Mavens: How does Star Atlas’ cutback impact the perception of web3 gaming?
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Our blockchain gaming experts share their views on the recent news that Star Atlas developer ATMTA has had to adopt a crucial downsizing strategy, including cutting back its staff by 73%.
How significantly does this impact the perception of the blockchain game sector as being both inexperienced in terms of development skills and financial management?
David Amor – CEO, Playmint
Star Atlas was the poster child of misplaced confidence. It was a game of unending scope and ambition, which people with game production experience called out at the time. It’s bad news for the players that invested money in the game, bad news for the individuals that were affected in the layoffs and has negatively affected the web3 gaming sector. The only silver lining is that there will be more scrutiny of teams promising the world on a stick without any history of having delivered it.
Robby Yung – CEO, Animoca Brands
I don’t think this is terribly significant for the blockchain game sector, although I do think that they will have a job of expectation management when it comes to their early supporters (investors and NFT / merchandise purchasers). I think their cost-cutting moves are a reflection of the realities of the current market conditions, and while we can debate the timing or extent of them, cuts in and of themselves are to be expected.
Gabriel Meredith – Merfolk Games
I think the situation with Star Atlas won’t affect the perception of blockchain game studios to a significant degree. There are many other studios that have been financially stable, and at the same time many other non-blockchain video game companies in general have had a difficult time this past year. I think one studio’s difficulties probably won’t alter the overall reputation of blockchain gaming.
Mike Levine – Mystic Moose
Star Atlas was a poster child of this space when we entered into it in 2021. But, as a veteran game developer, the project seemed overly ambitious for a team’s first game. Other game dev colleagues I showed Star Atlas to saw how hard it was going to be to realize the full vision of this project.
Given their high profile, the perception within the web3 space of this recent news is not good. However, for the greater gaming public to whom companies like Mystic Moose are trying to introduce web3 elements to – they have largely never heard of Star Atlas, so the impact there is minimal. We do hope they can turn things around.
Alexander Goldybin – Founder and Chairman, iLogos
This news is a notable setback for the blockchain gaming market, but not a devastating one. Particularly, it impacts those less familiar with the gaming world, including non-core GameFi investors, speculators, traders, and players who were captivated by the Star Atlas team’s grand vision.
For many game industry insiders, it was evident that the team lacked both the experience and resources needed to realise such an ambitious project. Some even suspected the venture might be yet another scam.
Additionally, the unfortunate trajectory of Star Citizen comes to mind. Despite amassing over 600 million dollars in crowdfunding and the extensive game development experience of its leadership and team, they have yet to successfully launch a game of similar scale. Hence, this recent development with Star Atlas can be seen as a natural progression, particularly given the somewhat pessimistic sentiment towards crypto-gaming currently held by a significant portion of investors.
Jerry Seo – Head of Business, Delabs
The recent downsizing of Star Atlas and the broader perception of the blockchain game sector as inexperienced should be addressed as separate matters.
There are two primary reasons for viewing these issues distinctly:
First and foremost, ATMTA faced severe financial challenges primarily due to the FTX collapse in November. They experienced a significant blow with a loss of $16 million, as a large portion of their capital was invested in FTX. With such a substantial financial setback, the company found itself constrained in its options, leading to the unfortunate but necessary decision to downsize.
Secondly, Star Atlas stands out as a blockchain-based AAA-rated game. The recent trend in web3 game development leans towards creating such triple AAA games. This status signifies the need for significant resources, especially when it comes to 3D graphic design. Moreover, Star Atlas’s adoption of Unreal Engine 5 necessitates a knowledgeable and skilled team willing to acquire new expertise. These advanced attributes undoubtedly call for considerable development resources and financial commitments.
In conclusion, Star Atlas’s choice to downsize was influenced by a mix of unexpected market dynamics in the web3 realm, such as the FTX collapse, coupled with the intrinsic financial requirements of crafting a top-tier blockchain game. Thus, it doesn’t necessarily reflect the inexperience of all Web3 game developers and their operations.
Nicolas Gilot – co-CEO, Ultra
After the pandemic boom, was there naivety that the web3 and tech bubbles would keep going; that more capital would be straightforward to secure? Categorically, yes. Significant layoffs have therefore been visible across the technology sector this year, not only for web3 organisations but also for giants such as Facebook and Amazon. At the same time, developing AAA games has become more intensive and expensive than ever, even for vastly experienced companies.
It is fair to say that the impact of these wider trends is often amplified in web3, where entirely new technologies and ways of doing things are being pioneered, and where the sector has been rocked by incidents like the FTX scandal. But this doesn’t warrant the labelling of an entire industry as inexperienced and unskilled. Ultra itself has managed to grow through the current market with a fiscal approach rooted in experience and long-term planning, recently reaching a milestone of 100 employees.