Digidaigaku Super Bowl Commercial
Gabriel Leydon clearly knows how to rally an audience and retain attention. The Digidaigaku Genesis NFTs have held a solid floor price historically.
The Super Bowl is imminent. The Coinbase QR code advert created 20 million application downloads. That’s a 20% conversion rate. Could we see something similar for Leydon and his DigiDaigaku team?
Let’s take a look.
Article Outline
Background
Super Bowl Analysis
DigiDaigaku Analysis
Gaming Sector Review
Other Considerations
Closing Remarks
Background
Collections
Just before the Super Bowl game, the overall floor market capitalization (MC) of all the collections is 35,436 ETH ($54m USD).
There will be a total of four key collections once the Dragons mint later today. The DigiDaigaku ecosystem includes the following NFTs:
The Spirits and various potions are used to create the Heroes and Villains, respectively. Leydon has hinted at a third ingredient airdrop (dragon essence) which will be used to hatch the DigiDaigaku dragon eggs.
https://twitter.com/gabrielleydon/status/1624724821446893568?s=20&t=BzgxqxlaKgA57iq4ayPNDA
Not bad for a single free mint back in August 2022: 16 ETH ($24.5k USD) in current priced NFTs plus whatever the Dragon is priced at post-Super Bowl (assuming the other floor prices hold once the event is over).
This takes a similar approach to the BAYC model, whereby a single Bored Ape mint of 0.08 ETH ($123 USD) back in March 2021 has delivered circa 150 ETH ($232k USD) in value to minters who held through all airdrops. That equates to a 1,800x return in two years.
2) Gabriel Leydon and Limit Break
Leydon is a well-known mobile game developer who changed the face of mobile gaming with Game of War — Fire Age (under his direction as co-founder and CEO of Machine Zone), an immersive parallel chat-speak game. It has been among the top-grossing games since its launch in 2013, eclipsing even Candy Crush.
To promote it, Leydon created a Super Bowl ad starring supermodel Kate Upton, which is still being talked about. Sound familiar? if the approach ain’t broken, don’t fix it.
3) Timeline
August 8, 2022: The Digidaigaku Genesis collection launched on .
September 26, 2022: Hero NFTs were minted.
October 15, 2022: Hero NFTs were revealed.
October 21, 2022: Castaway Collaboration took place.
November 22, 2022: Ether Orcs collaboration took place.
January 27, 2023: DigiDaigaku Villains launched.
February 12, 2023: The Dragons mint will take place at the Super Bowl.
What’s been six months has felt like a decade, but we are finally at the Super Bowl which will likely be a huge event for the future trajectory of NFT's success.
Let’s take a look at the Super Bowl statistics and why this may be the case.
Super Bowl Analysis
Viewers
The Super Bowl frequently pulls in excess of 100 million viewers. In fact, it’s estimated that 43% of viewers tune in for the adverts, rather than the game.
Marketing Cost
It has widely been held as the most viewed advertising platform, hence the cost to have an advert slot is astronomical. The typical cost for a 30-second slot is estimated to be around the $6.5-7m USD mark. That equates to roughly $0.07 for each potential viewer.
This isn’t unusual, with most digital advertising costing between $0.03 and $0.30 per viewer. If the audience is known to be relevant to your product or service, then this can push towards the upper end.
Limit Break (Digidaigaku’s fund) raised $200m of funding. Gabriel Leydon understands the importance of advertising to make a successful game, so decided to allocate sufficient funds to get the game in front of the largest single global audience.
Previous Adverts
Leydon is not new to Super Bowl adverts. While CEO of Machine Zone, Leydon ran a couple of Super Bowl ads for the games Game of War: Fire Age and Mobile Strike, starring model Kate Upton and actor Arnold Schwarzenegger.
It’s going to be the first full-featured NFT branding advert in the Super Bowl, an especially big occasion for not just NFT integration into gaming but the wider NFT ecosystem.
Mobile Gaming
Mobile gaming was extremely big in 2013 largely due to the likes of Facebook opening up their ad platforms. The cost per install was $0.30 and the break-even period was less than a day.
However, since then AT&T and Apple updated the terms with the Identifier for Advertisers (IDFA) causing the costs to spike. Now that same Install is around $60 for a free game download - Clearly unsustainable. So seeking new avenues to pursue gaming is necessary to remain profitable.
The process to Obtain a DigiDaigaku Dragon NFT
Super Bowl viewers will need to scan the QR code embedded in Limit Break’s advertisement. This will air during the Super Bowl’s first commercial break. Be quick, you’ll have 30 seconds! Ensure you’re streaming it live also if viewing from another country as you may miss the ad window.
The intention is to induce FOMO in those who are viewing it. They will see that they had the opportunity to obtain a Digidaigaku Dragon purely on a first come first serve basis. Once they realize the price of the asset on secondary then many that are financially motivated may commence the rabbit hole journey into the NFT ecosystem.
However, assuming that no Dragons were whitelisted, there is already a 10,000/100,000,000 (0.01%) chance of getting access to the drop. There are 1,000 whitelisted, but what intrigues me is that there are 6,000 minted which could be held back for other ecosystem asset holders. If this is the case then there would be a 0.004% chance of getting one, 0.009% if only 1,000 are whitelisted.
Coinbase Advert Benchmark
You’ll recall the Coinbase advert using a QR code, which moved around the screen consistent with the historical DVD screensaver.
The ad proved so popular that the app crashed for about an hour. Coinbase had more than 20 million hits on its landing page in one minute and the engagement was six times higher than previous benchmarks.
The Coinbase ad was estimated to increase Crypto application downloads by 279%. Bearing in mind that the estimated number of people already in Crypto prior to the advert was c300 million.
When we compare these metrics the NFT space is dwarfed. Only 200k wallets trade NFTs weekly. In relative terms, there’s a greater opportunity for growth from a NFT-specific advert being televised to 100m viewers.
If 0.1% of the viewers (100k) were onboarded into the NFT ecosystem then that would result in a 50% growth in the participants. One could argue that this is extremely conservative given the Coinbase advert created 20 million downloads.
If we were to assume the same adoption rate (20% of viewers) then the results would be a 100x increase in current ecosystem participants. If these viewers became loyal to the Limit Break brand, then the existing ecosystem holder base of c2k people could see a 10,000x growth.
All these are scenarios are highly sensitive to several variables, but it illustrates that there is a reasonable likelihood that this event will have a positive impact on the current status of the NFT sector.
Predictions
It’s America’s biggest stage. Typically betting, beer and big names take the ad spots, particularly given the price tag.
It’s clear that the entire industry has a lot riding on the future of this being a success.
https://twitter.com/igorlenterman/status/1624549027575648257?s=20&t=BzgxqxlaKgA57iq4ayPNDA
The success of the advert will be determined by its execution. It’s great that Leydon has experience in these adverts, and it’s clear that he has done his research over the past 12 months, but the devil is in the detail. The word NFT is hated by many that are not in the NFT or crypto space.
Using wording like “digital asset” or even just making the advert look like a fun game without the viewers realizing the QR code gives them an NFT, could be the defining factors that drive its success.
If this approach succeeds, it’s likely we will see a revival of the free mint meta as new money enters the ecosystem expecting to mint new NFTs with the same model set out by Limit Break, Leydon and DigiDaigaku.
Assuming the advert execution is immaculate, then the slightest influx of viewers will be noticeable to the current NFT liquidity. It will not be insignificant and could follow in the footsteps of Yuga Labs with BAYC.
DigiDaigaku Analysis
1) Price
The floor price of the Genesis DigiDaigaku is 12 ETH ($18.3k USD), up 32% in the past 24 hours. Volume is also up 31% over the same timeframe, with 28 sales. The estimated floor MC is 24,264 ETH ($37m USD).
The rare Mythics have sold for prices well in excess of the floor. This Mythic Leviathan sold for 59 ETH ($90k USD).
The $200m Venture Capital funding drove $3.1m in secondary sales within a 24 hour period. It will be interesting to see if the Super Bowl has a similar impact, or perhaps the event is already priced in.
2) Volume & Proceeds
There has been a total of 26.1k ETH ($40m USD) in secondary sales volume across all the collections. If we were to assume all NFTs received the 10% royalties, then there would be $4m in royalties received by the team. However, given the recent marketplace stances, it’s likely the actual amount received is less than half of this.
Most of the volume has been within the genesis collection, which makes up 71% of the overall sales activity. Key drivers are that it has been around longer, received the initial hype around the $200m funding announcement and any sales command a significantly higher sales price than the other collections.
Zero proceeds have been received for the initial mint of each of these collections. Leydon is a firm believer in the free-to-own (F2O) model and hence the ability to drive value back to the early holders and supporters of the project.
3) Holders
There are 854 holders, working out at a distribution of 42%. This reasonable holder ratio suggests that on average each holder has two Genesis DigiDaigaku.
However, when digging deeper we can see that 621 (73%) only hold a single NFT. If any of these were to sell they would exit the ecosystem altogether which is unlikely.
Origins’ proprietary methodology estimates nine whales in the collection and 24% of day-one minters are still holding their Genesis NFTs. As a benchmark (using the same methodology), Azuki has 30 whales and 16% day-one minters.
This suggests two important metrics:
There are fewer large holders that could dump their spare NFTs.
The holders have a greater tendency to hold their NFT long-term.
Limit Break is the largest holder with 99 Genesis NFTs (4.9% of the collection). This suggests they have conviction in the project long term to hold their own project. Outside of Limit Break Hype.Eth holds the second largest number with 74 Genesis Digis (3.7% of the project).
Gaming Sector Review
Mobile Gaming
Worth $98b in 2020, the mobile gaming market will grow to $272b by 2030. It’s unsurprising when 38% of the world’s population plays games, with 3 billion gamers estimated worldwide.
Development Cost
The average AAA game takes about four years to develop, with an average cost of about $80 million and higher. For instance, Rockstar Games spent roughly $128m marketing GTA 5 in 2013. It’s not cheap to market a game successfully.
Game Consumers
However there is a chance of recovering this in the long run, hence the marketing expense viability. Some gamers can spend up to $50k USD per day ($18m USD per year). These would be deemed the hardcore traders or gamers within the biggest game ecosystems. This would include skins in the main, so understanding the transition to web3 gaming using NFTs is not unreasonable.
NFT Gaming Sector Performance
The gaming segment of the NFT sector has struggled to recover from the play-to-earn Ponzi experienced a year ago.
The value extraction is tricky to manage with no new money entering an ecosystem, hence the high inflation of the ERC-20 tokens associated with these NFT gaming projects.
Other Considerations
Market Liquidity
It’s worth observing the macro picture to understand whether the wider NFT ecosystem will continue to perform well.
The recent Bitcoin Ordinal boom and Open Edition meta suggest that there is a reasonable amount of liquidity sidelined for the right projects. Irrespective of the direction of price action it’s certain we will see an uptick in activity as holders and traders speculate on the direction of the asset prices. Perhaps we will be lucky enough to see the DigiDaigaku ecosystem assets pump into price discovery.
But this will come down to the execution of the team on the day, but there’s no better veteran than Leydon at the helm given his track record of success.
Macro Market Conditions
However the macro hasn’t changed dramatically, so it’s worth observing that the available liquidity and the cost of living have an impact on buyers’ spending habits.
A hawkish environment means there are lower levels of disposable income. Although offering a free mint may be a good way of capturing the attention of the masses. If they suddenly see the price of the free mint they missed then this could bring more eyes on the space, which is Leydon’s intention.
Volume has increased slightly since mid-December in light of increased activity for the Blur Airdrop. However, it’s by no means close to the historical highs experienced in Feb 2022 of circa 250k ETH weekly volume ($384m USD).
Until the macroeconomic conditions change it is likely we will continue in a downtrend or at least stay within the 100k ETH ($160m USD) weekly trading volume range, down 58% over the same period last year.
Closing Remarks
The DigiDaigaku Super Bowl advert will be a significant event in NFT history.
There has never been an NFT-specific advert played at the Super Bowl. The Coinbase QR code created 20m app downloads, equating to a 20% conversion rate. If Leydon and the team were to do a fraction of that, then the NFT ecosystem would see a huge surge in interest and potentially volume/liquidity with it.
This is Leydon’s third advert, so if the Kate Upton, War Zone, advert is anything to go by then it could be a resounding success. 43% of viewers tune in for the adverts alone, and with a 6.5c per viewer cost it’s not a bad return for the USA’s number one advertising platform.
The success will be down to its execution. Will we see Kate Upton return for a touchdown?
Disclaimer: I hold an unmasked Villain and have entered the Dragon Whitelist contest.
At Origins we leverage data-driven decision-making, educational resources, and proprietary analytics to remain ahead of the curve with respect to blockchain tech, specifically NFTs. To find out more, please visit our website or Twitter.
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