Hard Mode: Will Web3 Gaming Ever Onboard the Masses? Di Pearson, Michael Powell & Carra Wu

okay ladies and gentlemen we're here for the web 3 gaming panel we're very excited to be with you today we have 20 minutes we're going to really keep the thing moving but what I did want to say is web 3 gaming what's the difference between web 3 gaming web 2 Gaming so my personal definition is in web 2 Gaming the games own the players and in web 3 gaming the players own own the game so I think that's my little distinction that I wanted to make so I wanted to relate really quickly and then go into round robin but I think let's do the round robin first which is let's do self inroduction my name is Mo I'm an investor with gomi cryptos capital Gom is actually a game company in Japan my my partner took it public and we basically have invested in seed stage Open Sea seed stage yield Guild games and a whole bunch of other ones so we're definitely excited to be here so that's my self- introduction so let's just go uh from left to right all right uh my name is D I'm on the U Mist laps Partnerships team uh we're the builders behind this sweet Network um I came from a web two background started at Apple then bite dance um then Facebook gaming ENT web Ed web 3 in like 2022 um yeah super excited for the panel hey guys um I'm Cara I'm a partner on the crypto investment team at a16z um I spend most of my time looking at the intersection between crypto and different kinds of games but I also cover other media forms including film music and IP as well as anything to do with nfts um I have a background in math computer science and economics and I spent some time as a software engineer and then as a product manager in and around the gamees space before joining The Firm perfect hello everyone my name is Michael Powell I'm the head of product marketing at immutable immutable is a web three gaming platform that makes it easy for game studios to integrate digital asset ownership into their games great so what I wanted to do is start with a Twitter conversation that I had with Hayden from Unis swap which is he posted that hey when you add money to games that means the games turn into either work or gambling right so his it was a very Downer type of tweet post right and part of what I was saying is really my retort was that actually really good games kind of start looking a little bit like work right that people in games they grind like they perform work like functions but that a lot of the distinction is is that games have rules and they're more fair than work and work may be a little less fair and that may be why people want the Escape of games right so I guess to me what I'd love to open to the panel and I I don't really do round robin questions I really want the panel to be reasonably assertive and jump in but I'd love to kind of just open with a question about what happens when you throw money into games and could it possibly be more fun and if so how or if not then you could just be like no I don't think so money's bad Cara yeah I'm happy to start um something that I hear a lot of our games Founders talk about is like what makes a fun game and universally I hear three things one is there have to be Stakes you have to care about the Game World you have to care about the context that these assets live in the second thing I hear is there needs to be chaos human beings tend toward order as a game maker you want to sculpt agency and you want to sculpt chaos and the last thing I hear is Affinity obviously in crypto you get a little bit of a hyperdrive on all three of these fronts if you do it really well you can increase inrease the stakes you can increase the chaos and you can increase the level of affinity people feel for these environments but it takes like a really fine-tuned excellent game designer or a lot of experiments being run in order to find that balance so I think it's it's not a normative thing I think that this technology has the potential to like really dial up the the volume on the three things that are like really important for making great games um I don't think like blockchains make things normatively good or bad either way I just think that when you add ownership into the equation people can get a lot more invested like modders Builders user generated content can get a lot more serious and people will invest a lot more time into creating high quality work because they know that they're not going to get rugged by the platform I I agree I think web 3 technology is really serves as this validation to you know the things that you have already been doing you're grinding you're playing you know thousands of hours of Animal Crossing and in Chinese we we use use the word you're using your liver to play the game uh you're already doing all of that you're be building communities around the game and um at the end of the day web3 technology really powers real fun games to bring them closer to their Community to give a a sense of validation a sense of strong ownership to those people who are enjoying um the the games and in return they will see higher retention or lower cost when when it comes to retention as well as lower ter rates so on and so forth so I want to I want to provide a retort right because the retort that I think is pretty valid that I've heard actually is that blockchain is beautiful and wonderful by scaling essentially solving trust problems right so in a sense the issue that uh I think is fair to say is that players tend to trust games and game engines right so there's very few cases where players actually have have a real grinding horrific problem that they got rug pulled by the game you know so often times players are reasonably satisfied with web 2 game ownership right that I own something right so I think that in a way that's a legitimate concern so I'm wondering uh you know if anyone has anything to add to that yeah yeah I think and this touches on your first question as well right but when we're transitioning the gaming industry from really a one-sided marketplace where users are paying $5 for a skin or item right into an actual thriving economy I guess that could be defined as work but it's that mindset shift from being a player to being an owner right and now there's economic value there and not only that but you're actually more engaged as a community member you're more passionate you have skin in the game pun intended um and that's ultimately going to make a more passionate community of players who are willing to spend more in your game so there's an incentive from the game Studio side and then there's also economic incentive from the player side which creates that thre driving economy and I would actually push back I think there are lots of cases in which Gamers field disenfranchised it tends to manifest as gamer rage on forums right when people are really angry at Diablo for ruining their auction house when people are really angry at RuneScape for obliterating all their gold when they're using it as currency in replacement for a lot of the hyperinflationary currencies in you know in 2008 Argentina right I think like it's a privileged position to say that Gamers trust the game it's it's very specific pockets of Gamers who trust the game there are plenty of enraged Gamers who who would probably go for a more credibly neutral platform if it were available um and certainly modders who create the own servers like they're not seeing any of the fruits of their labors um and I think there's like a great quote from my partner Chris's book which is developers know better than to build businesses on quicksand and I think part of the reason why you know you don't see this kind of flourishing creativity is because people know that they can get rugged yes and I do think that that does allow me to shout out a little bit of the project of foraster right because Chris was talking about foraster in that context which is you build on social media like Twitter and you get rugged right whereas if you build on foraster you're actually safe right so that's an amazing difference and we'll see a lot of juice there uh to throw the ball back to you again though like one of the things we were talking about is work right which is is it work right are games work and like gamees kind of our work and it's right if for example like uh CCP games the creator of E online right if you're managing a guild Fleet planet or whatever right you're actually a very high level manager right you're actually billions of dollars of in-game currencies of whatever credits right but like to me Hillmar said something very interesting which is he said something that aligns with what Herman narula said in uh virtual societies which is what he said is basically that um in in essence like games and work kind kind of flow together right and Hilmar said something very interesting which is he said that my job is to make games that are more compelling than real life and I think Evon line does that for some players so I just want to like ask you kind of how how you look at CCP games uh EV on line and the work they're doing yeah so um for those who don't have context CCP games is the maker of the Legendary game EV on line which is one of the very first MMOs ever it has been a persistent game so it's existed since its origination in I think 2003 and over the last 20 plus years people have been building billions of objects in this game because it feels like a real economy um within that game there are corporations which are the sort of Guild equivalent there are lots in lots of different roles that corporations can make for lots of different kinds of players when we we when we went to FanFest in Iceland a couple years ago I met this dude Oz who is running a multi-million dollar hedge fund in Eve there's no trust guarantees people people just send him money and he manages it with the like the hope that they get it back um and you can imagine like if that's fun for somebody in the context of this game if you offered guarantees if you offered escrow if you offered any sort of belief that like he was going to return your money this kind of thing could become a real job and it would be just as enjoyable for him in that universe as it is for him right now I think like games are simulation engines they're simulations of how people interact with each other of governance of human behavior and stuff that starts out looking like a toy Chris also says this I'm just going to steal all his lines end up becoming some of the most important advancements in Internet Technologies I think a great example is sort of gpus gpus were originally just for gamers and now it's sort of the back of all of scientific Computing and I think there's probably a lot of opportunity in crypto too for these kinds of simulation games to tell us a lot about monetary policy and governance and like human agent interaction yeah I definit itely think that it's exciting Frontier one of the big questions that I have especially since we have two kind of platform providers right uh you know uh immutable and Miss in Labs represented on stage like I'd love to kind of hear from platform providers uh you know D maybe you can go first to really talk about like the games that you're the most excited about that have come to your platform and really try to explain like what is it that you're excited about with respect to these games yeah D first um I think the games coming that that are most exciting to us are really at the end of the day it's really good games that are that are attractive to players looking for example um so for example we have one uh studio called embra studio um they're planning to launch uh the game called e4c final salvation um the game will be launching in H1 this year and uh I think the what the company has been focusing really um on this U like right now is really really to fine-tune their their in-game uh kind of activity is really how do I uh continuously engage with these players who are very interested in PvP um PVE those type of a aspect and then on top of that think about what's the right balance should I think about when it comes to tokenizing my in-game assets and Leverage The the technology web three like for for example the S network provides um to help them enable those asset ownership with their community and bring them and the community closer to each other how about uh immutable uh you know what are you excited about in the pipeline what are the games what kind of genre and tell tell me what you think is going to work absolutely absolutely yeah so um at this point in time a mutable has roughly 270 well-funded games that are building on our platform and we believe 2024 is going to be an extremely exciting year for games going live and we have shardbound metal core blast Royale actually just hit 400,000 downloads and installs um we have tree capsule Heroes uh Guild of Guardians um which actually we have over a million pre-re users for that as well so we have a whole slew of games that are set to go live over the next six months so it's going to be a really exciting time and those span different genres and you know we're still working on tweaking the different product bound is a tradable card game uh correct yeah yeah yeah yeah I know them uh interesting excited for that one yeah I think 2024 is going to be a really interesting year because the the life cycle for game development is so long and we have seen the wave of play to earn so on and so forth from the previous cycle and this year is really going to be exciting where're we're going to see more and more games focusing on gameplay focusing on true asset ownership yeah so uh in addition to having two platforms on stage we also have two VC's on stage and you know one of the things that's interesting about kind of upcoming games that I just want to put a quick plug in is I'm really excited about actually a co-investment which is robot games so we did robot games you know with a16z and our excitement is that they're doing bite-sized survival and crafting uh MMO right so this very kind of like uh casual format and very very short session times but also the ability to kind of tap into the survival genre and the base building genre I think is pretty exciting so I think from a genre perspective I'm excited about that so I guess throw back to you cara like what what what genres or what projects specifically are you most excited about um I'm going to not be specific I'm just going to reject that question what I will say is I think we're at one of the most exciting periods in the life cycle of any new Computing Paradigm um in the last year or so Builders have been really focused on infrastructure advancements and I think it's happened like computer has scaled much more quickly than anyone has expected on blockchains um and while it's easy to look around and think like where are all the games I think this is actually the leading indicator to the floodgates opening for lots more experimentation because it's it's it's not just about like do you have the throughput to process all of these actions on chain in order to make things ergonomic for developers you need to have way more extra compute in order for react to have existed on top of JavaScript machines had to have like way extra bandwidth and I think the same is true of like on top of raw solidity in order for lots of different Hobbies developers to start running experiments in building games you need to have game engines you need to have libraries you need to have Frameworks you need to make it so easy for people to spin up something on the weekend and for college students to go to a hackathon and build a great game and I think we're finally getting to that point where it's not just that we have enough bandwidth to complete all of this Logic on chain we also have the bandwidth to make it easy for developers to run experiments and I think that that's going to be the for Force multiplier I think that's a lot more High leverage than just like you know can we we process that many transactions it's like can we exponentiate the number of experiments that we're running and I think that's what's going to be so crazy about this cycle is like we don't know what genre is going to work it's probably out there somewhere but if we have a million developers running those experiments we're more likely to find it than if we've got 10,000 developers and I do want to put a plugin there which is that the idea of stimulating a developer ecosystem is definitely not unfamiliar to our platform Partners here on stage right which is that you can have a tokenized ecosystem fund you can boost these developers right but the thing that I think car is saying that I'm super excited about is if you can increase the number of developers by increasing the tool chain and the ease of development right the thing that I think is so interesting about that is that the boundary between ugc user generated content and developer generated content gets very thin especially as you see things like generative AI boosting things like 3D modeling or creating much more ability to kind of create assets and objects that could be manifest as nft right so I I I think that we are about to see kind of a laundry spin cycle around creativity in this space and so I do think a thousand flowers can bloom I think that's the Natural Evolution of games and this is true of like every majorly centralized gatk kept industry right like film industry people did not take YouTube seriously they did not see that as threatening like you know Classic Hollywood entertainment did not take influencers seriously but what these platforms allowed individuals to do was you can become your own filmmaker on YouTube you can become your own influencer on Instagram and people will become their own game makers on crypto rails yeah I'll let the platforms have the final say I think we're really at the time so uh please go ahead yeah yeah I mean I think car is is exactly correct right that's kind of the sequencing of operations where the tooling the apis the sdks have to be there to make it accessible for devs who are already building in unity in unreal then the content comes right and we're just kind of at that Floodgate moment where there's going to be a bunch of great compelling engaging content going live and then the users will come right so we talk about onboarding the masses it's going to come from compelling content it's not going to come from Financial speculation or new technology for the sake of new tech it will become because people actually want to play these games D final word that is true I think also one thing to mention is that um when we talk about web 3 gaming we kind of unnecessarily put us put ourselves into a into a niche at the end of the day it's really having the powerful tool to that makes it very simple for developers to build their game leveraging the web3 technology through simple Clicks in an SDK in a back end um so that they can get to Market more easily they can they can visual visualize and EnV Vision their um like the the way that they want to engage with their community in a new in a new way in a more intimate way much much more easy definitely makes a ton of sense uh what I do want to say is just a quick response to the idea that it isn't about out the money but the thing that's really interesting is that I also believe that crypto can reinvent the game industry right and that the thing that I think happens when we have a blowoff top in something like ether right is that Ultra Ultra super whales in ether become game producers right and they basically roll into town they bankroll all these web 3 games so the tail actually things like bitcoin price can Wag the Dog of gaming and can transform the entire game industry so you know it's a little bit of a Counterpoint to your perspective which is it's not about the money but the money actually is part of it it's part the industry needs a reinvention and we are going to reinvent the industry of gaming thank you guys that was great important stuff I can't wait to play my next set of games