exchange
  • A crossover with another GameFi project — for example, introducing characters from your game into theirs
  • Anything else you can reach an agreement on.

Sure, shared audiences is not a new trick — but it’s always very newsworthy. Imagine what would happen if Marvel and DC tried something like this. The scale is completely different in GameFi, but one can always dream, right?

Start with joint streams, AMAs, and conferences — and then proceed to thematic in-game events. 

Business development as a key to success

People tend to underestimate the role of business development (colloquially Biz Dev), but our practice shows that it accounts for 80% of success: truly the Pareto law in action. 

It could seem like partnerships aren’t that important for GameFi, since — as we have discussed — success can come on its own, as long as you  focus on the audience’s wishes and deliver a product that it needs. 

In reality, no major project would have achieved the success that it did without partners and large investors. They act as conduits to the Premier League, where the rest does depend on the project itself. 

What does business development consist of? After analyzing the flows of several projects, we identified a common pattern: strategic partners like Animoca Brands help attract the attention of large investors, such as Alameda. This, in turn, helps onboard leading exchanges and launchpads (such as Binance), and that captures the attention of the audience. 

So what should one do to attract partnerships? A business development specialist can’t just write to an Animoca executive and convince them to sign an agreement. Here’s where marketing comes in: accept the fact that a successful founder is a public personality. Speak at conferences, organize your own meetups, and attend Level Up events where you can meet potential partners. 

A tip: the organizers of large events usually request to see a recording of a speaker’s past presentation before they decide to invite them or not. Remember: all successful projects have either a strong background or strong connections — or both

For example, the above-mentioned Arc8 made an impressive leap from a modest mobile app with rewards to a content-rich platform after they started working with Animoca Brands. The result? A tokensale on the website of a game by Animoca, which was announced the day before, sold out in 7 minutes. Arc8 soon had 1.5 million players at launch and a partnership with Manchester City. 

Important: Tier-1 projects get listed on large exchanges from the get-go. Without strong partners, this is virtually impossible. 

Summing up

The most crucial thing to understand is that marketing is only part of a successful project. You need to focus on creating products for the long term based on users’ wishes — otherwise you won’t be able to become a vibrant part of the Web3 industry.

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