In the latest episode of his Blockchain Gaming World podcast, editor-in-chief Jon Jordan talks to Pixels CEO Luke Barwikowski about the growth of the social RPG, which is now the most popular blockchain game in terms of daily active wallets.
As well as talking about the problems of scaling the game and building out the developer for long term success, we also discuss Pixels‘ Chapter 2, which will change many of the game’s underlying features, making it more exciting for players individually as well as building out deeper progression for in-game guilds.
This interview has been edited for length and clarity.
You can also listen to the podcast via the Fountain app and earn Bitcoin.
BlockchainGamer: How’s it going being the most popular blockchain game?
Luke Barwikowski: The more scale that you get, the more attention you’re going to get, the more bad actors you’re going to bring into an ecosystem. We took security super seriously after the release of our token. We moved hundreds of millions of dollars through our software in the first couple of days, so we knew that was the biggest, most important priority. People tried to take advantage of that. People tried to hack us, but overall it was a really smooth launch. We’re really thankful for that because the team put a ton of time, energy and effort before the token was out to make sure that we were safe, secure and solid.
And then as we’ve scaled, there’s also other issues that start to come up. Servers, infrastructure, the normal stuff like that. Our dev team is amazing, so they’ve done a really good job of scaling. It is not an easy thing to do, to scale a multiplayer game to a million DAUs, especially when it’s real time, all these concurrent users.
When it comes to org building, we’ve been thinking a lot about that too. We’re in a really amazing spot where we have a lead (if you want to call it that) in terms of web3 gaming users so what we want to start to do is think about how we set the organization up for the next two to five years.
What we want to be known for is not being a web3 gaming company. In the next five years, we want to be in the conversations of all gaming companies. We want to be a top five gaming company. Setting the organization up for that is the struggle right now; thinking about how we want to build moving forward. What are the things that we should focus on? What kind of talent do we need? And how do we continue the things that have been working really well for us?.
For example, when we first started scaling up, I thought we needed to professionalize the organization a little bit more. I still think we do need to do that to some extent. But also I think what we’re going to start doing is doubling down on the things that people really love about us, which is shipping really fast, giving new updates to the players, keeping them involved in the process. Trying to figure out how to do that at scale with the attention, it’s kind of the fun and tricky part, but that’s the next focus, basically.
Last time we spoke, I think the team was about 15 strong. Has that changed a lot?
No, not significantly. We’re being really careful who we bring on. What’s great is that in 2021, when I was trying to hire talent inside of web3 gaming, it was very difficult. I could get very few people from the industry to sign on. It’s turned for us now where I think some people are waking up to what web3 gaming can be and we’re getting a lot of really good inbound interest. So as we’re building out, the big things I’m looking for is do people want to work hard and be part of something new, because bringing in corporate talent isn’t always the best fit.
We need people who are willing to be hungry. We also need that professional experience that we haven’t had on this team before too. This is a young scrappy team that’s just figuring out how to make things work and now we want to combine both of those things.
You’ve become something of a figurehead for blockchain gaming. How are you finding that?
It’s cool to know that I can maybe help make the industry better because we have a lot of lessons that we’ve learned from actually having a game out. There are lessons that you can only learn when you have a game out. That was partly why I wanted to work with Sky Mavis and the Axie Infinity team so badly because once I started building a web3 game and we had a live web3 game, I realized, you need experience to understand what the problems even are.
So yeah, I just want to do my part and help other people in the space make the space better. Because if the space grows, that’s also good for us. Like it’s easy for me to hire. It’s easier to like onboard new users if there’s more reputation and like a better view of the space with everybody. So we need better games to come out. I’m dying for them as well.
How come Pixels is growing by 10x when other blockchain games are growing 10%?
Partly it’s because we look for the 10x improvements. I think a lot of games people are used to looking for 10 % improvements. When you’re dealing in a very competitive space, you need to hyper-optimize so you’re looking for the things in your pipelines that can maybe improve like a 5% funnel. Because when you’re talking web2 gaming and you’re dealing with the volume they typically do, a 5% improvement in one moving users from one screen to another might be millions in revenue, right?
A lot of people in gaming are part of a huge organization and so when they come into web3 gaming, they bring their expertise. That’s going to be important in three to five years as more web3 games come out and they’re all competing for attention. But right now we’re in a pretty uncompetitive market, meaning that there’s not a lot of games out here. So what we look for are the 10x improvements. My team is more focused on the 80:20. We want to get features out that are like 80% polished.
When the space gets more competitive, we’ll probably have to be doing that 20% polish. It takes a lot of time, so we’d rather focus on the things that are new and innovative to get attention and move quicker because to me there’s still so much value to be unlocked in web3.
One of the next things that we’re going to be working on is reward targeting. At first I was debating, do we hire this crazy data science team here, or do we just cowboy it and build something that’s 80% as good as something in web2. When we add the web3 native methods, it’s probably going to be extremely powerful. We’ll get it out quicker. We don’t need to spend as many resources on it. So that’s kind of the approach; build stuff quickly, build new things, and try to iterate on them as quickly as possible.
It’s interesting that your token has a lot of internal utility. You specifically say it’s not speculative.
When we were helping the foundation design the token, we had a very different view of how tokens work compared to other teams. We’ve been very intentional about not designing a Ponzinomics scheme. Really how we view tokens is more like free-to-play gaming. I don’t think it’s too different in the long run. I think you could pull off a lot of stuff that we’re doing with web3 gaming with fiat currency in the long run, if the team wanted to do that. The interesting stuff to me is more viewing the token as a user acquisition tool.
Then the innovation we’re actually doing is what I like to call direct-to-consumer rewards. Tokenomics should not be so complicated. I have an economics degree. I love tokenomics. I was studying them. If you remember the space two years ago, I would read whitepapers and I couldn’t make sense of them. You expect the average gamer that’s playing your game to understand it and they need to understand it to play the game. It was a little ridiculous. And a lot of those tokens aren’t even around anymore.
At the end of the day, what we think about is there’s two sides. One, we want to give tokens to people who are more likely to use the tokens in the game. It’s not so easy. That’s much easier said than done. And then we want to make sure that the tokens are used inside of the game. If we pull both of these off, essentially we can create a system that looks a lot like a free-to-play game, except some people might end up coming out net positive, so play-to-earn. That’s the interesting part.
If you can make a system where 95% of your users are net zero or maybe even net positive when it comes to earnings, and then 5% of your users monetize like a free-to-play userbase, that’s sustainable. We’re not that far from cracking it, I would say. We basically need like 2x revenue from where it’s at right now to be net positive spend inside of the ecosystem, and we have basically done nothing to optimize monetization.
And players don’t need to know any of this. They can just play the game. They might get some tokens, which is pretty cool. It’s a great user experience, the first time that you earn a token inside of a game. Then we just need to make the game fun and give them reasons to use the token. Some people might want to, some people might not, and that’s totally okay.
So the big thing happening next week is the launch of Pixels Chapter 2. Can you tell us about that?
We’ve been building a live game for two years, and we’ve learned so many lessons. But we built Pixels in a very interesting way. It was like a hodgepodge of all these different things that we tried out and now we’re in an interesting spot where we want to start building a better system for the future. We want to make the game make more sense, so this is a whole systems redesign.
If you look at the game, it’s going to look exactly the same on the surface level, but the way the players interact with the game on the day-to-day is going to be very different. The way that we distribute rewards, the progression, all of this stuff is changing. Really it’s like version two of the game. It’s going to look very similar but play extremely differently.
There are a few goals that we’re trying to achieve. The first being we need the game to make a little bit more sense to the typical gamer. The systems coming in are going to be more MMO-like if you’ve ever played games like Runescape, World of Warcraft, Ragnarok Online, MapleStory. There’s a much stronger sense of progression when it comes to resources that you’re able to unlock. You have to get higher level tools, all the stuff you’re really used to seeing in social multiplayer games. We’re finally incorporating this.
We’re changing some of the resource generation mechanics inside of the game too. We talk about cyber prevention, about detection a lot. My take is there’s a bunch of different layers to that problem. One being the prevention, the capture side of things to the detection and banning, preventing people from signing up again, if you already blocked them – fingerprinting. Then the fourth area that’s really important is that the game is designed well, so some of the game design we’re implementing is supposed to be more cyber resistant.
Part of the end goal is we want to give out more rewards to more real users who have progressed further through the game. We want to create incentive structures to get further through the game. That’s part of the reason behind some of these changes. It’s going to be interesting to see how it plays out. Guilds are really tied into this release too so some of the social play. Then we’ve also focused a lot on a single player experience. Together, we think these things are going to create a better base for the future of the game and just make a much better experience for users. But it’s funny because there are still some things we haven’t quite fixed yet.
We don’t have great tutorials. The onboarding experience isn’t great. But it wasn’t the intention behind this. I wouldn’t say we’re going for the mass market yet. There are still a few things we want to test first before we start to polish and finetune. But this is basically the first step in creating a better base of the game and getting more content updates out quickly because it creates a better base to send out more content to the users – new industries, new types of items, new tiers, all of this. We’re trying to do this on at least a monthly cadence moving forward, content packs and all this stuff.
How are you looking to improve guilds, because this is both external guilds like YGG and also native Pixels guilds too, right?
Yes. There are Pixels native guilds. They’re natively integrated into the game. They’re going to be a really big part of the gameplay inside of Chapter 2. One of the big changes to the game’s systems is that resource generation is now single use. Basically if somebody’s farming on a plot of soil on NFT lands, then only one person at a time can use it. Guilds are going to be the guardians of the resource generation. <ost guilds have ownership over land inside of the game and it’s going to be up to them how they want to self organize. So if players want to gather resources that are land-only, they might have to join a guild or get permission from a guild to come onto the land and harvest some of the resources. That’s a new social element of gameplay, requiring a lot of cooperation.
We’ll see how it goes. I’m pretty optimistic. We’ve been talking to the guild leaders and players who are involved in the guilds quite often. They’re very excited about it. There’s still some new tools that we probably need to go and build, but that’s gonna be part of the experimentation.
Have you got to the stage of having web2 gamers playing Pixels yet or is it mainly web3 people?
I would say a lot of our users are somewhat familiar or they have a friend or a family member that is web3, but these users are a lot more casual with it. Pixels is probably their only web3 interaction. They might mint an NFT specifically for Pixels to use a skin, and that’s basically all they do onchain. These aren’t degens. They’re really wholesome. If you look at some of the content that we post on X you’ll see they’re really sweet, really awesome users..
It’s funny how the crypto gaming crowd has instead gone really degen with onchain games on Blast.
I think there’s a place for that kind of stuff. That was one area that was really neglected for a long time, too. But there aren’t many casual crypto experiences, like ones your mom would play, even now. I’m really surprised that we’re like one of the only ones right now.
I guess it shows that people still really like the FarmVille-style gaming?
It’s a great comparison. FarmVille is a great example. You can’t knock their success. It’s amazing what they were able to do. I am obsessed with the early days of Zynga. It’s a huge inspiration for what we’re doing.
In terms of the rest of the year, what’s the focus?
There are two things we’re focusing on. One is just the growth of the game, making sure the game is getting more fun, getting more content out, making sure the players are happy. Then there’s other experiments that we’re doing that are those 10x improvements. I’m very optimistic about the data science stuff that we’re doing and the effect it’s going to have on the ecosystem.
For example, if we figure out some of the user acquisition technology we’re building, there’s a really interesting use case for us to bring on or acquire other games or build our own games. We’re already starting building out other titles now with Pixels IP but if we can start to prove out this user acquisition technology, then it’s a huge competitive advantage for us. We might have tech that can scale rapidly, wildly just like this game and do like four or five other games at the same time.
And because Pixels is more casual, you’re not waiting for the rise of crypto games. You can just find gamers.
Yes. I’m so optimistic and weirdly confident of getting the incentives right and the growth will come. It’s just what we’ve seen so far basically. It makes sense. If there’s incentives, they should get filled.
And there’s opportunity for us to juice this up too. We’ve done nothing with incentivized referrals or incentivized content. We’ll start doing that when we’re really ready to push the growth levers.
Check out Pixels via its website. Chapter 2 goes live on 17th June.
