For the Love of the Game

(Market Commentary)

Zynga just put the bear market in a headlock while showing the gaming industry maybe the best way to launch an NFT collection in these brutal conditions.

If you’re not familiar with Sugartown Oras, this was Zynga’s first ever NFT mint for their upcoming Web3 game. The major game studio of course turned heads with their entrance into NFTs, but what really blew the community away was that their NFTs were completely free. Collectors didn’t need to worry about selling their last remaining prized NFT to afford this drop, which cannibalizes other collections’ floors. Though I guess technically that's how many collectors will have to get in, because as of this writing, Sugartown is sitting at a .32 ETH floor price. Collectors who didn't get a whitelist for the free mint will need to pony up to hitch their wagon on this horse. 

Source

The Zynga mint highlights the struggle of projects when it comes to pricing their primary sale. Trying to find the perfect price that collectors are willing to buy in while maximizing the amount of funds they can raise is like walking on a tightrope, but it seems no matter what price they settle on, collectors want little to do with it. Remember Wreck League failed to mint out their NFTs priced at .19 eth, and more recently Nakamigos were FUDed to oblivion with their announcement of a .05 ETH mint. Maybe there’s no price collectors are willing to mint at today, so making them free is key.

The real question about Zynga’s mint is what makes them so special that collectors are chasing them at this price on secondary, with 4k NFTs from the collection still remaining to be minted. Mystery, untold potential and the opportunity for endless speculation are the secret ingredients of NFT prices. Always were, and maybe always will be.

Zynga is teasing that Sugartown isn't just an NFT for one game, but instead the key to their broader NFT gaming ecosystem. Without a clear roadmap, there’s plenty to speculate on, so collectors can let their imaginations run wild with what the NFTs will do, and are driving up the prices on secondary. I've been telling my pals this secret for years, but this year it has become part of collective understanding, that as soon as collectors learn what your product is, speculation ends and prices tumble.

Are other game studios paying attention? I certainly hope so since we have some huge NFT games coming from more major devs. Konami announced last week a new NFT game called Project Ziron, and Krafton, the devs behind PUBG, also announced a new game called Overdare. I hope both were taking notes on Zynga’s entrance into NFTs.

Free NFTs in this market will win over both hardcore NFT degens but also opens the door for the NFT and crypto-curious in traditional gaming. Let's hope these two embrace a more sustainable way to offer NFTs, and help drive the space forward at this critical time for NFT gaming.

Peep the charts

Only in NFTs could you call the changes in numbers this week stable, yet here we are. In a space that used to show us wild double or triple digit swings on a daily basis, last week felt rather even. I’m watching for long periods of stabilizing numbers to tell us we’re nearing a floor, or at least more realistic trading action.

Global sales, buyers, sellers, and total transactions still are on par with May/June 2021, and it will take a significant fall from here to reach the next level. I’m talking about Feb 2021 when we saw around $36m - $54m in weekly sales.
 

• DMarket, DraftKings, Gods Unchained, and Sorare (The Four) just dominating the top 5 collections this week. You know the story: huge supply, low cost, high volume collections with mass appeal (gaming skins, fantasy sports, and gaming assets). This is the winning formula for NFTs.

• The CryptoPunks saw some big sales this week including a Zombie Punk #3609 which sold for $682k this week.

• The Nouns fork is complete and over 50% of holders decided to leave the old collection and move on to the new iteration of the Nouns. Along the way they took their share of the treasury, totalling over $27m.

• Sugartown Oras free mint from Zynga had a red hot secondary market, and we saw the floor price rocket up to over .42 ETH. 

• $SATS BRC-20 collection helped Bitcoin reach as high as the #2 spot on the collection rankings this week, with huge sales on bundles of the hot BRC-20s.

• Ethereum sales were up ever so slightly this week, mostly driven by large BAYC, CryptoPunks and plenty of Nouns sales.

• Mythos Chain’s volume is yet again 99% composed of DMarket sales. People just love those CS:GO gaming skins.

• Polygon action is still largely driven by DraftKings, with 67% of its total sales coming from the sports collectibles.

• Solana’s sales volume is down 13.01% but the value of their NFTs has actually increased, reflected by the Solana NFT Composite’s +0.30% gain in the past 7 days.

Noteworthy Happenings

• Stoner Cats are now the 2nd NFT project to be sued by the SEC, just like Impact Theory last month. Also like Impact Theory, the Stoner Cats team agreed to pay a $1m fine, offer refunds, burn any held NFTs and remove royalties. They did not have to admit to guilt, but are now banned from being traded on major NFT marketplaces.

• Animoca Brands is now branching out their metaverse ambitions to the Bitcoin and have partnered with Horizen Labs to build Bitcoin’s first metaverse token to power multiple games, starting with Life Beyond.

• Pixels are the latest NFT project to move across blockchains, now heading from Ethereum to join the ever-expanding Ronin ecosystem.

• Nakamigos backtracked on their upcoming .05 ETH mint for their new Cloaks collection, and instead will now offer the collection as a free mint for Nakamigos holders.

• Opeppen has released 3 new sets of NFTs this week, with art coming from Vincent Van Dough and Jack Butcher.

NFT Forkast

Is there anything left to say about the NFT market at this point? With no catalysts for change anywhere in sight, we’re seeing a continued bleeding out in the NFT market. Maybe the takeaway here is that the lower volume in NFTs hasn’t really led to desperation and selling NFTs for pennies. Instead we see this gradual decline of value, as it seems traders are mostly happy to hold onto their NFTs for the long haul. They’re only selling when they need liquidity, though maybe it’s because they know there’s no buyers out there.

If you’re looking for daily NFT updates, check out my new daily NFT market update show called Inside NFTs, where I bring you all of the latest NFT happenings in under 5 minutes each day.

Have a MEGA GM and I’ll see you again next week!

— Yehudah Petscher

News Headlines

• Magic Eden now supports compressed NFTs, driving down the cost of minting NFTs

• Yat Siu submitted a proposal for the ApeCoin DAO to create a sister DAO to expand the use of $APE, and to purchase NFT assets

• The Stoner Cats have been banned from being traded on OpenSea, Rarible and more major marketplaces

• Yuga Labs has partnered with NFT Now for a new docuseries on CryptoPunks

• SuperRare lets go team members in an effort to cut costs in the difficult bear market

• The Bored Ape Yacht Club is hosting an open house for non NFT holders, open to the public for the first time ever

• This year’s Macy’s Thanksgiving Day Parade will feature a Cool Cats float, marking the first time an NFT character has appeared at the iconic event

Upcoming Drops

Matt Kane - Anons
Date - Sept 19
Blockchain - Ethereum
Price - Auction

Funko - Jurassic Park
Date - Sept 19
Blockchain - Wax
Price - $9.99 - $29.99 USD

HRO - DC Artworks
Date - Sept 20
Blockchain - ImmutableX
Price - TBD

DraftKings - Reignmakers Football Rush W3 Packs
Date - Sept 20
Blockchain - Polygon
Price - $19.99 - $39.99 USD

Marvel - Yoda #1
Date - Sept 20
Blockchain - ImmutableX
Price - $6.99 USD