‘Animal Crossing: New Horizons’ became a cultural phenomenon in the wake of the coronavirus pandemic. 25-year-old Daniel Luu created a marketplace for the game that became a phenomenon in its own right. Here’s how he did it.
It’s no secret video games, next to beauty and wellness, have been one of the few industries to prosper under the new reality brought on by the coronavirus pandemic. By April, success stories were coming in quick and by the dozen.
There was Travis Scott’s in-game Fortnite concert that saw over 12 million concurrent views from players. Microsoft’s Game Pass service broke 10 million subscribers. Nintendo announced sales of its Switch console were up 24 percent year-over-year. Animal Crossing: New Horizons, the fifth main title in the Animal Crossing series, sold five million digital copies in its first month, breaking the Switch’s record for most digital units sold in a single month. It’s this last story that’s gone on to define gaming, and in a wider sense, culture, during the worldwide lockdown.
As of press time, New Horizons is the second best-selling game on the Switch, with over 22 million units sold. By the numbers, that means over a third of all Switch owners now have a copy. With people all over the world playing, the game soon became more than a game, serving as a digital environment for wedding ceremonies, college graduations, and fashion shows.
While the game was growing in popularity and this cultural shift was occurring, a 25-year-old in the D.C. area named Daniel Luu was compiling a spreadsheet of all the game’s items in a Discord server with help from the New Horizons community.
Discord, a free chat client popular with gamers, served its purpose well, giving players, or “villagers” as they’re called in Animal Crossing, a centralized place to contribute to the growing database. Like most things niche, however, it wasn’t very user friendly.
With a background in software development, Luu took all the items in the spreadsheet and launched Nookazon, an easy-to-use online marketplace for buying and selling in-game items. At the time, he couldn’t have expected Nookazon to go on to have its own Wikipedia page or get written up by the Washington Post. Like the game itself though, success arrived overnight. Literally.
Not long after launching, Luu, better known as squishguin to his modest TikTok following, posted a 15-second video introducing the site and went to bed. When he woke up in the morning, the web traffic had surged from 6,000 users to 180,000. Call it chance, call it luck, call it being in the right place at the right time, like so many entrepreneurs before him, Luu’s life was leading up to this point.
More Than a job
Attending a computer science-focused high school and minoring in computer science at the University of Maryland, Luu was no stranger to building websites. “Computer science is not only my job, it’s also my hobby. I’m always building sites. I’m always building apps.” He’s built so many sites over the years, he has trouble recalling the first one he ever built (“maybe a YouTube doubler?”).
After graduating, Luu worked for a number of tech companies, refining his skills as a software developer from a local startup to banking giant Capital One. From one employer to the next, running his own business was always the goal. “Being an entrepreneur has always been my dream. Coming up with new ideas, putting things out there, and having an impact on people.”
Since his college days, Luu had been listening to podcasts focused on startups, internalizing founder stories to one day tell his own. “I love the podcast Indie Hackers. It’s not necessarily about investments or the unicorn stories of startups, but it’s about people doing it themselves, figuring it out, working on it.” That sentence couldn’t be a more perfect summary of Luu’s own journey.
When lockdown was in full effect, Luu picked up New Horizons, joining millions of others in developing and taking care of their own virtual island. The more he played, the more he wanted to learn about the game and the community.
He joined the official Animal Crossing Discord and soon discovered channels dedicated to trading items in-game. “The channel was chaotic. It was all over the place. If you wanted to find something, you had to actually search for it in the chat. I thought to myself, ‘why not use my developer skills to create a better experience for this?’”
Luu did just that, creating a website like he had countless times before, this time with the help of two friends. The site was soon live, becoming New Horizons’ leading marketplace for buying and selling everything the game has to offer. Catering mainly to other players in the Animal Crossing Discord channel at first, the site’s value across the global New Horizons community following that fateful TikTok video was unmistakable. Luu’s entrepreneurial dreams were arriving sooner than expected.
“Being an entrepreneur has always been my dream. Coming up with new ideas, putting things out there, and having an impact on people.”
From 0 to 100
With those dreams came challenges, chief among them the difficulty of scaling. “Just because you build a great product for a couple hundred people doesn’t mean it’s going to work for thousands of people.” Luu tapped into the same community that had propelled the site to international fandom. “I connected with people and friends from Animal Crossing that we’re building sites. Over a month of studying and learning I was able to get the site up to speed to actually handle the amount of traffic we were getting.”
Like all entrepreneurs, Luu was solving other issues at the same time, some as they were happening, others in anticipation of them. There was the issue of moderation, solved by enlisting 60 moderators on a volunteer basis. There was the inevitable issue of in-game bugs, allowing players to duplicate rare items and make fortunes, solved by implementing a median price history to reflect true-market value instead of relying on price averages.
Most importantly, there was the issue of keeping the marketplace trustworthy and safe, solved partially through a combination of the above and the implementation of a review system, paving the way for some users to become power sellers.
Although Nookazon had become the de facto marketplace for New Horizons, it always planned to keep the site free for users to make trades and never intended to make commission on transactions; besides Nintendo’s Terms of Service wouldn’t allow it.
However, as the site started to grow, Nookazon needed a way to cover the costs of the database. Enter Patreon. A trusted platform for creators, Nookazon started offering monthly subscriptions that range in price from $3 to $100 across seven different tiers. With so many visitors to the site, Nookazon turned to ads, quickly diversifying the revenue stream.
While it’s unclear just how much revenue Nookazon is driving between the two, the site has made enough for Luu to leave his day job as a Senior Software Engineer at Data Intelligence Technologies, giving him the opportunity to officially embark on his career as an entrepreneur.
Just Getting Started
After creating dozens of websites over the course of his life, Luu had built one that worked, one that was seemingly sustainable long-term. He took the Nookazon model and essentially replicated it for a new site called Traderie, a platform to power individual marketplaces. The way Luu puts it, “It’s going to be a one-stop shop for all in-game trades.”
The first game to launch on the Traderie platform is Adopt Me!, a massively multiplayer online role-playing game (MMORPG) built on the Roblox gaming platform i.e. the Shopify of gaming.
Unlike New Horizons and the company powering the game at the heart of it, Nintendo, Luu spoke directly to the team at Roblox, hearing straight from the source just how much trading was taking place and the need for a more user-friendly platform around it.
The Traderie Adopt Me! site is almost indistinguishable from Nookazon. And that’s the point. In less than six months from launching Nookazon to leaving his full-time job, Luu all but perfected the model.
He’d intuited the same lessons of iteration every other successful entrepreneur that’s come before him has, while proving the banal truth behind mundane proverbs like “if it ain’t broke, don’t fix it.”
Today Traderie counts four full-time employees, including Luu, among its staff. Although the success of New Horizons and therefore Nookazon can be partially explained by the effects of the coronavirus pandemic, Luu firmly believes the digital marketplace he’s created is here to stay. “There are tons of game studios out there that don’t have the capacity to build out marketplaces because they’re so focused on building the game. That’s something we can help with.”
Powering the world’s biggest Animal Crossing community, Luu may have inadvertently stumbled upon a new business model altogether, one that allows video game developers to outsource integral aspects of their games, like trading and community, to experts that have perfected the digital trading model through trial, error, and sheer fandom.
With 2.5 billion people around the world playing video games in one form or another, Traderie might need a bigger server.