Means of Creation: A New Opportunity for Game Developers in NFTs with Gabby Dizon
Means of Creation is a talk show hosted by Li Jin and Nathan Baschez that brings prominent figures from the tech industry and looks at innovations within major social media platforms and the creator economy in general.
Li is the founder and Managing Partner at Atelier, an early-stage VC firm that has a great eye for seemingly undervalued companies in different niches that are on the rise, like Yield Guild, one of the companies on her portfolio. Nathan is the Co-founder of Every and Project Manager at General Assembly, a learning platform and coding boot camp.
Means of Creation is available on Every, a writer collective that provides newsletters and podcasts from seasoned investors.
In this episode, they feature Gabby Dizon, Co-founder of Yield Guild Games (YGG) where he gives more insight into the Metaverse and how the focus on delivering a good product has contributed to Axie Infinity’s incredible player acquisition. He also explains why people started leaving minimum wage jobs and started gravitating towards this play-to-earn model that is uplifting the lives of many. This short segment drives home why game developers should be excited about this revolution that has taken the gaming industry by storm.
Means of Creation - Playing Games to Earn a Living in the Metaverse - Featuring Gabby Dizon
Li (25:28): All this sounds amazing for players, if you are a player you can now earn through playing these blockchain-based games, you can participate in the value that has historically been accruing to game developers and gaming companies. I also want to get your thoughts on how does this impacts game developer. Why should game developers consider adopting a play-to-earn model versus being a traditional game developer that controls all their in-game assets in a centralized database?
Nathan (26:03): What are the pros, and what are the cons?
Gabby (26:05): I have been hearing that question from developers for the last 3 years, so I am really glad you brought it up. I liken it to the point in time when Amazon shifted from mostly selling items directly to enabling their third-party marketplace and for game developers, this is such a huge shift in mindset because you are basically saying “I am going from making 100% of the profit of what I am making, minus the platform fees, the 30% of Apple and Google''. For example, I am getting a 4.25% cut which is in the case of Axie, on all the things the players are selling, and for a lot of developers that is quite a shift in mindset to make like “Why would I enable something where I am taking a less than 5% cut if I can make everything directly”. But as we’ve seen with Axie, just the progress of community-based player-driven economies and the growth they have had in the last six weeks or so is absolutely crazy. With a game that’s not available on the “IOS App Store'' or “Google Play Store''. The DAU (Daily Active Users) is now over 350,000 and people are spending somewhere between $15-20 in the marketplace, every single day. The 4.25% marketplace fee for June amounted to $8 million and in the first 6 days of July, they made another $8 million. This is with zero paid user acquisition, they haven’t paid a dime to Facebook or Google, so I think this is just a glimpse at what the world past the walled gardens that the IOS App Store, Google Play Store, these big platforms are creating. It’s just a glimpse of what happens when you give that power and give over much of your economy to your actual user base.
Li (28:08): It’s like the slice of the pie is smaller than it was before, but the pie can be much bigger because everyone in the ecosystem has more skin in the game.
Gabby (28:22): Yeah, absolutely and the players have basically taken on the role of marketing, user acquisition, and investing in assets in the game, the community is doing all of that for the developers.
Li (28:34): I think this is really significant, and I want to create a verbal exclamation point here! I think this is a huge shift in the platform and network design that I think is going to pervade out to a lot of “labor marketplaces” and when I say labor marketplaces, I mean any platform in which there are multiple segments of users, creators, people who are building on top of platforms and adding value to it. Right now, that value gets distributed according to whatever rules the platform decides, and inevitably a lot of platforms end up taking the lion’s share of that value. But I think in the future we are going to see a world in which platform founders and builders end up deciding to take less of the economics for themselves and distributing them out to their participants, the people that are actually creating value on those networks and in turn creating networks and services that are much bigger than their centralized counterparts. I think that the future of social networking and labor marketplaces is going to go in that direction. I just want to iterate how massive of a shift this is.
Gabby (29:56): Everyone nods in agreement.
Nathan (29:58): Absolutely.
Li (29:59): I have stunned everyone into an agreement.
Nathan (30:05): I also think it is bigger than the blockchain, I think that blockchain is a really important piece of it but just the idea that platform participants should have more control over the platform and have more of the upsides, which is something that we see evidenced in the behavior of pretty much any platform now. They are all doing it in one way or another, and I think the blockchain itself is a really important tool, but it’s undeniably just a broader shift.
Li (30:05): Yes and I think, I would push back on it not just being about blockchain because I think that the blockchain is a unique and powerful enabler of this shift. I think this “enabling participants to become stakeholders” dynamic is near impossible to achieve in the traditional equity system. It’s near impossible to distribute equity at the scale that Axie has done through their tokens.
Gabby (31:09): Because equity is analog, right?
Li (31:12): Yes, and for private companies, you’re restricted to 2000 equity holders. 2000! And the platforms that we are talking about are world-scale they have millions of participants on them and there is just no way to distribute equity to each of those millions of people whereas you can distribute tokens to each of them, seamlessly and instantaneously at very low costs, rewarding them each proportionally to the value they have contributed.
Gabby (31:38): Yup, absolutely.
Li (31:12): So this is now a “Crypto Podcast”.
Gabby (31:45): That’s actually very relevant to my experience as a game developer because we were independent game developers creating mobile games, and living in a world where the ones that had the most user acquisition budget for Facebook and Google, were the ones that could dominate the App Store and so for us as basically independent developers, it was really hard to make a living, unable to make the games that we wanted to make and that’s what drove me to Crypto in the first place. I was at first looking for a technology that would disrupt the game industry and level the playing field all over again, but what I found during my time in the Crypto space was that not only would it level the playing field, it would do it in a way that independent people, not only creators as individual people but also these teams that wanted to create Indie games together, they had an actual place in this world and that’s the most meaningful part to me.
You can check out the full podcast on Every.