Is the Illuvium overworld boring?
We have seen a lot of leaks lately of the Illuvium overworld and there are concerns in the community, I am here to discuss my thoughts.
We started from watching Grant stream overworld on Illuvium showcase to now having full blown streams showcasing the overworld in all its glory. However this doesn’t come without it concerns and we are going to break down some of my recent analysis into the ILV token, revenue distribution and of course breaking apart the overworld streams to see what we are in for. There is a lot coming for Illuvium over the next 6 months and I don’t think anyone is quite ready for what’s about to happen.
This is a busy time in everyone’s lives and I don’t want to bore anyone out of their minds so I will keep this all concise.
Is revenue distribution changing for the better?
Does Illuvium need to launch soon to survive?
Overworld looks and feels amazing but let’s discuss if it could be better.
We will cover all of that here and more so please keep reading. I am excited to share this journey with you.
The power of ILV tokenomics
There has been a lot of discussion surrounding Revdis, its true definition and the possibility of it now being adjusted given it is impossible to sustain itself for things like Merchandise sales.
The initial proposal of revenue distribution was to buy ILV off the open market as revenue enters Illuvium and then distribute 100% of that to tokens eligible to revdis. Split based on weight and some other factors. This initial definition pertained to the fact that in-game purchases in Illuvium has very minimal overhead costs and fits this setup quite easily. However as things like Merchandise and TV series are added into the mix as new revenue sources the definition doesn’t sustain itself.
In the case of merchandise if you spend $30 to make a t-shirt and then sell it for $60. And then because of the Revdis mechanism you are returning approximately 20-30% of the revenue from the $60 then you are operating at a 20% loss overall. This is obviously not ideal. So the term Net Revdis may be implemented soon in the future to further clarify the systems in place. Meaning after costs are taken into account. The remaining revenue is distributed to stakers.
Where all of this starts to get confusing is how it pertains to things like paying employees, expanding the studio and so on. There’s a lot of bets on the studio doing well to be able to fund the expansion and growth of the metaverse. If you then decide to remove salaries before distributing revenue it becomes significantly easier however you could start to massive diminish the returns from revenue distribution for the community, which is the promise they all engaged with.
Personally I believe they will make the right choices and try to maximise the revenue distribution benefits for stakers, still ensuring the entire studio doesn’t completely disintegrate.
Is Illuvium headed for a disaster?
Lelahel has always done some excellent work and helped me with my own calculations in the past but even this time he has outdone himself.
He has managed to craft a dashboard that shows the current spend of the Illuvium studio and carefully predict potential endpoints for the current runway. It is worth mentioning that the Illuvium runway is not the same as the Treasury. The runway is made up of Stablecoin cryptocurrencies such as USDC and Tether and was received from investors during the initial rounds of capital raises. Up until this point the treasury tokens have really only been spent on things like council payments.
When we take a look at this chart we notice two key details. Firstly the Illuvium teams monthly spend has increased drastically over the past 6 months or so comparatively to its early days, which makes sense considering how much the studio has grown. But more importantly over the past 6 months spend has been completely erratic, and it appears to be relatively hidden what the money was actually spent on. They have cut down their staff by 20-30 people in recent times and have also hired some new more crucial members on board but the rest of the money seems to have vanished. Is it marketing? Outsourcing development for Brightland Steppes? Or maybe upgrading the servers?
Why this is relevant is because if they were large unforeseen purchases which I’d expect they were then we may not need any more over the next 6-12 months. If that is the case then these projections could look very different. However let’s work with what we have.
If we use the simulated 3 month average then it’s clear that the runway may not last too much longer. Meaning Illuvium will be empty (before using the treasury) in November in 2023. Although that is 12 months from right now if the game hasn’t launched it could prove a serious issue. I am doubtful it will be a concern however running out of funds is not the core issue. This entire space is highly competitive and showing weakness can be far more dangerous than actually being weak.
Without the confidence in job security many integral team members could be poached by other studios which could harm the development and quality of the game. If the community sees weakness the tokens price could drop lower which will impact the ability to raise and increase the runway in the future. So many moving parts depend on showing strength especially during a bear market so this has to be corrected quickly without heavily impacting anyone or delaying the games launch.
The current theory is to sacrifice revdis on this upcoming Illuvitars sale and use the funds to bolster the runway and make Illuvium even stronger than it already is. There are lots of variables to analyse here and although they aren’t perfect if Illuvitars can be even half as successful as the first Land sale then it could provide a 50-150% boost to the current runway. Easily saving the day.
At the end of the day, the game continues to attract more positive attention and is not far off completion. It is the final stretch in ensuring the game is ready for the masses when mainstream finally enters web 3 gaming.
Does the Overworld leave a lot to be desired?
The overworld looks amazing and has many features even typical AAA studios seem to forget but is this enough to be one of the top games in the world?