Star Atlas: Web3 and Solana Game Development, with Co-founder, Michael Wagner

For those of you that don't remember , he's the co-founder of Star Atlas , a space-themed video game metaverse of grand strategy , open world exploration , territorial contest and political domination .

With a blockchain-based layer that utilizes Solana , star Atlas is striving to be the first blockchain game to deliver AAA-grade cinematic quality visual experiences and , from what I saw at PlayGG a couple of months ago , y'all are nailing that for sure . But thanks for coming on the show . I appreciate it .

But , man , we faced some challenging times but we just persevered . We stuck with it . We kept building , made changes where we needed to , and the team is doing incredibly well . We've shipped a lot of products over the course of this year , but most recently , and really with much fanfare , is our Sage Labs product .

Now , sage is Star Atlas Golden Era and that is a browser implementation of the Star Atlas universe . So it's not the Unreal Engine content , it's not the cinematic open world MMO content . This is a 2D browser implementation that activated , largely activates the economy .

It's all centered around resource extraction and crafting right now , but the future vision for the browser-based gameplay which is developed in Play Canvas and it will be with 3D WebGL assets , is more of a real-time strategy gameplay loop .

So it's all focused on territory control , gathering resources , crafting star bases , building those , going out open world PVP in this map and being able to receive rewards for doing that . And again , sage Labs is really a 2D implementation , so much more of an O-game style , whereas the future version of Sage is essentially kind of like Stellaris for people familiar .

But man , it has been absolutely blowing up . We and people in our community are posting numbers . As of two days ago , we did some 2.3 million transactions on Solana . We made up 15% of the daily network transaction volume and this has been increasing over the last several weeks , so we just rolled this out on September 21 .

We're about two and a half weeks in and the user counts are good , the growth is good , the transactions are good and what's really cool is we've built effectively all of the game logic on Solana through seven different Solana programs .

It was a good demonstration of what was possible , but still very limited in the feature set available . And so this evolution into labs . Now it's just a massive , massive improvement over the gameplay economics and the gameplay mechanics and again creating a system that is sustainable , going into the future as well .

Escape Velocity was we knew that was a temporary product that would be deprecated , wasn't intended to continue , but labs . We now have the foundation for all of the future gameplay mechanics that go not only in labs but across the Unreal Engine client as well .

So now in Sage Labs , it is based on the assets that players own . Now we have ships that are selling for $3 or $4.00 . We have ships that are selling for $100,000 .

So choose your own adventure in terms of how deep you want to go , but you can construct a small fleet of ships and still get out and play and start having fun if you spend maybe $10 or $15 .

And with respect to your comment on Soul , obviously we are massive supporters of Solana Network , but there was a really cool feature that we released , which was it is a fee payer service that we call Atlas Prime , and what that really means is all of our users are paying their network transaction fees in Atlas , which is our in-game currency , that is passed

through to a proxy service that we run . We pay the Sol transaction fees on their behalf and they just pay Atlas , and for us , this is a big win for the Star Atlas ecosystem because users are earning Atlas and if you're completely new to Web 3 or completely new to crypto , we do want to simplify that process as much as possible .

So earn the currency from playing the game and be able to pay all of your transaction fees and buy all of your items in that currency . That's how we create this circular economic loop for players . But a few ships and otherwise . Connect a wallet and you're off and running .

The scale of these things increases exponentially . Again , the price is associated with them , but there's also a ton of information out there already on different strategies and meta that people are employing . Going into the game and every one of the ships . There's a bunch of different categories of ships and manufacturers of ships .

I won't take the time to go through all of those right here on this call , but there's eight different manufacturers that have different specializations and different attributes . And then there's ships that are racers , fighters , freighters , transport , bounty hunter , mining ships . You can effectively specialize based on your in-game strategy .

Whether that's ultimately , in the future , wanting to engage in PVP with your fighterships , or if you're focused exclusively on logistic , supply chain management , extraction and crafting , your mining ships and your freighterships are going to be best suited for you .

And so , if you're thinking about managing your cost as you play because every one of our gameplay loops Operate as a Genuine business , which means you're spending food , you're spending fuel , you're spending ammunition , you're using tool kits these are the four core resources . They get burned for every action that you take it's like bargain trail button space .

But I should just go pick up like I don't know twenty , fifty dollars worth of ships and probably get like Two attack vessels like a freighter or something like that , and and then you form like this little gorilla group and start , you know , just trying to extract resources in the lab and see , see how it goes , like the best way to experiment .

It is a wallet connect and what happens on the back end is that creates a profile for you on chain and that profile will be used for character progression , xp loyalty point earning and then also managing permissions and settings within your account itself . Things like extraction of resources from the universe , that's on chain .

Crafting systems are on chain , the inventory systems and in fact , throughout the map of Gallia , which is the sage galaxy , it is localized inventory .

So if you have SFT assets , which all of the resources being extracted are , they are stored at the star base where you're positioned and if you want to get them back to , say , the central space station , you need to physically load them into ships and bring them back .

Or if you set up crafting hubs at any of the 51 different star bases around the map , you can craft at those star bases , but ultimately you have to get those back to your central space station .

So localized inventory and then going into the future , which kind of dovetails off of your previous question , is kind of like what is the matter or what's the best , what's the most profitable today ?

Well , the meta is going to shift pretty frequently across star atlas as we develop out new features , and a feature that's in our pipeline Is combat , and another feature is the actual star base construction , where players need to collect resources and build their star bases .

But you know , when we get into combat systems it gets more complex in terms of what's most lucrative , because you could stay in the safe zone but the extraction rates are lower and you know the amount of materials you collect is lower , your transportation costs are lower , but where it's most lucrative is out in the medium risk zone or in the high risk .

I feel like a twelve year old again , playing like starcraft back in the day .

But going into the future will also have a council rank system and a licensing system that requires players to . Everybody has to start on the same footing .

Everybody has to start with the smallest ships in the game and it's only through playing and collecting XP and allocating points to different skills that you're able to acquire the licenses allow you to fly those bigger ships in the future . Now , that gating mechanism is not in place today and it's possible we change that at some point in the future .

But the idea that somebody can just spend a hundred grand and then immediately destroy you because they spent more money we do want to try to prevent that to some extent .

And there are some founders who listen to this show and I think , like are probably navigating a pretty difficult market , like we all are , and I was wondering if you just share some Anecdotes of like how you made those decisions and the like how you navigated that with your community and just kind of talk about that process a little bit , if you're open to it ,

I think that we could valuable , especially for some of the younger teams in the space .

We made a first round of cuts in December , going into January to pair the team back . I think it was about 13% of our staff .

My goal , my objective , was to iterate and deliver product quickly enough that we could build momentum and interest and start to acquire new users . Now , you know , through the bear market , it's already difficult to acquire new users , and we're really working on this pioneering tech which is on chain logic .

So while we had a few products released over the course of the year , they didn't drive the momentum that we were expecting , and so as we got into July , I had to take a really hard look at our balance sheet and our run rate and whatever revenue was coming in and our ability to capture cash flow off of things like token sales .

Right At the end of the day , it was a simple mathematical formula . Here's what we have , here's what we're making , and if I don't make adjustments , this is when we die on the vine . And so I would just say , for anyone out there that is considering this right now , it is an incredibly difficult decision to make .

These are friends , these are people we interact with every day . These are great contributors to the product that you're developing most likely . But ultimately , survival is paramount , and so when we got to that point , you know , we made the cuts , and it was about 75% of the remaining team that we actually cut back in end of July , going into August .

The silver lining here while it doesn't feel good to make that cut , it was an immediate sense of relief .

The weight of the world was lifted off my shoulders in that moment because I knew that I just extended our runway , our worst case lifetime , out another 18 months , and really the goal here is making sure you survive until the next cycle and when you have product available for people to start to use and hopefully the product is something that they're interested in .

But one was the sense of relief that I got immediately , despite feeling bad about making that move . And two , what I think is quite surprising is it was an extensive exercise to decide who we're keeping and who do we have to let go , and what positions are they filling and what roles and responsibilities are they completing ?

Thinking forward about what is our roadmap going to look like if and when we make these cuts , which we knew were necessary . The people that we retained after a short period of turbulence , working closely on regular calls with the team .

Everybody got aligned extremely closely and one of the things , one of the challenges I would say that we faced as a team historically is that it was almost a pitfall that we had as much success early on as we did , because we tried to rapidly scale to account for the revenue that we had achieved in year one and even , to some extent , year two .

There's a great podcast that I've referenced I might have even referenced it before with you , but it's Tim Ferriss and he's interviewing the CEO founder of Evernote and he references this study , which says , essentially , every time you 3x the amount of people in your company , you need to radically transform all of your processes and all of your procedures , and we're

a fully remote company . We scaled from four people to 235 people over the course of a year and a half , and we operate almost exclusively through Discord , and so communication channels were broken , getting people to coordinate and collaborate .

Interdepartmental coordination was a challenge , and so what we found is that in downscaling the company , we actually had better fusion of all team members and we really isolated our focus on what we were all going to work on and we set to task , just having those meetings , having those priority calls , and our velocity , our momentum right now is arguably better than

it was when we had a bigger team . So kind of key lesson here is number of people doesn't necessarily translate into momentum or velocity of development . It's really ensuring that you have that team alignment , that cohesion , before you scale , and that's a lesson that I'll take into the future . Even in the face of significant success with income is .

I want to be extremely strategic in how we scale the next time around , because it actually introduced , I think , more challenges to us than the benefits we derive from it .

The bear market forced us to lay off about half of our people back in December , which sucked , but between then and now we shipped more better product than we ever did , just because of how much it focused our team and I think bear markets have that effect on people . It's bringing a lot of focus .

You got to really buckle down and figure out how to survive and frankly , transparently , our company might not make it still , but seeing how those people were able to rally and deliver a really great product in a pretty short period of time between because we basically pivoted the company to starting in January , like end of last year our revenue went from pretty

significant to nothing overnight after FDX that was a pretty big kick in the pants and I think , looking back , one of the big things I would do differently is when we were adding all that headcount , really trying to drill down and like , do we really need that headcount ?

Like , do we really need that person , and I think what happened with us is , with all those resources that we had , you know you try to build too much .

You're building all these different things and if you focus and focus like constantly pairing back and I saw something like Elon Musk posted this somewhere , like some video on Twitter about this where it's like pair back your product initiatives until you start having to add things back in later , that's better than having too many things that you're doing .

So , yeah , really big lesson learned for me as an entrepreneur and it sounds like you guys had a similar one and I guess , like for teams that I don't think it's happened publicly that much yet , but I think it's coming there are going to be teams that just don't make it , even with , you know , all the effort they might put in to like cut headcount and stuff

and figure out a way forward , they just don't get probably market fit or run out of money or whatever . What would you say to those teams , like in this market , that are almost dead or like on death ? Are there companies about to have to shut down ?

What would you say to those guys who are kind of thinking about what their next thing is or I don't know how do you deal with that as an entrepreneur .

Another quote I love is David Goggins , and he says you know , pain is temporary , failures forever , something like that . And for me it's as much of a struggle as it might be , as long as there's a penny in the account and we can satisfy our liabilities and we still have a vision for what we can build . We keep going , man .

We keep iterating , and so even if you're getting down there to the the final days , you never know what's going to happen . So just don't give up early . Definitely , fight until the bitter end .

But if it is a quote , unquote failure , a failure is a lesson . I don't think that there's anything intrinsically wrong with failing . If anything , I think it's a testament to the individual to try something that's challenging and fail . That's much better than just never trying at all .

So don't get discouraged from starting another business or doing something else again just because you failed once . Keep going with that too .

You know , what I learned is , if you give it your all and you wrestle hard and you leave everything out on the mat , you just shake your opponent's hand and you like , keep your head up and walk off the mat .

Don't say anything , just walk off the mat proud and come back again , get to the next tournament , get to the next match and do it all over again . And that's how , as an entrepreneur and I've had multiple companies that had some fail and some be successful , and that's just the way that I look at it .

If you really do hang on and go down with the ship and you really put everything into it and you know there's like nothing else you could do to make it work , then you can keep your head high and take those lessons with you to the next one , lick your wounds , take a little time and get building again . I don't think this bear market is over soon .

Some people have been kind of posting on Twitter like bull posting , like oh , we're almost at the end , this has got to be the bottom , and I'm like I don't know . So I think , like , keep building is the thing that I keep thinking .

If you know that you've done everything you could and you tried everything you could , like you said , hold your head high , know that you gave it your best and you'll do it again .

Like , when you think about that , a lot of these layer ones like a layer one , like if you look at yourself as like a Web3 ecosystem on top of a layer one , and they're an L2 on top of a layer one too .

So if you like , just do apples to apples comparisons and you look at those valuations , it's kind of interesting not to like price speculate , but it's kind of interesting if you look at that .

It speaks to the idea of only possible on Solana that , to your exact point , we think of ourselves almost as a developing in very much the same fashion that a layer one builds , because we have open access to our tooling , like all of those programs that we just rolled out for Sage Labs .

We've opened bindings , APIs , documentation , and we already have people that are looking at ways to integrate into those programs , build their own extensions , build automation tools which is kind of a bad word , automation botting . But we actually think that this is the big opportunity and this is why we're building on chain is composability .

We want other teams to build DeFi services , build lending models , build scholarship models , build liquidity pools with all of these different commodities , build wallet management or game management tools and make those open and accessible to all of our players .

So if you were to analogize that to what any layer one does , it's building a base tool set that other developers can then leverage to create programs and applications that live on top of it . Well , the way we're building on top of Solana allows other developers to build on top of Star Atlas in the future , and the benefit is we have a captive audience .

We have a user base that is extremely passionate about being able to play and what we're doing .

And if you're a developer and you're looking for a new opportunity , do you want to create something brand new out of the air and hope you can capture users , or do you want to build something that you know there's an existing audience for and we see a major advantage for that ?

You could imagine , maybe somebody else makes a different universe , but all my stuff , the basic contracts , are the same and so all of my game identity and gameplay and all my assets and stuff can pour it over to a different game even .

I'm not sharing any details on it at the moment , but the profile system itself is largely going to evolve into a Web3ID or Web3 passport of sorts , with the intention of allowing immediate access into any other game that wants to build on Solana .

Now we've already open sourced other tools as well , like our Foundation SDK , which is a Solana native integration into Unreal Engine 5

. Whether it's creating a mod for Star Atlas or creating a unique storyline or a single player mode for Star Atlas , within our asset repository on buildstaratalystcom , we have ship assets and art that people can leverage . We have branding that people can leverage . People are able to commercialize those .

We have a structure in place that allows them to earn up to a million dollars in revenue without paying any royalty fees to us . Take a chance right , build something and see if it works here and people the revenue engine . We are , yeah , and we've already spent all of this money and all of this time in creating amazing assets .

Let's make those available to people so that they can get ahead . Start our only requirement we have a few requirements , like if you're using the star atlas assets , than it needs to reference the star atlas , nfts or SFTs .

But , to your exact point , if you're a player and you own some of the ships and someone else builds a game Using the build repository , now your ships work in that game to you can end , your profile works , so you can just go play as a developer , can I also create new ships and things like that that People can buy and then after a million dollars , like

you guys , get a piece of that action .

That would be more of a one off conversation . But within this build repository it's startless branding . We already have eight or nine companies out there that are using this . Galley emergence is one that I point to . A lot star artisan shop , galley art station , enigma forty two .

These are groups that are either producing merchandise , apparel , computer peripherals , swag there's like placards . There's a couple of companies that are doing 3d models of our ships , 3d printed models of our ships , and they're commercializing this now .

They're selling it now and so they are responsible for reporting revenue back to us because once they exceed that one million threshold , there is a royalty between three and ten percent .

It depends on what industry you're in , but we think that those are pretty favorable rates generally to be able to leverage this library of assets and then otherwise , the ship assets that are included in there and if you just want to copy and paste our ship assets , you can do that again with the requirement that it points to the nft that is deployed on saloon .

If you create your own ships in your own gameplay mode , you can monetize that as well . It that revenue doesn't go back to us because it's not one of our assets ? Most likely it's a question I hadn't gotten before . I'm kind of curious how that would work , but most likely that would be excluded from revenue .

And that's a hard thing to do , like if all a game developer has to do is like create their game and then it's on top of your stack and then it can just start making money . That's pretty interesting . It's just be a high quality content at that point , high quality game , just different ideas for like a different universe or something like that .

But they can focus on that instead of having to do all this stuff that you guys just spent . You know what is it ? Two years now , a couple years , trying to figure out .

It's why we started building under this philosophy of on chain game logic since inception , and you know most people are taking the what I would argue is an easier path , which is we're going to build a game traditionally and then we're going to integrate NFTs into that and it'll still point to your NFT still great evolution for , I think , gamers .

I genuinely believe in this idea of true asset ownership and being able to Transact with the assets that you own without restrictions under the term service .

For us , that composability element is what we believe will accelerate growth and development around star Atlas because , ultimately , in no scenario could our team of people , whatever size it is , compete with a global audience of developers who are looking to build features around star Atlas .

You know Our team could scale to 50,000 engineers overnight through a hackathon or a game jam , because we've already incentivize people to go out and produce and cater to our audience . Our players win when they get new content or new features . That developer wins if people are using it and they're monetizing it .

We win because we just can't build it , and we can't build it fast enough , even if we wanted to . So it allows us to focus our energy on the core content of the star Atlas game and then open source tooling so that people can build their own extensions and enhancements to our ecosystem .

I wouldn't necessarily say before the end of the year , but I bet by Q1 of next year we see some deployment .

But our 2.2 release of Star Atlas is going to demonstrate the full integration of metagravity , and so this is server infrastructure . It's user concurrency , scaling and kind of network coordination . We've already demonstrated 5,000 concurrent users . Single instance that was at the PlageeGee event .

We're looking at 30,000 , potentially far more than that by the end of the year . So everybody in a single server , no sharding , no partitioning and still being able to seamlessly transition into and out of , say , atmosphere . But our goal is to have every single one of our players on the same server .

So that's coming out with the updated gameplay modality of competitive combat , racing with your ships , and so it's hover racing . We're looking at 100 player support per race right now in this tournament structure .

But you have ship mastery , you have character progression , you have ship configuration , so you can go in and customize all of the modules , components and crew members in your ship , and then your mastery is leveling up the ship itself , and then that would actually tie in with our mobile app that we also announced at PlageeGee , which is a fitness trainer for your

crew members . But the other part about this is that we have already laid the groundwork for program integration into Unreal Engine 5 as well . We did that with the Foundation SDK . We fully integrated our marketplace into Unreal Engine as well .

So if you're in the game client , you can buy and trade , and that's the same marketplace that we use at playstaratelesscom . So you're seeing the same order book and trading against other players on a peer-to-peer basis . But these programs like movement coordinate , combat , extraction , crafting systems these are going to directly integrate into Unreal Engine 5 .

So what I always try to describe is that we're not building multiple products . We're building multiple implementations of the same Starateless universe . It doesn't matter if you're an Unreal Engine or you're in browser , You're using the mobile app .

It's just a different way to experience the Starateless universe , because the base layer of all of this is Solana and the base layer of all of this is this economy that we've created . So I'll pause there , but really excited about Unreal Engine release this year .

We've got a great community who will help you get up and running and it's always active in there , and an amazing community team there for support . So join us in Discord . Look forward to seeing you guys out there on the map .