Blockchain Game Speech with Kevin Chou of Kabam&Forte, Co founder at KBW2019

[Music] hello everyone I'm Kevin Chiu I'm very excited to be here today I've been making games for over thirteen years and I've been playing them for about thirty-five and so today I want to give you the perspective of somebody who's been a professional game maker and a lifelong gamer about what's happening in the gaming industry and why I'm so excited about blockchain technology today my father was a computer scientist so we always had a PC around the house and I was playing games some of the earliest games on this 8086 that you see up on the screen the game that's on the screen is called the kathlynn it probably doesn't look like much compared to the games of today but it captured my imagination the way that no film or book ever did and ultimately it was the seed of inspiration for me to eventually pursue a career in the gaming industry I did this by founding a company called Kabam I did that in 2006 we started by make we were one of the first gaming studios in the world to start building games on social platforms starting with MySpace and then Facebook and then eventually we shift our efforts to mobile and made some of the biggest games in the world with major IP like Lord of the Rings fast and furious Star Wars and Marvel over 11 years we made 50 games that were played by over 500 million players our company employed a thousand people around the world including about 30 here in Seoul and we were making about 400 million dollars a year when netmarble when we sold two netmarble in 2007 for a little bit less than a billion dollars well I was fortunate to found my success in the game industry pursuing what I loved I know it's actually a very hard industry to break into which I learned over time today there are roughly Oh sorry well I'll just keep it going today there are roughly 400,000 people worldwide who make games and roughly 2.4 billion people in the world who play games so that's only point zero two percent of the people who play games that actually make a living making them so today I wanted to talk about a key question which is how can earn a living be more accessible and inclusive in the video gaming industry and of course I think blockchain is a major part of that it used to be that the primary way to make a living by making games is actually to make the game itself of course and early in the home PC gaming era many of these games were made by just one person so that one person would have to be the developer they'd have to be the the artist the game designer and the QA tests are all in one and this person that's on the screen is a legendary game maker richard garriott and he was a he's famous for making one of the first RPGs in the gaming industry called a call it Beth so this game he made entirely himself his mother drew the art that he put on the ziplock bag and sold that in retail and through mail eventually a publisher picked up this game and he made about $150,000 in royalties which is a lot of money back then for a teenager in 1980 of course these days the games that you and I know are much more complex and so much larger teams come together to make these games world of warcraft for example which is the picture here is the development team for world of warcraft is a game that over 6,000 people have come together to make in this last iteration in their expansion pack now as you might expect games have grown quite a bit in size and scope but it's also grown in the revenue is quite a bit the global gaming industry today is about a hundred fifty billion dollars and that is more than the global box office plus the global music industry combined together it's been larger for the last eight years but games as they become bigger and bigger from an industry perspective they've also had a bigger and bigger cultural impact let's take a look at some of these examples to see what I mean so we're start with film in the last 10 years or so more and more film have been made on video game IP so and these have drawn big-name actors including Angelina Jolie Jake Gyllenhaal and of course the rock and RAM pitch and these games have been pretty big commercial successes as well with Tomb Raider doing 275 million prince of persia doing over 300 million and rampage grossing over 400 million dollars in the global box office as these games have had box-office success something bigger is happening which is that the mainstream is now embracing games in a way that when I was growing up but gaming was a subculture of geeks like me but today global meetups like this which happened what you're looking at is a meet-up in Chicago's famous cloud gate sculpture 5,000 people showed up in a fan organized meetup around a game called Pokemon go this is the first one that was ever organized and since then over the last three years many such events have happened all over the world a community event on this - on this scale could not have happened without games becoming truly mainstream let's take a look at another example beyond mainstream acceptance games have now recognized for their contribution to the arts for example in the New York City MoMA considered one of the most influential voices in the art world they've added 20 games to their a permanent connection collection and have announced that they're gonna double that to 40 over the years this is just an incredible shift in mainstream perception and acceptance of games not just as entertainment but as the highest form of art and creative expression let's move to music marshmallow a famous EDM artists held a virtual concert in a game called for tonight over ten point seven million people attended this concert in real-time for context the largest live concert of all time before this has been a Rod Stewart concert in 1994 in Copacabana beach that drew 3.5 million people this highlights a novel trend that we're seeing in the video game industry which is people are finding new and unexpected way to earn an income through with the video game industry eSports is another one of these newer industries where people are earning a living making in the video game industry and me and making a cultural impact at the same time to give you a sense of just how much players can earn playing games consider this the world champion for fortnight this year guy named Kyle bugga Ruiz Dorf he took home three million dollars for winning the championship that is 50% more than what Tiger Woods won by winning the Masters this year for other people in that tournament took home seven-figure digits in salary in prize money as well earning income in competition it isn't just from prize money there's also salary opportunities as well so in a game called League of Legends in 2018 the average salary was $320,000 in North America in this game of League of Legends one of the biggest free-to-play games in the world over a hundred million people tuned in to watch this a game and sold out the Staples Center within one hour streaming is another popular way that people earn an income from playing games so this is where you stream a video game you play a video game and a streaming over the Internet and people all over the world can watch Ninja is perhaps one of the world's most famous streamers and he earns just over five hundred thousand dollars a month streaming from subscriptions alone that doesn't even include his sponsorships events endorsements etc and just he recently signed in announced a deal with Adidas for a major apparel line but even with all of these new economic opportunities from streaming to eSports the truth is that the barrier to entry for most people to earn a living from games is very very high in 2008 and we're actually eSports requires an extraordinary level of skill so in 2008 for example well over a thousand players play professionally that's just a fraction of the hundred million people around the world who played this game on a monthly basis similarly out of the two million streamers on Twitch only about 2% of them make a full-time income or substantial part of their income by doing that as a job so despite the growth of the industry and new ways that people have found her an income through gaming the economic opportunity for most people in the world is still out of reach I believe blockchain technology will enable new game economic designs that will change this blockchain technology has a number of unique qualities that perfectly align with the digital economic nature of games I believe many players in the next decade can earn a living from them if they choose to the most basic property is that public blockchains enable players to own and thus trade and sell the digital items that they earn or buy while playing a game players spent ninety three billion dollars on in-game purchases last year out of the 150 billion in the entire gaming industry blockchain can turn these in-game purchases into investments as opposed to just pure expenditures it enables a digital permanence captured in a public ledger that creates verifiable uniqueness in Providence so for example does anyone remember when comic book artist Todd McFarland paid 2.6 million dollars for Mark McGwire's 70th home run baseball imagine that same level of collectability and authenticity and provenance for collecting in-game items for example combined the sword or that the weapon that your favorite eSports players used in the World Championship for legal edges or another favorite game these are the type of opportunities that will come to gaming and come to eSports and come to streaming in the years to come watching can turn peripheral market activities I'll go into what that means into ones that actually contribute financially to a game's ecosystem blockchain is all for example some players pay other players to log into their accounts and play their games for them so that their in-game characters can gather more materials and level up faster this is called resource foreman and sometimes whole accounts get traded for the assets are in those accounts it's a service that players clearly want but developers like Kabam and many others around the world don't want this because we're cut out of those transactions with blockchain technology developers can build the type of infrastructure designed their games to support this type of service directly inside of the gaming economy itself ultimately I think we're gonna see new types of community based economics emerge within the gaming industry imagine a world where players can buy sell and trade their virtual items within a virtual in-game eBay players can offer their ad-hoc game playing services via in-game TaskRabbit players can create and sell custom virtual art in other assets in an in-game Etsy all of this can take place inside of a game as is powered as its digital assets are powered by blockchain what really excites me are the goods and services that game makers haven't even thought of yet because of not having these types of tools available to them for example as virtual games create have become have real world value attached to them could you figure out a way could others figure out a way to collateralize these assets using a defy protocol much like you would use a car or jewelry today to take to take out a loan this this type of community economics simply wasn't possible before and we now have the ability that transformed the gaming industry forever by really taking these tools and technology and making putting them in that power putting them in the hands of game makers I have the power to get millions and millions of users exposed to these blockchain assets for the first time 2.4 billion people will play games this year if only 2% of those gamers about the number of full time streamers on Twitch participate in a blockchain enabled game that would mean that 48 million people around the world could potentially earn a living by playing games and doing what they love this is a future that I'm passionate about building and it's one that Forte is making a reality and I hope I've shown you my perspective on this question how can earn a living become accessible and inclusive in the years to come through the video game industry last thing I'll leave everyone with is that we've put together a hundred million dollar fund which we're giving to game developers we're focused on games I already have existing audiences in significant revenues we've deployed about 25 of it already but I means we still have 75 left to work with developers all around the world and we hope that blockchain gaming will come to a game that you play thank you very much [Applause] [Music]