Nick Chong · 8 hours ago · 2 min read
With large sums of money and public attention turned toward blockchain technology and cryptocurrencies, the question of the ultimate “killer app,” or an app that immensely drives adoption and creates real-world value, remains.
The Chinese Gamble That Paid-Off
Famous for both creating a blockchain application and jamming the Ethereum network in December 2017, the team behind “CryptoKitties” has ample experience in the blockchain market to validate their strategic decisions, with the latest one being an Asian expansion.
For the uninitiated, “CryptoKitties” is a blockchain game centered around breedable, collectible digital cats that enterprising users may “trade.” Last month, for example, CryptoSlate reported that two users made over $100,000 solely trading digital cats.
Additionally, the company has begun infiltrating the Japanese, Korean and Chinese gaming markets as it hopes to capture the attention, and ETH, of game-obsessed Asians.
“CryptoKitties” is parented by Vancouver-based Axiom Zen, which has also released a third-party application called Kittyverse–an open-sourced digital asset licensing platform and an investment fund focused on gaming-centric cryptocurrency products.
Co-Founder Explains Strategies
Leading the expansion plans is Benny Giang, a “CryptoKitties” co-founder who recently launched the application in Hong Kong, China and Taiwan. To prevent a repeat of the December 2017 network jam, Giang initially released the iOS app to 5,000 players after vetting several WeChat accounts.
Benny notes that blockchain-based games in Asia are a “huge untapped market,” but face increasing competition. The reasons are clear: Asian markets are substantially better developed than their U.S. or European counterparts, regulations surrounding cryptocurrencies are better structured and developed, and the sheer number of gamers in Asia eclipse other continents.
The Chinese market is arguably the most developed for blockchain and, barring cryptocurrencies, related applications. However, “CryptoKitties” is facing competition in the Chinese market; internet giant Xiaomi, which recently launched an IPO on the Hong Kong Stock Exchange, launched a collectible bunny game, called “CryptoBunny,” last year.
Furthermore, search engine giant Baidu, dubbed the “Chinese Google,” also launched “CryptoPuppy” this year, enjoying a significantly larger market share and participants compared to a startup like “CryptoKitties.”
Remaining Culturally Relevant
Giang and his team realized a fundamental difference in their strategy before entering the Asian market–it is vastly different than other markets and driven by the unordinary.
Citing Uber’s debacle in China, Giang noted that the market had to be penetrated with local partnerships, be available in Mandarin or Cantonese and target the market with Chinese culture in mind.
In January 2018, Axiom Zen partnered with Hong Kong-based Animoca Brands to enter the Taiwanese and Hong Kong markets as well as introduce characters that are popular locally like Doraemon, Garfield and Ultraman. Axiom Zen also built a Chinese website, provided customer care services in the local language and hosted several giveaways.
Using such strategies, Giang achieved the support of local communities and utilized a traditionally-driven, community-first approach to winning the hearts of Asian gamers. By creating a sustainable userbase, instead of a fly-by-night operation making millions, the firm was able to separate itself from other cryptocurrency projects.
Despite gaining negative press after users quickly lost interest in the game, “CryptoKitties” raised $12 million in a Series A round led by A16Z and Square Ventures in March 2018. A portion of that money has been allocated for Asian expansion, with the rest allotted to manage American and Russian gamers.