Why do Gamers Hate NFTS? Moderated by Miko Matsumura | ETHDenver 2023

okay welcome we're we're here to talk about why Gamers hate nfts or do they hate nfts right so uh in order for me to kick off this panel I'm your moderator my name is Miko I represent Gumi cryptos Capital we're an early stage investor we definitely love nft we love blockchain uh seed stage investor into Open Sea seed stage investor into ygg so we're definitely like into the gaming sector so I'm very happy to introduce this uh esteem panel super exciting uh thank you for having me so um you know let's do the first and only round robin question the first and only round robin question is please introduce yourself give your first name your organization and uh uh and we'll we'll start with Steve and we'll come back this way hello figure that one thank you hi I'm Steve Cho I'm with mechanism Capital thanks a lot for attending today's panel you want to find out why Gamers hate nfts right that's kind of an inflammatory thing but we're here to kind of help answer that here today before mechanism I was at Apple I worked for this place called the App Store you probably heard of it in the App Store I worked at this place called games business management this happens to be the team that features the games and apps but also thought through do our users like those games and apps and why do they like them and what do we need to distribute on store so hopefully I'll be able to answer some of those questions for you today and really happy you can attend I'll pass this over I'm not gonna follow that up well uh my name is Wyeth Ridgeway I'm CTO of a company called random games we're building one of the first AAA and game nfts called the universe and it's actually a vision for an SDK and assets that can be used across all sorts of different types of games um and uh I'm I'm probably on the skeptically uh optimistic there's going to be a kind of version between games and nfts once we actually managed to provide value back to Consumers uh hi I'm Ali I'm from filecoin in the filecoin foundation I'm also an advisor at God working which is a nervous layer 2 focused on creatives and gaming so have some knowledge here hi my name is taehyun Kim people call me TK I've been in the game industry for about 20 years I started NY um about 11 years ago so we specialize in real-time multiplayer competitive games especially fighting games um and we're required by any more good brands about three years ago and we've been experimenting on how to bring web 3 communities and Gamers together so super excited to talk about why Gamers May hate nfts or do they okay I'm very excited about this panel I think it's wonderful we got TK La Wyatt Steve various themed organizations so for me one of the things that I really you know I'm curious to unpack I'm gonna throw this over to Steve in a second right which is that it's pretty obvious right when you look at the Ghost Recon nft launch by Ubisoft it was a disaster they they sold three nfts and then they had to refund them right they had to give refunds right because everyone was pissed as hell right everyone was like what the hell right so my short take on this is I actually don't think Gamers inherently hate nfts I think Gamers hate suits they hate suits so like to me like the you know EA Electronic Arts has been the most hated company in America for many years right it's a wonderful prize so I think that really when you think about ready player one the evil villain of Ready Player one is Nolan Sorrento who's a suit right so Gamers hate suits they don't hate nfts right but of course nfts often come bearing suits and Suits come bearing in FTS Steve so Miko thank you a lot for that question one thing I've known Miko now for 10 years I just realized I said it's just an honor to have them uh moderate this panel number one number two when I think about Ubisoft I mean when I worked at Apple this is the face I would have to give you because that's all we could really give you right if you think about what Apple represents as a brand right but the reality is when Gamers see a game and they see a company and how that company approaches the merchandising of that game it's super important right especially if the game already is existing that is not from the ground up something that actually implements nfts but so I can add on to something that's a game I'm not saying that about Ubisoft because I can't really talk on behalf of what Ubisoft has done but I can tell you if I was merchandising a game the way I would look at it is from the ground up ask yourself why is that nft necessary what is it about that nft that makes it amazing right if it's a space game you're not talking about a land sale in space right because if you're talking about lances in space space that makes no sense to me and probably makes no sense to your Gamers right it said it makes sense within the experience and if the game itself is supposed to be fun in that regards what is it about the nft right what is it about that nft that enhances that experience and what is it about that nft that does not require a prospectus of monetization that has nothing to do with the core Loop in the game itself then you have a disconnect and then you have users that may be potentially confused on exactly why they're even buying this thing or getting that ledger Nano s or getting the ethereum that they need or getting all the other pieces that they need to connect to make it even possible yeah yeah so I see I see TK and then I see La so TK go ahead Gamers have been conditioned in the past to think that whenever a big company does any sort of innovation in how they monetize games it is designed to milk them and design to have them pay money that they don't need to pay they've been conditioned to think that way right so it's kind of our fault as a game industry in terms of what we've done in the past especially with free to play right food to play is not all the same there are free to play games like fortnite that only does skins there are food to play games like you know a lot of games from Asia that does pay to pay to win you know they're all in the same but because of all the stuff that has been happening they're free to play they've been conditioned to think however nfts and three and blockchain Innovations all about two ownership it's not all about how to monetize or how to make people pay right so I think there should be something coming in the pipeline where there's a good game that comes out that Gamers look at it's like this is a good game right yeah and having nfts that perspective can change same thing has happened in the past with mobile games and free to play games yeah I think it will change Le okay yeah uh I just wanted to add to your comment actually and I think we saw a lot especially last year of mainstream Brands come in and go oh great this is the way to make money let's just throw nfts at people and I can understand there being a backlash because of that and I think what is getting misunderstood there is that nfts can really be a community building tool and I think one of the things about games especially is people are used to buying digital assets like we already do that we should own that data we should be able to Port that over to other games and I think these is where the utility of web3 comes in it's not about building like another Ponzi scheme but unfortunately I think the message has gotten maybe hijacked by uh a lot of different people and you can see the other side of the coin and why potentially gamers are like we don't want this we hate this there's a lot of misunderstanding around that area and there's been a lot of things pushed on them with no utility and for no reason so I can kind of see that but also you know another great utility here is and I'm going to give a shout out to ballast over here who is like a decentralized steam platform and I know steam band basically web 3 games this year um but they're also taking like these crazy amount of fees and you were talking about Apple before as well and that's something that shouldn't be happening like really people own these gains own this data they should be able to Port it over like these platforms who do have like you know I I do agree that they have like a large reach you can get a lot of users based on just being launched on there um so I can see the value there but charging like 30 or something ridiculous for something that you haven't developed I don't know anyway I'm going down a whole Rabbit Hole there so way off Facebook so I think that the point uh that Ellie was saying was you know the my summary of that is this idea that like people shouldn't care uh actually about nfts right because the whole point is is nft is actually an implementation technology just the technology right so if you're like oh you know you should play my game my game is a TCP IP game right so that way you can you know so nobody cares right it's like oh nft nobody cares right like it's like what it's like buy my nft nobody cares right it's like people want to buy but you what Ellie was saying people want to buy swords they want to buy deals there was no reason that copy on a blockchain or shouldn't be like okay go to multiple games with that and add on that the purchase process the Commerce piece isn't something that's so sophisticated that requires you to buy add-on Hardware or software or other mental gymnastics that you need to go through to make that purchase making sure there's less friction there and allow it to be purchasable in a way where you already are conditioned to purchase an item for for like small price pricing would be great but to ask a user to go out there and dump maybe a thousand to two thousand dollars on nft which is more than your Xbox or your PlayStation that then leaves room for the debate for that user to go do I like this experience or do I hate it I before could play those Ruby soft games and be very happy playing them but now they want me to buy a ledger Nano get to metamask buy some ethereum link this to my computer and by the way Ubisoft absolves itself if you lose any of these assets like the spaceship you just bought is that a good experience I don't know that's a good point and you can't you can't onboard these people that aren't in crypto right now by having them hit your game sales page and immediately asking for their metamask account like that is just so foreign to the experience they want if they can come on board play your game for a little bit and then find out oh that thing that I just unlocked and have invested in and made better whether it's a gun or a spaceship or whatever that's an asset that exists Beyond this game and in a marketplace where it can be resold and I can buy a better one that I like better that needs to be that experience it can't be like bam give us your ACH go install metamask figure out how to use moonpay and then maybe you'll be able to play our game that can't be the experience for onboarding people yeah 100 and you know earlier I gave a talk here on this stage which is called the revolution will not be televised Revolution will be gamified right and the point of connecting it to here is that it isn't a gamer Revolution it is not a Grassroots Revolution it's not a player Revolution it will be but it is not it is actually a Revolution by developers right against the channel and one of the things I want to do was actually throw this to Steve right because Steve used to work in the App Store in the Apple App Store which is the ultimate Walled Garden right it's really this kind of like Super Hyper control sphere which everyone is kind of like so it's the ultimate what we call in blockchain rent seeking centralized intermediary right so you and I had a great conversation once about the idea of an Internet that respects intellectual property right so that you're talking about an open uh App Store and open iTunes right that everyone can participate and that the creators are appropriately rewarded so I just wanted to kind of get you going a little bit on that and then see how the other panelists react so I helped put together this panel now I'm regretting it I wonder if maybe these questions are a little too pointed but like at the same time I I do respect it it's a good question so if you think about the app store right like apple and they talk about being a wall Garden the wall did you know is made out of glass at Apple Park it's actually custom made by Apple the machines that make the glass at Apple Park are custom made which is amazing um I could tell you that with the App Store and where we are right now with digital platforms this is a very challenging time you're seeing it with legislation you're seeing it with like in Europe the opening of app stores and marketplaces the reality is that right now more than ever with web 3 and distribution be really decentralized to the point where now the internet becomes part of your distribution model viably um it remains a question what will happen just app stores and how relevant will they be and where will they find their relevance right it can't be just in featuring Believe It or Not merchandising and featuring on store will get you x amount of downloads but you still need to find a way to get them to find a way to intrinsically want to play that game where's the fun of that game where are the fun and the things that we're talking about that needs to be found if you look at the games right now the app store today I can tell you this the top free to play games are pretty much the top free to play games they've not really changed Right Live operated very efficient free to play games but it's not as far as we can take gaming that gaming can only just be about free to play and that may be the evolution that the App Store needs to face right now they're left right now with a 30 commission asking themselves how do they justify 30 that's a lot if you think about it for a developer huge so that being said there's got to be another Frontier so when I was at Apple I was a subject matter expert around nfts directly responsible individual and really the thing that I lobbied for in the company that I don't mind saying because I think the company will more than likely go to where the users want to go because that's how Apple thinks it's not where to make the next Buck for Apple it's really always been about the user Journey about what you guys want and at one point if you think that nfts are valuable you think there's something there that you could potentially effectively monetize that may be something for this store to consider um and I always leave people with this at the end of the day if you think about the internet today it's gotten smaller than ever think about the internet for each of you how many websites do you go to what's really there it's on 100 it's probably less than 10. it's probably like what amazon.com Reddit Twitter the internet has gotten smaller because of these centralized platforms for once in our lives can we actually think bigger that fact the internet was much more vast much more expansive it's up to each and every one of us to make it look like that eventually so I'll stop there yeah I think the Apple App Store is also an example of why I think it's important that you just make a game as a game and then have the web 3 and web3 Community participate maybe outside the game app store has also recently updated their TLS so that you know if you have an NFD and like if you check the game or to see have nft or not and giving something in the you know in the game they're kind of you know saying that that's not um legal anymore you can that's not allowed anymore right so how do you put nfts in the game maybe the right answers maybe you don't put nfts maybe the nft should exist outside of game maybe on the website almost like companion website to a game where it's all about creation one thing I love about what's happening right now is that like all the kids or they're used to playing Minecraft and fortnite they're used to creating things right so maybe web3 should be the creators who are creating assets for the game outside of the game and then maybe there's some bridge that you can build over from the website to go into the game and when it goes into the game it's not an FC it's a game asset and that could be a revenue generation for the web 3 creators as well yeah so uh I did want to kick it over to Wyatt actually because like why it's actually doing the thing itself and create being Creator so like I'd love to have your commentary on kind of how you see this phenomenon and how do you convince Gamers who are hating nfts well one of the things because I talked to a lot of game developers that have nothing to do with nfts so I have this conversation over and over and over again and it's funny to have watched the sort of changing narrative between them being highly skeptical to being convinced that nfts are all just scam vehicles and then being like well maybe there is something the custodial ownership uh I will remind people that I I was one of the first my company is one of the first six iPhone developers so we actually ended up going through a lot of the growth Pains of the Apple store with apple and uh there was an enormous amount of hostility that people don't generally remember towards premium gaming when suddenly you could put your games on the Apple Store for zero dollars everyone said this is the death of gaming it's going to be awful and to be fair a lot of scammy products you know tricking you into hitting payment buttons and then you know reward Loops to encourage that there's a lot of bad stuff going on there but really within nine months or 12 months there were so many good games that were freemium games that suddenly nobody questioned it anymore you're right buddy so so I think you know the hostility I see with um the game development audience right now with against uh nfts I I think it's just a transient thing there are going to be a couple of games that come out that absolutely nail the onboarding process that make people just feel like this is a fun game oh by the way it happens to have nfts as something you could take this thing that you earned and sell it I really think that that's you know we're just waiting for those games to come on the market and then the conversation will totally shift one more thing to that and it has more to do I think with a psychology of the fact of one if you don't know too much about nfts and everything in the market tells you that it's speculation and every single Clubhouse on Twitter is talking about the speculation of these assets it doesn't give you a lot of de-riskment toward you wanting to participate in that game because it's no longer a game it's just a matter of just profit taking right uh the reality is the reason why what you said is so insightful in my opinion is because what he's basically saying so many words is when people started getting to free to play what they realized is that probably the amount of money they were spending that experience was less than the 59.99 exactly but you had to risk it all I'm buying and then playing at home and deciding that you didn't even like it free to play at one point was considered hated as well we could have done another panel just on that probably alone but the reality is free to play is someone here to say you look at blizzard right now blizzard activation blizzard King OverWatch is free Diablo mobile is killing it it is free and more of their titles may go that way right and the reason why I believe is because the barrier to entry to free to play allows people to de-risk to the point where if they're not getting the value out of that game at the moment that they're monetizing then it's not worth it for them the greatest thing that I've ever seen for free to play may actually be something where it's not free to play we have to pay you still pay all the way through which sounds like a terrible user experience the moment you get there you pay a hundred dollars and throughout that entire day by the the time you're done you've paid 800 what is that place called Disneyland so anybody hate Disneyland so so I wanted to add to that and the thing I wanted to add is is that if you think about the psychology of free to play right there's opportunities in free to play to actually create elegant design right which is for example um free to own right free to own is elegant design right what about play to own right these are all entry points and entry vectors into a much deeper experience because if you think about free to play one of the things that happened is is that you have to think about toxicity of different fundamental types of value systems inside of gaming so for example if you have a system in gaming where called pay to win paid to win is the toxic interaction between money and skill right that's bad game design right so the thing that's really interesting about free to play is I talked to my son who's 17 right and what he wants to do is he wants to flex and show his his friends how skillful he is in a game so he's like you need to join my game so you can see how awesome I am right I'm awesome you need to come see how awesome I am right if that's a pay game if they have to pay ten dollars to come see how awesome my son is at this game they're not gonna come see right so my point is is that that initial free to play is low friction entry right so we think in nft but the main point I'm trying to make is that crypto native game design needs to evolve I think the first step is free to play free to play to own free to own right and then we have to get more sophisticated right because if we don't get more sophisticated there's not going to be the the rest can we get to a point where it's never paying can we get to a point where it's never pay for the person that first got into the gaming experience and was a Creator started creating using the Creator tools that some game developers have been ambitious enough to create and they are the first ones in never pay but we're missing the most important ingredient here right Voodoo play good all everything's good but the game has to be fun and the game has to be really well defined to excite The Gamers right then what happens then then you have a real game when I'm what I mean by a real game is a game that is played by Gamers right we've had some few bad examples or maybe some of the games that took off in the beginning of this whole hype or games that were 90 speculators right and people saw that and they're like well I don't want to be part of that but if you create a fun good game where 80 are Gamers then you do have those people that care about the game they care about the community care about the assets in the game then you can have those speculators maybe 10 15 of those people who are selling to the consumers and it's okay to have that type of people if you look at games that are popular like Warcraft or World of Warcraft or lineage or whatever it's massive MMOs out there there are people who buy and sell you know um currencies and it's award for thirty thousand dollars Castle go for a hundred thousand dollars but but the important factor here is that yeah it's backed by 80 of players who love the game that's the important part and do they do they bristle when they find out this is partnered by Kleiner Perkins this is a partnered by Ubisoft it's part of by 10 cent they're like oh God it's the same same companies that typically were probably engaging it's more like greedy free-to-play model but the reality is the industry I believe is changing and I think it's evolving and I think there's more of an embracement that's why you see developers like even enway started off for free to play right but taking the leap of faith and the plunge should be on this stage today to talk about these things yeah and this is why it's so hard gaming is a head driven business it's really hard to make a game you know a partner of mine Dave Jones who's been in the game industry forever he told me that he creates a hit every 15 game and when I looked at the supercell numbers too yeah it was every 15 games that was successful right so it's a hard business you have to be able to make a good game and you have to know about three so it's super hard expanding on that though nfts though so with the nfts when it comes to nfts as well still the same idea and concept I think if we go back to the concept of what an nft is too it's basically a collectible though right that can help you build community or that you can prove ownership of and maybe it needs a Rebrand in in gaming as probably like I think Reddit is doing a really good job of that for example uh that's not exactly gaming but it's still social um and I think going back to your point as well of we need to be onboarding easier we need to reduce friction we're seeing social sign in wallets now we're seeing you know um you don't actually have to have a metamask and do all these multiple things to access you're seeing platforms that you know are interactive for a normal user that aren't you know having to like sign a wallet remember a private key blah blah blah blah let me make sure that we call out the special part of nfts because this has been in Jeopardy recently and it's something my company's taking a big stance on protecting Creator royalties if there aren't if there isn't a royalty mechanism inside of an nft it really is just a thing that exists on a server that isn't very interesting it's transformatively interesting with Creator royalties and I'll give a really specific example as to why uh we're making Heroes that can exist in a variety of different games and we're offering those up as assets the interesting thing about the Creator royalty is that we have a long-term investment in making sure that that hero concept stays relevant and actually becomes more and more useful over time so in 10 years we'll have upgraded the polygon counts upgraded the material textures why are we interested in doing that we're interested in doing that because of Creator royalties right so there's an alignment of incentives between the consumer and the the royalty or the intellectual property company that actually does not exist in any other markets yeah yeah so I'm super excited to hear Wyatt talk about this long-term investment in the IP and ownership rights because ultimately one perspective on nft is that it's a ticket and it's a ticket that buys you entertainment in the gaming industry it's ticket that buys Your Entertainment so if you're entertaining them for a long period of time like you're actually like building this huge relationship that marketing mechanism is what makes it possible before throwing to Steve I just want to say that the last word on that is really retention retention rate tension right so like this nfts will be insane for retention at the end of the day though we might be talking about two different groups of people they're creators because you obviously ugc experiences are really hot Roblox is an example of ugc experience with tools that potentially hopefully children can actually use to create games and different experiences based upon that but those creators may not be your Gamers right let me repeat that people that use your creator tools may have royalties tied to a sophisticated model through a smart contract delivered through an nft but at the same time your Gamers need to do what TK has been talking about they need to find the fun in your nft so what's the fun of your nft you want to offer an nft in your game that's supposed to be fun well you better hope your nft is fun too and know how to defend that without gamer right because they may not care about the Creator royalties but what they may care about is this they may own more than one of your games and when they're done playing that game they may still have their Elixir or their rubies or their hard currencies still in that game but they want to play a new game how do they take the value of that game that they've invested into it somehow transfer that over to the next game let me tell you how it works in Mobile congratulations you can yeah go ahead early yeah and I think another point on nft is not just royalties are available but also I mean like you were mentioning your and I've taken morph into something that really proves gives value on how many hours you've spent playing this game right that's Dynamic nfts you can create like so much value around them and and code value around them and again Port them over to the next game that you want to use or sell them off like I mean you should get value from from the time you're spending on that and also talking gamification as well it's not just in gaming either but you know you're um earning these things based on like a gamification model that can prove uh certain things like education and things like that as well I think it's valuable in that sense in gamifying other platforms as well so and and by the way like on a tangent you were talking about kind of people moving from one game to another in migration and this kind of thing and obviously upgrades right but really when we think about this we really should think about this fundamental definition of web3 gaming which is that it went through gaming the players own the game in web 2 Gaming the players are owned by the game right it's a product right and so the the point that I think is super important is is that this actually is more about IP rates and it's about basically the royalty rights why it talks about and it's really ultimately actually about transmedia franchises right so it actually transcends gaming entirely where you start to get into many many other kinds of media and even real world experiences and even AR real world world experiences so what I wanted to do actually is we're really low on time so I just wanted to have uh TK close and talk about ugc right because ugc is the secret ticket to the Steve's world where it's never pay right that's the way you create the sustainable economy and the user's time is actually being used to create and so everyone becomes the Creator so TK take it away yeah I really believe that ugc and creating and innovating on powerful ugc tools from the game developers is the glue that's going to combine the gamer Community with the web 3 community so if we're able to create maybe even with AI like super easy tools for anyone with an idea to create these wonderful things that gamers are going to be able to use in the game then the web 3 can be the creators and people who are creating things will own the things that they create right NFD the reason they they I think is because of the Creator royalties right that is the most powerful feature for our nfts so if you're able to create things easily and then create income from that using the Creator Creator royalties I think that's where the web 3 can exist and then the gamers or the consumers for the web3 uh creators if they're able to create things and for gamers it's great for the if they love a certain game and there's constant stream of content that's coming into a game that they love it's only a good thing right and we have this generation of kids who are used to Minecraft and fortnite and Roblox that are used to this kind of thing so I think the future is quite right for web 3 and game gaming to come together yeah thank you so much CK so you know that's it for the time for this panel but I do want to say that like what TK said about like the future of this kind of user created worlds AI assisted ugc is really kind of like an in-game scenario right because everybody's time spent in game creates value and it creates a network effect for everyone else in the game right so it has deep deep deep replayability right and that's how we get there so thank you very much great panel thank