BBW23 – Day 2 – Web3 Gaming

[Music] okay well uh welcome everyone and today we'll be talking about uh web three games uh so first we'll just introduce ourselves briefly I am um I'm a lawyer okay I a partner Nelson mulls don't hold it against me you still guys need us um perhaps now more than ever but we'll talk about this um so I work in the fintech space uh my clients are video game developers uh platforms issuing tokens and so on like different types of projects in web three space uh and I would like to ask my panelists to introduce yourselves this hi everyone uh Kendra Rodriguez I'm on the North American Business Development team for polygon Labs there's about six of us that are are based in the US and then we have teammates and counterparts in Europe ladam uh APAC Etc the best way that we like to to describe the BD team is we're evangelizing uh polygon's different protocols and helping various developers across different Industries understand what their use case is which uh solution within our different like protocols make the most sense so gaming obviously is a huge uh Focus for our team um we work pretty closely with Mike as well um yeah happy to be here thank you hello I'm Mike LaVine from Mystic moose um I've been a game developer for longer than I care to admit but uh started in the 90s working for George Lucas I am from Boston I i' say that I grew up in Newton I went to California learned a bunch of stuff and then came back home to uh start my own companies and we've worked with lots of Major Brands over the years and created our own games um and uh maybe we'll get into it but I'm not always sort of attracted to what the bleeding edges and new technology so before blockchain we were heavily into augmented reality mixed reality and then usually every five or six years in gaming there's new technology and blockchain and web 3 really uh caught my attention and so that's what our latest Venture is about and trying to navigate the web 3 gaming Universe well thank you um so let's talk about like first the definition what is a web three game to do that I actually want to first talk about what is a web 2 game right and here I'm thinking like a pre2 2009 World where Gamers were using consoles play Playstation Xbox right then 2009 comes iPhone comes right and then we have a whole different game within the video game Space um can one of you describe what is a web 2 game is and what makes it a web 3 game I me to handle that okay I mean I guess I would answer that by saying my opinion is really there isn't really a clear definition of what a web 3 game is at this point we're so early you're seeing massive experimentation in the space everyone trying different things I mean you know if you had to give it any definition it would be I suppose a game using some blockchain technology in some form but our journey into this and we we raised money um initially late December 21 from animoca Brands and some other great funds and you know when I got into this I knew nothing about blockchain and I'm still not an expert but there was a massive amount to take in and there was this whole Legacy of these other games out there and sort of well they're doing things completely different than really video games had done historically up to now and it took us I don't know 6 to 12 months to realize well what we knew was true was actually true and and that means games are about fun and you have to make fun games and that's the most important thing really that this space needs no one's going to care about an unfund game assets right so if we want people to care about asset ownership and blockchain Technology we need fun games that people then care about that want to own those assets so that's a short answer okay yeah I I'll add some more color on on top of that I think Mike and his team is very unique in the sense where when web 3 gaming started to become more popular it was the examples of ax Infinity where it was mostly like incentivizing players to play because of the financial benefits Etc in the last I would say 18 months our team and other chains and and just protocols in general like the wave of talent from traditional gaming that's now entering the space either by inventing new IP or kind of you know taking their like the IP that they never brought to Market and kind of trying to fit that and retrofit it and think about what sort of use cases make sense uh on the blockchain side um so there's a lot of interesting games in our Pipeline and other protocols that you're going to see I would say like launch probably in the next 18 12 to 18 months as well and we recently announced our partnership with the mutable which I'll talk about too but I would say like the the level and the quality of games that are being built now is very very different than I would say the the initial like wave of web 3 gaming that everyone was talking about in the past just statistically there are 1,873 web three games right now I'm just saying like it and that number just um like that was like end of December 2022 and it increased by 34% in less than a year before that so it is on the rise but to to me I just want to add a web three game brings A New Concept to games that wasn't there before and it's ownership okay web two games freet to play right model where you have Ina purchases you need to spend cash but what do you get you get maybe a currency like in-game currency you get something that you don't own you're kind of like renting it right once you stop playing that game it just stays there it's is within the game the game developer stops developing it the go like supporting the game it's gone right to spend the money that's it with the web three games I think you now have like through the nfts and such you have um the ability to perhaps take the asset outside of the game right and actually truly own it but we'll talk about nfts um just afterwards first I want to find out from Kendra what um polygon is doing right now because I've heard you have like some amazing initiatives going on can you tell us all about them right now I would say our team is seeing a huge huge adoption specifically in APAC very similar to kind of the wave of adoption that you saw when mobile games started to become more popular at the time a lot of again like the traditional developers at the you know at that that point in time didn't really see the value or kind of there's a lot of hesitancy about going to Market with mobile Games Etc Asia and APAC were the early adopters during that time and we're seeing that now as well Korea blockchain week happened about three weeks ago and I would say probably every single developer that's either thinking about entering web 3 or is um experimenting with the technology are all very focused on how do we attract the South Korean market how do we attct Japan Etc so I think just to start out in terms of like region and kind of a lot of momentum we're seeing APAC is definitely leading the way in Europe there's a lot of I would say Eastern Eastern developers as well that are starting to experiment they have a really strong developing Community there and again like mapping out the IP with some of the big studios that are based in the nordics in Sweden there's a lot of development taking place there in the US um obviously given like the regulatory climate and kind of what's happening I would say Mike again is in a very unique situation where there's a lot of interest from game developers that we're connecting with in full transparency there's a you know the UN like the lack of clarity on the regulatory climate of how do we introduce nfts what is it mean when we have custodial or non-custodial wallets how does it impact secondary market sales like those are all things that game developers haven't really had to think about in the past and so we're really working closely with some of these game developers to figure out okay ultimately where does it make sense to implement nfts in your strategy where does it make sense to actually leverage polygon one thing we kept hearing from those game developers that we've been working with is hey like we know how to build great games like that's where we're going to focus but can polygon and your ecosystem of different partners help us solve for the wallet solution the marketplace and all of those pieces so what we're really focusing on right now is building out those ecosystem relationships and channel Partners like an immutable magic Eden openc just recently hired a a gaming vertical lead and you're going to start to see a lot of our Partnerships coming out about how do we work really closely with these platforms to better serve those game developers and take away that heavy lift of implementing some of those um pieces that we were just talking about like the wallet and the marketplace and those sort of things earlier this year at the game developer conference uh in San Francisco one of the largest if not arguably the largest gaming conference in the world we saw there was a huge uh uptick versus last year in terms of again like these these gaming Studios that know how to build this IP and are starting to experiment and so we announced our partnership with the mutable there and for those who aren't familiar a mutable is essentially a modular stack that solves and takes takes away all the complexity of the blockchain layer and packages it into um this software kit that actually game developers can just easily plug into their game and they don't have to take they don't have to worry about all of the heavy lifting and the technical implementation and integration or even going through like a long list of vendors that need to help them integrate all of these technical pieces into their actual game development so to summarize immutable is a really important partner and we're seeing that a lot of the game developers who need to obate a lot of the complexity blockchain are working really closely with them and some of our other ecosystem Partners secondly APAC and in general uh Europe are definitely leading the way in terms of newer games that are coming out given that there's a lot of regulatory Clarity in those regions but we're suspecting in North America it's going to continue to happen and thirdly the last Trend I would just point out is our team is working really closely with more of the traditional uh Distributors and just platforms that I would say non web3 gamers are very familiar with think of like the Epic stores steam uh Google play uh iOS Apple um in general and just the Amazon teams and trying to figure out how we can support their strategies and make sure that game developers are appropriately building for their policies and and are building safe games and are fun games ultimately thank you and Michael uh Mike um so I heard that you are now working with Amazon Prime gaming program what is that can you please tell us about your experience in the program yeah absolutely and you know really we have polygon to thank it's a good segue to what you were talking about and those kind of web two Partnerships and yeah I mean I think and this is we we have built our game using polygon they've been an amazing partner to us and we're aligned with a lot of sort of philosophically about how we look at the space and they're really all about bringing in traditional Gamers into this space so through that relationship we were able to um in an introduction be I think only the second game um that Amazon Prime gaming has worked with it was amazing to work with them and what it is is is they work with lots of web Tu games now if anyone's been to Prime gaming where Gamers can come in and uh claim things once a month our our program lasts for six months and so the idea that Gamers can actually come in now and claim onchain items that you know could have be used in other games and have deeper value and ownership to them that's I think really enticing and something that they wanted to experiment with and for us just it's been massive to bring in new types of people into the space and you know all those things you were talking about really being new and on the bleeding edge of this space like we kind of had to invent that all ourselves cuz like those Solutions weren't there and you know I was I think smart enough in the beginning of this that I realized like look we're not going to build our own Marketplace and you know fast forward 2 years there's like probably 50 different Marketplace solu white label Solutions out there all you know competing to try to get games to be on them so you're seeing the Pieces come together but like you know for the prime deal specifically we also formed a partnership with um Horizon blockchain which creates the sequence wallet because we wanted something and really Amazon demanded that would be really seamless to those users and so it's an evm wallet it was important for us for it to be non-custodial and yeah we we took probably eight plus weeks evaluating again two dozen wallet Solutions on the market um to come to that decision and and you know it's so there's a lot to navigate still in this space as a developer sort of and trying to understand what the best Solutions are I mean one thing that we've always loved about polygon compared to some of the other chains and coming from a gaming background right we want our game to be everywhere we want as many people to play it as possible so we built our back end is really a Web Two web 3 hybrid where we can read what's in people's wallets and take a snapshot of that and bring it into our web 2 back end basically and have those two things always communicating and what that allows us to do is also work with other chains which we hope to do in the future and this is something polygon supports right we didn't want to be siloed we want blockchain we want to bring people together in our one game and not have these different versions on different blockchains that's just silly from a gaming standpoint so lots of things like that I think polygon has been head of the curve you know on understanding compared to a lot of these other chains which like build on our chain and you can't be anywhere else that it's just not a good model for games thank you so now I have the following question so you know so there are some games that you can access by you know by playing on a laptop or a computer right and there are other games that also have a mobile device version right and I personally see challenges bring in like web 3 games into the mobile devices perhaps even just because you know the App Store let's say wants their 30% and then what if like you make people buy the nfts I mean like encourage them to buy nfts do they then have to pay the 30% on the nfts how does that work like how do you see the reconciliation of mobile devices and web three games I'll be sure and then you can but I actually have the 180° opposite view of that so you know if you look at the gaming landscape first of all on the PC side it's really dominated by steam they own like 85% of the market for downloadable games then you have consoles as well both of those at least at this point are completely you know closed off to blockchain games in fact you're seeing some blockchain games go onto steam just cu the Market's so big and remove everything of the blockchain from their game by contrast you have m you have Apple and Google who've opened the doors they've written it into their policy so it it is possible now they've paved the way honestly that was a huge hurdle at the beginning that's now gone the the only hurdle left really and this is a big one is education and and making Gamers understand and care why they should even care about this and it's really a big problem honestly because you ask the average gamer they're happy right they they don't care that Blizzard or Riot is holding their Assets in a centralized database they don't know what a decentralized database is right so and and this is like a part of the struggle of this space is like and you're seeing big companies like mythical with NFL Rivals choose to use a custodial wallet right and we're like well isn't that the whole point of you know we we want to be non we otherwise as my blockchain engineer tell you then you are not blockchain right so there is this struggle to make the onboarding easier right but still sort of maintain that blockchain side to it anyways I went off rails there go ahead no no no it's all it's all interesting right we're all learning um now I have a question about you know so so used to be freet to play right and then you buy like making them purchases great we get that model now it's uh earn to play right that's the thing I've also heard of like move to play and na na na like all different variations and then the nfts com in somewhere where do the nfts fit in within the web three games what do they do why do you need them what's the purpose of the nfts and hopefully it's not just to make money right there should be some other like how do the nfts fit in within the earnto playay model that's my question you want me to do this too okay I I'll add some color yeah I mean with us first of all and I think you're going to ask me S another question maybe but like our nfts we've never said anything about value okay what we've all the only thing we've promised is fun right and and this is an asset that's part of our gaming ecosystem that if they own it the the value is that as we make more games they can use that asset in other games right and so to us if you look at the history of gaming and that's what appealed to me about this space in the first place is that really Gamers have just been renting their assets right they think they own them but they don't and this is where I get back to the education and so this is to us the core of it right and this is what we've realized too like all these deeper Concepts and web 3 defi staking forget about that if you can't convince people about ownership like one blockchain 101 as I call it we're never going to get to the second or third steps go ahead yeah I would say um there's definitely still games that are are marketing as earn to play or play to earn or move to earn and that I I would put that in a completely separate bucket to the type of game that Mike and his team is building and the games that we're really prioritizing and focusing on what's interesting is we've seen there's a lot of interest on kind of creating these communities and how do you lean into Discord and there's a lot of activity in Discord and kind of as you think about marketing gen Z and kind of how they interact with applications online whether it's a game or other consumer apps like there's all of these like subset of these different communities and tapping in and getting those communities excited and feel like they're participating in either the game development early on or as they are even either leveling up they have a community that they can talk to and they're they're actually earning rewards for their participation and so user generated content is another area that we're seeing like a high increase in kind of use cases of nfts and what does it mean to kind of interact with that technology but at the end of the day like the focus is fun game make the onboarding super easy and simple if you go to Planet Mojo's website you have an Android device you can play the beta you can actually immediately hit play and actually get into the game environment like that experience didn't exist about 8 months ago when you were thinking about the the types of web through games that were getting developed you had to either you know create an account in centralized exchange learn how to use a metamask wallet bridge over to metamask then go onto this different browser and then try to figure out how to sign in and then kind of like go through this pixelated gaming experience and stake these tokens and buy into these tokens like that ux experience is gone like I and that's not really an area that our team is focused on there are going to be those games and there are some games that are Focus focusing on being fully onchain there is a theme of that and like we are supporting those games as well and those are really targeting like the web3 uh Gaming Community or just like web 3 developers in general but that's a very I would say specific group that isn't really where we're focusing we're really focusing on kind of like the the broader use cases and and making fun games and supporting those game developers there I mean one thing that's crazy about this space in in terms of if you look at the history of games in my opinion is that throughout the history of video games you know the last whatever 30 40 years whenever there's been like this big change or or or movement like like a mobile or console and and video games are just like any industry right there's like one or two big creative moments and everyone chases and copies it right and so like just think back to the last few Cycles right like when mobile hit the scene Angry Birds and everyone copies it and then freeto playay emerges and a few games Clash of Clans and everyone copies it what's different here is everyone that happened and everyone thought it was like axi infinity and everyone got excited and started chasing this model and then Midstream we all realized this is not the model right we we have to now figure out there's something here and we still believe in the underlying principles but all of all of the companies like us who are chasing this and just like in the early days of freedom play if you look at those early days it evolved over a few years and then everyone kind of started figuring out and patterns emerged and that's that's really the phase we're in someone's going to figure it out hopefully us someone's going to be the zingga back in the days of Facebook games right zingo would move a button in Farmville and then a dozen companies would move the button to the same place like oh they must know something so you're going to see that happen in this space okay and then one last question I have and it's obviously at the top of my mind um as a lawyer so in the last I would say three weeks right we saw two enforcement actions from the on the topic that they have not touched before and that's the nfts in both cases the nfts were deemed to be Securities and were therefore sold illegally in unregistered offerings so um just just a quick um I mean one of the uh projects Stoner cats uh Stoner cats they promised to build um a web web uh series of six episodes about cats house cats that um taste some of the their owners medical marijuana and then you can imagine um so and then they raised money in 35 minutes they sold uh 8.2 million worth of nfts and those nfts were unique they were based on the character uh from the show and um they built the series but there was a secondary Market there was a secondary market and most of the nfts were resold on the secondary Market even before the second episode aired okay so my question to you guys do you see this enforcement actions and there was no fraud nothing right in both cases they were just doing their best do you see these enforcement actions having a chilling effect on the development of uh web three games in the United States you're going to make me answer that you sure you don't want to I mean yeah my answer is look a I'm a game developer and a CEO I'm not a lawyer um we hire the best lawyers in the space and take advice from them and without commenting on what those projects did I'll just repeat what I said earlier the only promise we've ever made to people with our nfts is fun right and entertainment and I think if you look at those projects you can go read about them they they did some things that we've been very careful to avoid and and so to me it doesn't really have a major effect on what we're doing I know I am not a lawyer uh as well I would like to you don't play one on TV no exactly um I mean the good news is I would say in the last 3 months with the appointment of Mark Vin who is our former Chief legal officer is now polygon CEO and um our in terms of like our legal team in general like we're very closely lined in terms of the different Regulatory guidances and and just really influencing and being in the room with some of the key influencers and decision makers Ryan Wyatt before he uh departed from polygon was at the White House testifying in DC about you know the power of ZK technology and what does it mean for polygon and how important it is to have some guidance so our team is pretty proactive not only in the US but across every single region in Europe and APAC and we have internal open all hands where we have engineers and BD and marketing folks asking pretty open questions to our leadership team and so I would just say we're pretty proactive in terms of talking to the right folks um it's like a huge priority for our team to make sure that we're providing the right guidance and making sure that the developers that we're supporting are involved in some of those um areas and we can get their feedback as well and we're able to articulate that feedback and kind of the successful use cases that we're seeing not only in gaming but in other industry vertical and sharing those use cases and getting like the legislators in the room on a laptop with a metamask wallet and familiarizing them with the technology that's been something that um our team continues to prioritize and we'll see moving forward [Music] so