Facebook’s Metaverse, blockchain gaming has been skyrocketing. We’ve seen billions of dollars flow into the space, massive returns, millionaires overnight, and this trend isn’t over with yet. If Snow Crash turns out to be non-fiction and our future lies within the Metaverse, then games will just become more and more popular, games that can make you money.
and there’s already thousands of people paying their bills by playing blockchain based games with this new technology. And this is why it’s important as investors that we understand how to properly analyze these investments.
So let’s talk about how to identify the good, the bad and the ugly in NFT gaming investments. So starting off, we need to define IGO. IGO stands for Initial Game Offering. This is the initial offering of a game’s currency through crowdfunding. Games are expensive to build, and developers need money to get their projects off the ground.
In order to do this, Buying into an IGO is high risk, high reward territory. It’s literally buying at the ground floor. A massive IGO success story is Bloktopia, who 700Xed in price after launch. That’s what we want to find, the next 700X.
So IGOs typically happen on a launchpad, which is kind of like a hub for crowdfunding. You can think of it as a kind of crypto startup incubator. A launchpad will do some due diligence upfront on a project, and if it checks all of their boxes, Now, luckily for us, there are many game-only launch pads. At this point, most of the best projects will launch on one of these platforms.
Some of the most popular are Seedify, GameFi, Enjinstarter and Gamestarter. Each platform has different rules and different projects that you can invest in, but typically there’s a kind of tier system. Usually there are both guarantee tiers and lottery tiers.
A guarantee tier means you will always be given the chance to buy into new projects. This is reserved for people who have invested the most amount into the platform.
The lottery tier means you’ll have a random chance to invest in a new game. This is for people with smaller investments, those who are just looking to, you know, dip a toe into the space. If you’re looking to guarantee an investment in an NFT game pre launch, Now, there’s nothing wrong with investing small amounts, but just know you may run into situations where you’re not guaranteed a slice of that project’s pie.
Now, from here, I’d like to thank the sponsor of this video, FTX. Some of the biggest issues with NFTs are the gas fees and usability. FTX is aiming to solve these problems with their newly expanded NFT platform.
You know, I’ve bought NFTs in the past, and it always kills me to pay $50+ just to make the transaction. It’s just so unrealistic for the average investor. And that’s why I’m excited about FTX, because they now allow you to buy Ethereum NFTs with no gas fees on bidding, buying, selling or listing NFTs.
And the platform fees are 20% lower than OpenSea. They’re able to do this by offering in-house custody of assets, which also offers great security. And then on top of this, FTX is actually the only platform that allows you to purchase both Ethereum and Solana
NFTs in one single place. And they’re the first open NFT marketplace that allow mobile trading directly on their FTX app.
How To Reaserch A Game
Now, just because a game is new or because it’s on a launchpad, So let’s talk about the If you can master analyzing these criteria, your odds of success will go up dramatically. Now, number one is your interest in the game.
If you’re interested in one of these games personally, you’re naturally going to be a much, much better investor. This is because one of the most important things when it comes to investing in games is staying up to date on the project.
As new and shinier games come out and game features become dated, old games just simply lose value. Because of this, it’s crucial that you This way, you can frequently reevaluate whether it’s still a good investment Now, what if you start to think an investment is losing steam? I have a tip that works beautifully.
One of my worst habits, personally, is falling for the Sunk Cost Fallacy. If I spent a ton of time or money on something, I tend to want to keep doing that just because I’ve done it in the past. And here’s my trick to get out of that mindset. I ask myself, and this works for literally everything.
Would I start this job again knowing everything I know now? If no, you probably should get a new job. Because you’ll naturally check their discord their website, or actually play the game, you’ll be more knowledgeable and on top of this investment.
There are plenty of options out there, Now, next is community and user metrics. You have to use the data that you can find and some of the most valuable data here is community activity. Twitter followers, Average Twitter replies & retweets,
Discord size, Average Discord messages daily, Developer involvement within the Discord, Average site traffic, trading volume of the game’s currency or NFTs, Telegram users and Telegram activity.
Now let’s do an example here just to break this down further on two random IGOs. They are just examples. Here are the two projects. Looking at their pictures alone, we know nothing. I don’t know which one would do better.
Now let’s take a look at just their Twitter pages. Syn City has 157,000 followers, a sizable following for a project that hasn’t even launched. Metastrike has 610,000 followers, which is still a large amount, however this is 2.6 times fewer followers than Syn City has.
Then I did some additional digging further here to find that the average post on Syn City’s Twitter has 2.2 times more engagement than Metastrike. This is important to look at because You want to look for that engagement.
Based on this single metric, we could infer that Syn City would see a larger demand for their token once it actually launches, thus pushing that price up further. However, it’s important to note that this is just one metric, one piece of the puzzle here.
You may want to gather 20 data points over ten different projects to build a true analysis here. First, you can use your community data to help choose between multiple IGOs. A fast growing, active community almost always points towards a bright future for a game.
Then, if you decide to invest in an IGO and snag some coins, you can later compare your new community data to your old data and reevaluate if your investment plan is on track for the growth and community development that you were looking for when you first invested.
So when it comes to investing, you need to be a professional if you want to get the returns of a professional. Just throwing your money around is a bad idea. I’m a firm believer in having some kind of informational edge in any investment I make, even if it’s as simple as tracking Twitter engagement on a spreadsheet.
Now moving on to the next and arguably most important criteria, the game’s founding team. The founding team not only lets you in on all the experience and brains behind a project, but it can also be your best defense against scams,
So if you find an entire founding team and they all have digital footprints across multiple sites or social media platforms, then odds are they aren’t trying to scam you. But remember, just pictures and names of founders is not enough. If you remember, I uncovered a project who used a fake person and name generator for their founders.
On the flip side, here, a core founding team with experience in game and dApp development can take a game very far. Perfect example is Illuvium, within their core team they have years of experience in dApp development, CGI and AAA game development, and look at where those credentials has taken the market cap of that game.
The way that I look at it, if they’ve succeeded in previous projects, they’re probably capable of doing it again, or at least more likely than a team who hasn’t done this before. If you can’t find any socials for the developers or no developers at all, I consider this to be a red flag.
Yes, there are good projects with anonymous founders. However, the way I look at this is there are so many projects to choose from, so There’s always another project I can put my money in. Now, one last point on founders. Something else I really like to do is watch interviews of the founders if possible.
I feel that this can give you a much better understanding of the person and their ability. Now, from here, you should take a look at a project’s white paper. I can’t stress enough how important the white paper is for evaluating an NFT game, or literally any crypto project for that matter.
So take a look at the white paper and ask yourself a few key questions. Now remember, games decay over time, so ideally you want to invest in games that keep users playing. Not only does this tell you what to expect as investor, but it also shows you that the team is thinking long term.
This is important because the earlier you invest in a project, the higher risk you’re taking on. Some games will occasionally show non-gameplay footage. Make sure you understand what the game is actually aiming to be. The goal here is to invest in games that will be the highest possible market cap.
For this to happen, you want a robust in-game economy with solid plans to build this economy. In order to keep track of everything, I will have an NFT game checklist linked in the description of this video that is yours completely free of charge.
Now, taking all of this into consideration will make you a much more successful investor. It’s always better to do a ton of diligence and invest in just a few projects versus just throwing money around willy-nilly like you’re some kind of crypto Oprah giving away virtual cars to everyone.
But is it really possible to become a millionaire with crypto gaming in 2022? Looking at the stats, as of November 2021, the average returns for gaming cryptos launched on Seedify was 4469%, more than 44X. At that rate, it would only take an investment of around $23,000 to break $1 million.
Potential Risks and Conclusion
Absolutely astonishing returns but hold on because we need to remember that As much as I think there’s still opportunity here, I would never bank on a 44X return.
Even all the diligence in the world doesn’t mean you have zero risk. IGOs are brand new games, so there’s always an element of luck at play and also keep in mind that this is catered towards investing in IGOs or smaller game projects.
When it comes to comparing like Sandbox and Illuvium, two huge NFT games, there’s a whole lot more data that you can look at but with smaller projects you can only find out so much.
The important thing is using the data that you can find. Doing so will make you a ten times better investor. And that’s going to do it for today.
From here I would recommend you check out this video on screen that goes even deeper into the massive opportunity of crypto launch pads and how exactly they work.
I would like to thank you so much for watching and I hope you have a profitable day!