Lin Jiujiu Chain Game Interpretation: South Korea's DAXA (Digital Asset Exchange Joint Consultation Agency) announced that it would no longer support the transaction of Wemade's digital currency WEMIX. Several large South Korean digital currency exchanges including Bithumb and Upbit announced that they would remove WEMIX coins on December 8.
In the following week, the price of WEMIX coin dropped from $1.7 to $0.3, with the highest daily drop exceeding 80%. The highest daily drop in the share prices of its affiliated companies Wemade, WemadeMax, and WemadePlay all exceeded 29%.
At the same time, similar to the story of chain games such as Axie, because of the collapse of WEMIX coins, "MIR4" ("Legend 4"), which became popular by making money through mining, is also being quickly abandoned by users. According to third-party data, as of December 5, the maximum number of concurrent online users of the international mobile version of "MIR4" decreased by about 78% compared with the same period in 2021, and the number of online users on Steam decreased by about 66% year-on-year.
Just like that, between the dismal user data and bad reviews, this "latest orthodox sequel" dealt another blow to the already aging "Legend" IP.
Why is "Legend 4" so popular?
In fact, before the collapse, WEMIX and "Legend 4" were both star projects in the Korean digital currency and chain game markets.
The price of WEMIX coin was often above US$5 in the first half of 2022, and once exceeded US$20 in November 2021. The project itself also received US$46 million in investment from Microsoft, Shinhan Asset Management and others.
During the same period, the number of concurrent online users of "Legend 4" exceeded 1.3 million, and it was in the top ten of Steam's concurrent online rankings. In the so-called "chain game" market, this product almost enjoyed a victory like a dimensionality reduction attack. The stock price of Wemade has doubled several times in a year.
This success comes from the mutual achievement of games and "coins".
If we talk about coins, on the one hand, playing with coins is an investment, and investment is about returns and risks.
Compared with the digital currency projects of a large number of shell companies and "white paper" companies in the market, WEMIX is backed by WEMADE, a listed company, a former online game giant, and the copyright owner of the then No. 1 online game IP in Asia, "Legend". These backgrounds make WEMIX theoretically less risky to invest in.
On the other hand, theoretically speaking, the WEMIX project itself has a more reasonable model and greater room for imagination than other blockchain and coin issuance projects.
The WEMIX project is mainly composed of four parts: token wallet, NFT trading platform, capital flow pool and blockchain game application. In addition to "Legend 4", WEMIX also has multiple product categories such as "AQUA for WEMIX", "CrypTornado for WEMIX" and "BirdTornado for WEMIX" under development or operation.
According to Park Guanhao, the founder of Wemade, the company currently has more than 40 game IPs that can be used for blockchain game product adaptation. The ultimate goal is to have 100 blockchain-based games. Through the appeal of IP game content + Play to earn, WEMIX can continuously attract users and enable them to continue to retain and convert between games, tokens, and NFT markets.
What if we talk about games?
In the so-called "chain game" market, "Legend 4" is an extremely rare product with a big IP and mature, large-scale game play.
This is an MMORPG developed with Unreal Engine 4, mainly targeting mobile devices. It has also released a PC version that looks like a mobile game simulator on PC gaming platforms such as Steam.
Simply put, the game has good 3D graphics, and its art style and cultural elements have obvious Korean characteristics.
The game content includes dozens of hours of plot and almost all existing MMORPG gameplay, such as combat, pet training, NPC romance, home management, etc. Players can experience a mature MMO gameplay within the first few hours of entering the game, and play mining online to make money after reaching level 40.
According to players who experienced the game at the end of 2021 and studios that participated in mining power leveling, because the game has a lot of automatic pathfinding and combat content, the experience is relatively boring compared to the latest MMORPGs on the market, but fortunately the picture expression, story, and gameplay configuration are far higher than similar blockchain games, plus the legendary IP sentiment blessing, the overall experience is "acceptable". In addition, according to the peak price of WEMIX, the daily income at that time could be maintained at more than 100 yuan, and it could exceed 400 yuan during the peak period.
For cryptocurrency users, they can make money and have a good gaming experience. For gamers, they can play the game and make money. The combination of the two has resulted in "more than one million downloads in a single month" and "more than $10 million in revenue in a single month".
Why did it collapse again?
Similar to the mutual achievement during success, during the collapse, the coin and the game also dragged each other down. Among them, the core reason for the collapse of WEMIX was that it touched the bottom line of investment and blockchain business, trust.
According to Korean online information and DAXA announcements, there are three main conditions that led to this thunderstorm:
First, the WEMIX project itself does not mine or issue coins directly on the public chain, but uses tokens in game products such as "Black Iron" to convert to DRACO coins, and then converts to WEMIX coins through the WEMIX wallet. During this period, the total amount, output speed, and value of Black Iron and DRACO coins are not completely transparent and controllable. In addition, the WEMIX wallet requests too much information from users, and everything seems extremely risky.
Second, Wemade was exposed to have multiple "fraud suspicions" during the same period. The less trust there is, the greater the risk, and the lower the price of WEMIX will be.
In January 2022, multiple Korean media reported that Wemade secretly sold approximately 50 million WEMIX coins, which caused panic among retail investors. The price of WEMIX coins fell from 7,000 won to around 4,000 won that week. Korean media reported that "at least 10,000 investors' assets were damaged."
In February, the 2021 financial report released by Joymade was questioned for fraud. Although the official refuted it, it eventually changed its revenue from 560.7 billion won to 337.3 billion won and its operating profit from 325.8 billion won to 100.9 billion won. The trust relationship in the secondary market continues to break down.
By the middle of the year, some investors began to point out that Wemade had clearly violated the promises in the WEMIX White Paper during the actual sales process of WEMIX. For example, it promised in the white paper that "1 billion WEMIX coins will be issued, of which 74% will be used to support the long-term growth of the virtual asset ecosystem." But in fact, the hundreds of billions of won earned by WEMIX coins in the early stage were used to acquire another Korean game developer, Sundaytoz.
According to public information, Sundaytoz was founded in 2009 and owns many classic casual game products such as "anypang". After being acquired by Wemade, the company was renamed Wemade Play at the end of 2021. Currently, no products are used for WEMIX or related blockchain projects.
Finally, in October, before the explosion, many media such as forkast began to break the news that WEMIX secretly issued more tokens. According to market data, in addition to the 245 million tokens that WEMIX informed Upbit, there were at least 7.2 million tokens circulating in the market. In other words, it secretly increased its issuance by nearly 30%. In the cryptocurrency circle where total transparency is an absolute prerequisite, this is a huge mistake.
So starting from October, Upbit and other exchanges began to issue risk warnings for WEMIX and required Joymade to submit accurate issuance data. After the warnings were fruitless, the five major exchanges decided to delist WEMIX on December 8, and the crash came.
Third, after the collapse of LUNA and FIX, the South Korean government's attitude towards blockchain and digital currency projects has changed, and it has maintained an increasingly stringent regulatory trend throughout 2022. At the same time, the gameplay of chain games and NFT+ games is actually illegal in South Korea. Its "Game Industry Revitalization Act" stipulates that "games shall not be used to carry out gambling or encourage them to carry out other speculative behaviors or allow them to carry out such behaviors." The "Game Industry Act" explicitly prohibits "currency exchange or profit from repurchase of tangible and intangible results obtained through games."
In fact, the once popular "Legend 4" was also released in South Korea as a "green version" without coins, and the mining gameplay was mainly carried out on the international server.
Back to the "Legend 4" game itself, why does the game crash when WEMIX crashes?
The reason is not complicated. After leaving mining and online earning, as a game launched in 2021, "Legend 4" has almost no competitiveness in the game market.
From the perspective of game content, Wemade made four major changes to "Legend 4".
1. The picture was changed from 2.5D to 3D, and a face-pinching system was added;
2. The core experience of the game has changed from the original no hard goals, users explore and upgrade on their own to a large number of stage tasks and plot goals;
3. The operation has changed from manual operation and exploration to a large number of automatic attacks and path finding;
4. The equipment system is centered on materials and is hatched by treasure chests dropped by BOSS, which greatly reduces the rarity of high-level equipment.
For old IP fans, this game is too "new".
Because of the disappearance of many classic experiences and the addition of online earning through mining, the social system originally used to serve the game has been almost completely taken over by studios and middlemen. They can neither play nor chat. All they can do is quit the game or give bad reviews to vent their anger.
For the new generation of players, this game is too old.
On the one hand, the new batch of players do not recognize this IP. Since 2003, Wemade has slowed down the operation of "MIR2" in the Korean server and has instead used "copyright operation" as the main source of income. The "MIR" series was kicked out of the top market of Korean online games long before the mobile game era. At the same time, because of the constant disputes over the "Legend" IP in the next decade or so, hundreds of companies and hundreds of products were not allowed to develop or operate. "Legend" also missed many opportunities in the large market dominated by China and failed to continue its IP influence in the mobile game era.
On the other hand, judging from the Chinese market, which represents the highest level of MMORPG at present, a competitive MMORPG must have at least four elements: strong expressiveness, open world, weak goal guidance but strong experience, and small groups or interest-based social interaction. As for related attempts, there was "Against the Cold" in 2018 and "Fantasy Westward Journey 3D" in 2019.
Even compared with these two products that were launched several years ago and now seem to have a bad ending, "Legend 4" does not have any advantages. According to a producer of a leading MMORPG brand, the design concept and level of "Legend 4" with 3D + a large number of idle experience was more common in China around 2016, and most of those products were approved around 2014.
"Changing "Legend" into a routine fairy-tale product in 2021 can be said to be removing its essence and taking in the dregs."
Therefore, loss has become inevitable, and the consumption of the "Legend" IP has become inevitable.
The future of the "Legend" IP is still in China
"Legend 4" failed overseas, but the story of the "Legend" IP is not over yet.
According to Shanda Games and a leading hardware channel practitioner, as of December 2022, the core user scale, online time and payment status of "Legend"-type products in the MMORPG market are still in a relatively stable state. During 2020 and 2021, the monthly revenue of some products in the domestic and Southeast Asian markets has increased by more than 10% many times.
Many practitioners believe that the failure of "Legend 4" in the cryptocurrency circle and South Korea will indeed have a certain impact on the development of the "Legend" IP, but it is not fatal. Mao Lin (pseudonym), a practitioner who has participated in the development and operation of many legendary products such as "Legend of the King" in Kaiying Network, believes that there are four main reasons why legendary games and "Legend" IP have failed to maximize their value in the mobile game era:
1. Continuous copyright disputes have resulted in IP being unable to launch new products in a timely and large number of products to maintain user relationships;
2. The content supply cannot keep up, resulting in the company's inability to obtain sufficient user data to guide content updates in a few years;
3. IP users do have a certain gap. Currently, they are mainly male users aged 30-45. The number of users and the time they spend playing games are small, and their acceptance of mobile games is not high.
4. The relatively old-fashioned art style and mechanism that emphasizes numerical competition of legendary games are difficult to attract the so-called "Generation Z" users and may even cause them to dislike them.
Another MMORPG product producer from a listed company believes that legendary games do have problems, but they also have advantages in some aspects.
First, the domestic "Legend" IP dispute is coming to an end. According to announcements from Century Huatong and Kaiying, Joymade and its subsidiary Legend IP Co., Ltd. have lost many lawsuits in China.
Secondly, "rivals" that used to be entangled in copyright disputes, such as Kaiying, Shengqu, Tanwan, and Coconut, have also established joint ventures in the past two years to concentrate their efforts on cooperation. Most of the companies and products related to "Legend" are also supported by local governments and policies. The National Legend Industrial Park has opened in Yichun, Jiangxi in 2019. The unity of multiple companies and government support are very valuable in the current game industry.
Third, in terms of content, the core experience of ancient legendary games has always included "free exploration", "weak goals", and "strong and weak competition". These elements are in line with the general direction of current MMORPG development.
If the R&D team is able to make changes in art that are close to current aesthetic trends, and at the same time try new content updates and payment methods, with Legend's 20 years of accumulation in plot, game systems, and gameplay numbers, it is entirely possible to create a product with gameplay that is above the passing line and has a relatively mature derivative culture.
More importantly, since Shanda obtained the agency rights for "MIR2", the largest and highest-quality users of "Legend" games are concentrated in China. When an IP with a long history is held by the world's best people in making online and mobile games, there are always opportunities.
Chen Tianqiao, who created the "Legend" IP, once said in an interview in 2003 that "raising is worse than giving birth". It was Shanda that turned a Korean online game called "Mir 2" into "Legend". And Wemade also admitted in an interview that Shanda knows more about the current "Legend" than Wemade. Perhaps, today's version has become: when Wemade uses "Legend", a well-known IP in China, to harvest global users, only Chinese companies are still thinking about how to write the next legend of the "Legend" IP.