Breaking through the cold wave of Web3 games, what is the origin of DPS, which received US$30.5 million in financing?

Author: Zen, PANews

Web3 games, which were once one of the main application directions of cryptocurrency and Web3, are now experiencing a severe winter. Not only have a number of small and medium-sized Web3 game studios shut down, but the market value of the token of the leading company Immutable has also fallen out of the top 100. In the investment and financing market, people have not seen Web3 game projects raise large amounts of funds for a long time, and the relevant narrative seems to have failed.

However, in this context, independent game studio Distinct Possibility Studios (DPS) recently completed a $30.5 million financing, which is a rare amount in the current Web3 game industry. This round of financing for DPS was jointly led by game-focused venture capital firm Bitkraft and European hedge fund Brevan Howard, with participation from Tezos Foundation, Hashed, Delphi Ventures, Shima Capital, North Island Ventures and Decasonic.

According to official disclosure, the funds raised will be used to develop its first project, a large-scale open world persistent first-person shooter (MMOFPS) called "Reaper Actual", and plans to release it on platforms such as Steam and Epic. According to official statements, the game will also integrate Ethereum layer 2 chain Etherlink, allowing game assets such as characters, bases, and skins to be traded on the chain.

How did DPS raise tens of millions of dollars in financing against the trend?

Distinct Possibility Studios (DPS) is a new studio co-founded by many veterans in the gaming industry. Its core leadership team are all heavyweights in the traditional MMO and large-scale shooter game fields, which is also a key factor in its ability to raise huge financing. DPS exists to go a step further and create a more infectious and attractive multiplayer game experience.

John Smedley, the founder of DPS, is one of the representatives of the American gaming industry, especially in the field of online games (MMO). He has served as the CEO of Daybreak Game Company (formerly Sony Online Entertainment, SOE) for a long time, and has led the operation and development of many classic games in the company's history. His most famous works include the 3D MMORPG "EverQuest" launched in 1999, and the large-scale free MMOFPS "PlanetSide 2" launched in 2013. Among them, "EverQuest" is one of the first graphical massively multiplayer online role-playing games (MMORPGs), which has a profound impact on the history of games.

Before founding DPS, John Smedley's most recent public position was the general manager of Amazon Game Studios, dedicated to developing new game projects, but he announced his official departure in early 2023. He wrote in an email to employees: "After careful consideration, I decided it was time to try something new." Perhaps since then, Smedley has decided to establish DPS.

In addition to John Smedley, other key leadership positions at DPS are also held by industry veterans with impressive resumes and rich experience. Matt Higby, Chief Creative Officer of DPS, has been deeply involved in the field of online games since joining SOE in 2001. He participated in the design and operation of EverQuest II, Star Wars: Galaxies and Free Realms in the early days, and later served as the creative director of Star Wars: Clone Wars Adventures. He also served as the creative director of PlanetSide 2, and was fully responsible for the game's world view, gameplay balance and subsequent updates.

DPS's Chief Artist Tramell Ray Isaac (often called T-Ray) is also a well-known figure. He is a key artist in the well-known game "Fallout" series and has drawn a large number of Vault Boy images. As the head of art, he has rich experience in the visual presentation of the game world view, characters and scenes, and has served as an art director in top studios such as Interplay, SOE, and Obsidian.

John Smedley (left), Matt Higby (second from left), T-Ray (right)

Flagship game Reaper Actual with optional Web3 elements

Reaper Actual is an open-world persistent first-person shooter (Open-World Persistent FPS). The official introduction points out that this game will "combine tactical shooting gameplay with MMO-style progression systems and strategic faction dynamics". The game is set on the fictional island of Marova. Players play a mercenary warrior called "Reaper" and are in constant conflict with other players and different factions controlled by artificial intelligence. The core gameplay includes base building, resource collection, faction alliances, and large-scale raid battles. The game world and battles will continue to evolve and update with the player's actions. Players' decisions and actions will affect the control of the territory and the progress of in-game events, strengthening the persistent online world experience.

Specifically, Reaper Actual has the following unique gameplay and mechanisms:

• Open world and faction confrontation: The game supports free exploration and combat on large maps, and different player factions and AI factions will conflict for territory and resources. Players can freely choose to join different factions, collaborate with allies, and carry out large-scale PVP and PVE missions.
• Base construction and resource management: Players can build and upgrade their own bases on the map for defense, production and assembly of troops. Base construction and upgrading consume resources and affect the types of troops and equipment provided in the game.
• Player-driven economy: The game has an economic system dominated by players, where players can produce weapons, vehicles and equipment and deploy them when needed. By completing various tasks and goals, players obtain resources for construction and expansion, which allows player behavior to directly affect the game's economic cycle and tactical choices.
• Dynamic missions and conflicting targets: The mission system of Reaper Actual supports mixed PVP and PVE gameplay. Mission targets will overlap or conflict with the actions of different forces, thus bringing unforeseen combat encounters. For example, at the same time, different factions may receive opposing missions, and player teams may meet unexpectedly, which increases the tension and diversity of the game.

It should be noted that DPS is not completely betting on the Web3 game track for Reaper Actual. It said that it will provide an optional Web3 asset market function when the game is launched: skins, bases and other items acquired by players can be bought and sold through the market, which runs on the Etherlink blockchain. In this way, Reaper Actual not only retains the free play and social experience of traditional games, but also allows players in need to use blockchain technology to "own and trade" in-game assets.

Why choose the unpopular L2 network Etherlink?

Etherlink is an EVM-compatible Layer 2 scaling network based on the Tezos blockchain. It uses Tezos' Smart Rollup technology and combines the toolchain advantages of the Ethereum ecosystem (such as compatibility with Ethereum wallets and indexers) with Tezos' high-security architecture.

According to Etherlink's official documentation, Etherlink can achieve sub-second transaction confirmation (usually less than 0.5 seconds) and extremely low transaction costs. The handling fee for each ERC-20 transaction is usually no more than $0.001, which makes it economically feasible for small in-game transactions. In terms of security, Etherlink's transaction status is regularly published to the Tezos main chain, inheriting the security guarantee of Tezos Layer-1; at the same time, it adopts an open verification and dispute resolution mechanism to ensure that the network is decentralized and difficult to tamper with.

These advantages are one of the important reasons why DPS chose Etherlink. DPS said that Etherlink can support "large transaction needs" and adopts an "energy-efficient" consensus protocol, while having "secure and reliable smart contract" functions. Smedley said that Tezos and Etherlink were chosen to support large transaction volumes, energy-saving protocols, and secure smart contracts. In addition, the vision of Tezos and Etherlink is also consistent with her strategy, which is to bring traditional gamers into Web3 by providing optional options and focusing on making it accessible.

However, more reasons may be that Etherlink, as the "son" of Tezos, is a Layer 2 solution strongly supported by the Tezos community. Similar to "Off the Grid" to Avalanche, Etherlink, which is pushing the first batch of key projects to land, needs a benchmark game project to "support the stage", so it is natural for the Tezos Foundation to provide financial support and serve as a strategic investor to guide it to the Etherlink chain.

What is the future of Reaper Actual?

Overall, Reaper Actual launched by Distinct Possibility Studios undoubtedly has a luxurious development team background and impressive financing scale, but judging from the project progress and industry environment, it is still in a very early stage.

The overall cold wave of Web3 games has not subsided yet. There is still great uncertainty about players' acceptance of on-chain assets, regulatory and compliance risks, and the seamless integration of on-chain and off-chain gameplay. Even with senior experts led by John Smedley, DPS will find it difficult to completely avoid these challenges in the short term. Therefore, although this $30.5 million "counter-trend financing" can boost confidence to a certain extent, we should maintain a cautious and optimistic attitude. In the next few years, the public beta progress, on-chain economic model and user retention rate of "Reaper Actual" will be the key indicators to judge whether it can truly "break the ice".

In addition, the fact that Reaper Actual uses Web3 as an optional module in its design also shows that the team may not be placing all bets on the blockchain. Even if the on-chain version does not meet expectations in the end, players can still enjoy a complete and mature gaming experience, which is an effective risk hedging for game developers who focus on high-quality products.