Host: Blair Zhu, Brand Director of Mint Ventures
Special Guest: Ricky, the CFO of Catizen and the co-founder of Pluto Studio
Contents
The Origins of Catizen’s Journey
Blair: Hey everyone, welcome back to Web3 Founders Real Talk, where we dive into unfiltered conversations with movers and shakers in the industry. Today we’re so excited to have Ricky, the CFO of Catizen, one of the most popular games on TON. Welcome on board, can you tell us a little bit about yourself? What brought you to crypto?
Ricky: Okay, thanks, Blair. I’m Ricky. Actually, I have been in the finance field for more than 15 years, but I’m more on investment. So I invested in the traditional industry and also I started investing in Web3 since 2018, I guess. I have been looking at a lot of projects, but I didn’t really get involved into the project deeply before. But then when I met the other co-founders of Catizen’s team, I think it’s like three, four years ago, right before the COVID, and we started to talk about how we can do something in the Web3 world. We basically love the idea of doing something together. So this is how I started to get involved in this Catizen ecosystem.
Blair: Wow. Interesting. Like I said, Catizen is definitely really popular right now. I can see everyone playing. And also your team just told me that you actually achieved 25 million users already. We would like to know if there are any intriguing backstage stories behind all those delightful cat characters. What actually inspired your team from the outset to build this mini-game on the TON platform?
Ricky: Actually, there’s another co-founder called Tim. So I knew Tim for more than 10 years. I think it’s around 15 years. So we are both cat lovers. We have adopted a lot of stray cats in these 15 years. And when we met the other co-founders of Catizen team, when we were having a video conference to brainstorm what to do in this Web3 world, we found that everyone was using a cat avatar. So we then decided if we were going to do something, we had to bring cats into this Web3 world filled with dogs, like the dogecoin, the Shiba coins, and all that stuff. So I think if we are doing a game, then this game has to be related to cats. So this is how we started Catizen.
Why TON？
Blair: Wow. It sounds like a bunch of cat person on your team, like when you have a virtual meeting and you all have this headshot. So what motivated your team to build this mini-games on the TON, not other layer one?
Ricky: Ten years ago, I think when I was investing in the traditional market, I looked at a lot of games and of course, teams also. We found that it’s actually getting harder and harder to make a huge profit by investing in WeChat mini-games or even Facebook mini-games, because all of the competitors in the market, I think they are making the best use of the big data and including WeChat and Facebook, the corporations themselves, they’re using very good use of the big data so that when they pushing the ads to the users on Facebook or WeChat, I think they are charging a lot because they know that when the users receive the ad, he or she will definitely spend a lot of money in the games. So if they expect the users to spend $10,000 in the game, then probably they will charge more than 70%, 80% on this channel fee. So it’s harder and harder. with all the experience and big data that we learned from the traditional game market in WeChat and Facebook. This is what Silver, the other co-founders is good at. And we are having all this very extremely well-designed UX/UI and the user game logic. And also with the engineers on our team, it’s actually easy for us to make a game or find a game that will become so popular in the new ecosystem out of WeChat and Facebook. So this is how we started and then we keep stretching and analyzing on different channels. So we look at also different chains like Solana, and TON, and also we look at Telegram and a lot of other communities. So we have been observing the TON ecosystem for a very long time. We think that Telegram have a very large growth potential and of course, already very large existing number of users, which is around 900 million, and they are still fast growing. So we then decided to leverage the growth of the Telegram system. And when Telegram decided to make mini-games and mini-apps a major part of Telegram, I think they were the perfect fit for our business model. So then we decided to choose TON and Telegram to be our partners and we will be creating a whole new embedded ecosystem. So Catizen is actually just a start. We still have 18 more games to launch this year and we will also be building other apps for the ecosystem like e-commerce, and short drama apps. So this is what we are doing with TON. We are leveraging on their large user space and the high growth rates and we will be bringing our experience and expertise from the traditional web2 world.
Reasons Behind Phenomenal Success
Blair: Wow, that is so exciting. There are a lot of things to look forward to and it seems this is your niche and this is your expertise because you are really familiar with all those mini applications within WeChat ecosystem. But now you’re just bringing all those experiences from Web2 to Web3 to onboard 25 million users. This is so impressive. Well, I would say this popularity seems to be very much driven by the increasing interest in Web3 games and also all those very engaging mechanism. What is your perspectives on this big success? Did you foresee such popularity and what kind of strategic efforts did your team employ to achieve this kind of milestone?
Ricky: So as you said, up to today, we have actually more than 25 million users. But if you only look at the data for on-chain in-game players, Catizen is not particularly outstanding compared to other clicking games like Notcoin. So what really sets us apart is our ability to continuously convert high quality users. As of today we had 1.8 million Telegram payment users. So Telegram payment users have to pay for Telegram and it’s very likely for them to also pay in our games. And also we have more than 1.4 million blockchain users. This conversion rate has been maintained at around 6% to 7% since its inception. I think around 0.66% for the conversion for Telegram and TON ecosystem from off-chain to blockchain. I think our figures are actually quite impressive. We are almost 10 times of the conversion rate. So it can be said that almost all the blockchain users in the Telegram ecosystem are quite stable. And if they continuously stay in Catizen and become active players in Catizen, we are pretty sure they will also bring a lot of value with their attention to our other games and ecosystem because for our mechanisms in our plan, when the users came after the airdrop, when they received the Catizen coins, so they can use the coins to play in Catizen game. And they can also stick these Catizen games to play the games that we are going to launch or play the games that we publish for our other partners. So in this way, we can continuously maintain and grow our Catizen ecosystem. So I’ve been emphasizing that it’s more than just a game. It’s an ecosystem. And also due to the in-app purchase and the in-app advertising model that we laid out from the beginning because if we can have more pay users to stick to our game, and because our game is fun to play and is quite addictive, people can actually expect some return from playing the game because it’s what GameFi is about, right? So this is how we are going to choose or design our game to publish for us or for our other partners.
Challenges in Web3 GameFi
Blair: Wow. It sounds like you do have a really extensive planning for what to do next. One single game is just the starting point and you’re going to build a really rich ecosystem on top of it. So here’s my next question, and this one might be a little bit tricky. Many Web3 GameFi projects, I’m not going to name those players, but you can see project builders are actually struggling with issues such as unsustainable patterns. Do these concerns resonate with your experiences? What has been the most significant challenge for Catizen in navigating those issues? How can you make this whole lifecycle of the game much more sustainable?
Ricky: I think we achieved it by a couple of things. It’s mostly about our experience and our team’s expertise in designing and executing our game plans. But I think there are also other more concrete features that we can share here. So one is our launch pool and our mini app center. So these two features are actually the major part of our growth for our ecosystem. In later stages, Catizen will add us as a attention economy hub. So our real value will not be just in the token, but also in the shared value of our whole community. So this community includes our Catizen game players, our other game players, or our original Catizen game players who earn a lot of Catizen tokens. And they try to use these tokens in other games or to purchase in our e-commerce platform or to play our partners’ games, or they spend it to watch the dramas that we publish on the platform. So this is the community that I’m talking about. So through this mini app center, they can find a lot of these selected games or apps that we choose for our users and from our partners. And we continue to accommodate high-quality users. By high quality, I mean they pay a lot of attention to our game. They spend their game-playing time of the day in our ecosystem. They spend their purchasing habit also in our ecosystem. If they decide to watch some drama instead of Netflix or other media platforms, they probably might want to also look at some new dramas that are published by our platform as well. So by accommodating these users and their attention, we can keep issuing tokens or assets that we have already signed agreements with our partners or our own studios. So the Catizen token holders can also continue to stay on our platform either by paying or by playing. Even if they just contribute their attention here, I think it is also worth a lot of value to us and also to our partners. So this avoids the death spiral faced by a lot of other market players here because they don’t really have that vision to build an ecosystem. Maybe they will decide to hinge on a single game. And even the best game in the world, they have a lifespan, right? Even if the players can play the game for two years, five years, ten years, they will still have a lifespan. But since we are publishing on economy and we are ecosystem builder, this is not really a concern to us. We can continue to publish good apps and good games and keep the attention within our ecosystem. So besides the partnership and this launch pool and mini app center of how we can monetize the current attention to our other apps and games, there’s also one major feature in our ecosystem that is the SDK and the game engine. Because there might be a lot of good game studios in the web3 world that might want to try to make a profit or make a presence in the web3 economy. But I think it is not that straightforward for the traditional Web2 market players because that requires some technicality, especially on TON and Telegram because TON is a brand new programming language. So if they want to connect their game to TON and also the other payment gateways and also the tokenization system, it is not that straightforward. From our own experience and our own development team, we have SDK to quickly connect those Web2 games and convert them into Web3 games, and publish them on Telegram. So instead of three months to nine months of learning time of trial and error, we can actually publish the traditional mobile games in less than two weeks, around 10 days, I would say. So this is one part of the SDK that actually bringing us and also our partner some advantage because they can quickly launch their game. Especially in this Web3 world, the timing actually matters a lot because if you have to launch a game maybe six or nine months later, your market will probably be shared by other players who are copying from your games. And also we have our proprietary game engine. In the past, I think before our game engine and we tried to test launch some games on Telegram, I think the loading success rate was around 80% to 85%. So we think that is actually affecting a lot of the user experience. So after that, we developed the game engine so that we can improve the success loading rate to 99.5%, even if in the peak hours, the success rate is around 95%. So when the users try to launch our game and if it fails, probably the user may not be returning again. So I think the loading success rate is quite important to user experience. So I think this SDK and game engine are also our core assets which distinguish us from other Web3 projects.
Mutual Prosperity and Potential Competition
Blair: Well, it seems like you guys know how to avoid the death spiral. I’m just gonna call that out. And also the SDK is gonna be a game changer since you do have everything planned out. And we have seen that the rise of other Telegram games like NotCoin appears to have heightened interest in Catizen. And also from a Twitter account, I can see there have been noteworthy collaborations with several other games. How do you view those dynamics of mutual prosperity and potential competition among all those games? Because I’m pretty sure there’s gonna be some potential competition, but what’s your take on this?
Ricky: Yes, we have actually established quite a good relationship with most of these popular projects in the TON ecosystem, especially NotCoin, because the cake, the whole market is actually so big. The competitors can also be our partners. We can monetize on their traffic if we partner up, and they can also monetize on our traffic if we partner up. So the competition actually helps to improve the whole TON ecosystem. We are actually quite excited to see more competition coming in, because if there’s more competition, meaning they will bring in a lot of other new users from the Web2 spaces, and it increases the market size. And I think at the end, or even in the middle term, only the best operators or the one with the best ecosystem experience will stand out. So if we are the ones that stand out, we probably will be the ones who can benefit the most from the increased market size. So we actually welcome competition, because we believe in ourselves, in our core tools and core assets. Back to the topic, we have already signed agreements for 18 blockbuster games, as I mentioned, each of which is extremely popular in the Web2 world. From our experience, we can convert it smoothly to the Telegram platform, and we can probably create a similar success to Catizen. And this is our own publishing strength, and our experience and our network in the Web2 world helped us to achieve this point, particularly. And then we also opened our SDK to allow other projects to integrate into our platform. So we even can allow our competitors in our Web2 world to join our Telegram platform, because as I mentioned, the market is just too huge. If we can work all together to increase the number of our Web2 users, it’s beneficial to all of the market players, and especially to the leading market player, and also to the TON ecosystem. If the TON ecosystem, has more users here, then the value of the TON coin will also increase. If the value of the TON coin increases, then our players and our users will become wealthy, and they will be spending more on our platform in the game or in the purchase. So I think to answer your question shortly, I think we definitely love those competition.
Blair: Okay, so it sounds like the competition actually makes you guys stronger, I would say. Well, myself, as a Catizen player, I really appreciate the low barrier of the game, because technically I’m not a really good gamer. But the whole enjoyment derived from upgrading cats to enhance productivity, like inviting friends for some additional rewards, and also leveling up is really impressive. However, do you anticipate that this game mechanism might be replicated easily? And what kind of measures or unique differentiator does Catizen possess to safeguard against this? I guess that’s a follow-up question on top of what you just shared.
Ricky: So it’s again about competitiveness. I think the first part is our experience and our team. But of course, there are always better teams and better people because young programmers, I think they learn very fast and they can learn from the success of the existing project also very fast. So we have to improve ourselves at the same time also, in order to keep up the competition. But I think the major part of our competitiveness is also about the technical barriers that we just mentioned with the game engine and SDK. I think if someone try to spend money and effort to build the same SDK in game and then launch their game, I think it will be a lot of time. And by a lot of time, say more than one year. So if they choose to partner with us, they can at the same time quickly launch their game and have a very good user experience with our game engine, because we have been upgrading and perfecting our game engine and SDK. And they can tap the market more quickly. And then they can also upgrade their games and also benefit from our ecosystem more easily because if they join our ecosystem, they can actually monetize on the traffic from Catizen and a lot of our other games because we will be instilling traffic from all our games and apps to our partners in the Mini App Center. So these technical barriers and our first-move advantage in the telegram and TON systems is actually huge barriers for them to cross. And the other thing is the business model. It is quite easy to simply copy a mini game, but it is difficult to replicate our business model because we aim to become a mini-game publishing platform, actually open to the whole mini-app ecosystem. So even for our Catizen, there are lots of internal features that are designed specifically for this mini-app ecosystem purpose. They can just by simply clicking on some buttons, they will be transferred to other apps or games so that we can exchange the traffic more smoothly. And the IAB and IAP in-game in-app purchase, the model can be, how should I put it? It’s not hard to create some in-app purchase items, but it is hard to let the players buy in-app or in-game and then continue to buy them. And then with all the returns or all the assets in that game, the users can monetize again by spending in our other games. So our ecosystem actually helped to set a high barrier for other single-game copiers because no matter how good the game is, if they don’t have a whole ecosystem to support if it reaches the end of the lifespan of the players, then the players go. However we continue to keep our players’ attention in our ecosystem by launching different features. And also, last but not least is the resource barriers. We already have a lot of exclusive rights to the best Web2 mini-games. So we had the first mover advantage by launching Catizen and a lot of partnerships with the TON ecosystem, major players, and of course, the TON Foundation itself. There will be a continuous influx of mini-games joining our ecosystem. So we can probably say that we are the biggest or one of the biggest gaming communities or TON ecosystem on the Telegram and TON market. So if they are trying to build an ecosystem or community of similar size, I think it is quite hard because we work from Telegram and TON and they were first launching or designing these features from the very, very first beta version. So I think this long-term relationship is hard to replicate. And even if they spend a lot of effort to talk to Telegram and TON saying that they want similar resources and similar support, I think it is quite impossible because TON and Telegram ecosystem has become very successful as of today. I think it’s harder for them to come into a single project operator, a lot of their marketing resources, I think it is not possible anymore. So there will be a lot of players in the market sharing these resources. But for us, we are actually the first ones who captured and monetized those resources. And this is how we go to this size. This resource barrier will help our ecosystem to grow stronger and stronger.
Token Distribution and Airdrop
Blair: I do agree with you that the business model is not easy to replicate. Maybe they are able to replicate one single game, but it’s actually a mission impossible to replicate the entire gaming ecosystem. Well, I’m just asking this for all of the players because I know it’s actually pretty exciting because you guys just made an announcement recently that 45% of tokens will be distributed through the offering, an increase from the initially planned 35%. Am I right? Could you provide more details about the upcoming July airdrop? I think the entire community is eagerly awaiting the information.
Ricky: Yeah, okay. First because the majority of our existing 25 million users are actually quite active users, we impose penalties on bots or users suspected of cheating. So they will be penalized by not having any airdrop at all. But our commercial rate of high quality users is quite stable, as I mentioned. As the user base grows, the profit-sharing space per user from airdrop will decrease. Therefore, our team continuously allocates our tokens or the tokens from the rest of the tokenomics in the Catizen airdrop pool. So it’s actually decided to be 20 something percent before, but in order to reward our community, we increased it to 45%, around 45% as of today. Even to the last announcement, it’s a 10% increase. We hope this will provide sufficient space for the community and let the users and players maintain their expectation, so that in the future they can continue to believe in our ecosystem and community. And regarding the timing of the airdrop, I would say it’s coming really soon. So we will look forward to that.
Vision for the Ecosystem
Blair: Wow, that is so exciting. Are there any other upcoming features or expansions that we can anticipate as well, along with the airdrop? I heard that you guys are about to launch a gaming platform, and you also mentioned multiple times today, featuring over 200 mini-games. Could you elaborate on this? Because you mentioned the whole ecosystem. I just want to know, how do you envision this?
Ricky: We are going to launch the SDK this week, so the upcoming mini-games will also be revealed. As I mentioned, we signed 18 mini-games to publish on our platform, and also there will be over 200 mini-games upcoming to join our gaming platform. We hope the community can pay close attention to us, and we will actively collect feedback to see what mini-games they want to bring in and what other apps they want to bring in to join our ecosystem. Our team will definitely work on that, because if the users like to have it, and if we bring that app or game into our ecosystem instead of them joining the other ecosystem or being a standalone system, I think, first of all, our players can use the airdrop categories to pay and play in these other games or apps that we help them to bring in. And it also helps those apps to grow more rapidly, because they don’t have to start from zero, they start from our current 25 million user base. So we will be paying attention to the feedback from the community. And for the airdrop, as I said, it’s coming soon because it is one of the essential components for bridging or connecting all these mini-games. So if we can airdrop sooner, then our users can enjoy the benefit of spending the airdrop coin in our other games in the ecosystem sooner. So this feature is coming.
Blair: It sounds like perfect timing for this podcast. There are a lot of good news and exciting features coming up. Thank you for sharing those backstage stories. Well, my next question is actually about the TON ecosystem. You probably answered my questions partially, but we’ve known that TON has shown really remarkable performance cycle with the growing numbers of developers applications within its ecosystem. So what’s your take on the current state of the TON ecosystem overall? Additionally, what kind of advice would you offer to other developers who will be looking to build games or projects on blockchain, like L1s or L2s? Are there specific challenges or headwinds to avoid or anything that we should take into consideration when we choose the infrastructure to build?
Ricky: We can actually see that the clickers in the TON ecosystem, they seem to have reached bottleneck phase. And in fact, for now, large-scale imitation is not as meaningful as before. This leads to an ecosystem having too many memes, but lacking healthy infrastructure and healthy assets. So advice to the developers to build game projects on blockchain or on TON ecosystem, I think they have to dig deeper into the user behaviors, because for one successful market player in this ecosystem, I think like us, we have been fighting and working in the traditional Web2 space for many years. And we have probably known, it is intuitive for us to have the best UX/UI and also the game logic. Technical issues are also a problem because TON is a new ecosystem, and even though its infrastructure is still growing, there are a lot of other parts that people have not touched on yet. I think the developers can look at different parts of the infrastructure. Like the DeFi project on the TON ecosystem, there’s still a lot of room there because they are just getting started learning and digging deep into it. The TON programming language is a good start because if a programmer thinks it’s a different language and doesn’t want to go to this space, I think it is wrong because the only reason why they choose to have a different programming language is that they think this is a greater version for the blockchain language. So it’s actually to us, I think it is more efficient in terms of the transaction. So the programmers, I think as a start, they should include this into their own package. And also dig deeper into different parts of the infrastructure because it’s just getting started. If they think they can build something in other ecosystems and other spaces, then why not try it on TON because there’s a lot of potential untapped here.
Applications and Impacts of AI Technology
Blair: Well, thank you so much for sharing such granular take from your side. So here’s my last question for today. I know we had a really jam-packed conversation about Catizen and also the future roadmap, all those good news like Airdrop and also the entire ecosystem. My last question is, in light of the current buzz around AI, how do you envision AI technology influencing the whole development of the gameplay sector overall? We’re seeing a lot of crossovers between AI and blockchain and crypto. We’re seeing a lot of applications emerging in this cycle. What’s your take on this?
Ricky: Well, there will definitely be many opportunities such as AI pets. So we are one of the largest cat-loving communities in the Web3 space. If AI can later assist our community, we’re actually already using AI a lot in our game design and in a lot of aspects in our operation. But if AI can further assist our community, whether it’s Web2 or Web3 players, launching cats in the cloud or creating electronic pets or using AI to create some shared fun models, there’s a lot of potential. So we are now also collaborating with Google Web3, applying many AI features to conduct some preliminary community operation activities. For example, creating interactive videos with cats. So if you look at our channels in Telegram, there are a lot of videos about cats and Web3 and so on. So this can help us with user education and also allow users to find their social value in the community in a relaxed and enjoyable environment. So I think thanks to AI, we can quickly work out a lot of viral videos. And these videos, I think they have more value than just a marketing purpose because there’s an international conflict in the Russian countries between Russia and Ukraine, and there are wars over there. And it happens that the Russian and Ukrainian players are a significant part of our user base. And when we look at the comments in those communities, we find that they actually think that Catizen is more than a game. It’s a tool to heal their scars from wars because some of them may be soldiers or some of them may just be escaping from their homes, which happen to be in the war zone. So they have to leave their home and go to other countries to stay safe. And some of them might not be able to bring their cats along or they will be worrying about street cats in their neighborhood. This game may not be able to help them to save the cats, but at least it helps them to heal a little bit by letting them see a lot of the fun cat videos and playing with the cats in Catizen. So this is also a slogan in Catizen to heal the world. So for us, I think it’s more than just a game. And we also just announced that we will be donating 1% of our revenue to the stray cats NGO to actually save the cats. So we really hope that we can not just create a good game. We are actually helping the people mentally. And also, now we want to help to save the cat physically by donating to these NGOs and hope these NGOs can save the stray cats from those war zones with a little bit more resources. This is our mission in this game.
Blair: Wow, you’re actually making a real world impact by actually saving those street cats. That is so touching and so impressive. So I do really side with you about making the whole education piece entertaining. I’ve been talking with a lot of entrepreneurs and everyone’s like, oh, how can we onboard next billion users? How can we get more mainstream adoptions? And we always talk about how can we make the whole experience more entertaining, more seamless? How can we just lower the barrier for the users, for the newcomers? I think everything is on the right track. Thank you so much for sharing all those insights and information today. And it’s really insightful and appreciate that. And also good luck with all those developments and all those good news about to happen. Thank you so much, Ricky.
Ricky: Thanks, Blair.
