KOLs are ruining everything! Right??
Gamified Episode #66 breakdown
A note from Gnoc
It’s been awhile but we’re FINALLY back.
Sam and I have been chatting about how we can get the most out of this newsletter and we feel really good about the new direction.
Here’s the TLDR - shorter ~6-8 minute reads highlighting the best 2 topics from Gamified mixed with Twitter only content highlighting some of the side topics. We might even mix in a spicy take section in the weeks to come.
Let me know what you think of the newer condensed format!
Re listen to Episode #66 of Gamified!
In Today’s Newsletter
Bullish or Bullsh*t; Pixels hits 900k daily active wallets
Are KOL private rounds broken?
ICYMI
Pixels Online hits 900k DAW - but what does that mean?
If you’ve spent any amount of time in or around Web3 gaming you’ve heard of Pixels, the darling of RONIN. You’ve probably realized that its not all good; the game is dominating with strong user numbers and revenue, but lately questions have been asked about how ‘real’ those user counts are.
Here are the facts:
Pixels have reported ~900k daily active wallets (DAW)
Pixels have reported ~3m total lifetime users.
One VERY important thing to note. Plenty of people have misrepresented the 900k number as daily active USERS; not wallets.
These are inherently different numbers.
Users; 1 person = 1 person
Wallets; 1 wallet =/= 1 person
A single USER may connect with 9 WALLETS (this is what I think is happening here). In this very basic example 100k users would be reported as 900k wallets. Making that insanely large number feel a little more attainable.
With that distinction made; Is 900k DAW bullish or bullsh*t?
Panelists discuss:
Lemz and Brydisanto made a point of mentioning just how consistent Pixels have been in their growth; this is a team that has been pretty much trending up only for the better part of the last 6 months. (Here is an article that shows 1.1m total users and ~300k DAW from Oct 2023).
Consistency is in my opinion, the most underrated attribute a team can have in Web3. Its relatively easy to get to the top of an industry as small as Web3 but it is damn near impossible to maintain that position for any extended period of time. Pixels’ demonstrated ability to remain king should not be understated.
Mike and Dub tip their respective hats to the way Pixels has built their community. Online events are PACKED with users, of whom thousands pay a monthly subscription fees. That type of (paying) community can’t be faked - and both panelists believe this is something worth celebrating. Having experienced a live Pixels event himself, Dub goes as far as calling critics “haters”.
Brydisanto reiterates the point above, adding that the combo of subscription revenue generation + a token listing on Binance is evidence that the team deeply understands both traditional and Web3 revenue streams.
Basically the entire panel agreed on a few things:
The numbers are impressive and should be celebrated. Revenue specifically had everyone excited.
The numbers are PROBABLY inflated - which is OKAY. Given the genre of the game and the financialized nature of Web3, bots are inevitable. What matters is Pixels has created a sticky experience for their (very) loyal players. Bots =/= a completely faked ecosystem.
“F*ck the haters” says Kohji. If any other project had achieved these numbers it would be celebrated by that team just as hard.
Here’s my quick take - I mostly believe these numbers.
Social MMO style games are incredibly popular and CEO Luke Barwikowski + team have done an excellent job building a game and a community that people want to spend time in.
Cynics will tell you 90% of reported numbers are fake (LOL) and the truthers will tell you bots barely exist in the game (LOL). As always, the truth probably lies somewhere in between but one thing is undisputable:
A LOT of people LOVE Pixels.
KOL rounds dominate Q1; do they work?
On the backs of perhaps the most successful social campaign of the last 12 months the team at PORTAL delivered a massively celebrated (and criticized?) TGE.
Key Opinion Leaders (KOL) or commonly known as “influencers” start posting their gains.
$5,000 turns into $200,000 (unrealized) - life is great, $PORTAL to the moon etc.
And then $PORTAL dumps..
The whispers begin: “The Influencer Cabal dumped their bags on us”. “Portal fucked up giving so much to influencers”. “This wasn’t a fair launch, why did influencers get access we didn’t”.
But was that warranted?
I can’t get over how stupid that “Cabal” word is. Literally every time I see it on Twitter I picture these brutes from Destiny.
After seeing the success of Portal’s go to market (GTM), games effectively fit into one of two buckets:
We have a token live
We’re launching a token in the next 6 months
The latter of which started leaning into the strategy that Portal did; the KOL round.
Typically, these rounds came after the private round (think traditional VCs, friends and family, super heavy weight content creators). They usually had favorable terms like big unlocks at TGE (15-25%), short vesting schedules (<6months), and low FDV (cheap to get into).
For awhile this worked. KOLs made money on their investments, Games made money on their public sales thanks to the hype from KOLs tweeting about the sale, and savvy retail traders even made money on the public sale because volume was so hot.
It all worked until it didn’t which begs the question; are KOL rounds broken?
The panelists believe this is a multi-faceted issue:
There are TOO many rounds right now (consumer fatigue)
Rounds are TOO complex (Lack of clear messaging structure)
Misaligned incentives (This is a complex issue but IMO boils down to this; with as 1 + 2 above has compounded with time it’s harder for KOLs to understand where the value is. Rounds are more expensive, less favorable and with longer lock ups. I can still make money if I get in, but why would I do anything but dump on TGE? This sell pressure has caused a lot of tokens to find success in the sale but pretty much die right afterward).
Monkey see, Monkey do; teams have run basically 1:1 replicated sales without any thought into how or why something was successful.
My take is really simple.
KOL rounds are not broken… some teams have just gotten lazy. “Misguided replication” was a term brought up by one of the panelists and I think it accurately describes the problem here.
If you’re launching a token you should leverage KOLs. We’ve seen the most successful teams (relative to their goals) do one of the following things:
Work with only the most visible KOLs. More impressions = more eyeballs = potential for more demand = better sale = better secondary. (This is your max extraction path).
Work with KOLs who are aligned with your brand vision. People you can growth with, get feedback from and potentially reap the rewards of the tokens growth with. (This is your max alignment path - God Council is a great example of this)
Teams know they should have a KOL round but they don’t why or how they should execute that round. Instead of doing either of the above, they simply open the door to anyone who loosely fits “KOL”.
The panelists agree; curation + education is the name of the game here.
Understand what you’re trying to achieve. Curate KOLs (and VC partners for that matter) that align with your goals. Execute with flexibility.
And perhaps most importantly… understand that you will ALWAYS receive some backlash for any financialized product.
KOL rounds are here to stay. We just need to be more deliberate with how we structure them.
In Case You Missed It - A spotlight on our favorite content from the week.
Fantasy.Top has been a hot topic. Follow Gnoc on Twitter for his thoughts later in the week!
🔥🙌❤️
Interesting to read, valuable to understand and use 👏🔥