Pantera Partner: Overview of the Current Status of TON Games

Author: Paul Veradittakit, Partner at Pantera Capital; Translated by: 0xjs@Golden Finance

What is TON?

TON (The Open Network) is a blockchain with Toncoin as its core cryptocurrency, capable of processing over 100,000 transactions per second, and is directly integrated into the messaging platform Telegram.

TON allows developers to create mini-programs and games that run directly within Telegram. These applications can be accessed through in-app links or bots, opening the app with just a click, without the need to download software. Among the 950 million monthly active Telegram users, over 500 million interact with mini-programs each month. For example, the TON wallet is also integrated as one of these mini-programs, providing a seamless entry experience into cryptocurrency wallets.

Playing Games on TON

The gaming industry is often a tug-of-war between game developers and platforms. Developers want to use platforms that are easy to access, easy to distribute, and inexpensive, while platforms try to build moats around their ecosystems to keep users and developers within their closed communities, while charging high fees to everyone. For example, the Apple App Store charges a 30% fee on all revenue.

However, with the TON blockchain, the incentive mechanism for game development can be reversed because the driving force of shared success between the platform and the games is through the increased usage of cryptocurrencies like Toncoin. If more people play games integrated with TON (for example, through new tokens, NFTs, in-app purchases, airdrops), more players might buy Toncoin, which could increase its price, benefiting both developers and the platform itself. Therefore, the incentive mechanism is to make the TON platform and games as inclusive as possible and share the games as widely as possible.

Developing games on TON is free of charge, with positive development support available, and games are incentivized to help each other grow. In fact, you can start creating a game with just a click, and Telegram has 950 million active users every month.

Current Games on TON

Currently, many popular games on TON adopt a "click-to-earn" model, where players can earn token airdrops or rewards such as NFTs through simple and addictive gameplay. The marketing goal of many games is to obtain token airdrops. Some of the most popular games include Catizen, Notcoin, and Hamster Kombat.

These games themselves are not innovative, but their popularity has exploded, similar to web2 games. One of the first examples of these games is Cookie Clicker, a web2 game where users click on cookies, which peaked at 1.5 million players in 2013. Cats & Soup is a game launched in 2022 where users can collect cute cats by clicking, which surpassed 50 million downloads globally last year and earned 2.2 million dollars in the fourth quarter of 2023. Recently, Farm Merge Valley is a game where users combine farm animals into larger animals, and it quickly became popular after launching on Discord's new embedded gaming platform.

These games have risen and fallen rapidly due to their connection with fashion. Many games can only maintain a lifespan of up to 6 months, after which their "cool" or "cute" factors fade away. TON is an excellent platform for launching these games as it has easy access to Telegram's 950 million monthly users, and games can encourage ongoing use through token incentives. For example, Catizen has a $CATI token, which currently has an FDV of over $500 million, and has allocated 34% of all $CATI for airdrops to users. The first 15% was distributed to early participants in September 2024 (150 million tokens worth approximately $82,290,000), and the remaining 19% will be used for future airdrops to users who play the game. See the Catizen roadmap presentation here.

The integration of Catizen and TON has been very successful; the game is shared in group chats on Telegram, and users are incentivized to continue playing to keep receiving airdrops. Additionally, the team behind Catizen can earn 20% of the total token supply, apart from in-game purchases and advertising. In fact, the average lifetime value of a paying user is about $35, which is comparable to the standards of successful web2 games.

Catizen is still exploring new development methods, such as staking $CATI, yield farming, airdrop collaboration projects, and building a Launchpad for games to join its ecosystem.

Leveraging its popularity and existing user base, Catizen is able to promote cooperative games or advertise other games within its own game, while also promoting its own tokens.

Catizen has its own game center, allowing games to be published on Catizen's own platform as a reward for collaboration. For the games in the game center, they provide their own SDK, leveraging their experience to simplify the complex multi-language TON stack, making it suitable for game developers.

Next Generation TON Games

Tap to Earn games are among the first games launched on TON, and they need to be experimented with. Now, developers on TON have more experience, better infrastructure, and a better understanding of the best incentive mechanisms. However, a major issue with these games is that they quickly lose their player base. For example, from August to November this year, Hamster Kombat lost 259 million players in less than three months, which is 86% of its user base. Therefore, the next generation of games funded and built on TON will be social, core, and DeFi games.

social games

Social games are games that incorporate shareability as a core mechanism, leveraging Telegram as a foundational messaging platform. This may include games that require sharing to progress. For example, Candy Crush Saga achieved great success because it was one of the first games to integrate leaderboards and sharing into the core gaming experience. This feature can be integrated into other types of games.

Midcore Games

Midcore games, in contrast to hardcore games, have more complex game mechanics and are more appealing to players looking for a richer gaming experience. These games are suitable for players who want to play for longer periods, target specific demographics or regions, and have more flexible monetization strategies.

Gatto is a typical example. It was originally a click-to-earn game, and is now transitioning to Midcore. Gatto started as a pet collecting game, but later introduced a PVE game mode, incorporating replayable features into the game.

Gatto PVE game screenshot

Delabs is a game studio that specializes in publishing mid-core games on Telegram and TON. The Telegram Gaming Accelerator, founded by Helika and Notcoin, also prioritizes mid-core games by providing funding and advice for Telegram games.

DeFi game

DeFi is the key to the success or failure of blockchain. As DeFi protocols naturally develop on TON, some game studios may gamify the processes of DeFi, whether in liquidity provision, swapping, yield farming, or other aspects.

Call to Action

Now is the best time to develop games on TON. Many of the initial obstacles faced by TON games have disappeared; there is now better documentation and technical support, the airdrop program design has been improved, more data is available for decision-making, and there are more investors and incubators to support eager game developers. They have better plans to educate and integrate web2 game developers into TON.

For example, games now understand that they should focus on metrics like retention rate and revenue per user, and the way Telegram is used varies greatly across different regions. Interestingly, Indian users make extensive use of group chats because WhatsApp has a group chat limit of 1,024 people, while Telegram has no such restriction.

To start building your next TON game studio, please check the resources at the bottom of the article.

Pantera's Commitment to TON:

Pantera made its largest investment in TON ever in May. Pantera is actively investing in the Telegram ecosystem.

The following is a list of portfolio companies invested by Pantera in the TON gaming sector:

• Helika: A Web3 game data analysis, marketing tools, and game management infrastructure platform. They also launched the Telegram Gaming Accelerator, a 10-week program aimed at helping game studios improve their games before launching on TON.
• Metatheory: The game studio recently launched the casual game Gimmecat on TON.
• Genopets: A popular Solana NFT game studio has created Genopets: Pixelton, a retro PvP battle game in collaboration with Genopets.

Resources:

Official Support:

TON Founder Resource Hub

TON Ecosystem

TON Gaming Playbook/Support

Early TON Builders Community

TON Development Kit (TON SDK)

Research:

Helika Ton Report

TON Blog

Accelerator/Investor:

Telegram Game Accelerator (50 million fund)

TON Venture Capital

Open League

TON Foundation Accelerator