Gaming products are a huge part of the entire playing experience. Acquiring tons of equipment, creating an extensive wardrobe, and customizing your in-game character is indeed an exciting journey. But isn’t it thrilling if you can transport these items even in real life? In this Outer Edge Live Twitter Space discussion, Daniel F of Howl and Zach Sekar of Outer Edge LA lead the conversation about leveling up gaming through Web3. Joining them are Actor and Director Carlo Lorenzo García, Scott Mitchell of Brawler Bearz, and Jake Meany and Ivan Alexander of Howl. Together, they discuss integrating dynamic NFTs, blockchain, and crypto when creating gaming products, allowing players to enjoy cross chain compatibility and solidify their digital identity both in-game and IRL. They also talk about why Web3 should adopt better terminologies when talking to traditional gamers, the regulatory challenges of Web3 integration, and which of the big companies right now would most likely lead the creation of a fully developed web stream space.
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Listen to the podcast here
Outer Edge Live Twitter Space: Leveling Up Gaming: What To Consider When Building Web3 Gaming Products With Carlo Lorenzo García, Scott Mitchell, Jake Meany, And Ivan Alexander
I hope everybody is doing okay. It's another Twitter space and another amazing conversation on Web3 amazing topics. I have the pleasure of being joined by my usual anchor Zach Sekar Cofounder of NFT LA. How are you doing?
I’m doing great. Another lovely day. We are talking about games.
Do you know what's funny about this? Right after this Twitter space, I'm going to see it and enjoy a little session of gaming myself. The perfect preempt for my lovely evening. Alongside Zach Sekar, we do have some amazing guests as well. Let's give a warm welcome to Carlo from Brawler Bearz. How are you doing?
How is everyone doing? Thank you so much for having us. I appreciate the opportunity to talk about doing a little level-up on gaming, especially when it comes to the blockchain.
I thought we had some other people from Howl here. I think I saw Jake or it’s just Twitter being Twitter. Let's kick off the conversation right now and let's start talking about the future and how these two topics can intersect. Let's start by talking and discussing how Web3 is changing the landscape of gaming. There are a lot of things going on in this topic in particular. I wanted to get over to you, Carlo, and see what you think about this. What do you think the future looks like?
We are only scratching the surface. We are seeing so many projects starting to explore the possibilities of what it means to utilize blockchain for on-chain gaming or in terms of decentralization of gaming assets. We got to talk about the advantages of doing this. We have a long road ahead of us in terms of reaching out to traditional gamers to introduce them to the benefits of utilizing blockchain for gaming activities.
It's going to be an uphill battle. What's exciting for me is the pioneering that's happening right now across so many projects, ourselves included. We have started to explore what's possible Scott Mitchell is the Dev and Founder of Brawler Bearz. He's joining us here too. He's been doing coding for a very long time. I will let him speak to it himself, but utilizing blockchain for even what we are doing with passive gaming is exciting to see, especially when people start utilizing and realizing the advantages of what it means to have things on the chain
The personalizations and customizations that you can do, having ownership over your evolvable character and your base character, and all the in-game assets that you have earned from playing within whatever ecosystem you are playing. I'm excited. We are just scratching the surface. We are right at the forefront of what's to come in these spaces. We are building or laying the groundwork for what's to come.
I agree with everything that you said. I want to use that as a cue to introduce two more people here. We have Ivan. He is the CEO and Cofounder to Howl. We have Jake who is the Marketing Director to Howl. Let's start with you Ivan. How are you doing?
I'm doing well. I'm glad I could join the space mostly because my flight has been endlessly delayed. I'm in transit, but I wanted to be here even if only for a little bit, and get a chance to hear Carlos speak. Let's do it. Also, I couldn't miss out on talking about video games and NFTs.
We are one of a kind. I know Jake also couldn't miss a good video game talk. How are you doing, Jake?
I'm good. I'm always up for a video game topic. You add Web3 to the mix and I will be there. I'm curious about how you all came about approaching the gameplay functionality because we have seen some backlash for Web3 gaming. It doesn't always have the best taste in everyone's mouth, and how did you approach how to make the game, and how to make it an enjoyable experience that leads to that generational gaming?
Scott, do you want to chime in on this too? I know that you have put a lot of thought into this from a dad's side of things and not having a lot of time, and taking this card-based WoW-RuneScape approach to the whole gaming ecosystem.
I'm Scott. Nice to meet everyone here. I'm excited to see how we can talk about games and Web3. From Carlo’s point, I am a dad. I don't have much time. I still get some time to play enough FPS games like Valorant. For me, it's all about casual gaming and then being in my middle 30s is a lot of nostalgia with retro games and click-and-play adventure games on SES or just that retro theme.
Brawler Bearz spurs it out of that and a combination of that, leveraging and utilizing the core tenets of blockchain, which are the longevity of the permanence, providence, identity ownership, and all these core tenets that we are here on the blockchain for. We try to incorporate all of these aspects into our game. Some of the biggest backlashes with Web2 world and Web3 is the Web2 world sees us as a scam. There are unfortunately a lot of scammers and a lot of opportunists out there.
In our position at the gaming forefront, we are not a AAA Studio. We are not backed by a studio, but a lot of the concepts and technology that we have built could certainly be leveraged in a AAA game. Our dynamic composable NFTs offer that customization, and I think that every game will probably have one in the future.
We don't care too much about the graphics on our side. For us, it's more on the strategic side and it's more casual gameplay. We are coming out with a Roguelike Card Game in phase two, Slay the Spire or Monster Train. There are a bunch of games in this class, but that's where our ecosystem is heading. We have the NFT that represents your core asset.
We have this item economy that has spurred very RuneScape and WoW-esque. We are going to incorporate all that and put it into a card game and our future web-based for now. I'm a web developer. I have fifteen years of experience. I’m a principal engineer at PayPal previously. I have been in Web3 for five years building on ETH. Web-based, maybe we go down the unity track eventually. For now, we are sticking to a wheelhouse of ours that we can pivot quickly.
It all sounds so good and you touched base on a lot of very interesting points. I want to go back a little bit and talk about dynamic NFTs and how they can revolutionize in-game assets as we know them. Ivan has some very good topics or points of view. Can you elaborate a little bit more? I know you have some good insight into that.
For the most part, some of the stuff that I'm going to bring up, there’s nothing that we haven't heard before. For those in the audience that maybe are not that familiar with games, especially in the past few years, there have been a lot of economies that have been created around individuals buying in-game assets. Whether it's to upgrade the avatar character you are using or simply enhance your experience. As these are on close end-to-end systems, you can't do much with them after you have paid the cash. There's no way to monetize it and often, not even a way to resell it. Admittedly, I play some World of Warcraft and we can sell things off on the internet but not as common.
The biggest part of it is we create these gamer tags and we play online. Essentially, we are building this huge social or digital identity, but it doesn't track our footprints as well as it should. One thing that I'm very excited about is the idea that you will be able to start creating a digital identity across every game and platform we create. You can start picking up all these data points about who you are, and the experiences that you have in the game themselves can be altered by this or experienced by this.
To me, that is something interesting. At the end of the day, we are all headed toward this world in which we are already seeing ourselves. We are going to be able to view ourselves as one that can have one life that's not IRL and one that isn't. I might have my own digital identity. I'm going to call it the self-sovereign identity that lives in all these virtual worlds. At the end of the day, they are all video games. This industry is bigger than the film industry at this point, and it's only going to keep expanding. Hopefully, we are going to see a lot more cross-path compatibility or I'm going to call it cross-chain compatibility against games being built on top of the blockchain.
That will be dope to see cross-chain compatibility. I do have one question. This is a general question for everyone. When you were talking about how games should be treated in the future and all the owner-change traceability. How much have we spent in the last years on video games, whether buying video games or spending on add-ons, weapons, and all that good stuff? I myself lost track, to be honest. I hope my wife is not in this space, but I spent a good amount of money. I would like to see that evolve. Ivan, you were going to say.
I was going to say there is no way I'm giving away that number in this space. It's embarrassing enough for me.
How about you, Carlo?
I will give away the number where I lost track. About $10,000, but that's the benefit. How do we talk about the benefits of blockchain technology? This is what was like for us at Brawler Bearz. It’s so important to put a proof of concept out there that is now out on the blockchain and people are utilizing it.
It’s the same thing that Ivan mentioned. You have spent so much time evolving a character, training it, and increasing its stats. You have earned all these in-item assets, whether it's weapons, armor, helmets, and things like that, and you can't do anything with them. What Scott has built here with Brawler Bearz is exactly a solution for this. You have your base character that is evolving. You can train it, battle it, and send it on a quest to get items.
Those items are NFTs that you can then sell on the secondary market or equip onto your bear. That's the composability aspect of it. These are dynamic NFTs. They are compostable. They are your gaming asset, and you have complete ownership of them. If you are tired of playing the game, you can sell it on secondary equipped. If someone buys it, they can leave it equipped or they can decompose it, take those items off the base NFT, turn those back into ERC-1155s, and piece it out on the secondary as all those additional items, especially if they are legendaries.
This is what has been built already. It is out there and people in our community are interacting with this. It has an emerging item economy that emerged earlier in 2023, where we are seeing legendary items that have been earned through questing. Got for 2 or 3 times the cost of the base NFT character. That is the benefit and that is where we are leading to. Being able to be right there on the front line of that is very exciting for me. Being able to support Scott in this is the reason why I'm here. Especially having spent so much money on in-game buys and things like that, I'm more than happy to explore an ecosystem and a technology that allows for that item economy to pull benefits out of the game without having to sell out of the game.
Before I shift the conversation a little bit and go back just a tiny bit, Zach and Jake, do you have anything you would like to say, interfere, or maybe ask?
I like both of these last two. Ivan was bringing up the persistence of digital identity. That's particularly interesting because it seems more feasible to be implemented quickly and begins this journey. Gamer tag, for example, maybe it's their ENS or something equivalent to that. It does start to be built and can be thought of as fairly permanent and persistent across the journey that they want to create and show publicly. Anytime we are talking about Ethereum, it's a cliche now to even talk about how Vitalik tells the story of a large motivation for creating it.
It was what we have been talking about items and characters being stuck in this walled garden rather than being transferable and useful over time. This is why gaming still seems like one of the definite use cases and areas where there are going to be true new economies that are much more exciting in the token in the Web3 sense than they ever were before. Eventually, people stop caring about your Warcraft gold, but we have got these transferable items and tokens that exist in an immutable fashion but are also extensible across growing ecosystems that can become exponential and more complex and interesting over time. Gaming will lead the way in tech.
I want to sum out a little bit and go to the first value-add that the blockchain in general can add to gaming. I believe that might be player ownership. At this moment, Carlo is almost bankrupt because he has spent $10,000 on beta games. There's no way that you can demonstrate that those $10,000 that you have spent on in-game assets or games is yours. If there's a bug tomorrow and something ridiculous happens, all of the assets that you have in the game might be at risk. I want to circle back on these ownership elements and hear your thoughts.
You could also have all those assets. For example, I'm going to go back to World of Warcraft. I'm a nerd, but if you get your account hacked, someone could literally run away with the account and pretty much everything you have in there. We haven't touched on security. We don't need to go down that vertical right now, but it's something we could at least touch on before we wrap because security is a major component of this.
Let's put a pin on that because that's part of the things that I have planned for this space, but let's not go down that route as you said yet. Let's go with you, Carlo. What do you think?
We have touched on the digital ownership aspect of it. There are some additional benefits here at play. It's that extensibility factor that was mentioned before. We have eighteen smart contracts that Scott has built in-house that power this Brawler Bearz ecosystem. Scott is very forward-thinking and he built in extensibility to these smart contracts.
There's this possibility of decentralization of dev where someone could create an additional UI or create their smart contract that wants to interact with the Brawler Bearz contract, whether it's exp, questing, training, or battling, and expanding the ecosystem based on anybody else's ideas. We can set a role to the original smart contract after their smart contract is audited, but it creates this extensibility. It grows a gaming ecosystem. It creates interoperability where you can then potentially port characters around.
That's the cool thing that would be fun for a lot of people in the spaces, to take your base character into other games if possible. There are other ways that we can work together than utilizing these assets. The generational gaming aspect of it is also interesting to me because this is an opportunity to say that maybe down the road, your child might want to play this game.
Especially if the space leads in the direction it's going to lead, there's probably going to be a lot more handing down of these gaming assets. Hopefully, we will retain value if people are still interested in playing these games or finding new ways to interact with them. Security is going to be a component, and education is going to be a big thing that we will have to do. Being here in the space first, we have to make sure that we educate and protect those who are coming in after us. Ownership is huge. If I could make back what I spent on those Web2 games, I would jump at that.
I wonder about anyone's thoughts on whether or not at some point we are going to call developers. Let's talk about more consoles. Imagine Sony or even Microsoft putting us in a position where all the history of purchases can integrate in some way and someday monetize it. I like the idea that maybe somehow, we are going to be able to pick up that whole loot as opposed to starting from zero. I'm curious about what everyone else thinks about this.
That's an interesting concept. Funnily enough, a few months ago, there was a little hubbub around Sony's patent around NFTs. The first thought that crossed my mind was imagine if every gaming console that Sony put out for a PS6 or something was a node on a blockchain in their private blockchain node. I was thinking to myself, that's millions of consoles powering the most decentralized network out there. It's not decentralized because it's owned by Sony. It would have the most nodes out there. It will have millions of nodes and you could get paid as an end user hosting a node on the PlayStation blockchain. Who knows? Maybe that will be a thing.
It's an interesting idea with the longevity of identity. I don't know how familiar you guys are with account-bound tokens, soulbound tokens, and positive reputation systems, and leveraging that technology. That's a very interesting aspect that hasn't yet been talked about much in gaming but I think it will come up.
Let's go down that rabbit hole. I have been doing a lot of research on soulbound tokens for a while now. It's something that blows my mind every single time. I venture into a new rabbit hole in research. Ivan, I'm going to pick your brain a little bit. What do you think of soulbound tokens and NFTfi and DeFi dynamics in the gaming industry?
A lot of what we have been discussing can be done or is most likely to happen through soulbound tokens. For anyone in the audience, these are pretty much digital identity tokens. It will represent who you are and your characteristics. There are a lot of ways we can look at it. Video games are interesting because we can track your avatar’s characteristics. We can look at the features that you might have accomplished or recruit traits and achievements. All of that can be put into a soulbound token.
The interesting thing here is that we are also looking at a place in which to me that's the initiation of a digital identity. If we look beyond and we look at the capabilities of soulbound tokens and we want to get crazy with this, we might even be in a world where we can leverage and monetize not only by selling. Imagine that I have this huge history, a certain level of exp and ethera, and I don’t want to make some money out of this. I know someone who's pretty much at zero, and they want to get a little ahead. They want to leverage what I have.
Imagine that I could go out and lease this out to that person. I’m now I'm making this passive income on pretty much the result of all the work I have put into something. I don't need to get rid of it and it's sitting the same way that I might donate art to a museum. Soulbound tokens would allow us to do this and if you want to get very crazy a little bit in the amount and venture of these contracts, you might even have the ability someday of having that changes with you.
It might be able to even track things that are going on in your social network. The reaction could all vary, depending on who you are. I'm not going to give away too much, but we are working on building out an Oracle tool for social media. Some of the data points that we are going to be accruing are able to pick up if we are having individuals like whitelisting registered for the app itself.
You can take the entire chain or the eChain. Use it like a Merkle tree and look back at everything this person has done. Imagine what happens when you can apply that to an NFT itself or the dynamic nature of an NFT, whether it’s my avatar changes or a reaction to me. I will pause there because I can go in a circle with this, but I'm very excited about this tech.
I would like to know Jake’s thoughts on all of this because we have had a lot of conversations surrounding soulbound tokens in the game in general, the gaming industry, and how Web3 can help. Jake, do you have anything you would like to add here?
I’m in full agreement with everyone about the benefits and we are speaking to a crowd that is all in agreement. I'm curious to hear from Mad Droids and Bearz about the language and the education involved. There are a lot on both of your sites that use blockchain terminology, but gaming has so many terms that are easily interoperable with terms like digital collectibles or NFTs. What was the decision in that language? Do you see a watershed moment where you can describe it in the same way that any AAA Studio uses to describe the benefits of its own game?
That's a great question and there are a couple of parts to it. For me, we are at a turning point right now where the majority of our audience is going to be Web3-native. There's not a ton of influx from Web2 gaming. It’s having that conversation directed towards educating this core community about what we are doing because we have a lot of tech blockchain technology that's being utilized.
We use an L1 to L2 registry locks taking, which takes a data copy of your Ethereum NFT and bridges it over to the L2 Polygon so that we can employ a gasless ecosystem for the gaming side of things. We are utilizing up dichotomy integration and paying for all the transactions that happen on the training questing and battling for our community. These things are potentially new concepts to even people who are Web3-natives.
We need to have this education of our core community through YouTube videos, Discord, and help groups. Also, making the core community understand the concepts through the gameplay that they can then teach and educate someone else. As we continue to move through the native Web3 space, educating people on what's possible with NFTs, dynamic composable and decomposable NFTs, L1 and L2, or gasless ecosystems, then we can begin the conversation as more Web2 gamers come into this space to be able to change that and use a different vernacular like what you are suggesting.
This is your character. These are in-game assets. You know these terms. We can apply them here. The only thing is that instead of pressing AB start or whatever it is that your controller is using, maybe you are signing this transaction. Maybe you are not signing this transaction because we will have something better in place by then.
It's going to be a long journey. Right now, let's focus on what's here and what's available, how we can educate this Web3-native community that's interested in gaming, help the new people that come in who are curious about it, and try to speak their language. You are right. We need to adopt better terminology and better vernacular when it comes to talking to traditional gamers. We have a long ways to go, unfortunately.
I do very much agree with what you are saying. I want to propose maybe a slightly contrarian view. When I think of Web3-native at this point, I think of the early adopters like individuals that were looking at this back in 2016. They have spent a long amount of time not only delving into how the tech works but also into ourselves as the tech evolves.
There are a lot of individuals that have joined the space, particularly with the advent of NFTs. You have one of those in the audience. I don't consider that Web3-native. I consider simply these individuals as early adopters, meaning they are Web3 users. When we talk about vernacular, one example we talked about is making the experience gasless. What that means is reducing in-game friction.
As I understand it, I don't have to pay within the game. Just take certain actions and do things. The real translation of that is simply this is more seamless like any other video game would be. There is a portion of this. Here's the thing, and I can be wrong about this. We have spent so much time in this industry talking about why the tech is interesting, why it's important, or how it works.
At the end of the day, when we look at adoption, it is more going to be about why this makes my life better. How it works or why it works at least for the audience is something we don't need to do. I'm not even worried about Web3 people educating that Web2 audience. We need to wrap it into a great little product and say, “Here you go and enjoy it.”
If you are a gamer, the gameplay will be intuitive to you. I might even argue the same for Web3 people. I'm not that concerned about us teaching them everything about how a game works. Carlo, potentially what you hinted at is teaching them at least for the time being how to use what is being built because the tech is rudimentary and we are not at a place yet where we can make products in this. This is my take on it. It's not too different but it's also my caution of you need to spend less time thinking about how we are going to educate Web2 and just give them things they want to use.
That's a great point, Ivan. I completely agree with you. Better UIs, better experiences, better flows and building a superior product that people naturally understand are going to be key. I'm interested in what you are building too because having that type of social oracle would be huge when it comes to dynamic NFTs, especially when it comes to the evolution aspect.
That's something that Scott and I have pitched internally about how to potentially use real-life data and create some data stream for leveling up your gaming asset with IRL activities. Being able to maybe potentially do that with social too could be interesting. You talk about soulbound tokens. That's something that we also employ. We have a faction-based system within our lore in which each person within our community can mint a soulbound token to their wallet to join one of the four particular factions, which gives a faction boost to one of their stats for all their bears. It gives them access to a discord channel that's gated for that faction.
What we are trying to do is create these mini DAOs within the community of these factions. We have set up treasury wallets for them so that they can do their faction senator elections to decide how those treasuries will be spent, depending on their different interests. It’s another way that we can utilize the technology that's there to create additional experiences outside of the gaming that's focused on the community aspect which is also important. I do see where we can take soulbound tokens, especially when it comes to achievements and identity. We’re just scratching the surface. There's so much more we can do and go with this. I interrupted Scott. Go ahead, Scott.
The best thing you can do if you are building a blockchain game is to remove the blockchain. As a developer who has been building on ETH since 2016 and 2017, the user experience has always been pretty crap. It continues to be that way. The best thing we can do as devs is to remove the blockchain. Remove the terminology. NFT is an unnecessary terminology. Even we want it grand under collectible RPG or passive casual strategy games or something like this. We don't even need to mention NFT. Web3-natives, you can call it NFT.
At the end of the day, if I'm on Valorant and I'm on a team game on Discord, and I started talking about NFTs, no one cares. It’s a very niched population. I do think we need to remove these very Web3-specific terminologies. As a dev, I look at the blockchain in the same light as databases with no SQL. There are dogmatic viewpoints based on what side you want to take. When you get older in your career, you look at this tech and you are like, “I can store data here and here,” and each has pros and cons. The blockchain to me is going to be that. That's what I see as the end goal. It’s this interoperable world of computer storage across everything. That's what I think.
I was joking around and told my cofounder. I don't give a crap about NFTs anymore. Don't take that at face value. It's exactly what you are saying. For lack of a better word, we should be calling these digital collectibles. When you look at blockchain, all we are doing is building the world's filing cabinet. That's the way to look at it.
I believe we have seen good and bad examples of how we can play with the language in that regard. A good example is Starbucks trying to stay away from the rewards programs. They are staying away from those technical terminologies. A bad example is the backlash that we see from the gaming community every time any gaming company or game developer company tries to say something about NFT.
Even if it's patent or they are trying to do something with decentralized storage or decentralized computing power or whatever, there's always a huge amount of backlash. I believe that's also partly because people don't understand it. I bet you that if we launch a game where gamers can cash out on in-game assets, the narrative is going to be 100% different. Ivan, are you going to say something?
I'm getting on the plane. I was going to throw this out there and I would love to hear your thoughts because there are these competing things here. Let's take Riot Games. I buy all these Valorant skins. They are in-game and every single user has to buy them. What is their incentive to allow peer-to-peer because they are making less money? What's the incentive for these big studios that already have these large ecosystems to move to Web3? Maybe there is none. Maybe it's indie only that has to take this path. What are your thoughts on that?
It's hard to predict what it would mean, but there is not a strong incentive right now for a Riot to give people that ability and empower secondaries and decentralize that way. I don't think we know that at AAA games, and decentralization is meshing that much quite yet. As soon as 1 or 2 games and maybe they do have to come from indie, to begin with, but take off and create an economy that is extensible and has exponentially more opportunity and possibility to expand compared to what Riot could. I think then they either pay attention or get absorbed.
This is like the classic and original definition of disruption when you come from below. In a lot of cases, these games on some level are free. How do you disrupt that and undercut such a thing? In effect, it’s giving something away or giving ownership away to the user. There is a possibility there. Unless one of these companies wants to protect itself from disruption, it maybe is going to have to come from the indie world. You might even call Riot. A game type that started as custom maps on Warcraft III became one of the more profitable game companies because Blizzard wasn't paying attention.
I'm right on par Zach, and the other thing is they have to be willing to do it. They have to see value in it. I'm not even going to say the game that I play because it's probably dumb with respect to a lot of the other games that are out there. There's a game that I play. They already have these concepts in place. I have the ability to make my character. I have the ability to change my fiat into their in-game currency. They developed a marketplace where I can buy additional skins and things from other people who play this game as well, but I'm using their in-game currency. They already have these concepts at play. For them, it is their value in decentralizing that in a bit.
As Zach has said, is there value for them to relinquish ownership over that a bit? They can still maintain their marketplace. Maybe they start their marketplace for these blockchain assets and they are charging their fee. Maybe that's how they can see some potential value out of it for them as a company. When we talk about common language, most gamers have already experienced some level of a concept of a digital currency or an in-game currency, their character, their playable asset, and then all their in-game assets. This is crypto. It's a closed-loop ecosystem compared to having it using blockchain technology.
Riot Games and all these big companies might. They indeed will most likely see a downturn in their revenue in the short term. At the same time, if you look at the long-term that is going to incentivize more people to jump on board with gaming, they are going to see more value in video games. For example, how many times did your mom tell you when you were a kid that you were wasting money and time by playing video games?
On that note, how many moms will be boarded on gaming because it might make them a quick buck or it might help them out with whatever expenses? We might be seen aware of not too far from now where gamification dynamics take over. That might be an opportunity that the big game companies are missing. At least that's my take. I'm eager to hear Jake's take on this because I know he has some wild stuff to say.
I completely agree with what people have said. The reaction to Web3 being used by major gaming studios was a blunt force instrument for increasing profitability. It was elegant and didn't work well. Do I think that major studios will do this and will it be done? As soon as there is profitability or a perception of lost profitability, of course, they will do it.
What we have seen is when games are successful, especially when we look at computer games, it's when there is an active community, an active marketplace, and a modification element. I'm interested to hear more about how these devs would be included in independent. That's what I have seen with the popularity of computer games, the ability to modify the game and make their versions. It is seemingly a walled garden from the actual gaming experience. To have it all incorporated under one ecosystem sounds exciting.
Carlo, do you want to take on this one?
I agree. I was going to say that I called my mom and I told her that she should have let me play more video games because I could have sold a golden key for 1,000 ETH. When I explained how much a 1,000 ETH was, I think she cried. You are right. There has to be profitability for those companies or a loss of profitability. If you can disrupt their economy in some way, then you get their attention.
If the communities or the gamers are asking for it and they are demanding it, then we will see action a little bit sooner. They have giant communities already established. One of the challenges that we have as project teams and building with blockchain games and things like that is we are up against the giant. We are David versus Goliath. We need to build up our communities organically, get them to understand what the benefits are of what's being built, and grow a community to the point where they can't ignore it anymore. They have to acknowledge it and then take some action. Hopefully, they will come to the devs that have been here building for advice. That's the end game that we might see happen because they are going to need these devs at some point if they do explore this route.
Scott, what do you want to add?
I was going to speak to some difficulties on the dev side in general. It boils down to interoperability. One of the hardest things between company A and company B right now to communicate is not having the right interfaces with each other to leverage each other's assets, or giving up company secrets or whatever it may be, or company data if they are sharing endpoints.
What's baked into the standards of NFTs is this interoperability. There is a definition, a spec, a standard for ERC-721, 1155, and whatever may come that's probably better than what we have now. All these disparate companies are able to communicate and leverage each other's assets. That is the secret sauce at least from the tech side, but it's this unified standard across the industry that will help that adoption happen.
I wanted to say that there are some very interesting propositions with soulbound tokens and account-bound tokens. One idea I had is a subscription pass by Riot that gives you access to every single Riot game that they could ever make. Whenever you play that game, it attributes the game that you have played onto that pass. There are these very interesting identity aspects that we haven't even tapped into on the gaming side. Ivan is not here, but I'm sure he would have something to say about that.
Unfortunately, he had to hop off because his plane was about to take off. On that, we are talking about challenges. I want to talk about the regulatory challenges of integrating Web3 into gaming. Everything that we are saying sounds amazing and it does paint a beautiful picture in everyone's mind. I know we are up against a lot of regulations and challenges in regard to NFTs and cryptocurrencies in general and blockchain. I'm eager to hear your thoughts, Scott. How have you thought about overcoming those challenges?
We have luckily some companies like Yuga who have the money to pay for lawyers and guide the way. Hopefully, they do a good job with that. They have other sides, so we will get a lot of insight. We have some use cases that we have seen. For example, Flow blockchain and Dapper Labs. Dapper Labs are in a lawsuit in relation to their NBA Top Shot moments, and whether or not their securities or whatever it is.
The judge didn't rule either way yet, but the stance there was since they were on a private block flow at the time permission was not permissionless. Now they have moved to permissionless from my understanding, but back then they were not. That centralized aspect of the blockchain was a mitigating factor for why that lawsuit couldn't be dropped.
I do think there is precedence there at least. We will see what the actual law will come out of that, but there is precedence saying almost like if you are on an ETH chain or Bitcoin that's decentralized, maybe you are avoiding the securities look and feel of an NFT. We will see what happens with that. I'm paying close attention to it.
Everyone is at this moment. I want to see what Carlo has to say about this. What do you think?
I'm in the wait-and-see camp myself. I don't think the regulators even know what to do at this point, and the landscape changes every day. The best thing that projects and teams can do is to be aware and read as much as possible. If you ever get to the point where you think you might be entering into security territories, get legal counsel on it.
I come from the DeFi side. If there is an in-game currency, as long as it doesn't have a liquidity pool and is solely a utility token for an in-game asset, you are probably going to be okay. Once you start to introduce liquidity pools into the mix, it's a very dangerous route to go down, especially if you have a centralized team. That's one of the things that I would avoid and that's our mission. We do have an ERC-20 utility token credit, but it's solely for gameplay and does not have any value outside of the ecosystem. It's going to be an interesting thing to watch, but I feel like we are still a couple of years away from any true legislation when it comes to crypto and NFT regulations.
We appreciate that point of view there. I do have a very good question. Where are you putting your money into? If this was a bet, who do you think is going to come up with the most solution of those big gaming companies for the Web3 space? What do you think? Let's start with you, Carlo.
I'm not putting my money anywhere to be honest, except maybe into Brawler Bearz in the play. I feel like we have had internal conversations in different spaces, Scott. I think that if one of the big console companies if Sony were to enter the space in a big way, I feel like that would be where I would put my money. I would put my money on the consoles because they are the entry point for all the other gaming studios. You want to go to the source. They have the ability to create that private chain. They have that essentially closed network and have a user base. That's where I'm going to put my money. Potentially, PlayStation. If Sony is going to do it, that's where I would go.
How about you, Scott?
If I were a betting man, what are the main companies out there? We got Square Enix, Ubisoft, and Konami. Didn’t Activision say that NFTs were garbage? Konami is at least launching an endgame platform for NFTs. If we look at the chance of success, we need to look at where the money is. Brawler Bearz is a very small project. I can't guarantee success. I can guarantee that we can keep building what we are building. I can't guarantee the world some of these other companies that have millions and hundreds of millions of dollars to pour into it.
If I was a betting man, truthfully, I'd probably put it into one of these big companies. Find maybe a product that looks good and sit it there. As far as right now, companies that are at least Web3-specific. Limit Break and Gabriel Leydon stuff with DigiDaigaku looks promising. I haven't seen the game, but at least their community is strong and they are Web3-first. They have a history of success. I would probably go there. That's probably where I would put my money right now.
That’s not financial advice.
My financial advice is to buy a Bear. I'm kidding.
How about you, Jake? What do you think?
Isn't a tough one. Sony PlayStation, at least with the hiring and some of the patents they have had, seems like they are trying to position themselves to it. I think what was said earlier is correct. What will happen is you will see an indie game get very big, and then it will be whoever adopts it and integrates it into its own studio and puts a ton of money behind it. That will be the one, but what is that game?
Axie Infinity.
I would have said that a while ago, but I don't know, but room for Mad Droids and Bearz.
As for me, my money is on two very controversial ones. The first one is EA Sports. Every single game that EA sports releases, it's a perfect use case for Web3 economies, NFTs, and Dynamic NFTs. I can't wait to see the first EA Sports game on the blockchain or at least using Web3 dynamics, DeFi, and all that good stuff.
When you guys mentioned consoles, it was interesting. I'm not entirely sure if I see them adopting a lot of the technologies. Keep in mind that Microsoft has been very controversial in regard to blockchain adoption. They are the owners of Xbox. Sony might lead the way, but there's another company that almost every single game that they release is a perfect example of Web3 economies, and it’s Ubisoft. If Ubisoft does it properly, it might end up leading the way. Those are my two big bets.
I have to agree with you on EA Sports because the one thing that they got going for them is licensing. Having a license with major sporting affiliations is huge. There's an untapped market there. That's a good point.
If you play NBA 2K23, NHL, NFL, FIFA, or any game that they are releasing, they have very strong in-game economics. It's very for-profit what they are doing. You have to buy tokens to get the best player in order to win the most games and get the best reputation. It is the ideal use case for Web3 economy.
There's something interesting there too. The trading card aspect of NFTs is probably the most recognizable reason to get NFTs because of the digital trading cards. That's why I bought NBA Top Shot a few years ago and why they got 500,000 users in the course of a month. They went to the pooper a little bit because they didn't keep the scarcity and demand going throughout their ecosystem, but there was something that was very special at that time.
If you were around, there was a lot of buzz and they were supposed to build a fantasy game on top of that and maybe build another game called Hard Court. That never happened. On the spectrum, we have the digital trading card that people in Web2 can resonate with, and then we have the game. They haven't merged yet. I'm interested in who creates that first. If it's EA Sports, that would be sick. I 100% agree with you. That could be the mass adoption play. That could be the trigger. Imagine FIFA and their card system moving to NFTs. That would be sick.
Before I got fully deep into NFTs and all that stuff, I was super hesitant about buying in-game assets on FIFA. I'm a big FIFA player. Right after I got into NFTs, I started spending money like crazy and buying top players like Cristiano Ronaldo or Lionel Messi and all these good players. There was a lot of money involved. Thank God my wife is not here.
It's incredible to see how those can turn out. For example, if I can use Messi for playing the final and then I sell them and then I can cash it out again, it will be great. It will give a lot of dynamic to those in-game economies. I feel like they are missing out on so much. At the same time, we idolize so much that they might be banned and never happen, but we will.
There are also some very interesting dynamics when we incorporate marketplaces into things. One project I worked on was an NFL NFT fantasy game. It predated Reignmakers. If you are familiar with Reignmakers, I built out a system like that.
We had them on the show a couple of months ago. I wanted to point that out.
We met them in New York before Reignmakers existed. The marketplace dynamics of things are very interesting. It adds a whole new dimension to gameplay and fantasy. I think that's another avenue that's going to be big upcoming. Reignmakers is leading the way right now with that. They released PGA as well. If they go into soccer or football, it’s a very interesting future for them.
On that note, I believe the time is up, so we are going to wrap. Any final comments or thoughts? Carlos, Scott, and Jake, what do we have to say before we hop off? Let's start with you, Carlo.
Thank you so much for having us. I appreciate the opportunity to talk about Web3 and gaming. I'm excited to see where the future goes. I will be out at Outer Edge in March 2023 and looking forward to being a moderator on a panel out there. Scott and I will be out in New York as well. I'm excited to meet with some folks in IRL and talk more. Thank you so much.
You are welcome. It's always good to have people who inspire a good conversation. How about you, Scott?
Thank you for this space. I enjoyed it. Some sharp minds in here that I wish I had connected to in the past, but now that we have met, thank you once again.
Last but not the least, what about you, Jake?
I just want to say thanks. I don't get enough opportunities to join this space, but conversations like this make me excited about what's being built and the people that are building it. It's great to meet everyone.
For my side, a couple of announcements. If you are in this Twitter space at this very moment and you didn't get a chance to tune in to the entirety of this show, you can always listen to the recording. For the future weeks, we might end up uploading it into the Edge of NFT Network. If you like the content, feel free to share it with your friends, retweet it, and mention it. Help the get the train going and so on. These series happen every Thursday, so turn our notifications to the Outer Edge account and through the Howl account because we overlap one another.
In the next episode, we are going to have a very interesting conversation on the latest happenings on Web3 and the most relevant news in the Web3 space, along with some other good folks that are going to be joining us. You don't want to miss it. Turn your notifications on and we will see you there. For now, that will be all. I was joined by Zach Sekar, Jake Meany, Carlo, and Scott from Brawler Bearz It was a pleasure to host this space with you. Have a good one and we will see you at Outer Edge in LA.
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