CryptoKitties Traction Part 1/5 — Revenue Analysis – Covalent – Medium

CryptoKitties Traction Part 1/5 — Revenue Analysis – Covalent – Medium

On the Apple App Store, it’s common knowledge that 94% of the revenue goes to the top 1% of the publishers. We see similar distributions on the Steam platform, the Facebook platform when it launched, etc.

For CryptoKitties, 95% of the players make less than 1 ETH over their lifetime.

On the other end of the spectrum, the “whales” (high earners who earn more than 10 Eth) make up less than 1% of the user base and that’s consistent with benchmarks across the gaming industry. We’ll be digging deeper into the behavior of these whales in a future post.

Additional revenue questions

We’ve only scratched the surface of the kinds of questions we can answer. Here’s more food for thought:

1. How many Generation 0 kitties are still up for auction by developers and not claimed by other players? It would be interesting to understand if there were a decreasing demand for these kitties because the market was flooded.
2. Now that Generation 0 kitties are no longer being created, are the volumes attributed to the auctions of kitties higher or lower? Another way of thinking about this is if your generation 0 kitty is an asset, how liquid is it?
3. Since we know the two revenue streams, which one is more sticky and corresponds to a longer game play? What should the developers market more?
4. Price discovery and liquidity. The matching algorithm currently is a simple Dutch auction. Can we find blocks of illiquid kitties and bundle them to make them more appealing? What is the ratio of successful auctions to auctions created and how is that trending over time. A key sign of the health of the game and the consistency of the developer’s revenue streams.
5. Everything to do with profits. What has been the most profitable generation of kitties? Or any other genetic trait like color, etc.
6. Everything to do with taxes. Are the players paying taxes on their gains? Are they short-term or long-term?
7. How are these numbers looking for other localized versions (i.e., Chinese) of the game?

What’s next

This is part 1 of a 5 part series on analyzing CryptoKitties using the data on the blockchain. The other parts are:

1. CryptoKitties Traction — Revenue (this post)
2. CryptoKitties Traction — Retention
3. CryptoKitties Traction — Reach
4. CryptoKitties Traction — Ratios
5. CryptoKitties Traction — Growth Opportunities

Appendix: The SQL

Here’s the SQL code you can use as a template for your own analysis. Our product Covalent provides direct SQL and API access to Ethereum-backed assets and protocols, so you’ll need something like our tool for the underlying data.

We are sharing the entire analysis on our blog.

Published at Wed, 13 Feb 2019 22:17:05 +0000