GamesBeat 2022: Launching NFT Games in the Open Metaverse
Andrew Green, Head of Developer Relations at YGG, speaks with The Sandbox, GAMEE and Ultra.io about the different factors influencing the latest innovations and emerging trends in Web3 gaming.
At the recent GamesBeat “Into the Metaverse” Summit, Andrew Green, Head of Developer Relations at YGG, led a virtual panel discussion with:
Sebastien Borget, COO and co-founder of The Sandbox, a virtual gaming world using blockchain and NFTs to empower creators and players.
Nicolas Gilot, CEO of Ultra.io, a blockchain-based ecosystem utilizing a single login system to access a variety of games.
Bozena Rezab, CEO and co-founder of GAMEE, a casual mobile gaming platform introducing blockchain to mainstream audiences.
The panelists shared their perspectives on how Web3 and decentralized gaming guilds can be utilized as a channel to address current issues in the video game industry. They also discussed how the advent of Web3 has changed the approach of game publishers to game marketing.
The following is an excerpt from the discussion. Watch the full session here.
Launching NFT Games in the Open Metaverse: GamesBeat 2022
Andrew (02:11): As we look at the current game market today, we're in a mode of intense consolidation. There are new privacy issues clamping down on user acquisition, and there are also a lot of new opportunities and new platforms. I'd love to talk to you all about some of the issues facing developers and publishers today in mobile and PC.
Sebastien (02:54): We're seeing a range of issues for both developers and users within the video game industry. This is a pretty mature market now, and one of the first challenges, like any developer will ask you for, is discovery, like, “I'm going to put a certain amount of effort into game production, and yet, how do I ensure that my game can be found and will monetize?” That's the first issue.
The second issue is monetization. That was the second question I mentioned, and that’s really related. The current video game market is mostly led by free-to-play. It's a business model, where I'll say just roughly one to three percent of users are willing to make a purchase that is high enough to compensate for the rest of the players. All the players are being monetized for serving them advertisements as a way to try to make a few extra bucks on them.
That's, in my opinion, a very suboptimal kind of user experience, both for players and users but also for developers, who are forced to put ads they don't like, forcing the whole industry to track and collect data to better try to serve ads to users to try to sell them games. So there's got to be something better ultimately, and that thing that we think is better is putting a user at the core of the user experience through letting them own the game asset and re-shifting the balance of value as we're designing video games.
Bozena (04:47): I second that, especially since the distribution and monetization are so interlinked together and the mobile gaming market is, you know, it's so competitive. There are millions of games pushing through the same distribution channel like App Store and Google Play. So, eventually, the stores are very powerful gateway holders and holding such incredible power. Developers will naturally look into paid advertising and how can we build our own organic channels that are not dependent on featuring on different stores, or they favor blockchain games or not favor games like that. And I think this is something that we have seen as well, that games are looking into what is the value of the user that I can pay to add networks as a paid channel, how much I can afford, and then squeeze this amount of users to get back and earn some margin.
So this is like normal gaming thinking, “How do we make money, and how much can we pay for a user? What is the value of one user?” Right? And what we're seeing there is a little bit of a shift in that thinking that comes deeper into the game design and into how games are built. And how audiences come to games is not exactly “What is the value of the user we can pay for?” but, “What is the value that the game can offer to the user?” So that kind of shifts the distribution of the value and changes the thinking about “How can we acquire users or invite?” and, “What is the value that the users see in the game so they come?” So, instead of paying the ad networks and other channels, what is it that we can offer to them so they will come and bring more with them?
Nicolas (06:40): The reality is now you have around close to a thousand games, new games, per month on PC. And the reality is that you don't get as much value initially, because you pay a big fee. So usually, it's 30% towards the market dominance team. So those business models were perfectly fine when they started 15 years ago, but today, if you want to get your game to stand out, it is highly complicated to actually get discovered by the users. And you spend tons of money creating your game, and after that, you have to spend tons of money marketing the game.
So that's a big dilemma that is really based on the quality of the game, but you also have a big impact based on the revenue that you're willing to spend. I think that's something that, with free games, will provide a lot of value by involving the community in promoting this content as well.
Andrew (07:35): Yeah, and that's across, now we're talking about all different aspects of both distribution and the player value. And do we see Web3 as a potential solution to some of these issues? Web3 has been defined as the internet owned by builders and users, orchestrated with tokens. Obviously, there are other tools like decentralized autonomous organizations, but by and large, how is Web3 impacting the way games can go to market and can solve some of these issues?
Sebastien, [as for] The Sandbox, the company has developed over a very long period of time, as these ecosystems have been changing and you looked into a variety of business models. When did blockchain click for you? And how did you see that it could potentially solve some of these issues?
Sebastien (08:31): I think there's no better way to empower users and actually reward them than through tokens. Tokens are a way to create engagement to shift the distribution of value from having centralized marketplaces and centralized stores that get 30% of the revenue initially but then, as they get your ad spend, can get up to 80% of your revenue — sometimes, for some top-grossing games — towards bringing back 100% of the value into the end of the users, and that's been a massive shift.
We've been doing The Sandbox platform for close to four years, leveraging blockchain technology, but The Sandbox initially is a mobile game that started in 2011, and we only were able to solve the issue of rewarding the creators and the users who contributed the most value in user-generated content and more, through implementing NFTs and implementing actual tokens.
Nicolas (09:40): I believe in terms of the approach, with this kind of model, you can actually involve the gamers much earlier in the process. So when they can really start participating by creating user-generated content, bringing awareness to the game, the developer can reward those players at the same time, whether it's NFTs or tokens, which aligns them with the success of the project.
So it's very interesting because as a gamer, I can become part of this project, and they are activities that we'll be doing on the internet and can actually bring value to the game and the community itself, but at the same time for the gamer himself. So that's a really cool approach, which I don't think was possible before there were tokens and NFTs available. So you have all these hurdles of the tooling that you have today, which are, after the wallets, you have to have KYC with the exchange, so there are many hurdles that you have to go through as a player if you want to get access to those games, and I think now there are a lot of new solutions coming to life.
By providing these first-layer solutions, you don't need to go into the hurdle, you just go directly into the game as a player and I think that's the key that will really help to get those games into the hands of the players.
Andrew (12:14): And Sebastien, you've built things to The Sandbox like the Snoopverse. How's the community engaging with that content? And are they collaborating on new ideas? How does that work from a kind of bottoms-up approach with new communities and new content within a broader world?
Sebastien (12:37): One of the key important aspects of community building is to showcase the utility of what that committee will be getting, through acquiring tokens or acquiring NFTs from your game or from your platform. That's something we've put a lot of emphasis on at The Sandbox by providing the creation tools first on our platform and involving artists and creators. And even as we’re now involving major IPs, major brands, and major celebrities into our open Metaverse, we're always very focused on showing what they will get exactly and what they will be able to do through the ownership of those NFTs, what value they get from that.
And Snoop as an artist, this hip-hop legend, has been also great at broadcasting to his fan base. Through Snoop, we get access to millions and hundreds of millions of fans worldwide who would be interested in the possibility to meet him in a virtual world where they can attend his first concert in the Metaverse, visit his house, engage with him and be part of his music clip if they own their Voxel avatar, and do other engagements, which is really community-driven value, like the artist here understands, with his fan, how he can use the platform and use the Metaverse to provide value to this fan the thing that matters to them and create more engagement. So this is a great example of leveraging The Sandbox and the Metaverse towards a better user-driven value.
You can listen to the full panel discussion here.
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