November 2nd, 2022
Disclaimer: FLYING FALCON HAS INVESTED IN GENESIS NFT HOOLIGANS AND THE MY PET HOOLIGAN ECOSYSTEM. THIS STATEMENT IS INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. INVESTING IN ANY CRYPTO ASSET IS A MAJOR RISK. THIS IS NOT INVESTMENT OR FINANCIAL ADVICE
The gaming industry is roughly a ~$300B industry and larger than all other media divisions combined. This is largely dominated by mobile and free-to-play gaming that primarily monetizes via in-app purchases. We believe the industry is set to expand as more games adopt web3 principles, most notably player ownership through digital assets. During 2021, we witnessed many web3 games bootstrap growth by tapping into play to earn marketing and incentivizing users through the potential for yield. Amid a wider bull market, in combination with games not yet being ready for mainstream adoption, yield focused players overpowered those who would play the games for fun. This led, in some cases, to unsustainable economic loops. Leading incumbent web3 game studios are now hyper focused on continuing to build fun-game experiences and lore to entice the next wave of potential users in a more sustainable way.
We believe that it will become obvious in retrospect that all users should own their digital gaming assets. However, owning your assets is not what makes a game enjoyable. If anything, owning your assets should happen in the background and be an option users can tap into should they want to trade or sell their ownership and exit the game. We believe that in order to reach the 3 billion + gaming users worldwide, web3 games must provide an engaging, fun experience with digital ownership as a benefit rather than a dominant factor within the pitch to users. We believe, to achieve this, we need a world class team to build an IP and game loop that is culturally relevant to those who are not yet in our industry, combined with a tech-stack that minimizes the necessary understanding of wallets and crypto. This is not an easy feat, as misinformation and in some cases bad actors have led many in the traditional gaming industry to despise NFTs and the industry around it.
Over the prior 12 months, we have been researching the space seeking to find teams that we believe could achieve the holy grail of bringing mainstream gamers into our space. We believe we found a potential winner through the team and community building My Pet Hooligan (MPH). As such, I purchased 103 Genesis NFTs and the below paper explains why MPH is the most likely new game participant to reach the masses.
AMGI – The Builders:
The MPH ecosystem is being developed by AMGI, a studio based out of Los Angeles with deep experience in the traditional gaming and animation world. Their objective is to combine proprietary technology with high quality, character driven animation to develop a new path between Hollywood and the web3 space. The team has been built around individuals from some of the most distinguished animation studios like Disney, Pixar and Industrial Light & Magic. Core team members helped drive projects such as Toy Story 1 and 2, Buzz Lightyear, Game of Thrones and Spider Man. Further, the team also consists of individuals with extensive experience surrounding Unreal Engine, AR and VR. In 2021, AMGI also partnered and raised capital from Delphi Digital, Bitkraft and YGG, providing them with the necessary crypto native partners. We believe the most successful games are likely to come from teams that have critical traditional gaming and animation experience, combined with crypto-first partners who can help navigate the inherent technical and cultural roads of web3.
IP, Community and Story Building:
To reach the masses, we believe games must develop an IP that can resonate and be culturally relevant to those not yet in crypto. We see far too many games targeting their IP towards the crypto native subcultures. While in some ways this audience may be easier to reach given their familiarity with web3 concepts, it’s also limited in size. As one measure of crypto users, Metamask reportedly reached 21 million MAUs during the bull market in 2021. While this is a large number and something the crypto community should be proud of, this is nothing compared to the three billion gamers worldwide. Gaming companies need to target the gamers not yet in our industry.
We have been extremely impressed with the creativity around the IP of My Pet Hooligans. This IP begins with the Hooligan (Hooli), the core character of the My Pet Hooligan ecosystem. The Hooli is a sweet and cheeky little rabbit, with a lot of inspiration coming from the team’s prior experience working at Pixar. Notably, the eye animations within each Hooli jumps out, setting up for a highly expressive character. Most other brands avoid eyes as much as possible given the inherent challenges.
The Hooli is freedom loving and has a rebellious nature, which caters to not just crypto enthusiasts but also to many of the wider gaming community at large. More specifically, the Hooli story began with the Hooli rabbits trying to overthrow the overlord and antagonist of its universe called Zuckcorp. Recently, the community was allowed to vote in seven of its own Genesis NFT holders to assemble as the “Hooli Heroes” to conduct a heist against Zuckcorp. The heist footage was released just recently as the Hoolis’ attempted to break out Zuckbots from the Zuckcorp overlords. The Zuckbots were just released as NFTs as a companion character for the Hooligan, among other use-cases. Importantly, future NFT/character drops are being done alongside a compelling story, rather than what is the more common and less successful NFT approach of figuring out the story later. We also like how the team is guiding the direction of the story, but including the community to help participate and shape the outcomes rather than be a one way push model often seen within Hollywood. The approach to storytelling sets them up well in cultivating a culturally relevant IP brand
In addition to storytelling, the tech-stack is what truly allows the characters and IP to come to life. The AMGI studio co-developed and built proprietary applications such as “Immi” and “Hooligram”. In general, these are high quality animation applications that allow holders to directly animate and interact with a 3D version of their NFT. In the background, there is a smart AI system that analyzes your face and, for example, if your face is sad, the AI will trigger full body motions that express a sad character. These applications essentially allow your facial expressions to be used like a joystick for your Hooligan. This allows holders to broadcast content on platforms like Twitch and Youtube with their Hooligan, all controlled by their facial expressions.
Utilizing these tools, a user can also utilize their Hooligan in the gameplay and control the in-game character expressions with their IRL facial expression. We believe content creators will increasingly find these AMGI proprietary tools extremely attractive to generate more personalized content while playing the game. For example, following an in-game kill, the content creator’s character will react to the actual creator’s expression adding substantially higher entertainment value for the end viewer.
In addition to Immi and Hooligram, the team also enables artists to generate artwork that can be utilized as graffiti within the virtual world. This allows the virtual world to expand and the lore to grow in a much faster way than the team can do alone. The team’s understanding of content and the aforementioned tech stack makes it easy and enjoyable for content creators to get involved. Roblox and Minecraft have largely become forever games thanks to UGC, and we believe Web3 games like My Pet Hooligan should leverage this playbook while also capitalizing on the native advantages for Web3 content creation including the better payment rails, composability, ownership and transparency.
The gameplay all takes place in the virtual world known as the “Rabbit Hole”. Playing it gives us a feel of a blend of GTA, Zootopia and Fortnite. It is built with Unreal Engine 5, giving the game the highest quality 3D visual effects and facial realism. The game is live today as an early alpha release, and we are highly impressed with the progress they have made to date. In our view, the production capability of the current playable version of the game is far beyond what we see out there today in web3 gaming. To be sure, the game is generally limited to high-end PC in its current form though future upgrades will be optimized for more standard hardware including console and mobile.
At present, the alpha game is a third-person shooter without any clear missions or game modes. You can run (or skateboard) around, pick up items, and attack other players and NPCs. More active game modes are being built out that will exist within the Rabbit Hole which will include PVE and PVP. Notable games expected to come to market include Team Deathmatch, Battle Royale and Capture the Bag. Importantly, all these games will actually be game layers played over a more seasonal base, resource management game called Turf Wars. Turf Wars will involve all 7 factions within the game who will be competing and cooperating with each other to earn $Karrots tokens, the in-game utility token. We believe by tapping into more familiar game modes, along with a culturally relevant IP, the game has great potential to reach the masses.
In addition to the various game modes, you can also socialize and hangout with others in places such as a movie theater and virtual bar within the Rabbit Hole. We believe the social component can become extremely powerful here, especially considering the tech software discussed above. The game loops and lore will provide a reason for users to enter the Rabbit Hole, and in many ways the social interaction is what will keep the users there. We see many users in the future actually coming to the Rabbit Hole entirely for social engagement.
Far longer term, the team has visions of expanding to multiple virtual worlds. Rabbit Hole would be one such virtual world in an environment of multiple virtual worlds that might look something like a Disney Land. It might be the case that each virtual world could be the home and game environment for other independent NFT projects. These worlds can then be connected through “The Interloop”. The long-term vision of connecting multiple games and 3d NFT projects through a larger interoperable world has us excited.
We strongly believe that to reach the masses, we cannot as an industry expect players to begin their onboarding journey by downloading a wallet, writing down a seed phrase, and purchasing digital assets. We like the approach MPH is taking in helping with regards to onboarding. Most importantly, the game will be playable without requiring an NFT. While Hooligan NFTs may be used as characters within the game, F2P is also an option where a more generic hooligan can be utilized to play the game. In this format, players have the option to purchase an NFT but are not required. We speculate that Hooligan NFTs may have some added utility and status compared to F2P, but we expect a thriving F2P environment to form as well for more casual users. Casual users can then be converted into NFT holders, but to reach millions of users we cannot expect everyone to purchase an NFT.
Something we’d like to see with games more broadly is the ability for NFTs purchased or earned in-game to be held with some centralized control by default, though with the optionality to transfer them to a self-custody wallet should the user desire. In this model, players may not even know they own an NFT and only care if they wish to exit the game and realize they can get some residual value for their time spent in the in-game economy. Likewise, in-game currency that can be earned in a game should be kept off-chain, though players should have the option to move on-chain should they wish to take the currency outside the game environment.
To be sure, anytime tokens or NFTs are added to games that can be exchanged for fiat value, the economy becomes increasingly more difficult to manage given the potential for yield first participants to enter the ecosystem. We appreciate My Pet Hooligan’s approach to building a fun and enjoyable game prior to adding a fungible crypto token into its game loop. This will help them attract users who are willing to consume within the Rabbit Hole which is necessary for any greater economic loop to be sustainable.
As noted prior, the game today is only accessible on high-end PCs. By building with Lyra within Unreal Engine 5 in future iterations, the team expects the game to be more readily available on less powerful PCs and eventually consoles. The team is also releasing a mobile-first battle game with the Zuckbot characters that should help expand its IP and gameplay to a wider audience. It will ultimately be important for the game to be released on more web2 gated distribution platforms. Adding NFTs and tokens into the Apple App store remains a challenge, though we are cautiously optimistic that terms will become flexible with time as users begin to demand as such. The My Pet Hooligan team is currently most focused on the Epic Marketplace for their next release of the Rabbit Role.
My Pet Hooligan NFT – The Genesis Collection:
Ultimately, I went ahead and purchased 103 My Pet Hooligans within the Genesis Collection. The Genesis Collection has a total of 8888 NFTs split across 7 factions: Hare Raisers, Bunners, Playboyz, Rogue Jumpers, Cypher Buns, Punk Bunnis and Mutants. Hooligans within the Genesis Collection are currently playable as personalized 3D characters within the Rabbit Hole, including access to the proprietary AMGI tech discussed above to incorporate real-time facial and body expressions.
Should the game reach millions of users, we believe the majority will be F2P users. In this potential scenario, we look forward to being part of the few (8,888 max) that can roam the Rabbit Hole universe with the individualized NFT version of the Hooligan. The Genesis NFT Hooligans are all individually, 1/1 unique and will likely be the most powerful way for users to flex and differentiate themselves from the rest. We are excited to get to own many unique NFT Hooligans that we can shuffle between.
Additionally, the Hooligans can currently be staked to earn a synthetic version of the $Karrots token, which is planned to be redeemable for the ERC-20 $Karrots token when it goes live. 15% of the max $Karrots token supply is allocated for NFT stakers, with the large majority going to the Genesis collection though a smaller percentage reserved for other character NFT drops. Further, it is expected that future character NFT drops, such as the recent Zuckbot drop, will allow Genesis Holders to mint them prior to the rest of the players.
As the web3 gaming space pivots to a newer more refined model where players are less focused on ROI, to a space that is delivering competitive and enjoyable experiences, we believe it will be ecosystems like My Pet Hooligan that will pave the way and become industry leaders. We believe the MPH ecosystem has great potential given the fun game experience combined with top-tier IP, lore and storytelling. We encourage you to join us in the My Pet Hooligan discord to join the conversation and help shape the future of the Hoolis!