The world of gaming just keeps getting better. Add to that the revolutionary aspects of blockchain technology, the future becomes even more exciting. In this episode, we take a look at the future of gaming as seen from KBW (Korea Blockchain Week). We have not just two but four amazing guests who are both shaking up and shaping the gaming world. Kyu Lee from Com2us shares the amazing growth of their company and their unique approach to Web3. Ed Chang, the Head of Gaming for Ava Labs, shares some of the highlights they are looking forward to, going beyond just being an NFT and gaming platform. Won Suh from WeMade takes us into their history, becoming one of the forerunners, not just in Korea but also globally, using blockchain in gaming. And Justin Waldron from Storyverse talks about how technology can connect people in many ways, specifically how blockchain enables collaboration and creates a unique platform for independent creators. From Asia to the world, today’s show is proof of the growing impact of blockchain technology on the gaming world.
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Exploring The Future Of Gaming At KBW With Kyu Lee From Com2us And Won Suh From WeMade
We are in Seoul, Korea, with Kyu Lee, the President of Com2uS USA. It's great to have a chance to talk to another Angeleno over in Seoul, Korea. I'm sure you've been here many more times than I have.
We have to travel all the way around the world to meet. Thank you very much for having me.
It's a pleasure. I've known some members of your team for a long time and have been excited to unpack your story a little bit more for our audience because it's interesting. We can go back to the origins of Com2uS and how you got into the mix and became CEO of the US division.
I joined straight out of college. Com2uS was called Gamevil back in the day. Gamevil was formed in the year 2000 by graduates from Seoul National University. We decided to build a game company. We have the best shot to make the first mobile game company in the world. Our business was struggling. We had to work with all of the carriers around the world. That's when I went to the US to establish relationships with the carriers back in the day. I went out to sign deals with AT&T and Verizon.
When the App Store came around, that's when mobile gaming went to the next level. Our business started growing. We went public. At that time, the number 1 and number 2 player in the market was Gamevil and Com2uS. Com2us was a company that we acquired. They were also a public company. We bought the founder's shares and created a hit title called Summoners War. It is still in service for the past several years. We've generated more than $3 billion of revenue from that mobile game.
It's over $1 million a day.
We've expanded beyond gaming. We started acquiring media companies, like the App Store brought all of the local Korean developers to the global stage, and made them unicorns. We were thinking that all of the OTT platforms like Netflix, Disney+, and all of those companies are going to do the same thing. We started rolling up a lot of entertainment companies.
In Korea or globally?
It’s in Korea. We're making investments everywhere. We have five public companies and about 40 companies that we directly control in the gaming and entertainment space. Because we're heavily invested in digital assets, it's obvious that we're interested in blockchain.
It makes a lot of sense. I appreciate all that context. You guys are keeping busy. Tell me a little bit more about the throughput in terms of the games you've created. Let's fast forward to your choice to create your own Layer 1, which I thought was a bold decision. It makes sense in the context of how you guys look at the potential here and what results have occurred there in terms of the types of games that you've created and the launching sequence.
In the beginning, we started investing in a couple of blockchain and crypto companies. We own the second largest shareholder of the third largest crypto exchange in South Korea called Coinone. We were learning the market. When we saw Axie Infinity and NBA Top Shot come out, we thought, “This is going mainstream.”
NBA Top Shot was what inspired us to do the show in March of 2021.
We have the number one MLB baseball game on the App Store. When we were looking at NBA Top Shot, we thought, “If that becomes a game, would the users play a game with digital asset ownership or without digital asset ownership? This is a huge threat to our business.” When we looked at Axie Infinity, Summoners War is a turn-based RPG game. Our game looks much better and more sophisticated than theirs.
If with more capital and human resources and if the game eventually gets better, it's going to be a huge threat to our business. We thought, “This is an obvious move that people will choose games with digital asset ownership over games without digital asset ownership.” We thought, “We're going to take this seriously. We're going to up our game. We're going to go all into Web3.” We said, “We're not going to be in the L-1 business.” We chose Terra.
It sounded like a good idea at the time.
Yes, because they didn't have a good gaming partner. We thought we could be the gaming arm for them.
They had a loyal, strong global fan base. The people talk about, in retrospect, the writing was on the wall, but the writing might've been on the wall, but it was an invisible ink.
The tech wasn't wrong. Cosmos was a great ecosystem that they worked on. It was a next-generation Layer 1. We betted into that. When the whole Terra collapse happened, we thought, “We're a big enough company. We're still early in the Web3 era. There are going to be many years ahead of us.” We have a lot of experience doing live operations, like running games as a service. If we can apply that knowledge, bring in the right people, learn the Web3 language in the proper way, and partner with a lot of good companies, we could do our own Layer 1. It is the conclusion that we came to.
You are calling it what?
It’s XPLA. It's the abbreviation of explore and play.
How many games have you launched so far? What are the plans?
We migrated the games that we had on Terra previously. The platform was called C2X. We migrated those games over and launched our new games. We have nine games already. The approach that is different from all of the other games in the market is we're not Web3 native because we still believe in the funnel approach. You have to go out and get the biggest amount of users.
If we're targeting 10,000 to 100,000 users, that's not fun for us. The reason why we come into the blockchain industry is because we want to convert everyone. We want to convert millions of users. Our approach is to start with all of the users that we have in the Web2 business and move them all over. Eventually, it will take longer. That's what we've been learning because the Web3 native games are focused on traders rather than gamers. What we're focusing on is gamers and educating them to be traders too.
What are the results? Can you talk about some of the early numbers on adoption?
We learned quickly that these are two distinct groups.
You have a lot of data to back up what you've learned.
We didn't want to overdo it. When we were moving our business from a package business to a free-to-play business, people needed time to adapt and learn. There are paid apps, and there are free-to-play apps. In between, there are paid plus in-app purchase apps as a middle step. We're taking the same approach. There are Web2 games and Web3 games. What we're doing is Web2.5 games. We're mixing Web2 and Web3. We're giving a flavor of Web3.
What's been the biggest success among the nine games so far?
We have a title called Summoners War Chronicles. That's been a big successful title. Even out of all of the games that we're servicing, it's the third largest game that we have. That game has done well. The amount of Web3 users is still a small portion of the whole game because you have to play quite a significant amount until you start being exposed to the digital ownership part. It's also restricted to a lot of countries due to the regulations. We're collecting a lot of data there. We're noticing what the hurdles are and where we have to improve. It's been a great experience. We're familiar with this because we had to go through the same steps when we were doing free-to-play.
It’s an iteration lean startup. What I've learned from this short time with you is, as I've done with my businesses, you guys follow an iterative Lean startup process. You approach every new business opportunity as almost like starting a company over from scratch. Is there something specific that you can point to that surprised you in terms of what did work in terms of the adoption where you didn't expect that to be such a powerful mechanism?
What we did learn is we didn't know the two groups would be that distinct.
It’s like twins from a different mother or father.
We also learned that certain countries, especially Korea, they'll go through many hurdles. There are certain countries where you throw a game at them, and they'll put out an Excel sheet with all of the odds of the got-you boxes. Korea is one of those amazing countries. They'll do all the math for you once you launch the game. It's a great test bed. Even for blockchain games, it is a great ground to learn from user behaviors.
What's next, and how have your plans for this migration over to Web3 evolved moving forward over the coming quarters and years?
One of the things that people don't know is there are two things I want to point out. One is it's hard to make a successful game.
If you could replicate your first game again, you would've done it by now.
We would've done it over and over.
You'd be bigger than Google.
Yes, but the fact is the biggest game that we created is a game that we created several years ago. Look at how many flops we went through.
You have more resources now, and you learn more. You'll get there. You'll do it.
The second thing is how long it takes to develop a game. When we first started mobile, we would develop six months to a year, and we'd pump out one game. Now, it takes three years to five years. For the better games, it's closer to five years. If you look at all of these Web3 startups that got funded in 2022 or 2021, it's great that they got funded with plenty of money. Those good games will take time to come out to the market. You'll still need to wait maybe a few years to see good Web3 games coming out to the market. That's when the healthy cycle of Web3 games is going to come out. I'm not saying it's going to take that long. They might have better teams. They might be leaner and meaner.
You are releasing new games. Is there one personal favorite among the games coming out soon you're excited about?
One game that we launched is a game called Minigame Party. It was one of the biggest casual franchises in Korea. It was a collection of thirteen hyper-casual games with cute characters. One of the things that I like about that is how I love mobile games because it's hard to find a gamer. All the kids, young or old or male or female, are able to play these types of games.
That's the beauty of mobile games. That's the reason why mobile games are more than 50% of the total gaming market. Blockchain games also have to address a huge market. The core audience may be easier to educate, but games that can reach a bigger audience are where it will bring blockchain more to the mainstream. We released that game, and it's a great game. I'd love everyone to check it out.
We'll share on our socials with our audience and encourage folks to check it out. This has been insightful. I appreciate the opportunity to get to know you and spend some time together. Where should folks go to keep tabs on Com2uS and what you guys are doing and stay in touch with your company?
We’re grateful to spend this time together. Thank you very much.
We are at Ava House, which is on this dope floating island. It was cool to come over here, besides the traffic and getting to know someone special in that ecosystem today, which is Ed Chang, Head of Gaming at Ava Labs. It's great to hang out, Ed.
Thanks for having me. This is exciting.
For those of you at home, Ed brings a wealth of experience to the team. He has a background as a Senior Director of Partnerships at Electronic Arts, head of business development at Streamlabs, and the founder of Basikz Agency. He's well-equipped to navigate the industry's evolving landscape and drive innovation adoption in the world of blockchain gaming, Ava Labs. Gaming has been the talk of town for this trip. It's easy to appreciate that with all the iconic IP and gaming history in Asia. It's worth asking this question. Why did you guys decide to do this event in Asia on this dope floating island? How does that relate to your focus?
When you look at the progression of how Web3 gaming has developed, you've seen a lot of investment from the Asian publisher side, especially in Korea and Japan, where you've got publishers like Nexon and Neowiz, Netmarble, Square Enix, and Goomy. These are storied publishers. They've bought into this crypto Web3 ethos more than their Western counterparts. Alongside a lot of the regulations and things that are being adopted and a general sentiment towards crypto, we think it's ripe for scaling up in terms of mass adoption. We were targeted as a company and not in gaming on the Korean and Japanese markets.
You've also seen that in the moves that we've made. The team traditionally has been in the West, but our first international expansion was in Korea. We've got Justin as our head of Korea and Roy as our head of Japan. They're doing a great job of spreading the word about Avalanche and bringing on some solid partners.
I'm excited about the gaming aspect. One of the companies that is doing something cool is Shrapnel. I got to experience playing a little bit of that game plan. It's a taste of a lot of cool gaming that's coming this way. In addition to the gaming and everything else, you have a ton of awesome content that's coming out. What are some of the highlights and things you're looking forward to as far as some of the things that Avalanche is moving forward?
It's great because it's not just on the gaming side. We announced a couple of big partners in Japan. They were focused on the loyalty point system across the 200 million potential users being represented. The tech and scale that we're excited about because we feel like you can only do that on Avalanche. We're announcing a DeFi protocol called Cavalry.
We've also announced a new NFT platform in the marketplace called Hyperspace coming to Avalanche. We're also going to be on stage announcing a new partner for a gaming program that we have called Arcade, which allows us to broker and bridge the connections between traditional Web2 publishers who want to learn more from native Web3 gaming teams and vice versa.
You also have a partnership with Rumble Kong. I'm a fan of the sports genre of gaming. It was an old-school Madden fan. Tell me a little bit more about Rumble Kong and what you guys are doing there.
We like that team. One of them was a cofounder of Sandbox, and the other one was a crypto native and NFT rental platform alongside other things. We've had a good relationship with them. We've been talking with them for a while. I also grew up playing games like NBA Jam, which is similar.
I played a lot of NBA Jam.
It’s like an ape-like theme. They've done a good job building a strong brand, traditionally on Ethereum. They've brought in some well-known influencers like Steph Curry and Paul George, who have wrapped the different gear and logos. They've got CA sports on board. They built a rabid following. As they're transitioning away from an NFT collection to an actual game, you need the scale, speed, and transaction fees that something like Avalanche can help with. We're excited to announce them coming aboard. It's going to be a gradual transition of how to get all the assets over. We're working a lot with them over time on figuring that out.
With the gameplay experience there, does the rarity of your ape have a lot to do with their performance on the court?
There are a lot of things to figure out. Gaming has moved towards more of a traditional free-to-play, even on the Web3 gaming side. The early games were like, “NFT is going to gate your access to the game.” If you're a game publisher, you don't want to limit that potential success. You need to hit critical mass. It's about how you get that top of the funnel as wide as possible. You can add on premium or premium features with NFTs.
I have picked up on that theme in conversations, especially with regulations varying by country. Some folks are making that experience around blockchain come later in the process, where you're already hooked in the game, and now you can take another level of stickiness to the experience.
When I started here, the conversation was similar to what Axie Infinity did with two tokens, and it was one token. Now it's like, “Do you need a token right for the game? Can you use a stable coin or the native coin of the platform?” A lot of interesting considerations that we are stepping through with all of our partners these days.
It's cool to see the evolution of even from what you're doing in gaming and figuring out how to bridge these pieces, making it more seamless and having that good experience. You have other initiatives going on. One of them happens to be the Avalanche Vista. There have been some great announcements that have been coming out with that. Can you tell us a little bit more about that?
The blessing and the curse of Avalanche is that we're not just an NFT or gaming platform. There are six verticals that we try to excel in. There's institutional, DeFi, and enterprise. Morgan, who leads our institutional efforts, has been doing a great job. There's this concept of RWA, which stands for real-world assets. We've announced a program with KRR, the massive private equity fund, about tokenizing one of their funds and putting it on-chain.
It's exciting. You have instant settlement and way cheaper transaction fees. You can think of a world where everything is on-chain and tokenized. You can easily transact those things back and forth. Vista is our first large initiative to help spearhead that, help handhold a lot of these large traditional finance companies, and bring them into this new age of Web3. With the toolset and the tech that we have, we're one of the only chains that can enable this at scale. It's exciting with all the efforts that Morgan is putting in.
In the South Korean market, besides gaming, you're also working with SK Planet. You had a big partnership there.
SK Planet, going back to this loyalty use case, has a loyalty program called OK Cashbag. This is something where it's got tens of millions of people who are using it in the Web2 world. They're bringing that into Web3. They're slowly onboarding all of these KYC users like actual, real use cases of your loyalty points on-chain. You can transact for other things and sign up for merchants.
That loyalty use case is massive in Asia, even more so than it is in the Western world. It's the start. There are a lot of other things we're talking to that team about. SK is one of the biggest companies in Korea. It's a great first massive announcement to the world that we're taking this market seriously and we're going to be here for a long time.
That's a good distinction and something I want to spend a quick amount of time on, which is a lot of emphasis on how you can grow in the Asian markets and learn from a lot of active pieces that are different than the Western side. From the loyalty standpoint or different interactions that happen over here versus what happens on the Western side, be able to learn from that and take it into other parts of the world. What do you say is one of the biggest things that Avalanche has learned from being here in Asia and being able to take some of those lessons and apply them to the rest of the world?
One of the first things is having a dedicated career team in the market has been helpful. I’m getting to know a lot of the players. I’m spending a lot of FaceTime with them, building a relationship like other markets, but having boots on the ground here with localized language support has been helpful, like helping partners like SK and others to get up and running and get help quickly.
On the marketing side, the way you're going to market to a Korean market is going to be different than the way you market in the US. Our team understands a lot of those nuances. We have tried those things and figured a lot of those things out. On a larger level, as well as crypto adoption, people here are a lot more open when they hear like, “This is an NFT. This is on the blockchain.” It is great because the Asian market has a much higher penetration than the Western market in terms of crypto adoption.
You are underscoring a key part of all this, which is the importance of being on the ground, having those face-to-face interactions, and breaking down barriers that way, especially in cultures where that's the way that business is done. It's not done via Zoom or Twitter DMs. It makes a lot of sense. Is there anything on the roadmap here in Korea or, more broadly, that you're particularly excited about?
The interesting thing on the roadmap side is Avalanche is one of the first out there to develop this app chain thesis. The white paper several years ago talked about this subnet feature that we have that allows you to flow your own private blockchain at the top of our main chain. For a long time, it was speaking about a blueprint where partners would be like, “That sounds cool.”
We've got a ton of supplements and deployment. We've got ones like SK, Merit Circle, and Shrapnel. People are seeing that vision. Other chains are taking notice. A lot of them are trying to fast follow the app chain thing. It's been great for us because the value prop is we've always said this is the future. This is our make-it-or-break-it. It's going to be subnets and horizontal scaling.
Stay tuned. There are going to be a lot more cool developments around subnets, things like AvaCloud, which we've announced that allows for one-click submit deployment. There are a lot of cool custom features that allow you to deploy your chain within minutes. That stuff makes it easy for a traditional noncrypto native developer to get up and running as fast as possible.
There are some pretty meaningful benefits from a security perspective, a privacy perspective, or a control side of things that enterprises and game publishers are looking for where they want to beholden too much on someone else's platform or technology.
Even beyond that, the analogy we use a lot is freeway. A lot of these monolithic chains are large freeways, but eventually, there are all these different cars and DAPs. There are times when there's going to be traffic, and you're beholden to the masses. Whereas with a subnet, you have your own private freeway.
You can set the rules like speed limits and traffic rules. You can control that flow and what the tolls are. What's great is the things that are happening on the mainnet don't affect the subnets. The privacy part, the speed, and the customization, especially for a game developer or a developer like SK, you don't have time to think about what's happening with the rest of the world. You're busy building your business.
We were on the other side of Seoul. We're going over in traffic. The bridge is clogged. We get here, and now we're in this beautiful floating island oasis where it's Avalanche swag and tasty food cookies with the Avalanche logo on them. I get it. It's your domain to do what you want with it. If you could have some little cost for me to get over this jet lag, that would be great.
One other thing I wanted to bring up is when you all were planning this event. They had the flooding that happened that put a damper on things. How does it feel to be here fully and have everyone here on a nice, beautiful day? Like how are you feeling with everything going on?
It feels good. We're known for a lot of things. One of the things that's awesome that I've noticed is that our events team did such a good job putting on great events and content. It was such a shame in 2022 that they weren't able to showcase the full power. It was impressive in flipping on a dime, switching the venues, and doing a one-day event, but this day is the pinnacle of all the planning from 2022 and 2023. They knock it out of the park every time. It's great to be here.
Where can folks go to learn more about what you guys are doing in the gaming realm more broadly and maybe get in touch with you if they want to do something on the gaming side?
Our Twitter handle is @AVAX for all things Avalanche. We've also got a gaming-focused Twitter. It's @GamingOnAVAX. You can send a DM to that account. My personal account is @EdC. DMs are open. I’m looking forward to hearing from anybody who might have questions or wants to talk about their project.
Thanks for having us. It's great to get a sense of what's going on in your world. I look forward to hearing more in the future.
Thank you so much.
It's the first day of the official impact conference at Korea Blockchain Week. Richard and I are here with Won Il Suh, the Executive Vice President of Corporate Development for WEMADE, one of the major sponsors of the event. They're doing so much interesting stuff in gaming, Web3, and blockchain that we wanted to sit down and have a chat. Thanks for joining us, Won.
If I may correct, it's not one of the biggest. We are the biggest sponsors. I’m putting it out there.
This was an important event for you guys. We'll talk a little bit about that. A little bit about your background first for those who are getting to know you for the first time. You have a range of experience in gaming, spending many years in the last decade overseeing global business development for WEMADE. You've experienced a lot of seismic events taking place in the evolving sector. That is an understatement. It's been a dynamic place.
Previously, as CEO of Nexon in Korea, Won played an instrumental role in launching some of the biggest innovations in the gaming industry, including the world's first free-to-play game and the first graphic massively multiplayer online role-playing game. He continues to focus on important areas in the gaming industry, including free-to-play, IP, and artificial intelligence. We should get into that because we have a new show, Edge of AI.
I joined gaming in ‘96. I started as an intern at Nexon, one of Korea's bigger game companies. I've been in this industry for a long time. What I like about blockchain and Web3 is that Korean game developers, in the mid-late ‘90s until maybe the early 2000s, pioneered online gaming. Before you'd retail games where you'd buy CD ROMs and you put them into your disc player, and you'd play the game or your console, we decided, “We've got the internet. Why not distributor games through the internet as well as make online playing a part of the gameplay itself instead of maybe matchmaking.”
We came up with new ways to monetize because your data was saved on the server. If you spend money to play stuff, you can go to another PC or another country. If you access your account, you can still have all that information. Being online changed how you design games as well as what you can do with games and how you can monetize games. I've seen that for the past several years.
What got me and WEMADE excited about web3 and blockchain gaming was there are a lot of similarities where this technology enables a lot of different things. One way to do it is you take a retail CD ROM PC game or a console game and you add an online component. You have multiplayer. You have some small online things. That's what's happening with blockchain right now. We are using what information we're storing on-chain versus what's stored on the server side. We still have maybe 10 to 20 years to go until we fully utilize this technology and how we design games.
That gets me excited because I've seen this trend happen several years ago. Korea, fortunately, is a small country. We're wired and connected. We were able to leap ahead compared to other countries and other companies. I see WEMADE as one of the forerunners not just in Korea but globally using blockchain and gaming because WEMADE, as a company, has been around since 2000.
Tell us a little bit more about WEMADE and WEMIX. Give us more of an overview of where you guys are at at this time in terms of size and scope, the number of games that you all support, and power.
I like to talk about what we do. Please interrupt me with more relevant questions, and I'm happy to revert back.
A general overview is helpful because you guys are unique in the overall gaming ecosystem, and that context was valuable for our readers.
As a company, we started several years ago. We started making PC online games. We're the first generation of PC online game developers in Korea. We've developed a lot of games. We have a game called Mirror, which is like the World of Warcraft in China. We were one of the first companies there. That's a huge IP for us.
In the last several years, we've developed games from PC. When mobile was happening, we dove into mobile gaming. We have different companies developing a lot of different mobile games. As we see the industry changing, Web3 is new. We’re like, “This is where gaming can excel.” We were a game company first using blockchain technology to make the gaming experience better.
When did blockchain come into the mix?
A few years ago, we made an investment. There was an internal team. There were 2 to 3 guys saying, “We think blockchain is going to be important. We want to do something about it.” The company funded them with about $1 million, saying, “Here's a little seed money. Start and do your thing.” We were interested early on, but it wasn't something that we knew was going to change the world.
As we saw that team and technology grow and the landscape changing, we realized, “We've got something here that could be beneficial.” A few years ago, we used that chain and the technology we had in one of our games, MIR4, which is one of our bigger IPS. We went free-to-play P2E at that time. We don't use that word so much anymore.
We had about 1.5 million concurrent users when we launched using blockchain. We realized, “There are many things we're learning and our gaming community likes.” We've gotten users from Brazil, Southeast Asia, parts of Europe, and parts of Africa where they probably wouldn't have known about this IP, but because we have blockchain technology and there were some benefits that we thought we were able to give to the users, we had a lot of interest from non-traditional WEMADE fans.
That got us to that year like, “We've used this technology.” We've invested in blockchain. We have blockchain programmers. We know how the ecosystem works and write smart contracts. We realized, “If we can give this value to other developers around the world, and they don't need smart contract developers and know that they need to audit their smart contract with a certain company, all of that stuff will do for them because we think this is going to bring value to game developers.”
We decided at that time, “We're going to become a platform and make our SDK available for a lot of different developers.” If you're a Web2 guy and you want to do something on the Web3 site, and you have no idea how to do it, not NFTs but also tokenomics design, we'll work with you on that. For the last several years, we've been creating a platform called WEMIXPlay.com, which is our site where we've signed about 120 games. We've launched about 30 games. Roughly, we're launching about 3 to 4 games a month. We are a platform. They're not all our games. We have about 7 to 8 games that are own. The rest twenty-something are third-party. That's what we're doing.
You have many years of experience. You take that and start diving into the blockchain. You turn it into an SDK. A lot of developers and people who are coming into this space don't need to know how to write smart contracts, how to do all of the NFTs, and how to set up all of the different ways that they could be utilizing these in the game. Now that you have this platform, people are coming and growing on this. There are a lot of different directions that WEMIX can go. What are some of the things you're looking forward to in some of the games that are potentially coming out that you know are in the background but are excited to see some of these new releases come out?
We have games that we're onboarding. Some of these games are Web2 games that are slightly added to Web3 components. There are some slight tokenomics or small NFTs. There are games that we're designing from the ground up and third-party games that we've onboarded that are starting as a Web3 game and how they use this chain.
One of the bigger games we've succeeded in is launching a game in Korea called Night Crows. This is an MMORPG and Unreal 5. It’s a beautiful game beautiful. You can see it's been the number one RPG for the last couple of months in Korea because we've launched in Korea only. We're going to launch the global version. The goal is within December 2023 or early 2024. This is going to be using all the know-how that we've accumulated with blockchain, launching 30 to 40 games.
Why did you start just in Korea?
In Korea, we have a regulation where blockchain gaming is not allowed for some reason. The Korean government is going to come around. They're careful because Korea is a country where, unlike the US, where you have ESRB, and you get a rating. In Korea, you need the approval of a government agent saying, “You can release this game.” All Korean games are released that way for the Korean audience. For blockchain gaming, there is no process yet. You can't get that approval in Korea. That's why, in Korea, we have a regular in-app purchase and free-to-play model, but going overseas, we're going to add our blockchain into it.
It gives you a chance to battle tests and learn what users like. You have this unique longitudinal perspective on the space. In the last few years, the industry has evolved a lot. What are some of the macro trends that you all see that might not always get discussed publicly in terms of the types of games that are popular type, how the user base is changing, and how the industry is evolving?
It's a tough question but a good question because there are seismic shifts like blockchain, but there are shifts in the way demographics are. In 2022, I've seen more hyper-casual games. Their business model is ad-based. Several years ago, you developed a real game. You spend 30, 40, to 50 hours and, in RPGs, 100 hours playing. A lot of these games that the developers that I've been meeting with, those type of games that I've talked about, because they require a lot of funding and a lot of resources. They don't want to spend three years of their lives with a 100 to 200-man team developing something NFF flops. It's a huge flop.
On the intention side, is the attention span of audiences changing? I feel like people had more time on their hands during COVID. Now, they're working out again, going out to dinner, and finding more things to do with their time than gaming. Has that impacted the types of games that people play and how they play them?
That has had a major impact. The way not just gaming has changed, but how the younger generation interacts with their smartphones. When you're traveling, even mobile games, you see the highest peak concurrent numbers when people are commuting to work on the subway or the train, when they're getting off work, and before they go to sleep. We generally see these three spikes.
With the younger crowd at school, they've got 5 to 10 minutes to play. If you play an MMO, it's not going to work, but they do want access. Because there is this thing in your hand where you can have internet access on a beautiful screen, the social shift towards being more interactive with your cell phone is probably another reason why this snack-sized gaming is happening.
You stereotype me. I'm that guy that might play 1 or 2 quick sessions in the morning, hang out after work, and watch TV with my girlfriend. She goes a little earlier, and I'm playing a couple of sessions before I go to sleep. I don't know about you, Richard.
I do a lot of mobile gaming, but I also do a lot of consoles. One of the largest challenges with the free-to-play model is getting to the point of conversion. Getting people over to start using is a dynamic that the Web3 model hasn't been able to figure out. It sounds like through your experience and what you're seeing over WEMIX, you are starting to crack that code. How do you think that's going to continue to evolve as attention spans are changing over time and you're seeing these trends start to happen?
This is something that everybody in the industry acknowledges. We need to make onboarding easier not just for Web3 games but also for having a wallet that needs to change. It needs to be more seamless. It's not us doing something like that. It's the whole ecosystem where we need to get better. I'm sure. It could be six months or six years, but during that timeframe, it will become a lot easier.
In a couple of years from now, do they even need to know what a wallet is until they need it? People talk about this. They're like, “Yes, that's true.” How do you implement it? Where is the use case of needing a wallet? If you're not on the DeFi side, gaming is the biggest touch point of where you need a wallet, but you don't need to know you need a wallet until you're into the game.
We're designing things like that. We've made investments in companies that say, “We're going to try to solve that problem.” There are a lot of good companies and great minds working at it. That's going to be cracked. If you look at Netflix or other media that's changing because of the short attention span, you need to be aware right away. If we read a book that's 100 years old, it's slow buildup. If you look at Netflix, for the first 30 seconds, you've got to be hooked into the thing. It's the same thing with digital art or digital animation.
The game developers now are generally older. They're maybe in their 30s, 40s, and 50s. We need to change some of the ways we develop our games for that first 30 seconds or have that wow moment early on because I think a lot of mediums and not games are catering to their audience that way. It's that our developers are of an older crowd. They don't value that as much. People are going to realize that. There are games where you don't need to do anything. You go into the game. TikTok is a great example. There’s no sign-up, and you're into it. It’s the same thing with games. That's going to be coming.
There's a good blend between dynamic storytelling and someone getting wrapped up in what's happening in the world that's being created and how they can keep going deeper and exploring that. There's also the person who wants to jump in and immediately start getting after. With all the different 30-plus games that you have and more coming, what are the trends you're seeing that are resonating with a lot of people? Is it the mobile games that are fast action? Is it the dynamic storytelling? Is it a blend of both? What are you seeing from a gaming aspect that's starting to resonate with people?
It changes from time to time. Several years ago, RTS was a big thing, and MMOs have always been there as their hardcore MMO players. You've got casual MMOs, hybrid MMOs, and different genres of games intertwining with other genres. There are still hardcore gamers. We like those guys because those guys appreciate their game. They spend a lot of time and effort and a sizable amount of money. For those guys, Web3 is going to be beautiful because it does fit into them. The developer is acknowledging, “You are not a gamer. You are part of the community. You make this happen. You make not the gameplay but the community and experience.” Those guys are great with Web3.
There's a trend of snack size or the short attention span gaming. Those guys add value in a different way. If you have a brand, and it could be a non-gaming brand, and if you want to be more immersed or interact with gamers, there are those shorter attention span games which your brand can have a connection with.
People are going to realize even more how much of an impact gaming has on everybody's life. If you're a gamer, that doesn't change. I've played games since I was 7 and 8. My mom broke our TV at home because I played too many games. Little did she know this was going to be how I earned my keep. I’m playing games for another several years until my eyes go out.
With what you said, I want to expound upon it a little bit. This idea of non-gaming brands and having exposure in the gaming world, whether it's through creating their own game or having in-game assets and another game, and how that relates to broader Web3 adoption as a whole. Are there recent major brands that have come on board directly or indirectly into your ecosystem? What's that experience been like for them?
Yes, to the first question in Korea, because gaming is such a big part of the Korean community and culture. There are huge brands like Samsung, Hyundai, and even big local brands. For example, you can go to a convenience store in Korea, and there are tens of thousands of convenience stores everywhere. You buy a drink, maybe a Coke or a soda. We have collaborations with these drink companies where you buy something, you enter that code into our game, and you have a chance to win something at Night Crows, the game we're servicing now. We have this with drink companies and other variety of companies.
Korean companies are aware that there are branding opportunities. I do see this with other big global brands. Some of the French brands have done something for a league. Louis Vuitton did something with them. There are interactions, but they don't realize how big it could be. It doesn't have to be super fancy and expensive. There are lifestyle brands that could do more with the gaming crowds because this is how they can build up their brand.
We've experienced it personally. I've shared the story before with our readers. One of the key moments in our lifecycle was when Animoca Brands collaborated with us after Yat Siu came on the show. We had an in-game Edge of NFT racing car in their REVV Racing game. Before I knew it, it was this beautiful cross-pollination of our audience and their audience and thousands of race cars riding around. That was an a-ha moment for me. There is a lot of potential there. Before we wrap up, I wanted to cover AI because I know that's part of your innovation. You guys are pushing Danielle, and I don't know if AI and gaming get talked about enough. What are some of the use cases you're applying right now with AI? What are the use cases that you see moving forward?
AI will change many things in the world. I'm a huge believer in AI and what it can do. It raises productivity. There are a lot of worries and naysayers about how it could negatively impact us. I'm sure there's that, but there are many other good things. In regards to gaming, we have developers or producers and studios that we own that are generating our content. You have faster prototyping. It saves time and money. There's all that going on.
We know of companies that are using NLP models to build them into their bots or NPCs. Because you've got speech-to-text and text-to-speech, all of that is becoming closer and closer. When you do quests within games, you press buttons, and you see the menu, but as I'm talking with an NPC, it is going to say, “Won, we think you should do this.” It'll be interactive.
A lot of that technology is already there. Game developers are solely implementing that. Maybe we need to implement more different parts of the AI puzzle into a single game because a game is not a single art. You need art, music, graphics, and storytelling. AI could have a huge impact on how we develop and how we interact with games. Several years from now, if you don't use AI in game development or part of gameplay, you've lost out.
A game is a symphony. You have many beautiful parts of it. Having all of those different instruments of the game and bringing it together is what makes it the beauty that is a game and makes people want to come back for more. I agree with you on the NPC side. That is one of the biggest areas where AI can come in and dynamically make games much more life-changing. If you had to pinpoint from the AI standpoint besides NPCs, what are probably going to be some of the most direct impacts from the gamer side of things that they're going to start noticing?
It could be in terms of content generation. As developers, hundreds of us make games and content. We did a major upgrade several months later. The content is consumed in three days or six weeks. There's always the battle of making new content for your users. Because we can shorten the content generation time through AI, users will be able to feel and play more content or have new content accessible. It'll make it more fun.
If you don't have that content, you have the social and online aspects. I'm happy talking with you guys online. In terms of content, that's going to be a big part. We might see a lot of smaller companies without the resources of $50 million or $100 million trying to make AAA games. They can reiterate, make small games, do a kickstarter project, put on a small launchpad, get quick feedback from the user base, and quickly build on top of that. All of that is going to be enabled by AI.
Before we wrap, you mentioned one big game coming out in December 2023. Can you could elaborate on that?
That's the Night Crows that I talked about. It's going to be a big game. You can Google or YouTube us. When the game comes out, we think we should be able to do a minimum of 2 million concurrent users. That's the record of all Web3 games.
Won, it is such a pleasure talking to you. Where can folks go to get more involved in WEMADE or WEMIX and follow what you're up to?
I primarily focus on our gaming side, but come to WEMIXPlay.com. You'll see all the games we've got coming up. If you're not a follower, you can follow us on Twitter and all the other good social handles.
Thanks a lot for your time.
I'm hanging out with all sorts of cool folks, including Justin, who I've been looking forward to getting to know better for a long time. I know a lot of your team, and it's great to have you on show.
It’s great to be here.
For those that don't know Justin Waldron, he's the CEO and Cofounder of Storyverse as well as the Cofounder and resident of Playco. They are headquartered in Tokyo. He has a prolific track record as an angel investor in over 60 companies. He's a distinguished entrepreneur. He worked with a prior venture, Zynga, based in San Francisco, which attained unicorn status.
In recognition of his achievements, Business Insider honored him in 2021 as one of the top 100 seed investors. He is revolutionizing the world of NFTs at Storyverse, which is exciting. What Storyverse does is empower users to effortly craft, animate, and distribute their narratives through digital collectibles, all while providing intuitive creator tools that require no coding experience. It is a decentralized community-driven platform that provides users with the tools to create, publish, and play interactive experiences and games called Stories.
Users can own their own Founders' Pass, which are NFTs to provide the holder early access to features within the Storyverse ecosystem that have different characteristics and attributes that would impact its value. Utility is a big part of the conversation around where NFT goes. I understand you guys have played a pivotal role in terms of giving all these PFP projects more spots. That's exciting. What does the world need to know about Storyverse and understand how it all started and where you guys are going?
One of the things that has always been my focus is how technology can connect people in new ways. With Zynga, when we started the company, we asked ourselves, “What should games look like if you can play them with your friends on social platforms?” We designed all of our games around that idea. With blockchain, a lot of people forget that it's the human coordination technology. If you think about it, it's a way to collaborate with other people without an interface, like social networks were a way to collaborate with people within the interface. Blockchain is an interface list way of collaborating with people you may or may not know permissionlessly.
I love the term human coordination interface. I don't think I've heard anyone else say that before. It makes a lot of sense in terms of the fundamentals of what we're doing.
It's less about where the buttons are on the screen, the pictures, and the people you're interacting with. It’s more about the wallets, the incentives, the way that we show up, and what we have to bring to the table. What we got excited about with the NFT projects was that they have amazing art, strong communities, and a lot to bring to the table. We see, from my background in games, that having these characters is a huge asset. Everyone has been excited about when these projects are going to ship some games.
What I started to realize is that the communities weren't set up or equipped to go and ship those games. We started to try to solve that problem through technology. The idea is that if you hold these assets, even if you don't want to make the game, you can put the assets into our platform. If you have a Bored Ape, CryptoPunk, Pudgy Penguin, Azuki, or the most famous IP out there in the Web3 space, you can put it into the platform. Creators can come with our tools and make games with those assets.
You can see Azuki games finally, and not one Azuki game. You can see hundreds of Azuki games because the holders have commercial rights. They can publish them. The creators and the IP holders can make money. It's finally letting people realize this idea that's been around the space for a while, like decentralized IP. If you look at IP, games are the biggest category. It's an exciting unlock if we can prove it out.
Is that the sole focus, or are there other use cases for using this IP and these characters that you have in mind?
Games are broad.
That will keep you busy for a while. I'm curious about other ideas that are percolating.
It's games that we're most excited about. The reason we're excited about games is games are now, as a lot of people know, bigger than movies and music combined by multiples. These characters are the types of characters you'd like to see inside games. What we realize is that in the NFT space, people want to support independent creators.
If you look at artists and musicians who are succeeding, these are people who put out their own collections with their names behind them. We want to be patrons and support them. That's missing from the game industry. The same transition we saw with YouTube and with Spotify more toward independent creators. We think that can happen in games. This is a way or path to making independent creators have the backing of these huge powerful communities behind them.
I'm curious to what extent some of the ideas that you had at Zynga are now able to come to fruition. Did you see this type of opportunity from customer discovery with your gamers and Zynga that they wanted to do and create their own games? When you got into the world of Web3, were the conversations you were having with the community that made it clear to you that they wanted to create games? Did you intuitively know this is the obvious next use case for Web3? It's clear now that gaming was a huge part of it. When you started the company, I don't think that was the talk of the town yet.
Gaming was coming on the radar. A lot of the projects are still looking like traditional game projects with blockchain elements. There's a lot of exciting stuff going on there. Fundamentally, what I've got most excited about in NFTs is this idea of the individual creator. We're seeing the internet trend in this direction. We're seeing the tools get more powerful. The question is, if it won't be one giant AAA company that makes the Azuki game, it could be hundreds of people. How do we facilitate that happening?
I don't think every IP holder wants to be a creator, but they all want to see their characters in a game promote the game. They all want to be involved in different ways. What we're trying to do is let the individual, passionate person stand out and have the tools to do it for free and efficiently with the IP and the communities that are there.
You picked up on this trend and opportunity from your previous experience in getting involved in Web3.
At Zinga, what we saw was that a lot of the games we made were games where people could express themselves. Even in games like FarmVille, if you told them, “Design this space,” they would say, “No way.” It's a blank canvas. It's intimidating. What we did was create the gameplay that got them going in a way where they were, little by little creating the space. Before you knew it, people who thought they didn't have any creativity created some amazing things.
The learning that I had from that experience was that everyone is capable of creativity. From when we start to grow up as children, it's something we draw and imagine things. We tend to lose it. One thing you can do in games that's interesting is pull that out of people by making it easy, playful, and fun again. The creators we're working with are serious. These are people who are Hollywood writers, and we see it as artists who never had a native business model on the internet until blockchain.
For several years, we had the internet. You couldn't sell art online, and NFTs came along. Art is on the blockchain. It's on the internet. That's what happened with games. Zynga brought premium to the rest of the world. That was a big deal because, before that, you didn't have an internet native business model for games. This idea of free games with in-app purchases is what unlocked games for the internet native consumers. We think writers still haven't had a way to bring their content to the internet in a way where they get paid.
I was one of the first investors in a company called Substack. They do a lot of writing that's around people who have some advice to offer or analysis, but not a lot of creative writing. It's hard to sell creative writing in that format. What we realized is that these writers are on strike in Hollywood are angry. The artists and musicians were angry who used this technology to create new opportunities for themselves. We think those people can be the content creators who create games and give them the opportunity to work with the best IP.
We're big users of Substack for our newsletter. It's been great for us. Thank you for your support.
I have a little to do with it, but it's a great team.
LP still makes a big impact in our world of starting companies in the US. Let's talk a little bit about character passes and the core assets of your ecosystem. What are they all about?
Character passes are for these people who hold top-tier NFT collections. They can show up on our site. We can validate that you own a CryptoPunk, Bored Ape, Pudgy Penguin, and Azuki. These collections everybody knows and loves. When we validate that you own it, you can give permission for it to be licensed into the platforms so that other people can create content with it. If they create content with it, you will get part of the revenue if it's revenue that's generated for it. That's all happening on-chain.
It allows for co-ownership on-chain. If you're the guy who wants to be more of the silent LP like you are with Substack, you have the ability to do that and still get a dividend.
It's a free mint. We're seeing all sorts of people get involved with that. Some of them are saying, “I don't want to contribute the art that I love that I have the right to.” They're also saying, “I want to be involved a little bit creatively. I want to work with the writer and creator to make something bigger that I have input in.” Some of these people also have a large distribution. They're people who are well-known on Twitter. They have some of the biggest accounts associated with Bored Apes or CryptoPunks. Their character is starring in the game. They're going to be promoting these games. They're also a part of the marketing.
To do that without that type of platform is a lot of work. By the nature of it, you're constraining the creative possibilities because you can't talk to everyone who might have an idea that you'd be interested in working with.
The other thing that happens is all these characters are rigged and animated in this game engine that loads instantly on the web. When you show up with any Bored Ape, Mutant Ape, CryptoPunk, or any of these collections I talked about, not only do we recognize you have it, but it's immediately in our engine with hundreds of different animations. A creator can go, pull it in, and make content with it. We're not saying, “We're giving permission to other people who can go and have to figure out how to do all that hard work themselves.” We're also providing the tooling to make it easy for the creators to do something with these people.
We've got a bunch of mints coming up. A lot of the creators are ready to start minting their collections. These games are going to be fun. They're playable NFT games, which is not so common in this space. If you think about things like Art Blocks, we like to think of what we're doing as Art Blocks for games. If you think about what Art Blocks has enabled generative artists to do, you can use their platform to publish your own NFT collection, but it's still got your name on it.
Everyone knows Fidenza is by Tyler Hobbs. He wouldn't have been able to publish that collection without Art Blocks. We're enabling a lot of amazing writers, like people who have great backgrounds in Hollywood, to publish their own NFT collections for the first time where they have a game that, in some cases, is going to have rewards. We look at something like what you could do with Dookie Dash. We think that's cool. People competed to play this game for about a month. At the end of it, somebody got an NFT. That NFT ended up being worth $1 million, which is nuts. That's Yuga for you.
We think if creators could do that on a smaller scale, that would be interesting. If I can make a game and my closest followers in the community on Twitter can play that game, it features all the IP we love, and at the end of those couple weeks, there's somebody wins the NFT or some of these prizes, that's an interesting model to get people engaged, playing and having fun with these NFTs beyond only collecting and flipping based on rarity.
I have all these ideas in my head now, like an Edge of NFT game at some point. I'll have to figure that out. Before we wrap, I want to touch on the fact we're here at Create Blockchain Week. Shout out to these guys who put on a great event. Why is Asia important to you? I know you guys are doing some other stuff in Asia. What's the significance of Asia to what you're building?
I've been based in Tokyo now for several years. I've been in Asia for a bit. For someone in games, a lot of the history of games in game development is centered in this area. As NFTs start to grow more in this space, it's going to be a key place to keep an eye on. When it comes to IP, a lot of the world's largest IP comes out of games and out of Asia. For us, we're seeing a lot of these brands come to Asia, and they're trying to study how we do toys and how we do other forms of media. They want to meet with these companies that have been doing it for years. This is going to be a key region for the next couple of years.
Enjoy your time here in Korea. I’m excited to keep tabs on what you guys are doing and stay in touch. I’m excited about the direction you guys are heading and the potential utility that offers the space more broadly for creators in particular, especially around some of the challenges with Hollywood and creator royalties. You're giving them a path there. That's great.
That's what it's all about. Technologies unlock new opportunities for people. If there's one thing we can do, it's hopefully bring a new class of creators online. Let's unlock the opportunity for writers and new types of game creators that didn't exist before.
Where can folks go to keep tabs on what you guys are doing and stay in touch?
Thanks, Justin. I appreciate your time.
Thanks for having me.