Crytek's new cryptocurrency will be used to buy new players

Crytek has partnered with a startup to create its own cryptocurrency called Crycash. Starting with a trial group in Turkey, the company will begin to pay users in Crycash for trying its free-to-play game, Warface. Crytek co-founder Faruk Yerli sees this is as a bargain for his company compared to paying for users through a traditional marketing agency. With luck, he told Polygon, Crycash could spread to other games or esports.

Yerli and Wachtang Budagaschwili, chief executive officer of the cryptocurrency startup, explained the process to Polygon on a conference call last week. Once players achieve certain milestones in Warface, they’ll be gifted Crycash. That cash will be deposited into their secure digital wallet. Crycash can then be traded online alongside other digital currencies, like Bitcoin and Ether, where the exchange rate will respond to market demands.

Alternatively, users who are already familiar with trading digital currencies like Bitcoin or Ether will be able to use those same exchanges to purchase Crycash instead. They’ll then be able to convert one type of currency to another, or even cash out of the digital economy entirely.

So why not just go with an already established currency, like Bitcoin? Budagaschwili explained that the market is so volatile right now, it simply doesn’t make any sense to do that.

Crytek

“It’s the same reason why Steam kicked crypto-payments out of their payment system,” he said. “It’s because of the volatility of the market. It’s ridiculous. You don’t know what Bitcoin is going to look like tomorrow. I bought one when it was at $4,000 ... now it’s [valued] at $18,000. But you can’t anticipate that. One day it went almost to zero, and then it came back up.

“If I’m building a business on top of a currency or some sort of ecosystem that I don’t really understand completely, I at least want to know how it’s going to be influenced.”

To Yerli, it’s a simple matter of quality over quantity.

Free-to-play games need quality users in great numbers to create a viable ecosystem. Most players don’t spend any money at all, and those that do need someone to play against. So to make a vibrant community that allows for whales, they need a lot of smaller, healthy fish.

“At Crytek, we have had a lot of dealings with ‘performance marketing agencies,’” Yerli told Polygon. “They told us that if we wanted users for our game we’d have to spend, per user, maybe between $5 and $10. But what kind of users are they?”

Yerli said he’s bought a good number of users in this way. Trouble is, they’re just not playing the game.

“I paid cash, and my user base increased, but my active user base did not increase. Obviously there’s a problem.”

Yerli said that not only will Crycash help the company increase its user base by incentivizing players directly with cryptocurrency, it will also speed the payment process for those who create assets for CryEngine, Crytek’s proprietary game engine. Rather than wait for four weeks or more for a credit card transaction to go through, game developers can buy assets with Crycash, and the money changes hands in near real-time.

Crytek

Yerli said that in testing the system so far, he’s seen “almost zero” fraud.

Budagaschwili, for his part, is thinking bigger. Since Crycash can be traded for other forms of currency, that makes it infinitely more dynamic. You can’t get your Septims out of The Elder Scrolls 5: Skyrim, but you can theoretically move Crycash from one game to another. One possibility is to get other games to deal in Crycash, connecting their in-game economies to Crytek’s through the blockchain.

Even more substantial benefits could come for esports.

“The problem that we see in the marketplace is that there are fairly huge prize pools, but they’re available to so few people,” Budagaschwili said. “There are very few tournaments, but there are a lot of people who want to participate. That makes earning money in esports very tough for 95 percent of people. We want to give these people the opportunity to set up their own tournaments, set up their own prize pools, so that it’s not centralized.”

Rather than leaning on Blizzard or Valve to set up leagues and prize pools, Crytek could use Crycash to allow individuals and small groups to do the same thing. Once they do, money could flow easily through this secondary, digital economy rather than across national borders in the traditional way.

Warface players will start receiving Crycash payouts, in a limited trial, in 2018. An initial offering of Crycash, where the currency will be sold online in exchange for select other digital currencies, is going on now, and will run through January 15, 2018. To be eligible, you need to first register at the Crycash website.