Creating Sustainable Blockchain Game Economies | KBW2023

[Music] uh ladies and gentlemen um thank you for attending the session here in the beautiful city of s um my name is Nathan Lee and I will be the moderator for this session um we have a we have an incredibly engaging session lined up for you today featuring two th leaders from the industry um to my right side uh we have about Mr himar from CCP games leading project Awakening and on the opposite side we have a Mr s hang from Nexon the production director of an Nexon maple story Universe uh why don't we just get it directly going U Hilmar could you first um introduce yourself and maybe just a little bit more details about project Awakening if possible um yeah um my name is Elmer Pon I'm from Iceland uh I've been working for the first Icelandic gaming company called CCP since uh 2000 we are mostly known for e on line which is celebrating its 20 year birthday this year uh on the 6th of May we have been operating even line for 20 years um over those 20 years we have learned a lot about managing economies and societies and interacting with a community a very demanding Community by the way people are very passionate about internet spaceships um and from that we have um collected like u a set of ideas we would like to explore um but uh would take a long time to explore uh within E online um some of them are techn technology ideas some of them are feature ideas way to organized things so um uh we've been tracking the space since 2015 I think done various internal pites which we've all failed but uh project Awakening kind of is the culation of that uh exploration and kind of the whole ecosystem of our three reaching some degree of maturity thank you um by the way this is my favorite quote from Hilmar he claims um based on his 6p games experience he is the one who built blockchain game without actually using blockchain technology that's that's my favorite quote for you um favorite quote from you um and please bear with us this uh session will once again be in bilingual to extract the most insights out of the these two gentlemen story univers Pro production director stain um moving on to the first main question um both of you have have mentioned that implementing blockchain technology digital assets or token economy to your product or your vision can revolutionize uh gaming experience for the users um could you share some tangible examples how um the how you know the the integration of the blockchain technology can help users um um so I I think it is um important uh to make categorize things a bit and uh because there are many layers to what a blockchain can revolutionize like you're like you're saying um I mean there certainly are some opportunities on the technology side um for example in E on line we have an ecosystem of third party developers which uh develop software around EV online uh mainly through an API Gateway which we um have for those purposes and managing third party development using an API um is not a great way to do it um uh we've seen those challenges from a Twitter to a Reddit uh Etc uh it is a very challenging Paradigm uh blockchains actually are a good way to moderate uh uh that ecosystem through kind of everyone paying for their execution so there's like a technical aspect to it um which already harnesses a lot that is happening around our existing game then you can look at it h at the heart of it it's probably best described as a business model Innovation uh and it's important to distinguish between business model and monetization uh gaming companies think a lot about monetization but this is more like a business model Innovation and it's turning the game into a Marketplace um it's ultimately building a game that is a market place on an ecosystem and that brings opportunity to people that either want to develop for that ecosystem or they want to contribute to that ecosystem to be a part of the business model um and that ultimately is the Innovation so when you have games like even on online or or other experiences from a fortnite uh Creator element to roadblocks uh or even to Minecraft you see these games over time turn into ecosystem um this has also Al happen to E online but e online's business model is not well organized for a Marketplace situation so there are technology aspects mainly around third party development and then it is a new business model where your game becomes an ecosystem SL Marketplace community Community [Music] gamer fan illustration fan cartoon influ for maple story online game Comm web Gish um we just heard a bunch of nice keywords there uh incomplete inefficient uh somewhere lacking um so let's take a look this uh you know Insight from a opposite vantage point you just mentioned that integration of the blockchain technology can make gaming experience more complete does that imply that current status of a gaming experience incomplete or in some way maybe lacking curious to hear your thought about that so um I think we're in a sort of an interesting phase in the industry where um um there's like um a push to embrace this element that may be started with MMOs you could even start here in Korea with Kingdom of the Winds coming out in I think 97 and then Ultima aest and later even online um is that um we have passionate communities um that have built around these experiences first it comes from persistency most MMOs are persistent worlds where the value of the world is built by the people which are building the world with the developer then we have later on experiences like Roblox for example where people are concretely developing games within the ecosystem uh and then we have services like uh twitch and you YouTube uh building these uh place where people frankly have very robust jobs around games so I think games have turned from this relatively linear experiences if to people which they then enjoyed to multiple degrees of part participation uh some of which reward the members for participating uh streaming is a great example of that Esports is another so I think we are all looking for a way to organize the business of games in a different way where more people are allowed to participate and it isn't just like the biggest dreamer the biggest influencer wins everything um so I think we are due for a business model Innovation to better include everyone that are creating value in the uh in the ecosystem it doesn't necessarily mean that the games themselves have to be very different but it will mean that the business of operating them will be different and it will be more inclusive of the massive amount of contribution that players and sort of pro consumers contribute to these worlds we have certainly seen that with Evan line and we have done um attempts within the limits of a web2 ecosystem to include people more but uh and we will continue to do that but uh blockchain and web3 offer like a different premise to organize this more sort of inclusive activity where everyone is participating in the business of building the game uh online in community nature incomplet story univ Community Creator item creating ability item creating ability Creator Community creator creating create Community creative power item creating ability so these kind of new strategies new approaches with blockchain technology will require uh you know sustainable tokenomics right and tokenomics is a very nicely Blended term token and economy um both of the corporates are very well known for managing extensively managing in-game economy for a very long time um could you maybe share some insights how you are able to do that and number two how your existing experience can be leveraged into blockchain technology game yeah so since we um announced that we are uh working on this kind of an experience um a lot of people that are making blockchain games uh have come to us and asked for uh feedback on tokenomics and economy design um and there is one thing I've observed from doing that uh which maybe allowed me to better understand um how differently we think about it is that um often uh um economy design for games are made by economists and uh um and the thing that I've noticed is that if you focus on the economy layer um usually the economy layer is used to solve uh solve problems and if you're designing the economy layer you're in way designing the solution whereas usually what you want to design is what is the problem in the first place and uh and that is more like um an activity for a physicist you you need to first uh go down and think about what are your digital physics what is your digital chemistry and what's your digital ecology on top of that and then once you threw all that stack then you get into the economy but the economy is more for the players of the game to solve it's not really for the game developer to solve it is the game developer's role to introduce the problems where the economy is the answer uh not start with the answer of being the economy and try to retrofit the other one I will take an example to better explain the point so if you look at our own economy where did our own economy come from it came from labor specialization we were making arrowheads to hunt deer we were uh taking the Skins to make leather we were cooking soup we were taking care of children and the eldery we had a lot of different jobs and then people started to specialize and then to express the specialization in a way to arbitrate between people money was invented so at the heart of it we were dealing with problems expressed by nature and we see this in the world today there are places that have oil there are places that don't have oil there are places that have uranium don't have uranium Etc so we have implemented the world economy to deal with this inherent asymmetry on planet Earth so you need to think about how to you create physics chemistry ecologies to the economy being the correct answer to the problem statement of the world you have created um it's a you can take it even more philosophy like um which I like quite a bit so often people think about what is the meaning of life like what is the purpose of life it is a more interesting question what is it about our universe where life is a reasonable answer life is an answer to a problem in the universe you need to think like that you need to think about what is the problem statement of your world that you're inviting a group of people to solve maple story mmpg [Music] e Kore dnamic balancing web item creating ability d stain okay so um both of the projects are really big projects um and big projects inevitably need big economy right and big economy once again inevitably um could potentially be linked to overall Market sentiment and why don't ask this refreshing question to the broader audience um please raise your hand if you haven't checked the Bitcoin price in the past one week so okay um given there's no hand raised we know that everybody knows that we are going to the bare Market um we are sorry but that's the harsh truth so given that we are in the bare Market um would that how would us going through the bare Market impact the project building especially when your projects are requiring robust economy well functioning economy and uh you know the sustainability in the longer term so um I come from a very small country Iceland um in Iceland uh about 360,000 people live in Iceland and we have our own currency um so our currency is listed on global markets the currency goes up and down a lot it does affect um things in Iceland but not as much as you would think um Iceland went through a big bang banking bubble and burst during the economic crisis of 2008 and everyone was worried is everyone okay in Iceland because the is the the fish money of Iceland had uh shrunk down to a half and everyone was fine uh and then it bounced back again things go up and down life is uncertain so whether the markets are up and down I don't really care uh we're making an awesome game um and uh if people agree and they're going to play the game whether the Bitcoin price is up or down or the ictic Crona is up or down it just doesn't really matter I know right now in the whole blockchain ecosystem there's like a halo effect I think that is just a a sign of lack of maturity that everything is going on up and down in unison um I think we as we have more um economies of sorts underpinning this space it will be more cross- collateralized because something is going well and something is not going well right now I think it is built on a lot of like Hope and Faith about the future I think the more real benefit we provide to people where they want to do it regardless of price uh the more um robust it's going to be certainly has has been the case with Iceland thank you Pro for um thanks for all these insights uh now this uh is this is going to be my favorite question for this session uh given that we have a two very insightful gentlemen here uh we are very curious to hear um what's your expectation for each other uh maybe we should take turn um for your turn um yeah so Nexon has actually been uh quite an inspiration for CCP um ever since it started so when we were making E online we were looking uh for is there another MMO that exists where everyone is playing the same game and it was Kingdom of the Winds from Nexon which was um the only other MMO game where everyone was playing the same game so um I uh learned a lot about Kingdom of the Winds particularly the PCU record of kingdom of the Winds and E on line was able to exceed Kingdom of the winds for uh Peak concurrent users in 2004 and there we claimed the world record for single sharted PCU so um and then as I learned more and more about Korea and as I've come more and more to Korea um I I observe that Korea is about uh 5 years ahead of the rest of the world so you in a way live in the future but you live in a future that is like adjacent to the Future For the Rest like the the future is going to be a little bit like Korea but like adjacent this has been true with many Innovations in the game industry Esports freeo playay um Etc a lot of these Trends have been born in Korea and as I listen to you describe kind of the premise of your project I see a lot of similarity I guess like living with passionate Gamers for decades it makes you think of very similar things uh but also we're approaching it differently um which I think is going to be very educational for us to see and uh as we were talking just in preparation we were inviting each other to our close tests so uh I'm excited to uh play test on your end and get your feedback on our experience uh so I I expect a lot of good feedback and learnings uh from your project as a enthusiastic gamer I'm very looking forward to the both of the projects too um once again thank you very much for listening to the session it was uh hilar vard Peterson from CCP games sonang from nexton and this is Nath Le from fecto mind thank you thank you I'm kidding I'm kidding come on are sorry