The Disruptive Potential of Blockchain in the Gaming Industry | KBW2023

hi hi everyone welcome to the hottest stage of KBW like literally speaking so you know very happy that you've joined us with these amazing experts here today um so I'm PL I'm Kean so co-founder and co-ceo of planetarium Labs we work on web three games and web three gaming protocols that are based on community power development so for example you may know us from nine Chronicles which is the world's first open source uh onchain game so without further Ado I want to uh I want to introduce the I want to introduce the speakers so yeah from starting from Q would you please introduce yourself and what project you're working on hi I'm Q Le I'm the president of come to us USA uh we're also the Genesis contributor for expla uh which is a layer one blockchain focused on gaming and uh content uh we've been developing games uh since the year year 2000 and we're a publicly listed company in South Korea hi everyone uh I'm Tin I'm the founder of AA Labs we are a uh gaming studio based in Vietnam uh we are making our very first uh blockchain enabled game course Cipher odysse which is an action RPG on mobile and PC uh I'm extremely uh glad to be here and to be learning from the speakers on the stage uh hello hello everyone uh it's it's such a great honor to share the stage with distinguished thought leaders in the space my name is hanu I'm from a game Studio card not games probably many of you guys are not familiar with our game our company uh but chances are you guys have come across our game League of Kingdoms so League of Kingdoms is one of the oldest and it's tablished game IPS in the blockchain game Space uh was launched in 2020 it's an MMO strategy game and we still currently uh have users around the world for around 50,000 users daily actively logging into our game uh our seven uh different nft collection collectively are driving more than 3 million transactions annually um yeah so it's great to yeah great to be here yeah awesome great to have you all I I think we're just going to dive into you know the the probably the most like deepest question and a question that they they are able to provide expertise on like what you know from from your perspective what's the one game changing feature of blockchain games and that traditional games just can't match and how are you actually implementing this in your game and your ecosystem so I guess I'll um yes I think um there's a lot of things that I would like to mention but I think one of the uh pure one of the things that I want to highlight um I I'm especially excited about uh game ownership uh game item ownership because uh there's you know there's a lot of games uh that have ownership and it's expressed in a lot of different ways uh and it's possible to do it in a web two way but there's not uh because everything is so centralized I'm not sure how much Clarity there it is there is for it and also the other thing is while the leading games enjoy uh the marketplace uh for doing so it's really not available for all of the developer uh around the world uh and I don't think and I think blockchain is a great way uh to easily adopt this I you know I I kind of want to see blockchain more as a tool rather than a a platform and uh we're yeah so and that's what we're trying to do we we have a big business in the web2 space and we're trying to move um everything into the web 3 space and we're we're all in on this but uh we we have a very different approach from all of the other web 3 games as we're transitioning we're more focused on transitioning the web two users um with through education to the web 3 space uh slowly over time awesome thank you uh yeah how about 10 uh you're so your ather laps is 100 people 150 people company working on Cipher and I yeah I'd love to learn uh the one gamechanging feature that you're implementing in your um in your game currently yeah to um you know to tap off Q's point I think uh traceability transparency uh go together I think of digital assets meaning in-game items are very important and this is one of the the I think the gamechanging feature that we think uh could really Empower our game um the second point is that uh because of these uh features it also uh create a mind mindset shift when it comes to game design uh as as Builders uh makers of the game now with digital assets being tradeable uh being transparent on the you know using blockchain we have to think more critically about what we put uh you know into the marketplace how we design the power creep how how do we deal with uh game inflation uh and things like that so that the players uh will get you know will be truly be part of the economy so to speak uh in a traditional web 2 uh game you know it's very easy for you know in-game currencies to get inflated over time but for us uh these kind of thing have to be keep in check uh with tools and you know like uh Taps and sync that would to design very carefully so I think that is a very critical mindset changing uh feature that uh blockchain enabl games uh must have in order to be successful and uh this is what we really focus on thank you uh and League of Kingdoms has been operational for more than two years and you know you've had to manage the MMO economy which is on top of blockchain and tradeable you know like what's that that gamechanging feature and some of some features that you might be really excited about uh implementing in League of Kingdoms yeah great question um so I think it's I think I need to also to off to Q's point that ownership is definitely the the major most primary powerful uh tools for web three games and just like just like uh just like Q mentioned that the these assets were could be owned and traded in in the web two ways but in the web three ways is in the web two ways it was more more like uh importing uh basically importing game items into the game but there is no way that they The Gamers were able to export the items out the assets out of the game ecosystem but with the web 3 features and uh by by effectively tokenizing the assets uh now we have we can uh Empower users to be able to you know have this two-way communication with the game ecosystem and external work and as a web stre game what we have experienced the last four years servicing the game is that we we're not doing it our everything on our own but we are uh as a part of a larger decentralized ecosystem that uh we're just contributing to to for this ecosystem to scale and all the other partners that we work with are adding uh actually uh joining forces with us so I think I think you bring up a really good point because um if you look at the web 2 market right now um we're like a lot of companies are struggling because we publish a game and if you look at where the revenues are going 30% goes to the uh the platform holder but surprisingly I I would be surprised if a company doesn't spend more than 50 % on at networks and that money is actually leaving the ecosystem and where does that money have to go like I think the money should be going to the revenue should be going to the game developers or rather to the users and uh I think um web 3 provides a great way as you mentioned um I think uh one of the one of the exciting aspects of it is how engaged the users are in in actually building the communities for the games and uh I think uh web 3 is very powerful in that nature and thank you for bringing back because this actually relates to the next question of you know blockchain promises to innovate and decentralize gaming economies and you know coming from a gaming Powerhouse like comto you know like what do you is this an actual statement that you you you want to follow through and develop and I think the one you mentioned about the ad networks and uh the value leaving the game is deeply felt by even smaller Studios so I would love to learn you know like what does it mean what does this decentralized gaming economies mean for big gaming Publishers and indie game studios alike I think I think we're still uh learning and like I remember when we were working uh on a product based uh game and then moving into the free-to-play space and it didn't happen overnight it had to actually uh there had to be many market iterations and a lot of the players had to look at each other and learn from each other I think we're we're still in the Pro process of uh finding the right right answer for it um and game development takes a lot of time and so um for like a lot of the game uh the web 3 games I think they were started uh like probably one or two years ago and even for our company we develop uh 10 to 20 games a year and most of the average the average time of development for these games takes about 3 to four years and and so I think we're very early U maybe we got a little bit excited and ahead of ourselves uh last year but um and I remember like even for mobile gaming we started mobile gaming in 2000 the App Store moment happened in 2008 we had to wait almost 10 years for that to happen so I think um I I know um there's a lot of different Market set sentiments right now but I think blockchain is here for uh to stay and I think everybody just has to give a little patience because a lot of the good games are be are underdeveloped including uh tins uh Studios games and I think uh once those start comes out start coming out I think that's when the next Bull Run will actually start thank you so very excited about Cipher um also joined the initial minting and uh yeah I mean I'd love to learn about decentralized gaming economies in your game and if you have any specific examples or insights to share that would be amazing thank you uh thanks H for the shout out um I mean I think we we look at decentralization you know through the lens that it has to be Progressive meaning that you know there are certain aspects of the game that we design at a very early stage to be decentralized meaning that it's transparent it's trackable it's traceable uh like uh like not games here saying that it can be withdrawn onto uh onto the the blockchain and player can be can freely traded outside of the ecosystem but there are also aspects that we as a game developer wants to uh keep in our sort sort of like control and operation just for the longevity of the game so uh you know when we speak when we say the word decentralization that's what we think um and then when it comes to uh The Gamers uh we we do a lot of like smoke tests where you know recently we're able to get our game into close Alpha and bringing it to the real Gamers we give we give them the game they play it uh we don't share we don't say anything about blockchain about digital assets and we can see we see if they truly enjoy it as a as a as a normal gamer and once they do and then we explain to them that hey by the way this item that you just acquired or unlocked or crafted can be you know your digital assets and then you can using our Marketplace or third party marketplaces can you can trade it uh can you know can buy and sell it then you know their eyes light up you know it's not like forceful uh you know in and like shouting from the top of the mountain saying hey we are decentralized but really making a good game first and then getting them really engaged into the the whole in-game economy and then introduce the the item uh assets ownership later on I think that's that's our Playbook and that's how we look at it yeah yes I guess like similar approaches with phase uh introduction of decentralized economies to players uh I guess for League of Kingdoms things were a little bit different you when so when when was uh leg of Kingdoms initially launched it was year it was three years ago three years ago right 2020 and you've had to manage and operate this ecosystem as people joined in and came out and I want to learn you know I I'd love to learn about your perspectives on decentralized gaming economies and maybe you talk a little bit about uh the community also joining in and developing a part part of that with together I'd love to learn more about that also yeah um I think we are uh kind of fortunate to be one of the all best game company to be in space uh and I think in a large CH of things as as uh TNN uh TN Q mentioned that we had a little bit of an issue with the pace and expectation for what possible was actually going to materialize uh but right now like we're like in the middle of of sort of a bear cycle which is kind of as a game company uh like we it's only only only about year uh things and sentiments are changed quite a quite too aggressively so it's kind of sad uh that if we look back and revisit some of the some of the promises that we had when we first started off all of these benefits of web3 game web three features and blockchain Technology when they are topped up to the game uh or or gaming um platforms are still valid they remain true and they still uh holds a lot of potentials um so so I I've been kind of go moving away from what you actually asked but um so our journey was like was actually involved a lot of mistakes so the reason I mentioned that we are fortunate was because we had the I guess we had a little bit more of a leeway or I guess spaces for us to wiggle looms for us to fell down and stand back up uh because the barhead wasn't it was just just uh you know beginning to open and we were just only one of very few Gam names out there um so our approach in a Nell was that from the very beginning was web 2.5 so at that time uh it wasn't that sexy so nobody was nobody care about like going web 2.5 is just uh you know putting it on the App Store and Google Play stores putting having a PC webgl version available for gamers non web3 Gamers to access yeah not of cool things at that time but uh that actually in in hindsight uh helped us be a little bit sustainable uh over the number of bare markets uh this one is a little bit longer so it hurts but um yeah I think I think uh here we are so we're going to be uh able to make it yeah yeah I I I do also have to say about me here but yeah no I think it's incredible and it's also reminds me of like two two companies from South Korea working together on we we we would like launch the network and first day like 20 people got in and then the network crashed and just a lot of experiences that we had to learn from scratch and so uh yeah I I want to move away a little bit from um economics and maybe shift the conversation to Tin about so your your web 3 Studios R route route is in Vietnam like what unique benefit have you observed and can you shed light on the diversity of your team in terms of international representation and maybe there are any lessons or insights that have emerged from managing such a multicultural group because a lot of us are based in Korea and just working uh strictly here most of the engineering groups and all yeah sure um so firstly about Vietnam as a country I mean we're uh the population is 100 million people uh you know it's a very young demographic so there's in like a large pool of uh of gamers and Vietnamese uh uh you know teenagers uh adults they all love gaming as a form of entertainment um and then Vietnam also uh it's very fortunate to have a very good educational uh system in place so in terms of like game development uh we have a good pool of game Engineers uh artists uh you know technical artists uh you know VFX animators and so on so uh you know a small fact is that we are we house two of the biggest like uh art Outsourcing studio in in in Southeast Asia and they they work uh as a third party Outsourcing for all the triaa games in the states so that's the background about the country and why it's an advantage for us to to be in Vietnam and that's how we're able to grow to 150 people in such a short time um regarding our internal Studio Talent um again uh we are very very fortunate to have all the uh like very experienced uh game Builders from game law from Ubisoft from all the gear Inc the big gaming studios in Vietnam to join uh and form our studio and through their experience and just the the love for making a great game we're able to get you know to this point in time um but on the on the on a bigger Outlook in terms of crypto and web3 related again Vietnam is very fortunate to have a large web 3 adoption rate I think quite similar to Korea where there's a lot of crypto user uh I think I think it's been rated as like number two or number three in terms of active crypto user wallet user so uh all these all those elements combined uh give us a very strong belief that Vietnam could be a good destination for a web3 enable uh game wow thank you for sharing and uh so moving the question to Q so come to us has aggressively pursued and launched multiple experiences on web 3 Gathering all these experiences and any unique observations and strategies as a major publisher you know moving forward from 2023 yeah so yeah talking about Vietnam I I love Vietnam and I think um so much talent uh uh there and I think uh yes we thought China was amazing but I think there's a lot of talent in Vietnam which I admire um yeah so like like one of the things that um we really learned uh coming into the web3 space is that it's like it's only been a year so so there hasn't been a lot that we learned but uh I think there there was a distinct uh difference between uh the Traders and The Gamers and uh like I think if if if anything was done last year I think it was all done by the Traders and um now the reason why the market is slow is uh now everybody shifted to focusing on the gamers and The Gamers still don't get web 3 yet so um and that's why because the gamers are waiting for good games to come out they won't they won't play games that aren't good quality they don't really care if it's web 2 or web 3 what they care about is give me a good good uh good game quality and I'll play it and I'll learn learn web 3 I think we're waiting for that moment um and we try to forcefully like move our users from the web two space into web 3 uh try to track how much conversion there was uh almost no no activity there and uh and like and then we we thought about going the other way focusing on the web 3 users but we didn't think it was going to be sustainable because you're targeting such a small group of users and if what we what we're trying to do is fund fundamentally change the gaming landscape not focus on just harvesting from a small group of Traders so um that very similarly we were um from the beginning focused on web 2 and transitioning them to web 3 and that Still Remains our Focus but and we're we're learning that that it's happening very very slow and um and also it's not only about the gamers it's also about our internal development teams uh because our internal development teams also have resistance there too because why do I have to go through web 3 when I'm comfortable doing all of my things in web two so those are the challenges that we are facing but we we had to do the same thing when we were doing mobile at the beginning because it w it was so obvious that people wanted to play games everywhere so moob we knew that mobile gaming was coming but of course our team was comfortable doing some PC games and didn't want to move over web 3 we uh move over to mobile we had to enforce that on a on a companywide scale uh that's exactly the same thing that we're doing and uh yes and I think uh we're trying to set the example uh showing that if come us does it then other gaming companies should feel comfortable doing it too and uh I know it's a hard hard challenging task but um it's it's it's also answering the same question do you want to uh in-game sword with ownership or without ownership it's so obvious you want to you want in-game sword with ownership and you want to be the real owner of it uh so uh we're on a mission to make that uh that transition happened and uh that's what we've been learning that it's slower than we thought uh thank you I mean coming from a web 3 Studio background I think it's very you know it's amazing to see web 2 Studios also learn and pick up pick things up extremely quickly to uh be and producing web 3 components into their games but I think we all agree that the adoption and the growth rate has not been though you know way we wanted it to be last year right and I think in ter shifting a little bit to uh tokens themselves so Han I want to ask um so given the pivotal role of rewards and this is um rewards in web 3 games how do you design incentives to resonate with early adopters and then maybe investors and new entrance uh you know this is a this is a very difficult question uh like on additionally like can we detach token prices from web 3 entertainment value and or do you feel that you know in some ways if you have tokens they're inherently intertwined because you have a large demographic which is just exposed to price downright yeah that's a long question I might be asking you the second part uh uh so for the for the incentivizing gamers uh I think like fundamentally it's not that like different like guess I don't think Webster incentivizing users is a different animal than web 2 uh because in the web 2 Gamers what gamers are chasing down are pretty much same they're looking for whatever the item that has value or some type of achievements that they can um you know demonstrate or some socier status or socier uh you know uh recognition that they can get from their socier Network and in coming to web 3 I think we are just transitioning them just adding a new type of be cool we just moving the data on servers to to blockchain it's it has a lot of implications uh after that but uh like from the game Studio incising Gamers I don't think it it it should be drastically different from what web two games have been doing um and the second question was uh the decoupling prices and uh decoupling that's another great question uh yeah so so I think tokens values of tokens the price of tokens are somewhat reflecting what investors are perceiving uh about the underlying project when it comes to gaming projects and for that reason I think it it's pretty similar to any other asset class they will the price will reflect two things one is potential growth of the product or what the platform and number two is more instant direct utility uh for web three games it can be a staking yield it can be some sort of a voting rights which users can claim in a short period of time so so in in that sense uh and because games are fundamentally intrinsically of entertainment product and I believe that the grow of a game hinges on the entertainment value I think it's inevitable I would like to like so in my my opinion because game is entertaining the game will grow and it will be reflected in the token value so basically it's it's it's quite impossible to decouple the G entertainment value off of the the the token price yeah yeah I I do want to add on to that um like if you well if you buy it goes up if you sell it goes down I think that's how the market moves um and I think when when the project is small I think um the fluctuation is much more bigger and I think that's why um significant amount of uh scale needs to happen in order to for those things to to stabilize just like the US dollar currency versus a lot of the other currencies around the smaller currenc around the world and um so in our case instead of like focusing on individual games uh we wanted to combine all of the games together and make a unified uh token that can be utilized across all of our games and in order to make sure that we can provide scale U that's why we're trying to pump out like dozens of games uh every year um just to provide the stability and until we get to that point I think people are still comfortable with uh with just in a purch purchases is how how they're educated they're they're comfortable with purchasing with their local currency so we've actually developed a couple of tools that will um that will like fluctu um control the fluctuation of the token so that the the tokens actually um uh act more like a St kind of a stable coin within our game and yeah so we're still experimenting around it and I think there's a lot of learnings coming from there but I think in the meantime there's a lot different ways to um deal with that problem kind of to add on to that actually like we recently like had a chance to me a lot of gaming company that that is that are interested in blockchains and also we have a community of Gamers um right now like I think the approach that uh come come to come to us is exp exp exp is taking is uh I think the right direction because we right now is is Catch 22 kind of situation where Gamers don't find good enough like good number of you good games and game studios are not coming into the space because there's not enough users so we need contents there so it gives good reasons for users to come uh great so thank you for the amazing uh amazing insights and uh insights I I I've definitely learned a lot through this talk and maybe just to finish a teaser for us starting from 10 what what's the next big thing for your project well um the next big thing for us is definitely the the the Clos Alpha launch that we will be getting the game into actual Gamers hands in the upcoming weeks and months and from the players feedback uh we'll hopefully tweak the and improve the game massively to get ready for Global launch early next year amazing Q uh yes we're continuously pumping out new titles uh and I think we're trying to learn um more from each of the launches that we do and uh we're we'll we we're going to try to share more of our learnings uh and so follow us on Twitter and medium and so that you get updates thank you yeah uh we as well are building uh our extension title which will be launching next year we'll be on a different genre that's extended on that's attached to Legal Kingdom so all the nfts and tokens will be in probably have utility yeah so stay tuned for the update all right thank you very much thank you thank [Music] you