Break On Through To The Otherside (Metaverse)
Can Yuga Labs become a gaming powerhouse?
The @OthersideMeta
The following is not financial advice and should not be construed as such.
Yuga Labs has a tremendous opportunity with equally daunting challenges. This will be a brief summary of how we are thinking about the positives and negatives associated with this potential game/metaverse. It’s important to note that general non web3 market sentiment for this game is low, specifically shown in responses from a number of high value video game content creators on Twitch and Youtube.
1. (positive) Super Users: Many video game studios would dream to have the core super user audience that Yuga Labs commands. Their "players" by default would be some of the largest spenders on any video game in the world. Here's an example of one survey on MMO habits: https://www.accrediteddebtrelief.com/blog/mmo-money-mmo-problems/
1A. (negative) Super Users: Highly committed spending users are both a gift and a curse. Yuga Labs needs to balance both sales and brand. If super users command game value, then new users will be damaged and cut out of gameplay loops.
If Yuga Labs ignores super users in favor of more accesible gameplay loops, they sacrifice some desired economics and monetization. The balance for this video game is incredibly difficult and a fear is that Yuga Labs could swing too far in favor of super users. This applies to lands and apecoin.
1B. (negative) Super Users land sample: Otherside can learn from other video games with land sale issues. Final Fantasy 14 online is one example with at least 30k players a day: https://steamcharts.com/app/39210. Land lotteries have created general player difficulties.
See this article on the subject: https://www.kotaku.com.au/2022/04/in-a-horrible-mirror-of-the-real-world-final-fantasy-xiv-is-facing-a-housing-crisis/
1C. (negative) Super Users coin sample: Most super users are going to demand coin prices always go up because of real money value. Good in-game economic balance would require the coin to be used as payment. MMOs have faced this issue. Here's an example: https://kotaku.com/new-worlds-economy-is-so-busted-players-are-bartering-1847904272
2. (positive) Unreal Engine Standardization: The current market assumption is that Otherside is being built on Unreal Engine. That would seem to be likely based on these sources- https://unrealengine.com/en-US/blog/epic-games-and-improbable-working-together-for-developers… as well as this https://ims.improbable.io/insights/spatialos-for-unreal-20201
This is a fantastic decision as some of the best games are built on Unreal Engine and over 15 top AAA games are in production using unreal engine 5.
Building Otherside on Unreal Engine gives this MMO access to the most advanced tools and next-gen “metaverse” standards. It may also prove highly valuable for future in-game ad integration. Ad integration requies another article so shameless plug we’ve written about it here:
2A. (negative) Unreal Engine Standardization: Because the technology is open for various games to build on the Otherside will have immediate competitors. This is not negative for the industry, but an acknowledgment. Many companies are building here's just one: @CoreGames https://www.manticoregames.com/
Again, not so much a negative, but Yuga Labs is not the biggest fish in the gaming pond. Yuga Labs is valued at around $4B. EA, at the time of writing, is worth $35B and Activision is $61B. Yuga Labs has to really nail this MMO release to make capital work.
3. (positive) Brand Experience Value: Otherside will have unprecedented access to the best brands on earth to create great metaverse experience activations. If they execute, it will drive people to play the game because of brand fandom.
3A. (negative) Brand Experience Value: If Otherside depends on brands to drive player traffic it is very risky for the longer health of the game. Brands are not loyal to any metaverse without contracts, many will be exercising budgets and have difficulty maintaining a gaming experience.
4. (positive) Improbable tech IP: There is no denying that @Improbableio has fantastic technology that will definitely attract initial users to at least try the Otherside. We thought the game chat spatial audio dureing testing was impressive.
4A. (negative) Improbable tech IP: While we do not publicly know the deal terms between Yuga Labs and Improbable...we know these are 2 different companies.
https://www.improbable.io/blog/otherside-metaverse-game-is-coming-normal-rules-do-not-apply
Unless these companies merged, Yuga Labs does not own Improbable's technology. That means Improbable can create similar gaming infrastructure for other competitors if that was desired. Improbable is dedicated to making Otherside, but they are also a business like any other company.
5. Allocation speculation: Let's assume Yuga Labs creates a community fund for communities to commit to the Otherside and bored ape ecosystem. It is possible that funding goes to communities that don't design games. We hope to see those potential funds go to real game devs and builders too. Just a thought.
6. (positive) UGC assets economy: Otherside has the funding, creative, and technology team to create fantastic UGC asset-making tools. This could be great for mini-games and other forms of entertainment in the otherside metaverse.
6A. (negative) UGC assets economy: We’ve seen a lot of deals and potential investments that are pitching video game worlds that are built by the fans. They often don't work for one reason...training. You need network effects to enable builders, but a new game tool is like taking a new college class.
7. (positive) is it a game?: It's hard to define gaming. We do believe Otherside has the potential to be the web3 social network. That does not require complex gameplay loops. Also, it has been done years ago!
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