NFT market frozen to the freezing point, can Yuga Labs regain its glory through gaming?

Can Yuga Labs revive its glory through gaming amidst the frozen NFT market?

Author: Weliin

Editor: Wendo

Everyone knows that NFT is cooling down. How bad is it?

On OpenSea, the largest NFT exchange in the world, the monthly sales volume of Ethereum-based and Polygon-based NFTs in September dropped to the lowest level this year, reaching $74 million and $5 million respectively, a 30% decrease from the peak in February.

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Ethereum and Polygon are the top two blockchain networks in terms of NFT issuance, and the NFT markets of these two ecosystems have now cooled down to freezing point. The ones who can feel the cold the most are the NFT issuers. Yuga Labs, which has suffered from the recent wave of bored apes dumping, has finally taken action.

On October 6th, Yuga Labs announced a team restructuring. The teams behind the NFT projects Meebits and 10KTF will be integrated into the metaverse gaming platform Otherside, and corresponding layoffs have already begun.

“We have already endured a lot (of pressure) internally.” Yuga Labs CEO Daniel Alegre expressed his disappointment in the restructuring announcement, pointing towards a way out, “Yuga Labs needs to actively collaborate with more external partners while refocusing.”

This company that creates blue-chip NFTs has also acquired several leading companies in the NFT space and decided to focus on the gaming industry. This year, the company created the game “Dookey Dash” using the “bored ape” IP, which attracted traditional esports players for a while.

After trying out real games, Yuga Labs probably saw the opportunity to break the ice in the NFT market and decided to launch more games and entertainment experiences based on Otherside in 2024. With the restructuring and focusing on gaming, where can Yuga Labs find opportunities for its NFTs to turn red?

Restructuring amidst the selling frenzy

As of October 7th, the floor price of CryptoPunks was 43 ETH. At the end of August 2021, its floor price was still at 125 ETH, a decrease of more than 65% in two years; Bored Ape Yacht Club (BAYC) fared even worse, with its current floor price of 26.99 ETH shrinking by 82.4% compared to a year ago.

Yuga's NFTs have dropped in value by 60-90% compared to their historical highs.

From the current market situation, the NFT industry has experienced a brief prosperity followed by the bursting of the bubble. Some well-known holders, such as singer Huang Licheng, sold a large number of NFTs including Bored Apes in a short period of time, causing drastic price fluctuations in the market.

With its own unfavorable situation and no signs of the overall market warming up, the restructuring of Yuga Labs seems inevitable.

In the restructuring announcement, Alegre pointed out the successful projects of Yuga Labs this year, including the highly anticipated game Dookey Dash, TwelveFold, and collaborations with BAPE and Gucci. However, he mentioned that some product launches did not meet expectations.

What are the focus of operation after the reorganization?

Alegre pointed out three clear directions: community growth and interaction with the brand; unique initiatives such as game, entertainment experience, and interactive social activities based on the Otherside strategy; development work focused on a few core things, continuing to build complementary long-term partnerships.

“Community growth” seems to be the top priority. This is not surprising, as Yuga Labs has become a leading issuer in the NFT market, thanks in large part to its flagship and star project, Bored Ape Yacht Club (BAYC) NFT series, which has brought a huge player market.

Not long ago, the topic of “declining vitality of the BAYC community” was hotly discussed on social media, and Alegre also noticed these public opinion reactions.

In response, he stated that Yuga Labs is well aware of the importance of the “early BAYC atmosphere” and promises to continue to maintain this energy, making efforts starting 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, empowering club members worldwide, and continue to cultivate community culture and creativity.

Yuga Labs acquired another NFT flagship IP, CryptoPunks, and also expressed its commitment to continue investing resources in this NFT series, consolidating and showcasing its legacy in the field of crypto art, specific approaches include education (including upcoming books), improving and simplifying the App, and providing more high-quality experiences.

The reorganization news may appease the anxiety of the community, but the shadow of layoffs has already enveloped Yuga Labs. Although the specific number has not been disclosed by the official, based on the follow-up tweets by Yuga Labs co-founder Greg Solano, the number of employees in the company after the reorganization still exceeds 120. Alegre stated 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 integrating own NFTs and betting on the gaming track

After the layoffs and reorganization, with the clear direction for the team’s efforts, Yuga Labs’ next important move is towards its own metaverse gaming platform Otherside, and the teams of two less well-known NFT projects, Meebits and 10KTF, have been merged into this gaming platform.

According to the official website, Otherside is a metaverse gaming platform currently under development by Yuga Labs. The platform revolves around the “Play To Earn” gold-making attribute of GameFi, incorporating the mechanics of large-scale multiplayer online role-playing games (MMORPGs) – users can see it as a virtual role-playing game (metaRPG) platform within the metaverse space, where thousands of people can interact online simultaneously. Unlike traditional RPG games, these player roles are represented by the NFTs they hold in their hands.

Yuga Labs has long been betting on the gaming track through Otherside.

As early as April this year, Alegre, a former Blizzard executive, stated that NFT still has a bright future because it is the key to the world of gaming, events, and e-commerce. Obviously, Otherside is the lock that matches Yuga Labs’ “key”.

On March 25th this year, Yuga Labs conducted the second voyage test of Otherside, with about 7,200 participants, significantly more than the 4,000 participants in the first voyage.

In the first voyage, sailors could participate in various game activities, such as free movement, sending emojis, sprinting, dancing, performing aerial flips, or showcasing their owned NFTs and experiencing private live streaming, etc.

Otherside is also a platform deeply integrated with Yuga Labs’ NFTs. There are a total of 200,000 NFT plots named Otherdeeds on this platform. On May 1, 2022, Otherdeeds was first opened for minting, and 100,000 plots have been sold out.

Among these 100,000 plots, 10,000 were directly allocated to BAYC holders and 20,000 to MAYC holders. Similar early bird benefits include all BAYC, MAYC, BAKC, and CryptoPunks holders receiving 3D models that match their NFTs when the game is released, which can be used as characters in the Otherside game.

Yuga Labs has launched the Legends of the Mara public beta

On September 26th not long ago, Yuga Labs also released the open beta test of the 2D strategy game Legends of the Mara (LOTM) on Otherside.

If Otherside is a grand blueprint in the planning stage, then Yuga Labs has already tasted some benefits in expanding the gaming attributes of their own NFTs.

In March of this year, Yuga Labs launched a game called Dookey Dash for BAYC holders. This game is similar to “Temple Run”. Although it only appeared as a simple web game, the high prize money attracted the participation of traditional esports players and quickly brought temporary popularity to BAYC and related token APE.

After developing games with their own NFT IPs and receiving a positive response, the Yuga Labs team stated that they will establish new gaming experiences through third-party partnerships in 2024.

Breaking the ice of NFT requires breaking the circle

In response to the current trends in the NFT industry, some industry insiders pointed out that the narrative of PFP (Profile Picture) representing identity has become outdated, and NFTs need new stories. Therefore, Yuga Labs’ game track planning for Otherside can be seen as one of the stories, and the emphasis on “third-party partnerships” is also quite obvious, which is to “break the circle”.

In addition to Otherside, Yuga Labs’ blue-chip NFTs have begun to collaborate with traditional games. Recently, the NFT series “Mutant Apes” (MAYC) derived from “Bored Ape” has reached a cooperation with the famous game IP “Dungeons & Dragons”.

On August 17th of this year, the game studio nWAY collaborated with Animoca Brands to develop the fighting game Wreck League, which launched its NFT genesis minting. Yuga Labs appeared as the “first season partner” of the game. The game will integrate four Yuga series NFTs: Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), Bored Ape Kennel Club (BAKC), and Otherside Kodas. Players can collect mech part NFTs in the game and then assemble them to mint complete mech character NFTs.

Otherside is the headquarters of Yuga Labs' gaming grand plan.

It is evident that Yuga Labs is making every effort to maintain its industry influence through the combination of games and NFTs.

Other blue-chip NFT issuers are not sitting idly either. They are also starting to seize opportunities to “break boundaries” using their NFT IPs. For example, the well-known blue-chip NFT project Doodles partnered with Crocs to launch a limited edition “holey shoes”, and Pudgy Penguins introduced Pudgy Toys physical toys at the end of September.

From these examples, it is clear that giving NFTs more application scenarios has become the path for major projects to break through. Games, IP collaborations, and IP derivatives are all means of “breaking boundaries”. In this process of change, Yuga Labs is no longer just a simple NFT issuer. Their attributes have become more diverse, and perhaps it is more appropriate to describe them as NFT IP brands.

And this also means that when entrepreneurs have the idea of entering the NFT market, designing a series of cool, bizarre, or beautiful images is no longer enough. What entrants need is the ability to turn NFT series into market-flocked IPs and then transform those IPs into more commercially valuable applications.

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