Apr 17Liked by Richard

Richard, very well articulated.

I really liked some of the ideas —GDP vs GMV, the one time seigniorage event (akin to IPO). The main thing is maintaining a community’s consistent trust in the team/entity to deliver a solid open economy without letting them succumb to insider behavior.

Some thoughts…

VAT-driven monetization requires a lot of faith. Devs are incentivized to push variety and velocity of goods, and develop a wide economy, but it’s not obvious you’re able to plan out a UA campaign, for example. (less risk for investment underwriting, for one)

The main challenge is that your monetization is contingent on creating valuable, deep and rich worlds, (which is a function of time but also luck), rather than tuning and optimizing for funnels and retention. Secondarily, you might find that the market size is small, much too late, as you build your game and its community. So we’re back to hit-driven Movies…

One challenge is the working capital requirements for a company to build open economy games. Not only to build but to market. F2P/P2W scaled more easily. Even $20 1M presales / sales is non trivial to achieve without some significant marketing / buildup. This is why the token sale / presale meta was promising, but it broke because well, GMV.

Second challenge for taking and estimating corporation profits is VAT evasion (lol) and alignment (I hold all these tokens. When do I sell them? Will the supply overhang scare people? Can I print more? Why/why not? etc).

Always a pleasure to read your writing!

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Many thanks for this article. Have you looked into the game Rust (https://rust.facepunch.com/)? This seems an extremely intense example of the violence/survival mechanism you mention. In the early days, they tried out several ways of releasing personalization skins (ended up doing it through steam, though if they did it today maybe they would consider making them nfts on a chain where transactions are cheap gas-wise). This would seem to be close to what you think can happen with web3 gaming? What do you think?

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