The Downfall of Seafight: A Cautionary Parallel to Cryptocurrency
Commonalities between a browsergame in the 2000's and the crypto market
The Downfall of Seafight: A Cautionary Parallel to Cryptocurrency
In the early 2000s, the online game Seafight emerged as a beloved game for millions of players worldwide. Its engaging pirate-themed gameplay, combined with a vibrant community, propelled Seafight to the forefront of online gaming. A significant part of its allure was the pvp and social component: players connected with friends and formed alliances through platforms like Teamspeak, enhancing the communal experience and fostering deep, long-lasting bonds. The game was also player versus player meaning you could sink the ship of any player anywhere, anytime, 100 times in a row if you’d liked, appealing to the ego to spend money to be stronger and win harder. To be someone.
However, as the years passed, the game declined. Not due to a lack of innovation or creativity, but rather because of its escalating costs. Frequent updates and the introduction of new content demanded increasingly significant investments from players, turning a once-accessible game into a costly hobby. This economic model, which heavily relied on continuous spending, ultimately led to a mass exodus of players, leaving behind only the most dedicated—and often addicted—users.
This phenomenon is not confined to the realm of online gaming. You guessed it, crypto mirrors these dynamics, or at least I expect them to. Much like Seafight, the crypto market attracts a vast number of participants, lured by the promise of high returns and the excitement of digital assets. The social aspect is also significant in the crypto community, where investors and enthusiasts congregate on platforms like Discord, Telegram, and Twitter to share information, form groups, and build a sense of camaraderie. Yet, as many investors pour substantial amounts of money into cryptocurrencies, they often face losses and disillusionment, causing them to retreat from the market. In both scenarios, the pattern is clear: high costs and the potential for significant financial loss drive away the casual participants, leaving a core group of enthusiasts who remain deeply invested, both financially and emotionally.
The Cost of Playing Seafight
As Seafight evolved, its economic model began to rely heavily on payments. While the game was free-to-play, many aspects of the gameplay could be enhanced through purchases. Players could buy premium currency, known as "pearls," which could be used to acquire powerful ships, and canons. This model incentivized spending to remain competitive, especially in PvP.
However Seafight included a new, better tier of canons every year, ultimately creating an endless spending loop. Do you start to get it? New coin , new cycle, same outcomes.
Many of the frustrations were about:
-Introduction of Frequent Updates and New P2W Content
-Examples of Escalating Costs and Impact on Players
-Pay-to-Win Mechanics
-Event-Driven Spending
Community Response to Increasing Costs
Ultimately after trying to fix an engine that is not fixable, the players began a slow bleed mass exodus. The new era of pay for cosmetics and general downfall of MMO’s helped the decline.
Parallels to the Cryptocurrency
The dynamics observed in Seafight's decline bear a striking resemblance to trends in the cryptocurrency market:
Economic Pressures: In both Seafight and the cryptocurrency market, participants often face significant financial pressures. In the case of crypto, investors frequently pour substantial amounts of money into exchanges, and lose. Study GMX / HLP vault, trader’s net pnl graphics etc..The volatile and unfair nature of the market means that many investors experience significant losses, leading to disillusionment and withdrawal from the market.
Community Dynamics: Just as Seafight players connected through Teamspeak and forums, the cryptocurrency community is heavily reliant on platforms like Discord, Telegram, and Twitter. These social networks play a crucial role in information sharing and community building. However, as the financial stakes rise, the sense of community can be overshadowed by the pursuit of profit, leading to similar issues of attrition and dissatisfaction.
This creates a semblance of belonging and community to otherwise very lonely human beings.
Retention of the Dedicated: In both scenarios, the remaining participants are often those who are deeply invested—both financially and emotionally due to lack of meaningful lives. These individuals continue to participate despite the economic pressures, driven by a combination of addiction, hope for future gains, and a deep-seated commitment to the community.
By examining these parallels, we can gain a deeper understanding of the factors that lead to user attrition and the long-term sustainability challenges faced by both online games like Seafight and crypto.
Comparison with Cryptocurrency
The cryptocurrency market has experienced explosive growth since the introduction of Bitcoin in 2009, and the biggest bullmarket ever in 2021, which i define as the peak of cryptocurrency.
Both Seafight and the cryptocurrency market rely heavily on the financial contributions of their participants. In Seafight, players who invest money in the game gain significant advantages, mirroring how early and substantial investments in cryptocurrency can yield high returns. However, just as Seafight’s escalating costs drove away casual players, the high risk and potential for substantial financial loss in the cryptocurrency market often deter casual investors, and create a lot of losses over time. Both scenarios create an environment where only those willing to take on significant financial risk remain engaged.
The Role of High Spending and Impact on User Retention in Both Cases
In Seafight, high spending was necessary to remain competitive and enjoy the full extent of the game’s offerings. Similarly, in the cryptocurrency market, significant financial investments are often required to navigate and take advantage of market opportunities. This creates a barrier to entry that can discourage new participants. Over time, as losses mount or the financial burden becomes too great, many users opt to leave, leaving behind a core group of dedicated, and often addicted, participants.
Addiction and Retention
The phenomenon of only the most dedicated or addicted individuals remaining in Seafight and the cryptocurrency market can be attributed to several psychological factors:
Sunk Cost Fallacy: This cognitive bias leads individuals to continue investing time and money into a venture because they have already invested significant resources. In both Seafight and cryptocurrency, players and investors often feel compelled to stay engaged to justify their previous expenditures.
Community and Social Pressure: The social networks within both Seafight and the crypto community reinforce engagement. Players and investors build relationships and reputations within these communities, creating social pressure to remain active.
In that world i am someone, why quit?
Addiction to Reward Mechanisms: Belonging, Social contact, Gaming, larping and investing trigger dopamine release in the brain, creating a sense of reward and pleasure. This can lead to addictive behaviors, where individuals continue to seek out these rewards despite negative consequences.
Intermittent Reinforcement: Both games and the cryptocurrency market employ intermittent reinforcement, where rewards are given at unpredictable intervals. This unpredictability can create a strong compulsion to keep playing or investing in the hope of achieving the next big win.
Social Identity and Status: In both communities, individuals often derive a sense of identity and status from their participation.Just as a guild leader in a game, a followed twitter account is someone. This can lead to a deep emotional investment, making it difficult to disengage even in the face of financial loss or diminishing returns.
Long-Term Sustainability Concerns
The reliance on high spending and the retention of only the most dedicated participants raise concerns about the long-term sustainability of both Seafight and the cryptocurrency market. As the casual and moderate participants leave, the user base shrinks, potentially leading to a decline in new investments and engagement. Without a steady influx of new participants, both platforms risk stagnation and eventual decline.
A thesis on Coinbase listings
During the peak froth of 2021, Coinbase listings were often seen as prime opportunities for investors to dump their holdings and cash out, capitalising on the surge of new buyers entering the market. I believe that in 2024, Coinbase intentionally avoided listing memecoins to mitigate this phenomenon and reduce churn among its user base. By not listing these shitcoins, Coinbase likely aimed to prevent its customers from going all-in on memecoins and becoming exit liquidity for more experienced traders looking to offload their holdings. This strategic decision helps protect users from substantial financial losses, fostering customer retention, better long term ARPU (Average revenue per unit [customer]), less Churn.
I do believe Coinbase will list PEPE, WIF and the others during the bottom of the bear market, sparking a memecoin mania run similar to March 2024.
Conclusion
The downfall of Seafight and the dynamics of the cryptocurrency market share striking similarities in their reliance on high spending, the creation of economic pressures, and the retention of only the most dedicated or addicted participants. In Seafight, the escalating costs and frequent updates drove away casual players, leaving a core group of financially committed users. Similarly, the volatile and high-risk nature of the cryptocurrency market deters casual investors, leaving behind those willing to endure significant financial risk.
Reflection on Lessons Learned from Seafight's Decline
Seafight lives as a shadow of its past after 18 years of existence with a small niche community that lives on.
Seafight’s decline offers valuable lessons for both online gaming and digital financial markets. It highlights the dangers of over-reliance on high spending and the importance of maintaining a balance between profitability and player or investor satisfaction. Ensuring a fair and accessible environment is crucial for long-term sustainability and user retention.
The parallels between Seafight and the cryptocurrency market underscore the broader implications of how the “customers” are seen in crypto.The industry must consider the long-term effects of their economic models and the well-being of their participants, otherwise it will face the inevitable euthanasia coaster. By learning from Seafight’s experience, the cryptocurrency market and similar platforms can strive to create a more sustainable environment, by favouring real economic models that reward investors, and not just create bagholders.
This is all utopian because markets are negative sum games, but if that is the case and it is written in the stars then Crypto will end like Seafight.
Dead, milking the last dorks until no one is left.