The Asian Banker: Play-to-Earn and Transition of Traditional Finance to Web3
In this webcast, Emmanuel Daniel, founder of The Asian Banker, is joined by Gabby Dizon, co-founder of Yield Guild Games
Established in 1996, The Asian Banker is a leading provider of strategic intelligence and builder of platforms in the financial services industry. They run regular programs around the world that are delivered through a plethora of creative and highly imaginative platforms including video, audio, teleconference sessions, training, site visits, global awards, and in-house management and board-level programs.
The webcast’s interviewer, Emmanuel Daniel, is the founder of The Asian Banker, Wealth and Society, and Bankquality.com. He is an entrepreneur who has served various prestigious organizations including the Entrepreneurs Organisation (EO), Council on Corporate Disclosure and Governance (CCDG) in Singapore, the Ethics Sub-committee of the Accounting and Corporate Regulatory Authority (ACRA) of Singapore, and The Asia Society. A highly regarded speaker and consultant, he speaks at international events on a variety of topics in the financial services industry and the development and future of Asia. His first book, “The Great Transition,” is due in late 2022.
In this episode, Emmanuel talks to YGG co-founder Gabby Dizon about the adoption of blockchain technology in the gaming industry and how it gave rise to play-to-earn. Gabby and Emmanuel also discuss the paradigm shift of banks starting to engage in Web3 and the partnership between UnionDigital Bank and YGG.
The following is an excerpt from the webcast. Watch the full interview here.
Emmanuel (4:03): Tell us about the evolution of the gaming industry. You just gave us your evolution, which is the evolution of the gaming industry, which is, it started as a game, and then it went on to the blockchain and now it's crypto-native, meaning that you generate income by playing, right? Give us a sense of how the gaming industry has evolved and where it is today.
Gabby (4:33): The game industry has evolved a lot in the last 30 years, and the predominant business model in the last 10 years was free-to-play games. These were games that you could download for free, whether on the PC or your phone, then other games would monetize via in-app purchases that people would pay for things inside the game. Now, these things were consumable, and the players didn't own them. When you deleted the game, you had nothing left. With the advent of play-to-earn gaming, putting game assets on the blockchain, now you have permanent items that have some value that other people might want to pay for. So, this is a big shift because of all the time that people spend in gaming, it's usually purely for entertainment, meaning that you do not get any value back. Now you can essentially play the game and create, earn and own assets that have real value in the real world.
Emmanuel (5:45): So now, explain to me the whole idea of a guild. Why is the guild important?
Gabby (5:52): A lot of people play games like Axie because apart from enjoying the game, they want to be able to earn some money and then own some assets. And typically, a lot of people who want to play the game don't want to buy the NFTs. First, they want to play the game and see if they enjoy it. As a guild, we buy the assets and lend them out to our player community who loves discovering these games, as a way for them to try them out and earn some rewards. We split the revenue with our community. We typically keep only 10% of any rewards that are earned, most of it goes to the player and their community manager. Yeah, so the guild organizes people, and we buy the assets and lend them out so that people, gamers can try out these games and earn some value, some tokens or NFTs, without having to pay anything upfront.
Emmanuel (11:15): Now, talk to me a little bit about your relationship with UnionDigital Bank — this is a traditional bank, or rather, this is a digital version of a traditional bank — and how that relationship came about, and why the relationship is important.
Gabby (11:30): UnionDigital is very interesting because they’re trying to create a new digital bank from the ground up, rather than create a digital extension of an existing bank. And yeah, they naturally partnered with us because UnionDigital is looking at the use of blockchain technology to deliver its products as a purely digital bank. And a lot of the player community that we have within YGG is very savvy on crypto and would probably be very interested to use a purely digital bank such as UnionDigital.
Emmanuel (12:14): Okay, so they wanted to be a digital bank. At some point, I have to speak with the founder of UnionDigital Bank, which is a subsidiary of a traditional bank, which is Union Bank of the Philippines. How does it work? How does the relationship work? And here, your entire ecosystem is crypto-native, meaning that you don't participate by putting cash or exchanging cash into crypto, you generate your crypto when your gamers participate in your ecosystem. Then the question is, how do you monetize it? How do you make it, how do you spend that money, right? And that's where the relationship with UnionDigital Bank comes in? What are some of the regulatory hurdles that you faced? In working with UnionDigital Bank, what are some of the real relationships, the real benefits that the customers get?
Gabby (13:14): When our community plays these games and earns crypto rewards, whether they're tokens or NFTs, of course, they would want to find a way to cash out and be able to spend that money in the real world, and that's where digital banks like UnionDigital comes in. YGG itself does not touch fiat money. We don't convert tokens to pesos, US dollars of our community. We simply give them access to the crypto economy via the NFTs that we own. And that's where partners such as UnionDigital come in. They help convert the assets into Philippine pesos, for example, so that people can enjoy the fruits of their labor in these games in digital economies.
Emmanuel (15:52): Now, in terms of moving the technology that you're using onto the blockchain, what are some of the things that you're working on right now, to enhance that experience of the players, the gamers on the blockchain? I would imagine that speed is one of the issues. The other would be, what data do you capture in the transactions, and then make it immutable and transferable? I'm just imagining these things. But what are some of the technology issues that you are dealing with as you make that transition?
Gabby (16:31): Yes, so we're creating player profiles for people so that their wallets can show and reflect the experience that they have played different games while interacting with crypto protocols. So think of it as a way for people to get experience badges that denote them as just having tried or experienced different kinds of things, or fluent in different skills. And this will give them the opportunity to unlock unique experiences where people may be paid, for example, to try out a new game or a new protocol, depending on their experiences on-chain. And this is the ecosystem that we want to build so that people can build their on-chain reputation system.
Emmanuel (17:11): So how much artificial intelligence (AI) is involved in that? Would you even say that there's AI there in some way, like being able to process a lot of data and draw a profile?
Gabby (17:24): Eventually, once there's enough data for us to tranche, yes, there is AI involved, but it's more of creating a reputation system to start with.
You can watch the full episode on The Asian Banker’s YouTube channel.
Check out Emmanuel’s Twitter to know more about his projects.