Blockchain and games have a tantalizing future. Companies are building a $ 100 million fund to get developers to develop games with Blockchain, which will provide secure and transparent decentralized Ledger technology that powers Bitcoin and other crypto currencies over the past year. A handful jump in and test the water. At the last Tron summit in January, I hosted a panel with three of these experimenters: Taehoon Kim, CEO of mobile game maker Power Rangers nWay; Dan Chao, head of startup Rogue Nations Games and manufacturer of Crypto Assault; and Jared Psigoda, CEO of BitGuild.
"To be honest, our biggest problem right now is that most blockchain games that are made are crappy," Psigoda said.
Then there was another day Most of the mobile games were bad, but entrepreneurs like Chao made a good impression as they sold their startups to major gaming companies. Ubisoft has become active in blockchain games, but many big companies are on the sidelines. If they sit too long, they may have to pay a lot to buy the start-ups of Blockchain games. Or these startups will buy them, Psigoda said in a breakneck voice.
I'm hosting a chimney chat with Tron CEO Justin Sun next week at Pocket Gamer's Blockchain Games Next event on March 1
Here is an edited transcript of our panel.
Taehoon Kim: My name is Taehoon Kim. People call me TK. I am the CEO of nWay. We're making real games for emerging platforms, and the emerging platform is now Blockchain, so let's move on.
Dan Chao: I have a small team just half a block away from here. We've been working on a blockchain game called Crypto Assault, a kind of strategy MMO where hundreds of thousands of players live together in a world that uses tanks and jets to kill each other.
Jared Psigoda: I am the CEO of BitGuild. We are a chain of games with block chains. We originally started building games on Ethereum and later switched to Tron. We also have Guild Chat, our social messenger, which allows you to exchange cryptos and receive crypto coins. We have a number of other projects we are working on right now.
GamesBeat: Could you tell us what you are doing in the field of Blockchain, Games and Crypto? Why are you here? What interested you about Blockchain?
Kim: I will now take a step back and talk about the blockchain gaming ecosystem. As I see it, it's mostly people who are already crypto owners. There are people who have all these cryptocurrencies and are all trying to make money. It's not necessarily the gamer crowd yet. Of course, you'll see games that are more game oriented, pyramid games, games that feel like lotteries. Real games have not arrived at Blockchain yet.
We work closely with Tron to find ways to increase mass market acceptance. How do we bring gamers into games with blockchain elements for trading and real value in play items? We're doing research and development, and we're also working on a separate game that brings a whole new experience to this genre.
Chao: How many people have CryptoKitties popped on the radar for me and I was really interested. I've always loved jumping onto a new platform to see if there's anything relevant to it. When Facebook games and later mobile games came out, that was very interesting. I love solving new problems and seeing them – what's the added value of the blockchain in games? Is there really something there? Maybe we started developing Blockchain games last April to see if we could bring anything else than we've already seen.
Psigoda: I've been a hardcore player for as long as I can remember. Pretty much all the MMOs you can imagine I've played from Ultima Online to EverQuest to World of Warcraft. All Diablos, everything like that. One of the most interesting things I've seen in these games was that it was most fun to trade items with other players. If I play Diablo as a magician and you are a barbarian, if I pick up a really cool barbarian item – these games were all designed to trade items and trade currencies. One of my first companies was also a World of Warcraft gold farm in China. The concept that virtual currencies are worth real money has been an obvious concept to me since I was 12 years old.
Once I've seen Blockchain, with the possibility that these virtual brands have real value and you can trade Smoothly through the Blockchain there was this Eureka moment. Hey, we can do some really cool games that make us feel like we're in the 90s when there was trade. It's not like the mobile games where you always spend money now, but you can never trade your items with another player. It's a pretty fascinating industry and it's just beginning. We wanted to be part of it.
GamesBeat: In three to five years, one could define as a success that here are the CEOs of Electronic Arts and Activision and Ubisoft talking about Blockchain games. What will lead us to such a result, to a future in which this unfolds its full potential?
Kim: It reminds me of the free business model. Long ago, the big publishers laughed about it and said it would never work, and now it's their turn. It's only a matter of time before they understand that.
Chao: What really gets us there is the cracking of the game design that actually works with Blockchain. I am not convinced that we have already seen it. I always tell people that my future depressing view of the blockchain – if they just named cosmetic skin in Fortnite, that's probably not the most exciting thing they can do. But finding a game design that's not just gambling or a CCG, something like that, that's the real thing that breaks it all up. Whether it's something that looks like Roblox – there are many things to think about. It will be the game design that really breaks it up.
Psigoda: I agree. Our biggest problem, to be honest, most blockchain games that are made are shit. 2018 was not a very good year for Blockchain games. It will take time. As you mentioned, ten years ago, at the Game Developers Conference, we talked about this new thing called free-to-play games, in which, instead of going to Best Buy and spending $ 60 to buy a game, that Game completely free would be you could buy these items in the game for 99 cents or a few dollars. If you talked to Blizzard or Activision or EA or one of these companies back then, they would say, "That's the dumbest thing I've ever heard. We will never do such a thing.
However, if you look at the entire mobile games industry and many other PC games now, pretty much all of the most popular games can play microtransactions for free. We've found that making a game for free is more profitable than making people spend money on it. Fortnite generates $ 10 million a day in revenue. When EA and these guys come back in three years, new generations of game design are being made by the flashy startups. They are not made by the big boys. The big boys, if we're lucky, will come in and buy us in a few years. Or we buy it. [laughs]
Kim: The term "blockchain games" will disappear. Once we have established ourselves on the mass market, it will only be games and they will contain blockchain elements.
GamesBeat: What do you think of the choices you have to make now? For which platform do you decide whether it is Tron, EOS or others? What are some important things that you need to decide in the beginning? What choices do you have to make now to support what you need to support?
Kim: When creating an app or game that's exactly what you expect, go to Ethereum, of course. But the reason why we work with Tron is that they are very forward-looking. They work closely with us to make changes to the platform and to create new experiences that reduce the entry barrier for regular players. That's the main reason why we work with Tron.
Chao: When we started, it came to market capitalization and users. They wanted to select the blockchain with the most users. But that changes a bit now. Of course, there are Tron and EOS, who support games in an excellent way. They really help with marketing and visibility. On the technical side, transactions per second and gas prices are a big deal. It is very important to really optimize for lower gas prices.
But you have to weigh how much it really matters to the users to have the whole game in the chain. For example, our game consists mainly of 99 percent of the chains. It's like playing a normal game with a centralized server. The units, the map, all the commands, and all the stuff is on the server when they move. The purchase of the units, however, takes place exclusively in chains. When a new unit is created, it also happens in the chain.
At first I was a bit nervous because the users disagreed with it, but in the end it does not seem to be that way. They just want to play a fun game and then make a part of their investment. This is a kind of lengthy way of saying, is transaction speed important? If the transaction speed drops below one second, you can start doing everything in the chain. Is that really still the right choice? Obviously, there are the gas costs. There is also a lot to do with seed funding. Some other ecosystems like Tron also help in this way. This can be very important when starting a new business.
Psigoda: I summarize it in two points. The first point, as mentioned, concerns the question of centralization versus decentralization. I think it was CryptoKitties that had an interesting data point. 99 percent of their traffic or similar left their website when they saw that they had to install MetaMask to play the game. I do not think that absolutely everything has to be decentralized, because what the players care about is a good game. It's not about our big vision of decentralized products. Second, it's the choice of your Blockchain. As I said, we started with Ethereum. We started seven or eight games on Ethereum. It was unacceptable for us to spend a dollar on transaction fees to buy an item that cost 50 cents and then wait five minutes for the transaction to finish. It was decided which Blockchain would really support the games. EOS was one of them. Tron was one of them. We thought very much about both. They are both fast. Both have little to no transaction fee.
The main decision factor for the move to Tron was the community. There are now many blockchains that can be said to be technically capable of performing a blockchain game. They have fast transaction speeds and so on. But the bigger question is who will play these games. These games are played with the token of this blockchain. Tron games are played with TRX. If you have another blockchain that solves your problem technically, but they have 200 owners, then you have no community to play your game.
We found out that Tron has been the most supportive of both the Tron Foundation and the community, and there are many people in the Tron community who really want to find more ways to use their tokens. Gaming was one of the most obvious ways for them to do that.
GamesBeat: We all remember how important whales were in the free game room for mobile games and board games. The community of many whales may be the one you want to be attracted to.
Psigoda: Tron has some whales, yes.
GamesBeat: If you use your imagination, what could happen to Blockchain games? I did not think much about Blockchain and Crypto until I spoke with Tim Sweeney of Epic Games. He said this could be the way to get to the Metaverse, the virtual world of virtual worlds that pops up in stories like Snow Crash or Ready Player One. Is that one of the final goals you think is possible?
Psigoda: Again, most people have probably seen Ready Player One. If not, I recommend it. When we talk about the metaverse, we almost think of a life in the future where we spend a significant amount of our time in virtual worlds. I almost say that we are partly there. The reason why I say this is sometimes when we pause and think about how many of us stick to our screens every day, whether it's your mobile phone or your computer or a tablet. Just go into a subway and look around. When 99 percent of people in a room stare at the screen of a mobile phone, are they really here or are they out there somewhere?
On top of that, in the future – we talk about things like artificial intelligence, which results in far fewer jobs in certain industries like the manufacturing industry. Even doctors could be replaced by AI in the future. By adding virtual reality to how virtual reality has evolved over the years, we will look at a possible picture in the future in which all or a majority of the population spend a lot of time in virtual reality or within these virtual worlds.
What will happen is that there will be people who earn their living in virtual spaces. People have been doing this for years in games like Second Life or Entropia Universe or EVE Online. In my opinion, blockchain will activate assets that you acquire in these video games or virtual worlds – you can convert them directly into a hamburger at your local McDonalds. Items that you acquire in these meta-verses or virtual worlds through the power of Blockchain can be converted into real money in the real world. Nothing else than Blockchain can do that.
Chao: I would say you should not watch Ready Player One. Maybe you will save two hours there. [laughs] But that's not my point. My point is, I'm a player first. I am not a utopian thinker of blockchain. I do not believe that it will solve everything. My thing that I'm really wondering about – Blockchain article. We can not give them away for free so they have value. There are initial costs to purchase these items.
Right now we have games – no matter if you're in ARK or Minecraft or whatever, if you hit a tree that throws wood out, wood comes for free. Law? If at some point this results in an object, it will be hard for this object to be worth anything, because all wood comes from an economy that is not a zero sum. Here I think, whether it's the Metaverse or whatever – that's the hardest part to crack. Will we all agree with an economy in which we are neglected and downsized for every single resource and every element we create? So I think that this works really well with cosmetic items, but working with functional items is difficult from a business perspective.