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Yat Siu, Executive Chairman of Animoca Brands, helped organize the GamesBeat Summit Next 2022 event and spoke about the hurdles blockchain games face as they gain momentum. While explaining that, he also mentioned that Asian game makers may have an advantage over US and European game makers when it comes to blockchain and cryptocurrency games.
Siu sought to cut down on both the hype and the negativity about how blockchain games will go mainstream and disrupt traditional gaming.
He was interviewed by Concept Art House CEO James Zhang in an online fireside chat at a preview of the GamesBeat Summit Next 2022 event.He credited CNBC with his Siu as “Mr. for investing in hundreds of his Web3 companies and driving adoption of blockchain gaming.
survive the winter of crypto
Animoca Brands has a great interest in NFT games, which is why Siu’s company’s portfolio includes 380 startups. Zhang asked his Siu how companies will survive the crypto winter.
“Well, first of all, I don’t really think of this as winter. I mean, it’s obviously a bit colder. If this is winter, then 2018-2019 was the Ice Age. We’re going through this together.” I got over it.”
He noted that nearly $3 billion has already been invested in blockchain games this year.
“It’s a great time to be a gamer,” he said. “Maybe the valuation isn’t as high for him as it was nine months ago. But a good studio with a good concept can raise money.”
He said, “I think of this as economic development. Metaverse/Web3 is like building a new nation. But 30-40 years ago it was a military dictatorship, the 3.4 billion people who play games still don’t own the assets they’ve built up over time, this is a better internet, DAO and If we believe blockchain tokenization and Web3 and the open metaverse are the future, then I think we’ll be fine if we go astray in the long term.”
Challenges Facing Blockchain
Siu said challenges are well known, such as the onboarding process that makes it difficult for newbies to establish a cryptocurrency account. Many people do not understand why they need a cryptocurrency wallet to play blockchain games in the first place. there is.
Some companies opt for “Web 2.5”, a combination of cryptocurrency payments or fiat currency (e.g. USD) payments against non-fungible tokens (NFTs), holding assets to ease entry to However, Siu said it does not teach people about decentralization or what it means to actually own assets when you have someone else maintain and manage them.
east vs west
The bigger challenge is that while gamers in East Asia seem to embrace blockchain gaming, the West does not.
“A strong minority is very much rejecting the idea of non-fungible tokens and crypto as a whole, rather than ownership per se. And that’s another hurdle,” said Siu. I think what companies really struggle with most of the time is not getting customers.”
Since Animoca Brands is a global company, this has also affected us. But Mr Siu said he sympathized with his Western counterparts. He noted that early stories from critics were that the free-to-play game abused many players in the West. A game that has sometimes flourished in Asia. My fear was that incorporating powerful financial instruments into the game would skew the gameplay in favor of the wealthy.
“I think the bigger story is the fact that people in America, especially young people, for example, have a very anti-capitalist mindset,” Siu said. “The fact that socialism actually has a powerful political agenda today when you look politically through the lens of the American landscape. But perhaps he was unthinkable five or seven years ago.”
That is why the group sees crypto as a tool for the rich and crypto games are very expensive to start playing. They are also often seen to scam you out of your money. , Siu believes the environment is different in Asia, where young democracies embrace capitalism and property rights. This is probably also due to the fact that many of the games to date aren’t all that fun, and even though big-budget blockchain games are in development, they haven’t been released yet.
“I think it’s an opportunity,” he said. “If you remember last year, many of the biggest gaming companies, including companies like EA and of course our good friends Ubisoft, always said they were going to get into this space. And for the most part, this year has been a full-blown retreat.”
In China, the government has banned everything related to cryptocurrencies, preventing these games from gaining traction in China as well. However, Siu said that smaller startups in the blockchain space have created an opportunity to gain a foothold in the market before the larger ones.
“I think this is the beginning of a very interesting restructuring of the world of digital entertainment and digital property rights,” said Siu.
Asked if the stalemate between gamers and big companies will end, Siu said some lessons can be learned from how mobile gaming has evolved. Big companies like Activision Blizzard faced similar resistance from hardcore gamers with their mobile games. They didn’t succeed as quickly as the domestically grown mobile-first game companies and eventually had to acquire the mobile game company. For Activision Blizzard, King was acquired for about $6 billion.
“Large incumbents are usually very strong in M&A strategies,” says Siu. “I think when the market moves, that will be their entry point. I think Asia will take the lead because the Asian audience is much more open to this. We have user experience barriers to overcome Asian companies don’t have consumer barriers to overcome, but Western companies have consumer barriers to overcome .”
Siu believes that South Korea is the most active blockchain gaming market, with all major gaming companies including companies such as Netmarble, Com2Us, Wemade, and Nexon pursuing blockchain strategies.
“In a national sense, I think South Korea is probably the most active,” Siu said. “I think all the major Korean game companies are trying to do something with her Web3.”
Beyond that, Japan’s South Korea is also making big moves to invest in blockchain game companies.
“We definitely see a trend that Asia is leading and moving forward,” says Siu.
In the US, however, Washington state’s strict gambling laws may prevent Microsoft and Valve (Steam owners) from moving towards reward-based blockchain games. Securities under federal law.
“In the US, you can’t spend a day playing Web3 games without seeing the latest decisions and investigations by the SEC (Securities and Exchange Commission),” said Zhang.
Yuga Labs, the operator of the Bored Ape Yacht Club franchise, got tangled up with the SEC and Kim Kardashian had to pay a hefty fine for promoting cryptocurrencies.
“So, if digital ownership is the power and promise of Web3, how can NFTs and tokens be designed to provide value and ownership without being viewed as securities?” said Zhang. Asked.
Siu noted that different countries have different approaches. He noted that much of the regulatory research focuses on the area of fungible tokens. There, each token is exactly the same as another token, just like any national currency or fiat currency.
“What matters is why you buy the asset,” says Siu. “So if it’s a utility, huh? Anyway, from our point of view, if you can launch a game item and use it in-game, and there’s a definite utility, which I think is happening more these days anyway, this is It’s clear that it shouldn’t be security.”
Games for unbanked people
Siu pointed out how NFT games are good for countries with low gross domestic product per capital, as the ability to acquire NFTs and sell them on the secondary market can be a source of income. He said some games are focused on financial inclusion, allowing unbanked players to find a way to play, and that sometimes he is offered through player guilds like Yield Guild Games. I said there is also
“It’s a delicate balance that we have to strike, but generally speaking, I think it charts the right path,” Siu said.
He said Hong Kong will launch a digital asset policy that provides clarity. Siu said last year he saw a change about playing and earning games like Axie Infinity, but now there’s a pivot in talking about the fun of games.
He said game developers need to realize that people play for different motives, whether it’s to make money or for fun. However, a player who emphasizes one of these motives he should no longer dismiss the game in which he corresponds to one motive. And while some see play to innings as a slave model for indentured apprenticeship, others see it as a path to financial freedom.
“The ownership paradigm is more critical when people themselves start engaging in ways that they want to make money from that ownership,” Siu said.
Siu said the model on blockchain is interesting compared to free-to-play where a very high percentage of revenue comes from a very small number of players.
“What tokenization does is enable a way that free people can measure the value of the network effects they play, and then whether they choose to cash out or reinvest in new stocks and assets. said Siu.
He also said decentralization from Web3 means less profit going to the big platform companies. That money will not be used to make better games for game developers or players. If you give user acquisition money to a gamer instead, that gamer may put it back into the game economy. Wealth redistribution.
“Even if they only give back 10% or 20%, it’s higher than otherwise,” he said. “It’s a much healthier ecosystem. It’s really a rebalancing of incentives.”
Zhang asked how to protect digital property from hackers. Siu said that with responsibility comes ownership and education is the key. We need voters to make regulators think about the right policies and legal protections, not to mention better security. He also noted that NFTs may have security built in, and if stolen, they may lose the same utility.
“As an industry, we need to come together and maybe we need regulation on this,” said Siu. “Do you have a recovery button? Does anyone have the ability to take back ownership?”
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