European Blockchain Convention: Web2 Game Studios Embracing Web3
In this podcast, YGG Head of Partnerships, Sarutobi Sasuke, speaks with Sebastien Borget, Rudy Koch and Maria Eneva-Olms about how existing game studios are responding to Web3.
The European Blockchain Convention first started in 2018 with the mission to accelerate the blockchain ecosystem in Europe. Its global audience of founders, investors, regulators, developers, corporations, and many more come together every year to learn, get inspired and connect. This event covers and discusses different blockchain topics such as fintech, cryptocurrencies, NFTs and NFT gaming.
“The Gaming in the Metaverse” discussion brought together Web3 enthusiasts and leaders, namely YGG Head of Partnerships Sarutobi Sasuke, The Sandbox co-founder and COO Sebastien Borget, and Mythical Games co-founder Rudy Koch.
The panel was moderated by Maria Eneva-Olms, who is a member of the board of directors of the Global Blockchain Women Alliance and a manager at the fintech company, Lucht Probst Associates.
Sarutobi, aside from his role at YGG as Head of Partnerships, is also the founder of BlackPool HQ Academy, a scholarship program for blockchain games such as Axie Infinity, Aavegotchi and Sipher. The program is under BlackPool, a DAO built for NFT gaming and trading.
Sebastien is a veteran in the mobile gaming industry with 11 years of experience, four of which have been spent in blockchain gaming. He is the co-founder of the blockchain-based 3D open-world game, The Sandbox. In 2020, Sebastien became the president of the Blockchain Game Alliance, an organization dedicated to promoting blockchain within the game industry. Cointelegraph also recently named him one of the top 100 most influential people in crypto.
Rudy has a diverse background in the gaming industry, having worked with different AAA game studios such as Activision and Blizzard Entertainment. He also worked on several games, from the Call of Duty and World of Warcraft franchises to Club Penguin. Currently, he is the senior vice president of Mythical Games, a game company focused on building player-owned economies with top game developers and publishers in addition to their portfolio of games.
In this virtual panel, the group discussed how current game studios could bridge the gap between Web2 and Web3.
The following is an excerpt from the discussion. Watch the full panel here.
Maria (23:25): Let's talk about how the traditional gaming companies can embrace blockchain technology and the play-to-earn model. What do you think about that? Maybe, Rudy, you can start, because you’re helping actually build this bridge.
Rudy (24:01): Yeah, that is our main focus. As traditional game developers who got into the space, we wanted to look at blockchain through that lens. How would we get these concepts in front of the mainstream audience? How would we take concepts like private keys, wallets and gas fees? And how would we put these in a way that doesn't become a barrier? People play games, because they want to have fun, not because they want to get confused. This has been a major focus for us.
At the same time because our background is in traditional games, we've been deep in conversations with a lot of key folks in the traditional gaming industry. And It's been interesting, it's been fun. Three and a half years ago, it was not cool to talk about blockchain and NFTs in these venues. There was a small group of us that were believers and we weren't met with the same enthusiasm when we were talking to the Web2 world. This year, I think, has been amazing. We hoped we would be here and we're excited to be here where the whole world is looking at NFTs.
Now the discussion is there, it’s forcing the traditional gaming industry to take a look at Web3, blockchain, NFTs and to really think about it and develop a point of view. We've seen them becoming much more open. But at the same time, it's an industry that traditionally is quite risk-averse and they're not going to — especially when you look at the big companies — they're not going to risk a billion-dollar franchise to test out some NFTs. That's the biggest challenge. How do they do this in a way that's meaningful to their bottom line, meaningful to their business and does not risk what they've already built? Because making games is hard. When you've got something that works, you want to make sure you optimize around that.
We've got this sort of traditional industry that's entrenched in Web2 technology culture. Now they're looking at Web3 and the thing that's important to know is, it’s not just a straight transition. What we're seeing is this clashing of paradigms. I think, Sebastien, you touched upon this, right? You got these centralized companies that build centralized games and worlds where they control everything.
You've got this true ownership of Web3 clashing against the walled gardens of Web2, and they're trying to wrap their heads around these concepts. What we're seeing is that they're taking cautious steps, and this is why we call ourselves the bridge from Web2 to Web3. We've gone out ahead and started to innovate. We've gone through the changes, we've gathered data, we've learned what works, what doesn't work, so we can help them reduce risk when coming into the space.
This year, because of all the conversation, they're starting to take steps in. “Okay, let's start small. Let's start with NFTs. Let's see how that works.” I think we're still a little bit away from going full tokenomics, social tokens and governance. It's a matter of time, but I think they're going to take careful steps into this space. At the same time, not to say that there won't be innovators who will go in headfirst. We're starting to see more traditional, smaller indie teams that are just excited about the space. They've got a point of view and they're jumping in at first. So I think we're going to see some maturation happen over the next couple of years. That's critical and it’s been really exciting.
Maria (27:50): Rudy, I think you're doing a great job building this bridge. I'm super excited what's going to happen next year. I think it's going to be a big explosion. So I'm very excited about that. Guys, what do you think? Sebastien, how do you see that?
Sebastien (28:07): I definitely see 2022 and forward reach a tipping point. At this moment in time, there is not a single gaming company in the world that is considering, “How do we integrate NFT, how do we launch that?” Ubisoft, one of the largest top 10 gaming companies, has made the splash as they launched Quartz. Square Enix has announced it, EA has announced it, and Zynga has announced it. If you look at the top 10, it's definitely happening and it's happening on all levels, large companies and indie game studios.
Which means that by next year, there will be a whole different landscape into gaming. A lot of competition from competition, more innovation, I expect that will be great. We're going through some cycles here, but overall, a new design concept around ownership will be introduced. We’ll probably stop seeing Sandbox clones, Blankos clones or Axie Infinity clones.
People will need to innovate to not be just a “me too'' kind of game, try to bring on new agencies that will actually enlarge the market. And as more and more users enter and get progressively or abruptly, depending on your take on the topic, introduced to NFTs and Web3 decentralization of owning your identity, tokens and your digital assets, we're growing an educated user base that, in my opinion, will be much less likely to come back to anything we've seen before in free-to-play or even premium games.
Once you get the idea, “Oh, I own this and can sell it or I can use it somewhere else.” If someone takes that right from you, you will say, ”Why is it becoming abnormal?” We're redefining the norm through ownership and It's happening to users that are more crypto savvy right now, leading that trend. After that, the whole new generation of gamers that board like this — imagine a whole new generation of Fortnite players who now digest digital ownership like they got the iPod or digital music instead of CD-ROM or Blu-rays for movies. They will not even think of that thing of the past, they will be beyond that. I think that is where the industry is moving over the next five to 10 years and there's no return.
Maria (32:52): Alexei, how do you see that? How is the traditional gaming industry going to embrace blockchain technology and the Metaverse?
Sarutobi (33:07): I definitely think there's some kind of regulatory challenge. There are some concerns from existing business models. We can already see with games like Axie where there's been this huge revenue generation, popularity and growth-hacking mechanic where, when a game has a viable digital economy, and you can participate in a way that you can extract and maybe contribute value into in a much more interesting way.
When you look at the revenue that Sky Mavis was making over the summer recently, I think it has turned a lot of heads. And like Sebastien mentioned, I highly doubt that there isn't a gaming studio that hasn't sat down and had a conversation relating to NFT strategy. Just to echo your thoughts again, I think 2022 is going to be a huge year. I'm very much confident that we're going to see major studios adopting NFT strategies in games.
I think it's a huge opportunity, I think there's going to be some pushback. I think there's this very strange and unusual, unfounded pushback against NFTs from a certain subset of the gaming and art community. I'm not completely sure why there's these people doing this. But I think it's only a matter of time before they get kind of drowned out by the people that are really enjoying and embracing these technologies. I think there's a lot of misinformation surrounding that.
But definitely, I think that the mainstream and traditional gaming sector is going to have to embrace or be overrun. It's one of these things where I'm pretty confident. You can already see with Ubisoft, for example, launching Quartz. I think this is just the first of many. I'm sure that the opportunity for this secondary market sales monetization mechanic is too big of a prize to ignore.
You can listen to the full discussion on YouTube.