How Gaming Guilds Survived the Bear Market and Positioned Themselves for the Bull Market of 2024

Blockchain gaming guilds have accumulated billions in treasuries during the last cycle. But how did they adapt in preparation for the 2024 bull market?

Which gaming guild performed the best in the bull market?

bear market

Gaming guilds, organized groups of sponsored gamers, were the breakout business model of 2021 in the Web3 space. With popular blockchain games like Axie Infinity requiring expensive NFTs to play, gaming guilds stepped in to provide scholarships for players, allowing them to access the necessary resources to learn and play. These guilds became cash cows, onboarding players from developing countries affected by COVID lockdowns and unemployment.

At their peak, there were over 20,000 gaming guilds, with 800 guilds in the Philippines alone. Many of these guilds raised significant amounts of funding, with the Merit Circle guild raising $100 million and the Avocado guild raising $45 million in 2021. The YGG guild was valued at over $10 billion, signaling the belief that the revenue would continue to flow indefinitely.

However, the collapse of Axie Infinity, the game that fueled the guilds’ economies, threw a wrench into their plans. Mitch Penman-Allen, co-founder of the Perion gaming guild, explained that they had already anticipated Axie’s lack of sustainability and had diversified their business models. Unfortunately, the collapse came faster than expected, exacerbated by a $620 million hack of the Axie ecosystem.

So how did these gaming guilds survive the bear market and position themselves for the upcoming bull market? Let’s take a closer look:

The Original and the Copycats: How the Gaming Guilds Began

Gabby Dizon, founder of the YGG gaming guild, was a pioneer in the Philippine game industry long before crypto. He saw the potential of blockchain and NFTs for gaming applications, especially after the success of CryptoKitties. Discovering Axie Infinity in 2018, he realized that lending Axie NFTs without giving away private keys could be the foundation for a scalable guild concept. YGG quickly raised $1.25 million in seed funding and became the first guild to scale.

Sustainable Tokenomics

Dizon recognized the importance of blockchain’s smart contracts for transferring value and programming value within virtual economies. YGG used its treasury to reinvest in breeding Axies and acquired other NFTs for investment purposes. Today, YGG focuses on building a Questing and Achievements platform using its treasury funds. This platform allows gamers to earn achievements in different games and build their reputations on-chain. YGG’s Guild Advancement Program is designed to demonstrate gamers’ capabilities and contributions to the broader community through provable achievements.

The Guilds Pivot to User Reputation Building?

Reputation building has become a clear theme for the gaming guilds’ future strategies. YGG’s questing program, Superquests, offers learning programs delivered through short-form video content, enabling gamers to develop new skills. On-chain reputation for quests in virtual worlds can now be checked via wallet history, proof of contribution, and associated metadata, providing transparency and verifying individuals’ achievements. Reputation will play a crucial role in separating valuable contributors from those looking to extract money from the ecosystem.

Strava for Gaming

Perion DAO, another gaming guild, has also focused on building a gamer reputation tool called XP. Designed as a “Strava for gaming,” XP allows gamers to track and compare their achievements with their favorite gamers or friends. It aims to merge traditional gaming ecosystems with proven models for rewards, incentives, and healthy competition. By gamifying achievements and providing social leaderboards, XP encourages gamers to showcase their skills and build their reputations in the gaming community.

Gaming Guilds and Work-to-Earn

While some gaming guilds have shifted their focus from play-to-earn to work-to-earn models, CGU remains committed to its mission of getting people in developing countries employed and using crypto as a means of payment. CGU has developed a Talent Management System (TMS) to track players’ earnings and engagement, helping them identify skills and tailor work opportunities based on completed courses and tasks. CGU pays users in developing countries for microtasks such as writing posts, following social media, and data labeling. They have also ventured into providing web3 services to web2 companies, further expanding their revenue streams.

Will Web3 Gaming Surpass Its Axie Infinity Heights?

While gaming guilds may still have high hopes for the next bull market, it remains uncertain whether games will emerge that offer the same opportunities as Axie Infinity did and attract a critical mass of players. However, the guilds’ pivots towards reputation building and the development of online gaming community infrastructure signal a promising direction for Web3 gaming.

The gaming guilds’ journey through the bear market has taught them valuable lessons about sustainability, diversification, and the importance of user reputation. As they position themselves for the upcoming bull market, they continue to experiment, innovate, and build strong foundations that will support the growth of the Web3 gaming industry.

🏆 Featured Gaming Guilds: YGG, Perion, CGU

Q&A: Addressing Readers’ Additional Concerns

Q: What challenges did gaming guilds face during the bear market and how did they overcome them?

A: Gaming guilds faced significant challenges during the bear market, such as the collapse of the game economies they relied on, decreased user bases, and declining revenues. To survive, many guilds diversified their business models by investing in new games, building gaming infrastructure, and exploring work-to-earn models. They adapted to the changing market conditions and focused on developing online reputations and community building to remain relevant during the downturn.

Q: Are gaming guilds sustainable in the long term?

A: The sustainability of gaming guilds depends on various factors, including their ability to adapt to market trends, build strong community bonds, and provide value to their users. Reputation building, as seen in YGG and Perion, is a key strategy that can help guilds establish long-term viability. By focusing on developing skills, achievements, and on-chain reputations, gaming guilds can attract and retain users, ensuring their sustainability in the evolving Web3 gaming landscape.

Q: What is the outlook for the Web3 gaming industry in the future?

A: The future of the Web3 gaming industry looks promising. While the collapse of Axie Infinity highlighted some of the challenges associated with current gaming models, it also paved the way for innovation and the development of more sustainable and user-centric approaches. As blockchain technology continues to advance and mainstream adoption grows, we can expect to see the emergence of high-quality games that leverage the benefits of Web3. These games will not only provide immersive experiences for players but also offer real value and meaningful rewards, fueling the growth of the industry.

Conclusion: A Bright Future for Gaming Guilds

Gaming guilds have navigated through the bear market with resilience and adaptability. They have learned valuable lessons from the collapse of Axie Infinity and have pivoted their strategies to focus on user reputation building, community infrastructure, and work-to-earn models. By fostering online reputations, developing gaming achievements, and providing opportunities for users to showcase their skills, guilds are laying the groundwork for a sustainable and thriving Web3 gaming industry.

As we approach the next bull market fueled by the Bitcoin ETF, gaming guilds are well-positioned to take advantage of the opportunities that lie ahead. With their newfound strategies and a deeper understanding of the market dynamics, they are ready to lead the way in shaping the future of gaming.

🌟 Share this article if you enjoyed the read and join the conversation about the future of gaming guilds in the Web3 space. Together, let’s unlock the full potential of blockchain technology and create meaningful experiences for gamers worldwide. ✨

References:

This article was written by Max Parasol, a lawyer at Gosai Law, a Web3 firm. He has worked as a crypto and AI researcher, gaining valuable insights into the intersection of law, blockchain, and artificial intelligence.

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