Digital assets and gaming on the blockchain.
For this post I will be analyzing the business model of a blockchain based product using the STOF business model framework. Splinterlands of course.
“The consequences of falling behind are so irreversible, companies must either master and remaster the technology or die.” Hopper (1990)
In this new era of emerging blockchain technology it will bring a wave of change to existing business models. With that in mind we will see new companies try to disrupt the accepted way of doing things and create new trends.
“Digital transformation is concerned with the changes that digital technologies, such as blockchain, can bring about in an organization’s business model, as well as the subsequent changes in products, organizational structures and the automation of processes.” Clohessy (2020)
STOF Business model framework.
These are the four concepts to analyse when looking at any new technology.
What product or service is the business offering? Where is the value behind the technology? What is the USP for it.
These are the technical functions and core competencies needed to create the service offered. What is the basis of the technology powering the service.
How does the organisation provide value to the service thought their offerings and business models. Adding a supply of value to the project.
This is to analyse the value and revenue that can be created through the organisation. A business is of no use if it cannot create more revenue than it needs to operate.
Splinterlands as a blockchain based business.
Splinterlands is a blockchain based online card game. They are going to revolutionize the online gaming sector by introducing ownership of assets within the gaming community. The company was crowd funded in the beginning by the HIVE community but has build a full scale business from this starting point. It is the 3rd most used blockchain based Dapp right now and has been the most popular game at times.
The game is based on the HIVE blockchain which offers fast and free transactions with immutable accounts. Ideal for a game with a variety of tokenized assets that needs speed, simplicity and security. The chain is built to scale and can handle massive expansion. Currently at No 10 on the blocktivity rankings it is only operating at a percent of capacity. The team has an involvement in multiple other HIVE projects and a long history of delivering good products.
The game is based around assets and ownership so the value is fed into the system through sales and sponsorship. It is free to play in the beginning but to own a full account and inventory there is a $10 fee to join.
The team has a variety of products for sale and an in game currency that can be traded on HIVE based exchanges. They have build a whole eco-system around the game and it’s rewards that allow you to buy/sell assets and currency on the open market while rewarding the players for their activity.
The team has also created partnerships with brave browser, WAX blockchain and many others to expand their connections and branding to a wider audience as they grow.
The team is very strong financially speaking and have grown their business organically through partnerships and user generated revenue to a market cap of over 8M in just two years.
The game development has been community based since day 1 and grown to suit the needs of it’s players while expanding the eco-system and creating a larger network effect. You can spend multiple crypto or fiat currencies in game and the team has also launched a large land sale for the next level of development recently generating large user investment.
The products sold are digital and low cost to produce but they are all unique in-game assets and hold a market value in your account. It will be the next wave of online gaming as games create nft assets and have internal markets to operate on. They have also gone cross chain with these assets as you can move them from #hive to #wax where they sell for their collector value rather than the in game value.
You can earn from playing and this will be a huge disruptor to existing games that cost you money but don't retain any of that value. Here you can spend thousands building a strong account but if you get bored it can be sold to another person in one whole sale of broken down but you don't lose the value. Over time it grows in value.
We are looking at the future of gaming with online communities set up around rewards based systems. The top players will be able to become full time earners through secondary markets and building audiences for their game play. It will become an all encompassing circle where you can grow through the game and create a way to monetize your activity. On #web3, time will really be money.
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