# Captain & Company: Massively multiplayer mainstream web3 gaming By [0xScientifica](https://paragraph.com/@0xscientifica) · 2024-01-21 --- **_Disclosure_** - _This report was constructed using publicly available information, first-party testimonials from Discord and Twitter, and one interview with a development team member. The Captain & Company core development team has not validated all of the information in this analysis report, and this should not be solely relied upon to make investment decisions. Members of 0xScientifica have holdings that include NFT assets in Captain & Company. This statement is intended to disclose any conflict of interest and is not a recommendation to purchase assets related to Captain & Company. The information within this report is current as of January 2024._ Purpose ------- This report is designed to provide an institutional-grade analysis of the Captain & Company ecosystem and its native token, $KAP. This report covers a comprehensive breakdown of Captain & Company’s positioning inside of the broader gaming market, its gameplay, ecosystem value creation, $KAP tokenomics, financial analysis, team, risks, and known roadmap features. Key Takeaways ------------- ### Primary Strengths 1. Captain & Company offers extremely unique & highly social gameplay, leverages easy viral sharing and streamer-native integrations, similar to “Among Us.” 2. The economic model is a sustainable flywheel, featuring “zero-sum-plus” loops where value accrues to the NFT holders and $KAP tokenholders, placed in an MMO-lite setting. 3. It is the first truly cross-platform web3 game (mobile, PC, web), complete with fully on-chain crafting, trading, and upcoming land production facility gameplay, all abstracted from players via web2.5 proprietary wallet integrations. ### Primary Risks 1. If there is an insufficient volume of players, the zero-sum-plus model will not capture sufficient attention, as ecosystem taxes will be too low to continue to drive interesting reward sums. 2. The game is a new genre mash (Battle Royale x MMO x Adventure) and may not appeal to every player, or the game in general may not be fun. 3. The game is designed to be played by 90% web2 players, so the presence of NFTs may cause a lot of player toxicity in the early adoption days. Industry Themes --------------- Web3 gaming has overwhelming failed to gain traction with traditional mainstream audiences, but has repeatedly proven itself to be a formidable playground for raising capital and driving whale buying behavior and wholesale speculation. The current climate in web3 gaming could potentially leapfrog traditional “free to play” gaming revenue models, but only after a game is launched that can appeal to a massive web2 audience and drive substantial user numbers. * _Web2.5 compatibility —_ The playerbase in web3 alone is too small to support real gaming economies, so “web2.5 compatibility,” or the practice of abstracting away blockchain so “normie” users can participate, will dominate 2024. * _Mobile is king —_ Mobile remains the largest gaming market by a wide margin, and the web3 opportunity in mobile is entirely untaken (principally due to the constraints of dealing with wallets on mobile, which web2.5 compatibility approaches solve for). * _Play to earn, redux —_ Play to earn is not dead, but it’s been reconfigured into more sustainable models that leverage different player risk and spending profiles to distribute wealth along a gradient of players (e.g. whales take on risk / reward, minnows scrape up pennies). The core theme of 2024, and where Captain & Company has a chance to shine, is in combining these prevailing industry trends into one palatable experience for the average web2 consumer. While the ability to earn fragments of tradable currency and cash prizes may form a substantial Eastern audience (e.g. Filipino & Vietnamese), only highly streamable and engaging gameplay is capable of drawing in the more whale-friendly audience (e.g. US & China). Blockchain adoption in mainstream gaming remains a “when,” not an “if,” and Captain & Company has the potential to accurately capture the exact audience blend needed to bridge that gap. _Web3 gaming is inevitable._ Game Introduction ----------------- Captain & Company is a massively multiplayer first-person pirate adventure game where players pilot ships and bring up to 10 of their friends onto those ships to go hunt down other players and steal their treasure. The game will have three core game modes, one of which is about to go live in 1Q24: 1. _Naval Battle Royale Extraction_ — A world-first cooperative naval extraction game where players compete against other live teams to sink opponent ships, steal precious loot, and extract before they’re caught. This mode is about to be live. 2. _Instanced Adventures —_ Players will take their crews with them out on the high seas to seek out islands with resources, sea monsters, aggressive NPC faction raids and more as they fight, craft, and plunder their way to the top. 3. _Player-Owned Social Economy —_ Players will own islands which can house various social and asset production buildings, including: bars, shipwrights, tailors, and blacksmiths. These each weave into a complex taxation system where players can govern entire Flags (alliances) of Crews, and raid other player-owned islands. The game whitepaper [here](https://docs.capnco.gg/) contains more in-depth descriptions of these game modes as well as future feature sets on the roadmap. See Appendix I for a full list of official links reported by the project. Players are encouraged by the developers to participate in all available game modes, as each lends specific benefits to the other. In the core mode of naval battle royale extraction, players use ships they’ve crafted with resources to destroy opponents and extract “nuggies” (which can be converted to real money on chain, via a pegged conversion mechanism). These nuggies can then later be used to pay for services on islands (like creating new ships, weapons, or cosmetics), or hypothetically to buy property (like bars, shipwrights, blacksmiths, or tailors). **End-Game:** The end-state of Captain & Company is to be a largescale player-run MMO economy similar to something like a cross between EVE Online and Puzzle Pirates. Player ownership via optional blockchain mechanics means that users will own their ships, the resources they farm, the buildings they create, and the islands they raid, all in one super-social experience across browser, mobile, and desktop. Target Market ------------- Captain & Company has three core target demographics: * _Streamers, multiplayer leaders, competitive players_ — These are players that want to bring their friends (or viewers) with them on the ride, and serve as the core evangelists of the Captain & Company universe. The game specifically caters to these players by allowing them to bring up to 10 friends on their ships with them, and provides easy-invite codes to let viewers hop on the streamer’s ship from any device without an account or signup required. These players are termed “Captains.” * _Non-competitive players, farmers —_ These are players that are just along for the ride, enjoy the general gameplay mechanics, and may be looking to earn a small amount of cash on the side. They are not likely to own their own ships or assets, but they will form the majority of the playerbase and may eventually collect enough resources in-game to become a crew leader. These players are termed “Company.” * _Investors, whales_ — These are players (who may not ever even play the game) that hoard NFT assets with the intention of renting them out via Captain & Company’s native NFT rental functions, or to speculate on their value. This is the smallest cohort by size but the largest by value, and mechanics like automatic ship rentals (& re-rentals), island production facility gameplay, and island tax systems all expressly cater to this crowd. These players are termed “Admirals.” **Mobile, PC, and Web:** Critically, Captain & Company is cross-platform, featuring the full game across mobile, PC, and web browser builds, and can be streamed or played on any low-end device across the world. This is incredibly important, as the barrier to entry for Southeast Asia (SEA) and Latin America (LATAM) participants (who canonically have lower-end devices than most AAA games require) is reduced substantially, which increases the probability of mainstream adoption and a global playerbase. **Web2.5 Wallets:** Captain & Company is designed with the intention that 90% of the playerbase will be “web2,” that is, not have a crypto wallet or own NFTs of any kind. To reduce friction and ensure this is possible, Captain & Company features the proprietary KAP Wallet, which enables users to sign up using just their email, and they’ll immediately be assigned a wallet which can be used in-game without requiring any additional finagling or blockchain transaction signing on the user’s behalf. This means that Captain & Company can effectively onboard users from Google Play, Epic, and other mainstream stores without forcing them to go through the rigamarole of setting up a Metamask wallet, which is a substantial advantage in mainstream user acquisition. Ecosystem Value Creation ------------------------ The Captain & Company ecosystem is built on two models: * The [Zero-Sum+ model](https://sampeurifoy.medium.com/zero-sum-plus-zs-gaming-679b94da1438), where participant winnings are funded by a combination of fungible tokens wagered by other participants, advertising fees, taxes, and in-app transaction revenue. * The [Gladiator / Lumberjack model](https://sampeurifoy.medium.com/fixing-nft-game-economics-gladiators-lumberjacks-d3d832acb3a6), where gameplay with asymmetric economic risk drives a supermajority of players to be value extractors and a minority of players to be value contributors, all driven by an ever-expanding progression meta. In simpler terms, these two models describe a scenario where players are incentivized to take on excess risk in return for potentially even greater rewards _and_ the chance to drive forward on their personal progression ladder. Players battle each other inside of Captain & Company using NFT ships, which they pay a repair fee to fix their ships after losing. When they’re destroyed, they drop the same amount of value that was used to repair them, which can be scooped up by their opponent. The winning team then splits the earned tokens amongst their captain and crew members, generally in some 90/10 split. In addition, ships will randomly drop additional NFT loot (cosmetics, resources, blueprints), and captains will qualify for large leaderboard-based rewards at the end of each season. Therefore, some of players’ losses along the way are redistributed to the players who take on no risk but serve as the social fabric that winners show off their accomplishments to, a critical element of any MMO. The captains themselves are the beneficiaries of all net new NFTs and the majority of reward tokens in the ecosystem, which can be sold to the new players who are trying to become captains themselves. **Positive Expected Value:** The model is “Zero Sum Plus” with respect to players, as the net expected value of all participants inside the ecosystem over time should trend to a positive sum, unlike traditional zero sum games. This is accomplished by the developers actively injecting capital and value back into the game by way of (a) leaderboard reward distributions and airdrops, (b) distributing their own treasury NFTs via loot drops to winners in-game, and (c) taking in exogenous capital (e.g. advertising) and using it to underwrite gameplay emissions or losses. * * * $$E(X) = \\sum\_i^n x\_iP(x\_i)+y\_iP(y\_i)+z\_iP(z\_i)>1$$ _Where E(X) is the expected value after n games played, a per-game token payout of_ x, _additional random NFT loot drops_ y, and fractional leaderboard rewards z. * * * The ecosystem generates value predominantly through traditional sales of in-app purchases, e.g. cosmetics, ships, repair resources, land deeds, and others, in addition to a 7.5% ecosystem withdrawal tax (only levied on players as they extract/sell from the ecosystem). Notably, there is currently no intra-ecosystem tax, i.e. no tax so long as you keep your assets in the game / engaging with other players. Web2 players can purchase NFT assets to wallets that are attached to their emails (supported by the KAP Wallet, which is supported by Magic.link, the same technology behind IMX Passport), which will likely substantially improve value capture. Captain & Company will be a seasonal live service game, and will sell new limited-edition sets of ship components and lootboxes at the beginning of each 4-month season. These ships and assets are always only ever created once, and once they’re fully circulating they will not be created again to ensure asset scarcity. **Airdrops.** The developers have previously airdropped a large number of other web3 assets (e.g. Shrapnel game packs, NFTs, WL spots) and may do so in the future. **Seasonal Play-to-Airdrop.** The game features an ongoing socialfi play-to-airdrop program where players can either hold the ship NFTs or complete social sharing quests to generate Doubloons, which will ultimately be raffled off at the end of each season to earn various NFTs related to land in the game. How Does the $KAP Token Accrue Value? ------------------------------------- **Buyback Mechanism.** 33% of all value from in-app purchases and ecosystem taxes are used to directly buy back $KAP in the open market. This is substantial, and, as any form of payment can be used to make an in-app purchase in Captain & Company (e.g. credit card/fiat, common crypto tokens), this represents net new value that will constantly be flowing into the $KAP ecosystem. **Staking**. Users can stake their $KAP tokens as $KAP-ETH LPs at [https://staking.kap.gg/](https://staking.kap.gg/) and earn ~100% APR (at the current time of writing this report), and their rewards will be further locked for 1 year from emission. This will help support healthy liquidity in the $KAP ecosystem. **Minting NFTs.** Users can use $KAP to mint the various game-related NFTs (e.g. ships), which should provide additional upward pressure on token value. Critically, the $KAP token does not have single-sided staking, and so the only recipients of net new $KAP tokens will be ecosystem contributors (either players who have won leaderboard events or stakers who have contributed liquidity). ### Th $KAP <> Nuggie Peg Players are uniquely insulated in-game from movements in the $KAP token externally by a peg mechanism that ties the value of 10,000 nuggies to always represent $1 in value, denominated in $KAP. Specifically, when a player withdraws 10,000 nuggies, they will always receive $1 worth of $KAP tokens (minus fees). This is important as it helps to prevent everyday players from suffering severe price shocks if a volatile token changes in price (e.g. SLP causing headaches for Axie scholars), and instead allows the game to exist as its own entity but continue to drive volume and speculation towards the paired token. Financial Analysis ------------------ The yield to players who both own NFTs and who do not are proposed broadly below. Note that these numbers reference various conservative values for web3 gaming metrics, as well as liberally interpret various statements alluded to by the devs and in the whitepaper ([docs.capnco.gg](http://docs.capnco.gg)) but also demonstrate the impressive upside potential for a game that can properly capture web2 playerbase sizes. We interviewed one of the team to confirm at a high-level the majority of these facts, but much of this is still unknown. Using the formula above we can calculate the expected earnings for three types of players: * Admirals, who own a large number of ships and rent them out. * Captains, who own a ship and repair it / use it to battle. * Company, who do not own anything but support Captains in their battles. ### **Calculating a Captain’s Income** A Captain’s winnings are largely determined by their win rate. As we do not yet know the full scope of gameplay mechanics, this analysis assumes that all Captains are playing on a level playing field, and that there are not (yet) additional assets one can purchase that will give them a substantial improvement in win rate over another. A Captain with an average win rate of 50% (a “normally” skilled player, who doesn’t often win) should expect to see some minor positive APR primarily driven by NFT drops in-game as well as end-of-season leaderboard rewards, which have not been specifically disclosed yet. The “Value Per Kill/Repair” metric and the Captain’s win rate both heavily influence the magnitude of a Captain’s APR, and, in the scenario that the cost to repair is high and their win rate is strong, there is a chance that skilled Captains will be able to create a substantial amount of value via the Captain & Company universe. ![](https://storage.googleapis.com/papyrus_images/4db4a882a57819ea854de4db7f2f9684b18c2565b01b525654301f74ded87f73.png) ### **Calculating a Company Member’s Income** A Company member’s earnings are largely determined by a) the number of ship battles they participate in and b) the Value Per Kill/Repair of those ship battles, whatever it happens to be, as these numbers have not yet been confirmed. Because Company members risk nothing, their income is “safe” and not subject to loss at any point in time. But, concomitant with that, their earnings numbers are substantially lower than those of Captains. Company members are also at the mercy of the Captains they choose to team up with. The economics split those Captains are willing to hand out determine a Company’s income by a wide margin. A split of 5% was used in the projections below, where 95% of the cash goes to the Captain, but 5% is split amongst the Company members. A Company member who plays with either a) a more generous Captain or b) less other Company members on the ship will see much higher multiples of income than are presented below. Note that this also assumes that Company members will qualify for any leaderboard distributions, which have not been confirmed. ![](https://storage.googleapis.com/papyrus_images/de848512d53d7ca89ef630697800af2582d6f830a6515824d3552643a0f4b96e.png) ### **Calculating an Admiral’s Income** Admirals are investors or players that own a large number of ships but do not play the game themselves, instead, they rent out their ships to Captains. Their income is largely determined by the number of DAUs in the game, as that will directly influence the demand for rentals of new ships, partially because more battles will be fought and partially because ships are always limited in supply. Admirals get paid no matter if a Captain wins or loses, and here we’ve chosen to show the theoretical amount an Admiral might get paid as a % premium on top of the price paid to repair a ship, as we believe this will be a reasonable proxy for the ultimate price that Admirals set and Captains are willing to pay. In a conservative scenario, using DAU numbers similar to only somewhat-popular web3 games, the return for being an Admiral may be substantial, assuming that it isn’t too onerous to set up rentals. In a reasonable upside bull scenario, using DAU numbers similar to somewhat-popular web2 games, the return for being an Admiral becomes extremely strong, even with a presumed higher cost of entry per ship. ![](https://storage.googleapis.com/papyrus_images/52a08c378a42f5b974e8f87ca73a6e5d47375d08e54dd5d2b8afd41aad530a22.png) ### Team The team is led by the KAP Games contributors, principally [Sam Peurifoy](https://www.linkedin.com/in/sampeurifoy/) (”[Das Kapitalist](https://twitter.com/DasKapitalistGG)”) and Michael Perl. Both have extensive experience in gaming, with Sam recently earning a spot on the Forbes 30U30 list for his work in Venture Capital around gaming, and Michael previously founding a small studio that did over 100 million downloads without ad spend in midcore mobile categories (e.g. [GunCrafter](https://play.google.com/store/apps/details?id=com.naquatic.guncraft), [MonsterCrafter](https://play.google.com/store/apps/details?id=com.naquatic.monstercrafter)). They’re supported by a robust team of game developers and engineers. The team is funded by very strong backers including Samsung NEXT, Solana, Polygon, Near, HBAR, Algorand, GSR, Wintermute, Portofino, Keyrock, Yield Guild Games, Blocklords, Splinterlands, Shrapnel and more, with advisors including Kieran Warwick of Illuvium, Jon Van Caneghem of Cloud Castles, Aron Beierschmitt of Crypto Unicorns, and Corey Wilton of Mirai Labs/Pegaxy/Petopia. Risks ----- Web3 gaming is a new field and filled with a number of difficult-to-foresee risks, not the least of which is a complete collapse of the underlying tokens themselves (though note that in this case, players are largely insulated from $KAP movements in both directions, except for hypothetical leaderboard rewards). Core risks are summarized below: * _Execution risk_ — By far the greatest risk is that the game will not be good or that the marketing will fail to achieve sufficient traction. This is mitigated somewhat by the fact that this team has previously shipped mobile midcore titles which easily grossed millions of downloads, but there is always substantial execution risk in a new venture. * _Player churn risk, hardcore mechanics_ — If the game is interpreted to be too hardcore by the players (e.g. they are either losing too much cash or not having fun), players will churn en masse and cause severe downward pressure on DAUs and commensurate revenue. * _Native currency leaderboard rewards_ - The leaderboard rewards will hypothetically be denominated in the native $KAP currency, which may see extremely value fluctuation and lead to difficult-to-predict income parameters. This can be mitigated by paying out the leaderboards in stablecoins, though the developers have not highlighted this anywhere. See Appendix II for a complete SWOT analysis of Captain & Company versus Pixels and Axie Infinity. Roadmap ------- This roadmap was created by combining elements from the Captain & Company whitepaper with messages from the developers in Discord and an interview with one of the core team. This roadmap is subject to change and speculative in nature. Refer to the official roadmap ([here](https://docs.capnco.gg/resources/roadmap)) for the developers’ position and refer to Appendix III for a screenshot of that roadmap at the time of publication of this article. * **2Q22** - Development Begins * **4Q23** - Pre-Alpha Public Testing * **1Q24** - Season 1: Game Launch, Basic Economy Live (Earning, Rentals), Ship Customization * **2Q24** - Season 2: Economy Improvements, Gameplay Variation Improvements, Mobile/PC * **3Q24** - Season 3: Social Hub Improvements, Gameplay Variation Improvements * **4Q24** - Season 4: Potential Land Gameplay / Player-Owner Shops? ### Price Catalysts We see a number of near-term catalysts that may drive outperformance of either the NFTs or the related tokens, as well as some near-term price risks, some of which have been previously highlighted by the community. * (+) Successful game launch would drive more volume for game asset NFTs * (+) Integration of web2.5 login and checkout would increase revenue and NFT volume by allowing web2 players to join the economy * (+) Deployment of a mobile version to the Google Play or iOS store would substantially improve discoverability * (+) Deployment of a PC version to the Epic Game Store would substantially improve discoverability * (+) Deployment of the webGL version to larger browser distribution sites (like [CrazyGames.com](http://CrazyGames.com)) would substantially improve discoverability * (-) There have been a substantial number of stakers of $KAP tokens dumping their rewards for the past few months since unlocks began in October, which may weigh on $KAP prices and reduce leaderboard rewards * (-) The size of additional seasonal NFT mints may cause downward price pressure if those assets are seen to compete too directly with existing NFT assets * (-) There are a large number of very strong web3 games launching in 1Q24, which, while Captain & Company will be at the forefront of those, they are still formidable competitors for web3 attention Appendices ---------- ### Appendix I Official links as reported by the project. Website: [https://capnco.gg/](https://capnco.gg/) Twitter: [https://twitter.com/capncompany](https://twitter.com/capncompany) YouTube: [https://www.youtube.com/@capncompany](https://www.youtube.com/@capncompany) Twitch: [https://www.twitch.tv/capncompany](https://www.twitch.tv/capncompany) Facebook: [https://www.facebook.com/capncompany/](https://www.facebook.com/capncompany/) Tiktok: [https://www.tiktok.com/@capncompany](https://www.tiktok.com/@capncompany) Substack Blog: [https://blog.capnco.gg/](https://blog.capnco.gg/) S1 Lootboxes Collection: [https://opensea.io/collection/captain-company-clockwork-lootbox](https://opensea.io/collection/captain-company-clockwork-lootbox) Certificates Collection: [https://opensea.io/collection/captain-company-certificates](https://opensea.io/collection/captain-company-certificates) Ships Collection: [https://opensea.io/collection/captain-company-ships](https://opensea.io/collection/captain-company-ships) Cosmetics Collection: [https://opensea.io/collection/captain-company-cosmetics](https://opensea.io/collection/captain-company-cosmetics) Resources Collection: [https://opensea.io/collection/captain-company-resources](https://opensea.io/collection/captain-company-resources) $KAP Token: [https://www.coingecko.com/en/coins/kap-games](https://www.coingecko.com/en/coins/kap-games) ### Appendix II SWOT analysis of Captain & Company versus other industry heavyweights in a similar midcore / web2-friendly genre. ![](https://storage.googleapis.com/papyrus_images/c39e7bb9122a1542523fffc0cdaa25fd57268d2fe8ef7fdbbc30eb6646ac21a2.png) ### Appendix III Screenshot of the official roadmap at [https://docs.capnco.gg/resources/roadmap](https://docs.capnco.gg/resources/roadmap) as of 1Q24. ![](https://storage.googleapis.com/papyrus_images/9b142e466cea5ed1b4ff7cada34781696a5602aad1c28d6d728a4d5834df40c7.png) --- *Originally published on [0xScientifica](https://paragraph.com/@0xscientifica/captain-company-massively-multiplayer-mainstream-web3-gaming)*