Ep. 117: LiveOps in Web 3 Games

The Mastering Retention Podcast recently featured an episode discussing how Live Ops work in the context of Web 3 games. The guest speaker was Patrick Gorrell, the Chief Technology Officer of Splinterlands, which is a trading card game hosted on the blockchain. 

Creators and Guests

Host

Tom Hammond

Co-founder and CEO UserWise | serial entrepreneur | Inc 500 | angel investor | startup advisor

What is Mastering Retention?

Welcome to the ultimate gaming breakdown with Tom Hammond and Neil Edwards! Tune in every week as we deconstruct today's top games and reveal the secrets behind their success.

Ep. 117: LiveOps in Web 3 Games with Patrick Gorrell
===

[00:00:43] Tom Hammond: Hi everyone. Uh, welcome to today's episode of the Mastering Retention Podcast. Um, today we actually have a very special episode. Um, I say that a lot, but we have a lot of really special people in here, so I, I get super excited, but I'm, I've been really looking forward to this one. Um, so we've had a number of people reaching out, requesting, um, You know, how does Live Ops work within the context of Web three games, and even more specifically, how is Splinter Lands doing it?

[00:01:13] And we've been lucky enough to, uh, have, uh, Patrick. Gorrell on the show with us here today, who is the C T O of Switzerland. So we're gonna dive into all things web three, what they're doing from a live ops perspective, um, how the blockchain itself can actually impact engagement and you know, how to plan around that, like your live ops calendars, all sorts of fun stuff.

[00:01:38] But before we get into all that good stuff, um, Patrick, I always like to just ask like, [00:01:43] What's your story like? How'd you get into games, how'd you get into web three? And, and, and what are you up to today?

[00:01:48] Patrick Gorrell: I appreciate, and Matt, thanks for being a host today. Um, yeah, my story doesn't actually start in gaming at all.

[00:01:55] Um, when I was early on, I, I got into finance and was very successful in finance. Um, I decided, well, I didn't really decide market conditions cuz this was all during, like the mortgage crisis back in 2008, 2009, that I wanted to pursue something a little different and a little bit more constructive. Cause passing paper around wasn't really my thing.

[00:02:16] It it, it was fun and it was profitable, but, uh, I liked building things and I liked being a creator. So I went into engineering. I actually taught myself how to program, um, just from reading books and sitting down, taking the time to understand how data work. How information work and how, um, you know, building systems works.

[00:02:33] And then I started getting jobs working in technology. Probably the, the, the, one of the best things that happened to me was I got picked up by [00:02:43] a company called Speaker in Hollywood, which was, ended up becoming like the world's largest private aggregator of social media information. Mm-hmm. So we would just rip entire copies of like, social networks.

[00:02:53] And we were also the largest influencer network as well. Um, and in that I kind of, uh, I got a lot of exposure into growth and how influence, uh, worked for the most part and how social media platforms, uh, were, you know, basically crushing the original media industry. Um, and then while that was happening, I also got it back in the trade and finance and fell in love with blockchain.

[00:03:20] Uh, not so much the cryptocurrency and speculative side, but really more of the information and like the use cases that came. From decentralization and the transparency of information that came from as well. So, uh, I started working heavily in the data science portions of crypto. Um, I went to work and I developed a company called F R S T, which was, uh, analytics [00:03:43] platform for watching all the transactions on, uh, these networks, on decentralized networks.

[00:03:50] Ended up working with a bunch of really large, high frequency trading funds, um, out in Chicago. Uh, a lot of 'em, you know, some of the biggest high frequency trading funds in the world. Um, and ac you know, was exposed to probably the more, uh, I would say transaction heavy side of the industry and the scale, uh, that was required to run operations like this.

[00:04:11] Cuz what we found out is blockchains are like social networks of value. So you can see where all of the value is going because they're transparent, right? So as long as you know what those relationships are, Um, then you can start to make assessments about what's moving towards, you know, what value is going towards certain protocols or certain tokens or, you know, certain trade strategies that happen, like arbitrage and things like that.

[00:04:34] So what the idea that we basically did was found all of the most profitable wallets, um, and just followed what they did and then [00:04:43] would try to beat them at their own game. That was basically it and did it at scale. Uh, and so, um, After that, uh, I went into energy for a little while, uh, but was still heavily, uh, scoped out on working on products like Unis Swap, which was decentralized exchanges, um, you know, building a lot of contracts, uh, working on the technology, mostly solidity, uh, working on networks too.

[00:05:07] And, um, I was at N F T L A and I was approached by their, uh, former cto. At Spinner Lands while I was walking around and we just hit it off right off the bat and I knew a lot of the issues that they were facing from scaling a blockchain application. Mm-hmm. Um, I knew how to handle, cause I'd been there before, I had already done a lot of this stuff in the past.

[00:05:28] You know, dealing with sites that get massive amounts of traffic or having to big economics into your overall strategy when economics for certain industries was never really something you had to think about. Right. Um, which we would call like tokens. Right. Uh, so. You [00:05:43] know, after a while in trying to understand the, the landscape, when I was introduced to Splinter Lands, I couldn't believe it.

[00:05:49] Uh, I used to play Magic and gathering when I was younger, right? Yep. And I still have a whole collection of cards, my alpha cards. Um, I love that kind of stuff, right? And, uh, when I started playing Splinter Lands, I was like, oh my gosh. You know, you realize that like you can compete in a world of AAA games, right?

[00:06:09] But there's something about like more strategy focus, less about the design, or I would say about the interface, let's say like interface isn't the most important thing, even though it is considered to be like the heavyweight. Yeah. Uh, in game design, right. Um, but a lot of people really weren't finding the connectivity of those types of games.

[00:06:28] And it's not for everybody. Right. Uh, and what Lin Lance chopped into was really the same kind of, uh, feeling that I would get, playing the magic gathering with my friends back in the day. And it's a lot more communal, um, in the sense that like, you sit there and you take your time to [00:06:43] think about things, it's not on edge all the time.

[00:06:45] You can be very strategic and kind of sit down and build. Uh, so

[00:06:49] Tom Hammond: for, for folks that maybe aren't familiar with Splinter lens, do you wanna give like a high level, like what, what's thinking about, like what, what do you do with it?

[00:06:56] Patrick Gorrell: Yeah, absolutely. So Spin Lines is a trading card game that's hosted on blockchain, and we're on a, a chain called Hive, which is a little obscure.

[00:07:03] It used to be, um, it, it had forked off from Steam originally and the company was originally called Steam Monsters, but it is a trading card game, very similar to like Magic Gathering, uh, or you know, if you've ever played Pokemon in, in a sense, right? But we have our own set of characters. All of the cards and all the assets in the game are tradable, um, assets that we track and.

[00:07:25] We actually keep, you know, most of the assets or all of the assets are tracked on chain. Uh, meaning that they are blockchain assets. They could be fungible or non fungible tokens that could be used in the game to build your decks, to go and battle and to basically become a more prolific player, you know, earn your way up through [00:07:43] the ranks to become a much more progressive player.

[00:07:46] Um, on average we have about, well, I would say in our peak we were running about 250,000 players a day. Overall, I think we're about to settle on our fourth four. Yeah. 4 billion battles fought. Um, some of our heaviest transaction days will have more transactions in our game and on chain than all Ethereum and all the tokens on Ethereum.

[00:08:07] So we'd be pushing like 14, 15 million transactions a day. Wow. Just, uh, it's very impressive. Right. So, uh, architecture, there's a lot of architecture that goes into this. There's a lot of, uh, paint design in the economy side. Which I had to become very familiar with. I wasn't used to it. Um, these metrics have helped build the game and actually make the game, uh, I would say, uh, re retain value even through bear markets that we have to deal with in crypto, right?

[00:08:36] So it's awesome. Um, everybody goes through parabolic spikes. There's no doubt about it. That's just kind of how crypto is, [00:08:43] uh, because you know, it's a lot of fear of missing out or what we would call a reflexive market. But, um, Yeah, the idea is to not lose because of that. Like the, those events shouldn't be what sets the tone for the company moving forward.

[00:08:59] So I think what they've done, uh, you know, previously is really focus on just making sure that, you know, it's a, it's a real audience base that we're not getting botted heavily. It's been one of my major focuses, uh, as well as trying to make sure that the assets are constantly in use, that they always have a use case in the ecosystem as well.

[00:09:20] Tom Hammond: Okay. I have so many questions, but you talked about bots. Yeah. And I've heard a lot of people just say like, Hey, most of these users on splinter lands are bots. Like, how do you identify if someone is a bot or it's just somebody who loves the game and is playing it a lot? So

[00:09:36] Patrick Gorrell: originally they had opened it up, uh, and had an api, or a lot of the transactions happen, right?

[00:09:42] So yeah, [00:09:43] there, there's really nothing you can do. And if you switch to something that is fully, uh, blockchain or decentralized, Eventually when you start submitting all of your game information on chain, it's, it's a, it's technically a, an open market, right? Anybody can do anything at that point. Like everybody has access to the same information.

[00:10:01] Uh, even though they can't sign things on your behalf, uh, you can build infrastructure on top of it. So what ended up happening was a lot of guild. Would get together, they would build applications, combine their cards together, create accounts, and go out and try to serve and, and try to win trade against themselves in order to bolster up their position in the game.

[00:10:19] Yeah, we've been, we've been fighting hard against that. Mostly trying to focus on making sure that the interface is where most people interact. Right. A lot of the stuff we can't shut down because we have, you know, core components of our market, sorry, our markets and other infrastructure that we have to use.

[00:10:35] And it's also hard for us to control information because everything gets submitted and it's not all of the game transactions, but most of the asset transactions [00:10:43] get submitted on chain. So you can kind, it's like, uh, how do I say this? It's everything is state full, right? So you have to assume that everybody has access to the same information that you do, um, and can you use that against you, right?

[00:10:57] Mm-hmm. So, you know, I don't wanna say that there's a lot of obfuscation that goes into it because it's not really, our goal is to. Make the information obscure. But uh, you know, other than that you have to focus on making it real live player. Uh, you know, you wanna make sure that your audience is focused on real live play.

[00:11:16] Um, that, you know, I guess in a sense too, uh, the economics play into this, like, because it's so inexpensive to transact on hi if you don't have to pay for transaction fees. Um, it does make it very easy for, you know, electronic. Interfaces to come in and start, you know, trading and, and tracking, um, you know, different, I would say for the most part they'd be tracking other players to see how they're doing and [00:11:43] see where they're going, uh, whether they're ranking up or leveling down.

[00:11:46] Right. Uh, a lot of this also goes into the actual mechanics of like how our ranking system works as well too. Right. So, uh, we had issues, especially early on with bots trying to do wind trade, so they would purposely lose themselves in order to. Bolster up their accounts or, or even purposely lose to themselves so that they could fall down a couple ranks and then start taking advantage of players who have, uh, less capacity to win those rank, you know, win at those levels.

[00:12:13] So it, it's tough. There's a lot of different vectors that we have to be aware of. On top of that, we have to, you know, there's a whole lot of things that outside of normal gaming, you don't have to worry about. Like, we have to go through certifications, we have to worry about K Y C A M L, all of those points too.

[00:12:28] So, There, there, I mean, I could go into depth about the, the technicals behind, like the architecture and things that we have to deal with. Um, but it is, it is different than traditional gaming, uh, by far. [00:12:43] So let's

[00:12:45] Tom Hammond: talk a little bit about running the game. Uh, definitely sounds like there's some, you know, unique challenges that come with it.

[00:12:51] Um, So in traditional, so PL lens is a mobile game, right? So we'll talk mostly about mobile games, but um, in the world of mobile games, um, if you look at the top grossing, I don't know, 100, 1000, wherever you wanna draw the line, um, Probably an average of 50 to 60% of the revenue, sometimes even upwards of 80% of the games revenue comes from what we call live ops or these, you know, limited time, you know, events, whether they're daily Quest or like some special tournament or special offers or any number of unique things.

[00:13:26] Basically. You know, some, some type of surprise or change interaction that comes as the games run. Um, just because it's, you know, more cost effective for us to continue to push out new, interesting content to players rather than, you know, pushing [00:13:43] out our Diablo one and then just leaving it there, kind of stale.

[00:13:46] Um, I, I think magic, the gathering is probably the best example of live ops as they've been doing it for, again, like. What, 30, 40 years or whatever, where, you know, every three months they push out another new set of, you know, cards. Oftentimes those cards will have new mechanics in them. How they come up with some of these mechanics, I don't know, they're, they're wonderful.

[00:14:10] Um, but they, they push out these new mechanics, which will oftentimes make some of the old, you know, meta. Obsolete because they can't compete with this new mechanic and it kind of cycles through it, which does a few things. It like encourages people to continue to spend money buying like the new mechanics, but it also like gets rid of that stale feeling where the game continues to feel like new and exciting.

[00:14:30] Oh, I have to learn this new mechanic and how to combat it and how to beat it, and different things like that. So it keeps it exciting. Um, so that's more of like the traditional world. Now we're talking blockchain and stuff like. How do you [00:14:43] guys think about live ops or how is it different? Is it exactly the same?

[00:14:47] Yeah,

[00:14:48] Patrick Gorrell: yeah. So, um, I was amazed when I saw how Quins was doing it when I was first introduced to, um, the platform. And, and just to touch on a point, I think only about like two to 3% of our total traffic comes from mobile. Almost everything is still web-based. Uh, and I would say a majority of our users are gonna be web focused, but we do have the mobile app.

[00:15:10] Which does encompass, uh, some of the usage. Um, we had about, uh, let me just kind of back up the first three, what we would call our pack openings that I was a part of when we would launch new products at Squier Lands. Um, the first three that I was a part of when we launched new card sets and you have to go and open your pack and go through the whole thing.

[00:15:35] Um, I think we had sold more than 2 million worth of packs in the first minute. On all three of 'em, right? [00:15:43] So there's a huge demand for these things. And one of the things that Lin Lands has kind of cultivated was really this idea that, um, based on some, you know, uh, leveling up of your cards, you have to burn cards in order to, to make them go up to the next level, to make them stronger, you know, a stronger character in her death, right?

[00:16:02] So what happens is a lot of our lower level cards end up getting burnt to create higher level cards, right? Mm-hmm. So let's say if it's a 10 to one ratio and it takes 10, uh, level one cards to make a level two card, right? Then you're gonna lose nine cards overall from, and you're gonna lose all 10 from that level, but you're gonna lose nine cards from the ecosystem by doing that, right?

[00:16:22] So what end, what ends up happening at the end of almost all of our pack sales? Cuz the pack sale runs for a limited series like you were saying. Um, Is that, uh, burning cards creates, you know, more of an opportunity for people to open up packs at a profit, right? So that's like one mechanic that is built into the game.

[00:16:41] If you, if you make it [00:16:43] so that you have to burn cards in order to level up, then as people are burning cards, the older and lower level cards become more and more rare over time. Incentivizing people to buy packs, open 'em and sell those cards. Uh, you know, hopefully, um, For more than what they had originally purchased them from, for, um, interesting.

[00:17:05] Other than that, yeah, that's like, that's just one economic factor that goes into it. Right? Um, there's a lot of other things that you can do too that enhance that. So like you can have secondary tokens in your ecosystem or governance tokens that also apply to how, like maybe a DOW votes. Right. Um, we do have a Dow, which is part of Thelen Lands ecosystem.

[00:17:25] Um, but you know, those are all separate entities in the, in the grand scheme of things. Uh, but you can use those tokens in order to purchase packs, right? Which means that token also has a derived value from this. Um, so there's a lot of things that, that can kind of go into that. And what you'll see is, uh, you [00:17:43] know, when you start to get the scale, it's about secondary markets, right?

[00:17:47] Uh, secondary markets are great because they set a secondary price point. It also creates opportunity for arbitrage where people can come in and sell assets for a higher price than what they bought 'em for somewhere else. Right? And so you get all of the secondary market activity that starts to happen too.

[00:18:03] And even though we're not really charging on any, you know, we don't make any money based on volume. Uh, the volume is great for the ecosystem. It's great for liquidity. It's great for bringing new players in, right? Cuz people will notice it. So that's another thing that kind of has a bearing on what we have to do.

[00:18:18] We have to make sure that our markets are active all the time. Right. Um, that to me is also one of the big un like a lot of people don't understand how much work, time and effort goes into understanding how those markets work. Right. The real economics, I'll just say like probably the biggest driving factor for crypto is the economic portion of it.

[00:18:37] It's not even necessarily like the exclusivity. Or the, the [00:18:43] gameplay for the most part. But it is really the economics of it because it's something, you know, far more tangible than you would get, than from a traditional game. Uh, another thing that we focus on all the time is, uh, we have, uh, you know, we start out really easy, like being a card game and a trading card game.

[00:18:58] And a auto battler is very generic. Like, it, it, it doesn't require that much of you, you know, it's not really physically taxing on you, right? Like some other games, we have to sit there for like hours and. You know, you're, you're high strung the whole time, right? But as we start to develop out our ecosystem and, and build onto it, what we're starting to notice is there's a lot of, um, what we try to avoid is you had to be there to understand the context and you had to be a part of it in order to know what's going on.

[00:19:29] Right. Um, and when I say that, it's like, as a game grows out, uh, people don't understand what certain functions of it operate, how they operate, why they are the way they are. What the incentives are for it. So we [00:19:43] try to make it as natural as possible, but it is still pretty tough. And being in web three, it's also very limited, um, because you have this extra layer of security that you have to wrap around everything, right?

[00:19:55] You have to be much more aware of, uh, you know, if you're dropping tokens or if you're staking contracts, or if you have liquidity pools that are open that they're, you know, there's financial ramifications for a lot of the things that could happen. It may have, you know, some unintended consequence somewhere else that you're not familiar with.

[00:20:15] Um, so, uh, one of the things that we are constantly trying to do is try to find ways for people to lock assets to something, right? So rather than having a lot of things in play, it's kind of locking them to make sure that they're out of play, but you know, you still own 'em and you can still recall 'em if you need to and use 'em for something else.

[00:20:34] But that also helps us try to stabilize a lot of the mechanisms behind the scenes, right? So we could have like a staking contract where you got to stake [00:20:43] assets to, I don't know, a land token, right? And on that land token, they can harvest resources, things of that nature, right? That's one of the big, um, I would say stories that we have kind of carrying through our ecosystem right now.

[00:20:56] So, you know, it, it just depends and, and. And after being through this and going through this with Lin Lands and being a part of this whole entire process, um, another thing to consider is the fact that like, the infrastructure operates very differently than traditional games too. So when we're doing, you know, as you would say, like in, as our live operations, a lot of these smart contracts are up there forever.

[00:21:19] Like if you're talking about Ethereum or EBM Change. Yeah. Right? Yeah. Like those contracts are up there forever and you can't take them down unless you have, you can have like shut off. Privileges on them. Right. But, um, it's very hard to recall the immutability, um, and have that work towards like a a, you know, if you're trying to make a five year game plan and you're building it off of smart contracts that are static

[00:21:41] Tom Hammond: today, so you guys can [00:21:43] actually like change them or have them expire whatnot.

[00:21:45] Cuz that, that was one of the biggest things that I was like, confused with is like, how do you set something that like, legitimately you look at any game, Over time, like World of Warcraft, how many times have they rebalanced something or, you know, moved something up or down? Like Yeah. Yeah. How, how do you guys do that in the blockchain?

[00:22:02] Patrick Gorrell: It, it, it all comes down to, uh, well, the game mechanics operate independently of most of our, like long-term, uh, I would say any of our smart contracts that we have on other chains, right? Like we, we, we try to focus most of our assets. That are used in the game on Hive, but we have bridges out to most of the Ethereum virtual network machine, you know, chains that are out there.

[00:22:25] So, um, it's tough. You can make smart contracts and this isn't hard to do, but you can make smart contracts that are upgradeable. Um, so you can actually, you know, upgrade the contracts over time. And that's something that we've, uh, messed around with in the past. Uh, we launched our [00:22:43] first real, like traditional ERC 7 21.

[00:22:46] Non fungible token called Rooney's last year. Um, and we had to bridge them back into the game so that they could become your PFPs in the actual game. Right. Uh, but those Rooney contracts, you know, it originally had started out as uh, what we would call like a E R C 1155, uh, multi token standard. And we had to convert it cuz we were working with Coinbase, or not Coinbase, but, uh, Um, open seat, right?

[00:23:11] And they required to have non fungible tokens. So when we made that adjustment, then we had to think again, like, okay, uh, we're stuck to this contract type. It's not really what we wanted, but it's what we have to use for now. Uh, so we have to think about how we're gonna adjust that over the long term, using different contracts and different staking mechanisms to support.

[00:23:30] Our use case, uh, later down the road. Does that make sense? Yeah. So it, there's a lot of planning that goes into the actual smart contract side of it, cuz you have to think about, you know, if conditions change, what are our options [00:23:43] and what can we do to save ourselves the headache in the future?

[00:23:49] Very

[00:23:50] Tom Hammond: interesting. And it almost seems like a lot of. Your success with your live ops has been some of those core economic decisions that you made at the beginning, which was like figuring out, hey, we want players to have to burn, you know, nine cards to get to that 10th one so that they want to do packs so that when there's a new thing that comes out, I have an incentive to actually like spend on those.

[00:24:14] Right? Yeah.

[00:24:15] Patrick Gorrell: So, uh, one of our founders, Matt, is like phenomenal at doing this. He, like, he's been ingrained in most of the. Economics of Splinter lands, uh, and been really kind of the critical piece behind the scenes, uh, because he was part of the original, you know, he was, he's part of the original plan. I mean, it is, the original plan came from him.

[00:24:37] Um, so when you, when you think about, like, you have to have a lot of understanding of, uh, like, again, like this [00:24:43] is one of the things that we try to avoid, but, you know, why is this here? Why is this a feature in the game? Is it really necessary? Right. Um, And so, you know, that's, that's kind of how it's come over time.

[00:24:55] We've been around since 2017, um, and we've been through quite a few bear markets, right? And so, you know, when you start to see asset prices fluctuate and become very volatile, um, you try to think of, okay, well how can we say, you know, what if, if you always try to think of the worst case scenario, like, what if we just completely came and our market goes flat?

[00:25:18] Like, do we have any recourse to it? Is there any other way that you can. Um, you know, uh, keep the values from totally collapsing and have 'em kind of stay more and stable and in tune with other assets, right. So I think what you'll begin to see as more and more games start to shift, uh, cuz we know all the large gaming developers are working on some type of blockchain experience.

[00:25:39] Like Unity has their Web three store that came out recently, right? [00:25:43] Yeah. Um, okay. So we know that there's gonna be a major shift towards the way the assets are basically managed across gaming ecosystems, right? Um, and it, it's gonna end up resulting in something very, you know, if it's not just full decentralization, there'll be some, you know, layer two on top of the decentralized network managing this stuff.

[00:26:01] Um, so I think what we're gonna start to see is really these gaming markets and these decentralized, uh, gaming markets, uh, really becoming, uh, central hub for the industry, right. And I don't mean like their traditional like asset markets where you can go and, you know, purchase an asset somewhere. Like I know, uh, web Asset Exchange was like one of the first big ones, but really it, it's not just about like the in-game, uh, you know, uh, let's say non fungible tokens that usually represent like items or players or characters, right.

[00:26:33] Um, but really the economic portions of it, which are like the credits or the, you know, the base currencies that are used in these games too. We're probably gonna see [00:26:43] the, the, you know, a proliferation of these types of markets, uh, over the coming years. Right? I can see that becoming a big thing. And what that's gonna do is it's gonna basically create like a reserve of value for gamers in the space, right?

[00:26:59] Uh, gaming by itself represents, I think, like two thirds of all digital media consumption, right? Like the amount of time that people spend on games compared to other media. Is unbelievable. Right. So imagine that is gonna need some kind, like if you start to move all the large games over to these types of ecosystems, that you're gonna need a lot of financial support mm-hmm.

[00:27:23] Across all of these things. Right? And it, and so, uh, one of the, the, probably one of the most eye-opening things that I've seen in recent years is guilds, for example, coming together and acting more like venture capital. Um, you know what I mean? Where you have guilds out, we'll raise a couple hundred thousand dollars or a couple million dollars, and then all of a sudden they'll start implementing it [00:27:43] in projects that are doing things that they want to do, or tokens that have a mission that's critical to their success.

[00:27:49] Right. Or, uh, focusing on developing applications specific to an ecosystem too. So I think that this is, I mean, this is kind of where it's headed. It's almost like. People who love gaming so much can now be invested in it as if it were like their own bank and their own, you know, retirements, right? Like that's the way people are thinking about it.

[00:28:10] And that shift is gonna require a lot of financial support, uh, in total. So I think when you start to apply traditional gaming alongside with like a crowd of people who are getting into investing and doing trading and things of that sort, that you're gonna create financial markets that are gonna be. Um, I, I'm gonna say it's gonna be insane.

[00:28:32] Um, I imagine volatility is gonna be crazy. Things are gonna pump, like nuts are gonna dump the same way. Like it's just gonna be absolutely insane. Um, but [00:28:43] I do think what it's gonna do is it's gonna provide a mechanism for financing and funding new game development, as well as creating, uh, people of interest will be able to invest themselves in things that they know rather than having to do like traditional investment.

[00:28:57] Uh, thing, you know, you put money in a Roth IRA, for example, right? A lot of people don't know what's happening behind the scenes, but they do know, uh, these types of games are their favorite types of games. And maybe this specific company is building something that, you know, is gonna solve a problem. So they would rather take a chance on that than just giving money to a stranger.

[00:29:14] Right? And that's kind of what we've seen. We've seen, you know, probably now at this point, billions of dollars flow into guilds, which are propping up these economies for a lot of these games, you know? Ecosystems.

[00:29:30] Tom Hammond: Hmm. So you guys mentioned you have a guild and splinter lens, like those spots, we have like

[00:29:36] Patrick Gorrell: 3000 guilds in there. Yeah.

[00:29:38] Tom Hammond: Lots, lots of guilds, dau or something. So how, what's it like working with [00:29:43] these guilds and these DAUs and stuff? Like, do you guys meet with them regularly? Like do they try to influence on like, new card design?

[00:29:51] Like how does that all kind of work together?

[00:29:53] Patrick Gorrell: Totally. Yeah. They, uh, definitely want new cards, uh, specked out and they wanna have input on almost all of it. We opened up a portion of our, um, communication to like what we call our Mav chatter, our Mavericks. Right. And there's quite a few people that are a part of that.

[00:30:10] Um, and they get some more direct communication with the team. But then we also have like our third party participants, people who are building applications on top of HA or on top of spoiler lands. And, um, in there our communication is, it's more or less like, We're completely separate entities. We have to treat it as such, right?

[00:30:31] We can't give them any kind of, uh, beneficial information about products that are coming out or about things that are gonna happen in the ecosystem because that would allow them to prepare before everybody else. And that's not something that [00:30:43] we can necessarily, uh, have happen. Like, you know, there's obviously a financial benefit to knowing things before they happen.

[00:30:49] Um, so we have to be very explicit about what information we release to all of our third party participants. Um, but you know, with that being said, it's more or less just about support and supporting them. Uh, we've noticed that certain things outside of our con our control can have an effect on these third party participants, whether it's a market or it's an analytics site, or it's a, you know, a trading, uh, application to some extent.

[00:31:16] Um, so there's not a whole lot that we can do as far as like work with them in advance about things that are coming up. But one thing that we are trying to do is institute more security and best practices around the way that we interact with each other, right? Um, and that's, that's kind of a tough road because you have, again, it's a decentralized network.

[00:31:34] You have people all over the place. Nobody's really bound to any kind of time commitment, right? So, uh, the only thing that you really have is like the financial and [00:31:43] economic incentive of like, Hey, we're gonna work together and we wanna make money. So like, we should make these things a priority, right? Um, but for guilds themselves, um, They are, uh, I would say again, probably some of the easiest ways to gain attraction and gain attention, uh, is just by working directly with Guild because they're incentivized to also work with other guilds.

[00:32:05] And even though there's a lot of competitiveness that goes between 'em in camaraderie that comes from that as well, like it helps, it bolsters the whole entire, uh, it just makes everybody a little bit more competitive. Right. Um, and that's kind of what you want when you're playing games. You want that competitiveness, but you don't want it to be too much.

[00:32:23] Right. You don't want it to become vitriol or, you know, have anything negative to an extent, but, you know, it's, it is what it's, it's not much we can do to compact, but

[00:32:32] Tom Hammond: yeah. So talk to me a little bit about, so we talked about like, you know, players want new cards and stuff. Like how do you guys go about coming up with like a new card [00:32:43] set?

[00:32:44] Like, yeah. What, what's your process for developing like new cards and then figuring out like, do they actually work? Like I, I was talking to one buddy. Um. A while ago, and he used to work on a collectible card game, and he said, you know, sometimes we thought we'd come out with like the perfect card and then, you know, it would, you know, go to our beta testers or whatnot and they'd be like, oh, that's like completely useless because I've got this other card from like three years ago that the designers had forgot about that would just like smoke it and stuff.

[00:33:17] So like what, what's your guys' process for coming up with new cards and maybe like testing it and making sure that it's. On par before releasing it to everyone as a whole?

[00:33:25] Patrick Gorrell: Well, it's, um, there's a bit of guesswork that goes with it cuz you can't understand how everybody's going to use a specific feature of a card.

[00:33:33] Right. Um, ideally what would happen? I could tell you in a perfect world, um, most of this stuff would be set up in tested on some kind of [00:33:43] Monte Carlo simulation that was inclusive to all the different cards index that we have. Um, unfortunately, it's, it's still very terribly, terribly difficult to do in a timely manner, especially if you're releasing a deck of x amount of cards.

[00:33:55] Right. And the larger the deck, the more, uh, you know, different types of playing cards that you have, the harder it is to get an accurate idea of what's gonna happen. But, well, that

[00:34:05] Tom Hammond: might also be a good question. Like, how often do you guys release decks and how many cards are they typically in it, just so people have like a context here.

[00:34:13] Patrick Gorrell: Typically we have two major and two minor releases a year. But I would say that's not limited. Like we've changed it up and we've released special packs for different purposes. We have a special event coming up, like we may do special releases for just a single kind of card. Right. Um, right now we have what we call our multicolor cards that are coming out.

[00:34:32] Um, right now it's a part of what we're selling, uh, sorry, zero cards. Um, but yeah, there's, as far as actually creating the cards, um, [00:34:43] One of the things that we try to do is implement new, uh, powers and abilities, right? New powers and abilities are tough because, um, we have a logic scheme that we have to follow as far as what powers and abilities have to happen in what order, and what conditions, so on and so forth.

[00:35:00] So we try to test most of that stuff, uh, just internally through use cases. And we have some of, uh, some like, it's kind of crazy. Um, Some of our biggest players in our game are also, you know, came from the community, became staff members at Spoiler Land, so they understand the way that the community is actually utilizing the game.

[00:35:20] Um, and we try to separate them from having any early access to things that are coming out. But we do take a huge amount of, uh, sentiment that comes from them when we release new cards and we go through our trial and have them test things before it goes out. Uh, that is a. That is a major component of new card development.

[00:35:40] Uh, other than that, it's a very creative process too, [00:35:43] like understanding how, you know, you can come up with the effects of the ability, but coming up with the names, coming up with all of the creative assets that go along with it. Um, our creative department has probably one of the toughest jobs, uh, in the whole organization because they are, you know, it takes a lot of time and effort, not only to, you know, create new things, but to understand what's already been implemented.

[00:36:05] And how it works. Right. Uh, so we have a phenomenal creative team, uh, who is working around the clock to support us in that development. But, um, other than that, like there's not, there's a lot of like pre-bake and pre-K solutions and a lot of math that can go into, uh, automating testing. Right. But you never really know until you actually see it in the wild and running in the wild.

[00:36:28] And, and the other part about it is once it's out there, there's really nothing we can do at that point. Like we can't. Go and make, you know, crazy changes to the playability or to the likeness of the cards. Cuz if they're assets, they're on a chain, there's nothing we can do about it, [00:36:43] right? So that, that's one of the big problems and challenges that our creatives and our tokens people have to worry about.

[00:36:50] The other one, like, and I hate to talk about it, but it is just overall security, right? Like, um, you know, in these environments people get hacked all the time. Uh, it's just the way it is, right? So, Uh, you know, if we have mechanisms that allow people to lock assets and make it hard for them to transfer, most of the time you would have to know where you lock those things in order to unlock them.

[00:37:14] And when your wallet gets, uh, compromised, typically the hacker is not gonna do all this research to understand everywhere you move things and what they mean. Right? So that's another big portion. Like when we do new card drops, we're always thinking like, okay, um, when we can lock these in the game or lock them in markets, like, how do we make sure that they don't.

[00:37:33] Mess up or that you know that they're not transferable by somebody else, or you're not giving somebody else permission to move these things forward. And I know, uh, that's like, [00:37:43] it's always one of my biggest concerns, um, while we're doing this. But again, it just, you have to have a, a team that knows the ecosystem, right.

[00:37:51] And that's probably one of the hardest things to

[00:37:54] Tom Hammond: cultivate. That makes sense. Yeah. Um, have you ever got done like a, a card release that went poorly? Oh, yeah. Uh, yeah. Tell, tell me a little bit about that. Like, how did you guys handle that? Because, you know, I think it's one thing to do like a, a poor release, but then there's another one, which is in the context of you guys where these cars that are released actually have a monetary value.

[00:38:20] Like, how did your players react to that? Um,

[00:38:24] Patrick Gorrell: so it just depends. I mean, it's so. Baked in with the speculated portion of a market, right? Like, are you familiar with the term? Like I I said it earlier and I'll, I say it all the time. Uh, crypto markets are reflexive markets, right? Meaning that people are, I'll give you a very good example [00:38:43] of like a person that's in the web three space, right?

[00:38:47] Uh, when they, when they're winning and they're actually doing well, they share it with everybody. Right. And they tell everybody like, I'm, I'm doing really well. Like, here, look at my numbers, look how I'm doing. Right? And they share it on social media, but when they're losing, they don't talk about it, right?

[00:39:02] Hmm. Uh, until they're pissed off. Right? Until they're so angry that they say something. So people are much more akin to share their wins than they are the losses. And that's one of the big reasons why we have such parabolic trends that happen, uh, in growth in crypto, right? Like all of a sudden assets go from being, I don't know, uh, let's say.

[00:39:20] 50 bucks to like $500 and it happens, it feels like almost overnight, right? Um, and that's what happens in the Hype train. If you were to look at all web three games, uh, search trends on Google and line them all up, right? What you'll notice is you have peaks that happen one right after the other, right? Uh, and it's crazy because you'll see the search [00:39:43] trends just go absolutely ballistic.

[00:39:44] You'll get 2000 times the amount of search volume you want a game, and then as soon as it falls off, There's another game right behind it that does the same thing, and then another one right behind that one. Right? So what you're looking for are people that aren't necessarily buying into the game, but they're buying into the assets, right?

[00:40:00] And the reason that they're doing that is because if something happened previously that denoted X, then if it happens again, you're gonna expect the same type of result, right? And so that's part of this reflexive pattern that happens where people look at the past to try to predict what's gonna happen in the future.

[00:40:18] And in doing so, they kind of cause this own manic uh, activity to, you know, take a hold and then they become very emotional. It's not about making logical decisions, it's about making, I gotta get in before everybody else and I gotta get out before everybody else. So you see these big boom and bus cycles happen, right?

[00:40:37] And it's crazy cuz again, like you can just look on Google search, compare all the largest blockchain, [00:40:43] uh, searches on trends, and you'll see exactly what I'm talking about. And that follows a pattern that, uh, we would call the a d Sr envelope, which actually comes from audio synthesis. It stands for attack, decay, sustain Release.

[00:40:55] And so what we wanna do is we wanna focus more along. You know, the attack is when something takes off Parabolically, the decay is when something falls off because it's no longer, uh, popular, or they think that they've hit the max threshold of the marketplace that people begin to sell. Right? Then you have what's called a sustain, where the, the price kind of levels out.

[00:41:15] And then the release is where it just kind of dies off if nothing changes. Right? So when you're talking about the frequency of releases and the frequency of drops, that's basically the pattern that we're looking at. So if like you were to do a Google search and search a d Sr envelope, you'll see exactly what I'm talking about and it splits it up in those four different sections.

[00:41:32] The idea is to have another release happened before the sustained portion of your market. Falls off to the release section and then that way you're kind of have [00:41:43] these attack dec case sustain, attack the case sustain versus attack decay. Sustain release, attack the case, sustain release. Cuz then you're just building all over again, right?

[00:41:53] And you're not adding to that critical base number that you need to consistently

[00:41:57] Tom Hammond: So through, through these kind of like cycles and stuff. What does it look like in terms of like attracting new users or like keeping your retention DAUs? Like do you see dips in new users coming dips in your d a u that then kind of correlate back?

[00:42:14] Or how does this kinda play into it? As

[00:42:17] Patrick Gorrell: soon as we started killing bots, uh, obviously we saw a huge decrease in the number of daily active users, right. That's fine. And it doesn't really affect us that much. Really what it comes down to is that, like, if, if I had to say like, if you have bad token releases, the problem is is we either launched it too early or too late in that e d SR curve and that e d SR envelope, right?

[00:42:39] Uh, meaning that we launched it too late, uh, and it's not gonna [00:42:43] sell out, uh, because, you know, not that many people are interested in that, that portion of the market anymore, or we sold it too early. And we didn't sell out because we're selling too many things at one time. Does that make sense? Yeah. So, so like that's, that's the gauge there, that's like the real, uh, metric that we try to follow.

[00:43:01] Like where's, where are we in that sustain, uh, right now in our, in our economy? And, and yeah, like I said, we've, we've done it too early and we've done it too late before.

[00:43:11] Tom Hammond: Here, here's something some people might be wondering. In the back of mind, when you guys do this, like new card release, do you guys have like a set number of, Hey, we're gonna sell 5,000 packs and then we're done and you have to buy, you know, all the cards off market or whatnot, or, or is it more like a magic, the gathering where I could come in as a single player and I could buy 5,000 packs if I wanted to.

[00:43:34] You know, it's intimate.

[00:43:36] Patrick Gorrell: So there are a limited number of packs, right? And yeah, you can come in and buy as many as you want. We have people that will drop, you know, [00:43:43] $250,000, $500,000 on packs, and they'll just sit on 'em. It's, it's, we've had it happen, right? And, uh, what they'll do is they'll sit on 'em and they'll wait for the next release knowing that, you know, X amount of cards have already been burned on the market, right?

[00:43:59] So you can assume that if people wanna participate and have the, like, let's say for example, You wanna level up a character from a pack edition that's no longer available, right? Mm-hmm. You gotta go buy those cards from the market, and you're gonna need liquidity in the market, right? So if someone is sitting on those cards, they're just gonna wait until it finds the price that they're waiting for, and then they're gonna release 'em on the market.

[00:44:21] Then you have to go back and have to start leveling up your card later on, right? Cause it's gonna finally create the type of liquidity that you need to, to move on. So it's, it's a give and take, right? Like, If there's enough people buying and there's enough people who are burning cards, and it's gonna make that happen a lot faster.

[00:44:39] Um, and as the cards become, you know, older and [00:44:43] as more and more the base level cards decrease, uh, what you, I think it comes down to, like, I was talking to our head of sales about this the other day, and I, I'm, I forget what it was, but the average is, I think it takes like 170 cards to burn, to make a max level card.

[00:44:58] Hmm. Right. So that's a lot of cards, man. That's, you know, that's 170 of the total amount of cards burn to make one la you know, one max level card. Um, and so when you think about it, you know that that's a huge amount of assets being taken off of the market, right? So again, I, I think it just comes down to like having those metrics kind of figured out, uh, based on each pack.

[00:45:27] Like that's what those. Those types of investors are trying to figure that out early on, I'm gonna say, okay, if I buy these cards now and these are the best cards in that series, you know which ones are expected to be leveled up the most, what's the likelihood that I have those in my packs? They could just hold onto the [00:45:43] packs and not open them, or they can open all their packs and just hold onto their cards.

[00:45:46] Um, another thing that we have that helps out with a lot of this is a rentals market. Like you can actually rent cards and play with them, uh, on our market. So if you wanna move up to like another league, So what we'll have is people that buy 50, $60,000 worth of cards, and then they do nothing but rent them out, right?

[00:46:02] And they'll rent them out until that addition is starting to pick up its price. And those, you know, those cards become more valuable. Then they'll start to sell those cards off. But in the meantime, they're just letting 'em sit there and earning a yield from the rental markets, and it helps a lot. Very interesting.

[00:46:21] There's a lot, like I said, the ecosystem is huge, man. It's like there's a lot that goes into, you know, making the, the types of markets and the, the necessities for a game like this. Uh, but that's where all the opportunity is. I mean, it's understanding those opportunities and if gaming is your thing and you love playing trading card games and there's probably no better, you know, [00:46:43] way to monetize this stuff than playing something like Swin Olands.

[00:46:46] Right. So, You know, and it's also great too because compared to like traditional web three games, um, where like if we did this on Ethereum, we would be out of business. It's just too expensive to operate, right? Mm-hmm. And the, the threshold, getting in on something like that is so high. It's such a high barrier, but because of the way things were built initially, um, it makes it very affordable.

[00:47:07] So a lot of our user base is, you know, we have a global user base, right? Um, and this, you know, it's because it's affordable. It's something that you could start out with with like $10, you know what I mean? And it doesn't require, you know, having thousands of dollars in ETH in order to contribute to something, or it costs hundreds of dollars to mint a single asset.

[00:47:26] Or even if it's 10 or 20 bucks for a single asset, like we wouldn't survive it that were the case. Yeah,

[00:47:32] Tom Hammond: I, I remember there, there were a few like mens earlier this year where it was like hundreds or thousands of dollars in like, Minting fees and I was like, this does [00:47:43] not seem sustainable. From like a gaming standpoint.

[00:47:45] People were advocating, of course this is fine. I was like, no. Like maybe for like a few elite people, but like normal people are not going to come into a game. I. That they don't know anything about and be willing to drop hundreds of dollars more than they would spend on even like a top of the line game.

[00:48:02] Um, so, so

[00:48:03] Patrick Gorrell: I have a friend this year who, uh, is excited because he gets to ride off the one and a half million worth of gas keys that he had tease last year. Crazy. That's great. So, um, yeah, I just, I, it's not conducive, like we can't build, uh, A prolific ecosystem. If that were the case, if people had to deal with those struggles, like it's just not gonna happen.

[00:48:29] But we know that as far as gaming assets is concerned, like Web three is the best solution out there. And for owning mean, you know, owning and creating markets for these assets, like there's really no better solution out there than Web [00:48:43] three.

[00:48:44] Tom Hammond: Yeah, so, you know, I could probably go on asking you questions for like hours and hours.

[00:48:49] I can't believe we're like almost at time here. Um, but I do have one final question for you, and this is a question I like to ask everyone cuz we are in the Mastering Retention podcast. Like, what's one tip or trick or lesson you've learned over the years to keep your retention higher? Like, how do you keep your players playing for longer day after day, ideally year after year?

[00:49:07] Um, and I'm gonna add a small twist here, like within the context of web three, like.

[00:49:13] Patrick Gorrell: Oh yeah, definitely. Um, okay. In the context of web three, it's not owning the eco, it's not owning everything in the ecosystem. Uh, we're still so small, uh, compared to the traditional sense of gaming, right? Like, even though we're the largest, you know, game or even decentralized application running by d a U, um, it it, man, that's a, that's a tough question just in the context of Web three.[00:49:43]

[00:49:43] But we actually rely on our third parties a lot, right? And those third parties are allowing people to come in and, uh, be a part of the experience. So when we go through these parabolic growth and uh, fall curves, uh, really behind the scenes, it's people who are already invested in it, you know, invested in the ecosystem cuz they've built something or they've contributed to something.

[00:50:07] So what you have to do is you have to think much more broadly and say kind of like, Hey, we've built this thing that a lot of people like, but you know, on top of that, you can basically do whatever you want with these assets that, you know, you guys own the assets. So people have created their own games on top of it.

[00:50:21] They've created their own marketplaces on top of it, uh, all of their own training stuff on top of it as well. And we should continue to support that as much as we possibly can, even though it's outside of our control and outside of our domain. Right. Um, that's what we found as kind of one of the havens for, uh, where we find our d a u our daily active users.

[00:50:42] [00:50:43] Right? Um, and it's just because of that, uh, that we see higher, higher turning numbers, especially when we're not producing things all the time. Like we'll go two or three deployment schedules without releasing like a major thing. Um, but these guys are releasing stuff. If you look at all of 'em, they're releasing stuff all the time, right.

[00:51:02] And so I think bringing more developers into the space, bringing larger games into the space that can work alongside of us is where we're gonna see the most growth over the next years. Uh, but other than that, like man, crypto itself has droves of people coming in and out. Like it is a huge, you know, revolving door.

[00:51:21] Um, so if we can capture a small percentage of those people and make 'em long-term players by having them engage with people, learn the markets and, and be a part of the asset. And, you know, understanding how they, uh, you know, value the things that we create. Um, then that's just gonna poise us to be in a position to make much smarter decisions down the road about releases and things that we [00:51:43] do.

[00:51:43] One other thing that we've learned too is like, you just can't release too much at any given time. Um, you know, we thought that putting things out all the time was great, but people get fatigued by it. Yeah. Because as soon as they run it, like you, you wouldn't believe how fatigued players can get. From new things constantly coming out.

[00:52:01] Cause then it feels like, you know, it, it looks like we're trying to do a cash grab and that's not the case at all. It's just all of our development is running at a certain point. We just have a lot of things coming out because we may have some much larger version of the game coming out. So we wanna get all these things in order.

[00:52:15] Right. Yeah. So you know, it, there's a lot of like framing that goes into it. And making sure that people understand that like, you know, there, there is an order of operations, but nobody really cares for that. It's, we could say it, but at the end of the day it is like, Hey, you know, we wanna have fun and we want, you know, we want these things to gain value.

[00:52:33] So, you know, you just have to say, I would say, uh, let's say you have to have temperance.

[00:52:40] Tom Hammond: Makes sense, man. That's great. [00:52:43] Well, thank you so much for joining us, Patrick. Um, if people, I appreciate it, do want to learn more about blockchain or getting in touch with you or splinter lens, like is there a good way for them to do that?

[00:52:52] Patrick Gorrell: Yeah, definitely. I mean, so the splinter lens discord is huge, right? Uh, we've got over 200,000 people in there, I believe, uh, in 3000 guilds. Uh, you can find us pretty much anywhere, but the website is quinland.com. And, uh, there's plenty of content. I do a lot of training on decentralized finance. Um, I have a group in a community called Crypto Monks, uh, that's on Discord.

[00:53:12] Uh, if you could find us. And on there, we're teaching people about liquidity, market making, project management, and side web three and trying to get people into the space as much as possible. So feel free to check us out. Um, and yeah, again, you know, check out our [e-mail] and feel free to join our discord.

[00:53:28] Awesome. Thanks so much ma'am. Alright, take care Matt.