Written by: Weilin
The whole world knows that NFT is unpopular, but to what extent?
On OpenSea, the NFT exchange with the largest global market share, monthly sales of Ethereum and Polygon NFTs fell to this year’s lowest level in September, at US$74 million and US$5 million, respectively, both down 30% from their highs in February this year.
Ethereum and Polygon are the first and second largest blockchain networks in terms of NFT issuance. The NFT markets of the two ecosystems have now reached a freezing point. The issuers of NFTs are the ones who feel the coldest. Yuga Labs, which was hit hard by the sell-off of Bored Ape some time ago, finally couldn't sit still.
On October 6, Yuga Labs announced a team reorganization. The teams of its NFT projects Meebits and 10KTF will be merged into the metaverse game platform Otherside, and corresponding layoffs have also begun.
"We have been under a lot of pressure internally," said Daniel Alegre, CEO of Yuga Labs, in a frustrated tone in his public letter on the reorganization. He pointed out a way out: "Yuga Labs needs to actively cooperate with more external partners while refocusing."
This blue-chip NFT creator has also acquired several leading companies in NFT projects and decided to focus on the gaming sector. This year, the company used the "Bored Ape" IP image to create the game "Dookey Dash", which once attracted an influx of traditional e-sports players.
After testing the waters with real games, Yuga Labs probably saw an opportunity to break the ice with NFT and decided to launch more games and entertainment experiences based on Otherside in 2024. Layoffs and reorganization, betting on games, in Yuga Labs' new game narrative, where can its NFTs find opportunities to become popular again?
Layoffs and reorganizations amid sell-off
As of October 7, the floor price of CryptoPunks was 43 ETH. At the end of August 2021, its floor price was still 125 ETH, a drop of more than 65% in two years; BAYC is even worse, with the current floor price of 26.99 ETH, a decrease of 82.4% from a year ago.
The value of many Yuga NFTs has shrunk by 60-90% from their historical highs
Judging from the current market situation, the NFT industry’s bubble burst after a brief period of prosperity. Some well-known large holders, such as singer Huang Licheng, sold a large number of NFTs, including Bored Ape, in a short period of time, causing sharp fluctuations in market prices.
With its own poor situation and no signs of improvement in the overall market environment, the reorganization of Yuga Labs is inevitable.
In his restructuring letter, Alegre pointed to Yuga Labs' successful projects this year, including the high-profile Dookey Dash game, TwelveFold and collaborations with BAPE and Gucci. But he said some product launches did not meet expectations.
What are the operational priorities after the reorganization?
Alegre pointed out three clear directions: community growth and interaction with brands; launching unique initiatives such as games, entertainment experiences, and interactive social interactions around the Otherside strategy; focusing development work on a few core things and continuing to build complementary long-term partnerships.
"Community growth" seems to be the top priority. This is not surprising. The reason why Yuga Labs has become a leading issuer in the NFT market is definitely inseparable from the huge player market brought by its first trump card, the star project Bored Ape Yacht Club (BAYC) NFT series.
Not long ago, the topic of "the decline of BAYC community vitality" was hotly discussed on social media, and Alegre also noticed these public reactions.
In this regard, he said that Yuga Labs is well aware of the importance of the "early BAYC atmosphere" and is committed to continuing this energy, and the efforts will start with the upcoming ApeFest in Hong Kong. In addition, the reorganized team will support the expansion of the Made by Apes IP tool and other projects, thereby empowering club members around the world and continuing to cultivate community culture and creativity.
Another NFT ace IP that Yuga Labs acquired through the acquisition is CryptoPunks. For this NFT series, Yuga Labs also stated that it will continue to invest resources to consolidate and highlight the series' legacy in the field of crypto art, specifically through education (including upcoming books), improving and simplifying apps, and providing more high-quality experiences.
The reorganization news may appease the community's anxiety, but the shadow of layoffs has already shrouded Yuga Labs. Although the official did not disclose the specific number, according to the subsequent tweets of Yuga Labs co-founder Greg Solano, the number of employees in the company after the reorganization is still more than 120. Alegre said in the letter that the transition plan for departing employees includes generous severance pay, COBRA medical insurance coverage, and assistance in finding new job opportunities.
Deeply tied to its own NFT betting on the game track
After layoffs and reorganization, and clarifying the general direction of the team's efforts, Yuga Labs' next most important move was directed towards its metaverse game platform Otherside. The teams of two less popular NFT projects, Meebits and 10KTF, were incorporated into this game platform.
According to the official website, Otherside is a metaverse gaming platform being developed by Yuga Labs. The platform is based on the gold-making feature of GameFi's "Play To Earn" and incorporates the mechanism of massively multiplayer online role-playing games (MMORPGs) - users can regard it as a virtual role-playing game (metaRPG) platform in the metaverse space, where thousands of people can interact online at the same time. Unlike traditional RPG games, the player characters in these games are all played by the NFTs in their hands.
Yuga Labs had already shown signs of betting on the gaming sector through Otherside.
As early as April this year, Alegre, a former Blizzard executive, said that NFT still has a bright future because it is the key to the world of games, activities, and e-commerce. Apparently, the door lock that matches Yuga Labs' "key" is Otherside.
On March 25 this year, Yuga Labs launched the second test voyage of Otherside. The number of people participating in this test was about 7,200, which is much more than the 4,000 people in the first voyage.
On their first voyage, voyagers can participate in a variety of game activities, such as free movement, sending emojis, sprinting, dancing and completing aerial flips, or show off their NFTs and experience private live broadcasts.
Otherside is also a platform that Yuga Labs deeply binds with its NFT. There are 200,000 NFT plots named Otherdeeds on the platform. On May 1, 2022, Otherdeeds was first opened to the public for minting, and 100,000 plots have been bought out.
Of these 100,000 plots, 10,000 are directly allocated to BAYC holders and 20,000 MAYC holders. Similar early bird benefits include that all BAYC, MAYC, BAKC and CryptoPunks holders will receive a 3D model matching their NFT when the game is released, which can be used as a character in Otherside’s game.
Yuga Labs has launched Legends of the Mara in public beta
Not long ago, on September 26, Yuga Labs also released a public beta of the 2D strategy game Legends of the Mara (LOTM) on Otherside.
If Otherside is a grand blueprint in the plan, then Yuga Labs has already tasted some sweetness in expanding the gaming attributes of its own NFT.
In March this year, Yuga Labs launched a game Dookey Dash for BAYC holders. This game is similar to Temple Run. Although it was only released as a simple web game, the high prize money attracted the participation of traditional e-sports players and quickly brought short-term popularity to BAYC and its related token APE.
After developing games with its own NFT IP and receiving positive responses, Yuga Labs officially stated that the Otherside team will build new gaming experiences through third-party partnerships in 2024.
NFT must break the ice first
Regarding the current NFT industry trends, industry insiders pointed out that the NFT narrative that PFP (personal profile picture) represents identity is outdated, and NFT needs a new story. Then, Yuga Labs' game track planning for Otherside can be regarded as one of the stories, and the intention of emphasizing "third-party partners" is obvious, that is, "breaking the circle."
In addition to Otherside, Yuga Labs' blue-chip NFTs have begun to cooperate with traditional games. Not long ago, the NFT series "Mutated Ape" (MAYC), derived from "Bored Ape", reached a cooperation with the famous game IP "Dungeons & Dragons".
On August 17 this year, Wreck League, a fighting game developed by game studio nWAY and Animoca Brands, started the NFT creation process. Yuga Labs appeared as the "first season partner" of the game. The game will integrate the four Yuga NFT series of BAYC, MAYC, BAKC and Otherside Kodas. Players can collect mecha parts NFTs in the game, assemble them and then cast complete mecha character NFTs.
Otherside is the home of YugaLabs’ gaming ambitions
It can be seen that Yuga Labs is doing its best to maintain its industry influence through the narrative of combining games and NFTs.
Other blue-chip NFT issuers have not sat idly by, and have also begun to use their NFT IPs as a test of opportunities to "break the circle" externally. For example, the well-known blue-chip NFT project Doodles and Crocs jointly launched a limited edition "hole shoes", and Pudgy Penguins launched Pudgy Toys physical toys at the end of September.
It is not difficult to see from these examples that giving NFT more application scenarios has become a way for major project parties to escape difficulties. Games, IP co-branding, IP derivatives, etc. are all means of "breaking the circle", and in this process of change, Yuga Labs is no longer a simple NFT issuer. Their attributes have become more diverse, and perhaps it is more appropriate to describe them as NFT IP brands.
This also means that when entrepreneurs come up with the idea of NFT, it is far from enough to design a series of cool, weird, or beautiful pictures. What entrants need is the ability to turn the NFT series into an IP that is popular in the market, and then transform the IP into applications with more commercial value.