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Space Summary
The Twitter space discussed the challenges and opportunities within web three gaming, emphasizing regulatory complexities, financial limitations, lack of use cases from large companies, and technological barriers. While the potential for growth exists, the absence of compelling examples and concerns over sustainability hinder progress in the niche. Notable highlights included the regulatory challenges in North America, the scarcity of examples from major companies, and the minimal impact of current gaming dapps compared to established giants.
Questions
Q: What are the key challenges for web three gaming?
A: The complexity of regulations, financial limitations, and lack of use cases hinder its growth.
Q: Why are large companies hesitant to embrace web three gaming?
A: The absence of compelling examples and concerns about longevity and financial sustainability are major factors.
Q: What is hindering the progress of web three gaming?
A: Technological limitations and the lack of a compelling example proving its viability are major barriers.
Q: How does the financial landscape currently impact web three gaming?
A: Financially, web three gaming is not a significant segment compared to traditional gaming.
Highlights
Time: 00:21:22
The complexity of regulations, especially in North America, poses a significant challenge for web three gaming.
Time: 00:21:43
Large companies lack use cases or example cases for web three gaming, unlike in the case of Axie Infinity.
Time: 00:22:01
The dominance of a gaming dapp is insignificant compared to a traditional gaming giant like Monopoly Go.
Key Takeaways
- The complexity of regulations
- particularly in North America
- poses a significant challenge for web three gaming.
- Financially
- web three gaming is not a major segment currently
- but there is potential for change in the future.
- Large companies lack use cases or examples for web three gaming
- unlike in the case of Axie Infinity.
- The current dominance of a gaming dapp is insignificant compared to traditional gaming giants like Monopoly Go.
- Longevity and financial sustainability are concerns for many games in the web three gaming space.
- The absence of a compelling example to prove the viability of web three gaming is hindering progress.
- Technological limitations are a significant barrier to the advancement of web three gaming.
Behind The Mic
The answer is to establish your presence in these decentralized communities because they are the future. The reason is very simple. One, regulations, especially in North America, are very complex. Two, no matter what you may think, web three gaming is not that big on the pie might change in the future, at least that’s my bet. But today, financially, it’s not a big piece. Three, large companies like to have use cases or example cases, and since Axie, we’ve had none. A pixel that’s dominating the gaming dapps, it’s peanuts compared to a monopoly go. Monopoly go is, in a matter of months, probably at $3 billion in revenue. When you look at an activision blizzard, what they want to achieve, a couple of millions, it’s not that good. And often for those games, I think longevity is in question. There’s very few games that have managed to have as many inflows, that have more inflows of capital than outflows. Right. So, you know, that’s very difficult. And so those companies are going to be slow until there’s an example that proves that it’s viable. The day it happens, the floodgates will open. Then the last thing is, let’s be honest, the technology sucks. The technology was not designed to scale a game for millions of players, right? If you look at any of the layer two solutions and you want to run a fortnite or you want to run a clash of clans on it, it’s going to blow up. We’ve had also near death experience with the Ronin bridge only in July. So in summary, this makes it a little bit similar to why it’s always challenging for the incumbents to come in even if they want to. Of course, things start to change when there are successful applications, when brave folks are trying things out and proving that they can work. But before we have that proof that it actually works, it’s very difficult to break into this. Now, if I continue on to the second part of the conversation in a sense, what Jose Carlos was mentioning earlier, which wasn’t a question primarily, was more his own thoughts and different perspectives here. For me, to summarize very simply is we’ve always seen a very high adoption in specific RPG games, MMO games, where people wanted to trade value and they had challenges in making sure of avoiding attempts to make sure they were not defrauded and NFTs here were hitting those first use cases. So why do I think those efforts have not yet been successful at the big enterprise level? Let’s come back to the initial conversation we were having today. Folks were talking about Final Fantasy, folks were talking about and Square Enix specifically with the stories. Yet again, those adoption challenges still remain even here for a lot of game companies because that first IPL, it’s always challenging in a sense that there’s a level of caution and conservatism here. So generally what happens is that these services will start with these RPG games, these MMORPGs that are looking to activate a small fan base to test and then when those work proficiently or efficiently, there’s a much better pathway to scale. But funnily enough, right, what examples do we have that have really massively scaled? So by the end of the day, there’s a sense that I do think there is still that risk. That’s why they initially remain somewhat skeptical. Yeah, we have some of those initial endeavors, but it’s going to be still a long way to really establish a full scale. But I think this is a very good perspective in the sense that for the games industry as a whole, two levels are important, right? The advantages derived from deploying blockchain based services as opposed to just deploying a centralized database. Beyond those initial advantages, that makes the adoption curve much more favorable. Do I want to start answering now your main question or do you want to go ahead and shoot? Absolutely. Just go ahead unless you wanted to add on more to what Charles said? I’m happy to just comment on what Charles said specifically. And think about the classic dilemma that all large companies have. Innovate or get left behind. I’m a big company, I’m Microsoft now. Why haven’t I built Empire yet? What’s going on? I don’t want to spend another $300 million on R&D right out of the gate. Rather than make all billion dollar mistakes, it’s better for me to wait for the ecosystem to grow, let a couple hundred companies build, and then I’ll acquire that one that reaches escape velocity to 20, 30, 40 million of revenue. That’s going to be a lot cheaper and a much better process than you trying to figure it out. You let the market figure it out and then you as Microsoft, with your infinite money, you can just acquire the company 400 million, 200 million, whatever that number is. Yeah. So Jeremy, everything you just said right now, would you describe this as this strategic advantage that you foresaw when you’re embracing web three and nfts in terms of market positioning and revenue generation, right? Absolutely. You know, the vision has changed, but thesis has not. The thesis is still, it’s impossible to make a successful mobile free to play game today. It’s not impossible to make a console or PC game. I’m sure you’ve seen the stat. Most people play old games, right? They still play Fortnite League of Legends. Like that’s still 80% of their playtime are not new games. They’re games that have long life cycle. And so the concept of capturing those players is doubtful and low probability rate. Meanwhile, taking this stance that digital ownership allows for new ways to acquire users, it’s like rewards, point air drops, point claims, but also retain those players better because it’s proven that owning digital assets convinces you to play longer, but also monetizes better because you always have the ability to resell that asset later. You buy the magic sold for $5, maybe you resell it for ten if you got lucky, but maybe you just resell it for three and you feel like at the end of the day, $2 net. It is a pretty good trade, right? For the fun you’ve had. Yeah, right. That makes a lot of sense. Look, I’m going to pass the same question over to mix AI. David, we’ll have to hear your thoughts on this. Right. What do you think are some primary motivations for web two gaming giants to transition into web three and NFts, right. What are your thoughts on your. David? Oh man. Well, first off, get it. Getting the big companies to come over, like the answer to that, it’s going to be boring. Like nobody, nobody listening is going to get excited by that. Like these companies are going to come in because the smaller exact strategy that Jeremy just said here is a bit more applicable than the mutual, right? They’re going to wait and see who’s going to develop some really compelling content. And then they’re just going to add that company or that product is an addition to their content library. Historically, what the technology and this is maybe one of the challenges that we’ve had, team’s been building a great technology, but sometimes not finding the immediate application, we’ve seen something similar here. Now the inverse side, unless your company is going through significant troubles, companies are conservative about what they invest in. They don’t want to go left or right a bit too much. They’re going to go for less volatile things where they can plan and predict success, which is short till there’s a really visible example. We’re also going to take a more cautious approach and wait for that outcome to see how that outcome permeates before making a decision is clear. So if you’re looking at this right from the strategy you have to advise companies initially, you take a stance whereby you allow smaller companies to build and when these smaller branches emerge into really successful functional and scalable application examples, you start selective engagement with those types. And many of us have maybe live through this with traditional web and social media where it was high reluctance initially. Then once those games or those applications converted to the mainstream, then you suddenly get actions and acquisitions and integrations extending beyond refocusing resources to really make the case for a broader application spectrum. That makes a lot of sense and history has proven that indeed it works. It’s like, hey, we’ll sit here and if I’m a company and I’m waiting to enter web3, okay, let’s see a couple of examples and then integrate, right? You also never know what policies will get rejected next after the first one. So we have to approach this very cautiously. Basic examples starting to become visible and then after basic examples, adoption strategies and scaling mechanisms to get there faster. Think about this, I think fantastic. Is there anything else you wanted to add here in terms of your own perspective from the stance of traditional web game developers that want to know why enter web3 at this stage? Right. Yeah, absolutely. Observations can be super generic in terms of success. However, like we were talking, the path we charted in once proven that they can successfully adopt. Next question to answer would be overall game design structure, the ability to scale it without any huddles that need to be jumped over consistently. As we’ve seen, the traditional game’s been risk adverse. We have to instill confidence, generate enough cases for them to start trial programs, following up to scaling depends on adaptability projected outcomes as well. So yeah, I think you nailed it folks. Jeremy and David. Then I’d continue with an additional remark, but yeah, if I was to sort of think things through and give you high level rationale, companies are enthusiastic but any leap of faith has to be justified first through case validations before the alternative. Go ahead and continue Jeremy. Love to hear further your thoughts before also David would jump back see what’s left to add. Okay, sure. You know, I think what’s left to add? You know, earlier on, I wanted to touch on something more foundational in terms of some ideas that have been quite commonly featured. Something I wanted to mention during the session earlier is that extractive platforms usually tend to run into scaling issues as they aim to onboard too many users too rapidly. It’s this nice cautious balance that a properly designed NFT-based system offers with definite return mechanisms and benefits. And I’m glad we really explored those nuances as we have discussed earlier. Essentially integration of decentralized schema here offers a tremendous reward distribution and disrupts that value chain significantly. Right. Therefore, the short-term, long-term vision of companies playing cautiously makes a lot of sense. Right. A lot of game companies plan initial entry upon observing community demands flexible as well. Tentative pilots starting with exploration of potential distributed tech functionalities culminate in established versatility. And this modeled outcome frequently showcases transformative outcomes shifting minds opening up creative on-chain pathways as incentives enable comprehensive adoption frameworks. Looks like we touched most aspects of this conversation. If there’s anything more specific you wish to get views on, feel free to steer the direction so that we can contribute further enriching this dialogue. Oh, absolutely. I mean, there’s definitely a lot to dive deeper on, but I can see the hour is almost up. I appreciate you both so very much any other conclusionary remarks as we look to wrap this up and takeaways for anyone from here. Yeah based final remarks essential takeaway game companies have reciprocal motion profound transformative potential stance exemplifies general favorable direction adapted towards this adaptive ethos proves industry exploratory period aspirational experience can set rigorous standards for adopting diverse scalable variety implementational directions overall essential point remains the same. Success requires leveraging of smaller initiatives and then scaling post-solidification of substantial engagement metrics measured by that so aligned that’s my ultimate summative thought structuring semi-reiterative however extremely critical. Definitely echo those points, small pilots post refinement becomes larger validation frameworks proof of valid scalable implementations eventually justifies further expansions beyond potential deployments. Yep, comprehensive engagement strategies deriving sustainable remunerative pathways ultimately when proven leads productive innovation cycles too becomes foreseeable third-degree effect conceptualizing larger management imperatives ensuring overall progressive intent choice and collection strategy soon realizes. So definitely acquiring integrated transactional mechanisms skyscraper motivations overcoming reluctances and hesitation synchronizes robust implementations across the spectrum will positively lead moving forward. Haha, Jeremy hit the spot alright this integration field is multifaceted lot more exciting really proud to be part of this insightful delve looking forward continually propelling forthcoming initiatives portraying more valuable applicable convergences from gaming spectrum. Really inspired by what’s been happening in social fi. So we’ve been cooking up that program for a couple of weeks and ultimately prioritizing it for next week. So it’s going to be really hot. I have to say, for the Kols here, for anybody that has any sort of community, you don’t want to miss it. If you think that top fantasy was wild, I think this is even more crazy and it’s more fun, at least the way we’ve been designing it. So expect to see it all over the timeline and that’s going to further boost our. Our chain, but, yeah. Thank you so much again. Basa. I got a jump. Yeah, of course. Do what you got to do. As a pleasure. All right. Take course. Bye bye. Alright, guys, have a good one. This will be the official wrap up. See you guys next week. Peace out.
