Long-term trends in blockchain game pre-sales and NFT auctions

Contextualizing current data

May was a busy month in terms of blockchain game pre-sales and auctions.

Altitude Games raised almost 500 ETH (c.$130,000) in the first week of its Battle Racers’ pre-sale, while the total for Dapper Labs’ Cheeze Wizards was just shy of 700 ETH (c.$176,000).

Then the first vehicle auction from Animoca Brands’ F1® Delta Time hit 416 ETH (c.$110,000).

But how does this compare to previous activity?

Auctions vs pre-sales

The first thing to note is pre-sales and NFT auctions are different sorts of events and shouldn’t be directly compared.

Simply put, the F1 Delta Time auction was for a single high-value item, whereas Battle Racers and Cheeze Wizards were selling a number of different items at different prices — all available in effectively unlimited supply.

And even Battle Racers and Cheeze Wizards differed in that Cheeze Wizards’ pre-sale was a week-long, while Battle Racers was offering discounts for the first week of its month-long pre-sale.

As you’d expect, for both games peak revenue was hit early in the pre-sale period; day 1 for Battle Racers and day 2 for Cheeze Wizards. In the latter case, this is partly because DappRadar runs on Universal Coordinated Time, whereas the Cheeze Wizards’ pre-sale operated on Pacific Time (an eight hour time difference).

Similarly, both games experienced a strong end (D7/D8) to their pre-sales; again this is expected given their time-limited dynamic.

Finding historical context

We see similar trends when considering four previously successful pre-sales from blockchain games.

One thing that’s immediately obvious is these games were all more successful than Battle Racers and Cheeze Wizards, despite the dollar price of ETH being higher in mid 2018.

Something else worth noting is the enormous spike in terms of Axie Infinity’s day 1 performance.

Of all the games considered in this article, it was the only title already live and with an existing strong community prior to its pre-sale, which was for land, a major game feature.

In the other cases, players were buying assets in games that were going to launch, so the sale dynamic was inherently driven as much by present speculation as future utility.

This isn’t to say speculation isn’t as powerful as behavior as utility, of course. When we look at the totals raised, the first 8 days of Gods Unchained’s pre-sale (a game which is still to go live) raised more than Axie Infinity’s land sale.

And all four sales raised more ETH than either Cheeze Wizards (and Battle Racers).

In this context then, we can suggest that while the blockchain game market remains fairly buoyant, some hangover in sentiment arising from the late 2018-early 2019 crypto cycle remains.

The different dynamic of NFT auctions

However, a different argument can be made from the behavior of people competing for single, high-value NFT.

Of course, there are obvious reasons why this would be the case. A successful pre-sale needs to attract and encourage hundreds of blockchain gamers to spend. It’s a much better guide to the general atmosphere in a market.

In contrast, an auction may only attract a handful of people who have the resources to participate. Hence it’s a better marker for the level of speculative risk with which crypto enthusiasts are comfortable.

Placing this into historical context, there were two key NFT sales in 2018.

The first was that of Celestial Cyber Dimension, a custom CryptoKitty created in digital and physical form specifically for a charity auction as part of the Ethereal Summit in New York. The second was Hyperion, a high-value card auctioned as part of the Gods Unchained pre-sale.

Both NFTs were sold for what at the time were considered surprising totals but neither was positioned in the same way as F1 Delta Time’s first car — ‘1–1–1’ — in terms of being a singular, and importantly, online auction.

And drilling down into the dynamics of that auction, it’s clear there were a number of people willing to bid large amounts to buy the car. Bids from three unique wallets were for 360 ETH or more, so at least three people have faith that such NFTs can hold — and perhaps even generate additional — value.

Yet, despite the amount of data available, there’s always some uncertainty around the motivations of those involved, and there’s no better example than the case of the most expensive NFT ever sold.

Despite lacking any obvious special attributes, the so-called ‘Dragon’ CryptoKitty (#896775) was bought for 600 ETH and then immediately put back on sale for 600 ETH by its new owner.

Fat fingers or an attempt to create value? It’s hard to know, although the presence of a CryptoKitty named ‘Was 600 a mistake?’ at least demonstrates a sense of humor.