As gaming continues to face the challenge of Retail adoption, the secondary performance of the gaming sector has been lackluster for the past 24 years. Apart from the overall market downturn, the main reason is that we are still in the early to middle stages of a bull market. Retail will come later in the cycle. Historically, the leading indicators are: Btc price > Crypto interest > Chain gaming interest.
When they finally arrive, whether it’s game content or infrastructure, those with true Product Market Fit (PMF) will be clearly evident. In this time of limited incremental users, there has been an ecosystem that has maintained a high user base and growth – that’s Ronin (backed by Sky Mavis, the developer behind the hit GameFi Axie from the previous cycle, with Pixel being the hottest game on Ronin currently).
Essentially, Ronin as a previous-generation side-chain technology is unremarkable. The market may have briefly shone the spotlight on $RON and $PIXEL when they were listed on Binance. This article will delve into the true competitive edge behind Ronin – Sky Mavis’ localization and distribution operational capabilities. In a sea of ghost chains, if suddenly people discover that your property, despite not being heavily promoted with mountain views, school district amenities, actually has quite a few residents, how do you think the market would reassess its value?
Crypto gaming’s ups and downs follow a typical bubble evolution both in the crypto world and in the real world. This is also true for chain gaming. The first cycle from 2020-2021 saw Narratives > Fundamentals, where a sexy narrative with a high ceiling attracted a flurry of speculative funds and attention. The second cycle from 2021-2022 saw the bubble burst as people realized the deep-rooted reasons for the success of new things, leading to the demise of many projects. The third cycle from 2023-2024 is marked by a more rational market that focuses on projects with true moats. For gaming projects, if they cannot find their unique PMF and rely solely on narratives, failure is highly probable.
The value proposition of Crypto games and the true gaming users are widely misunderstood by different stakeholders. VC firms believe in Fully On-Chain Gaming (FOCG), groundbreaking gameplay innovation, while game developers focus on high-quality AAA games. Exchanges target web2 user growth, players aim to earn in-game rewards, and retail investors seek high returns. This misalignment has hindered the gaming sector’s performance for years.
Identifying the most PMF users, the Normie e-beggers, is crucial. The Southeast Asian market, particularly the Philippines, cannot be overlooked. Garena’s experience in localizing games for the Southeast Asian market highlights the importance of understanding what users like, what they can afford, and meeting them where they are. Many crypto games fail in this aspect, leading to difficulties in Go-To-Market strategies and user acquisition.
The Philippines presents a unique P2E gaming landscape with educated users and a mature gaming community. The success of games like Pixel on Ronin underscores the importance of localization and community engagement in emerging markets. Without a localized approach and distribution strategy, game projects in these markets face significant challenges.
In conclusion, P2E gaming never dies; it thrives in the right environment. Markets like the Philippines, Eastern Europe, and Africa share similar characteristics that make them fertile ground for P2E games. By focusing on localization and engaging with Normie users, crypto gaming projects can tap into these markets’ potential and drive sustainable growth.