Next-Gen Web3 Gaming: Pioneering the Evolution

Transcript

okay um let's start so uh today we have um the best gaming company and best application players here so here's Sebastian Sasha Mabel yeah my name is Ryan uh from hasht uh we are like a crypto fund we have been investing to crypto since 2016. now we are breaching like a western and East especially with heavily investing into our application layer you can start your introduction please okay hello quick introduction by myself so I'm the CEO and co-founder at the sandbox as well as the president of the blockchain game Alliance sandbox is a decentralized virtual world where like

anyone can become a Creator make 3D content as well as full experiences and games meet them as nft truly own them actually monetize them the way they want okay Sasha my name is Sasha I'm the CEO and one of the co-founders of parallel parallel is a trading card game and sci-fi world that's in closed beta and uh that's what I do Mabel yes great to be here my name is nabel I'm the chief Revenue officer at fine Satoshi lab we are a Next Generation web3 entertainment and social Studio or Flagship product is stepping and followed by more which is our non-custodial NFC Marketplace as well as our upcoming game SLG can't call gas

hero yeah so uh before like going into real story so can you more like emphasize your uniqueness what is special for your project a Mabel you can start happy to start yeah yeah um so we started off with Steppin right I think people known us with how to really align the blockchain based incentive with people's user behavior and I think that's like something that we will continue to Carry On by designing the right mechanism to really incentivize people to do things with blockchain as well as the gamified behavior another thing that I wanted to mention is that we do believe that in crypto games or after games you need to

own the consumer that means like you have to see like direct a customer with that being said you have to be the publisher and the developer yourself that's why we are building we are being a studio ourselves rather than um say like we start with the with the product and then later on become a platform we have to do both I think that's like probably the two two parts I would like to mention okay so Sasha like okay go ahead yeah sure uh so I guess what's unique I think like if anyone has seen the cards from parallel like a lot of the greatest um kind of games and films are artists work on I think they stand out uh pretty uniquely um obviously the trading card genre has traditionally been dominated by fantasy

uh we're more like a space card game is kind of a joke um but obviously the players are able to own their cards right I think um trading card games is a bit of a misnomer now like if you played Hearthstone or magic Arena you know you don't own the cards and um I think what we're really doing that's different is kind of bringing uh new mechanics to the game bringing treatability back to the game and allowing web 2 and web 3 players so traditional Gamers and web 3 Gamers to meet on the battlefield and be very competitive in playing our game so our mission has always been like how do we Empower and you want to become a creator that Journey actually started in 2011 on mobile back then without

blockchain or nft is just like a game in 2D on smartphone where you could create games by the touch of your fingers very intuitive very accessible it became a quick success we had 40 million downloads over time 70 million prior Creation in a gallery where other can access the content but also we find that like their creators needed more than just Fame and recognition to keep being engaged on the platform as we were losing our best credit over like the months or the years so we jumped quite early on in blockchain and nft finding like first crypto kitties at the first game and we say maybe we can do better than virtual cats with that technology and enable

anyone to create their own content on it monetize it so blockchain and NFC came as a solution to what like uh like empowering creators and let them monetize user-generative content fast forward after five years a sunbox count now over 5 million users with the wallet we have a partner with more than 400 Global Brands we have presents in 10 different countries around the world and we've grown a pretty logical system that comes now 230 Studios who are building on Virtual land on our platform as we continue to sell new labor rules of land and develop curate Brands and develop new forms of experience that are Avatar Centric sounds good so Samsung

you have in this space for like four years five years so you'll keep building a lot of stuff so uh what what can you what do you see uh um any uh new users users Behavior you can you can share any takeaways to the to the audience yes um first thing is I think like we're single still a lot of experimentation and I still consider this is an early phase of adoption specifically when I look back yeah it's like the video game industry uh smartphone tablets we haven't found like the perfect business model yet that will apply to blockchain games we've gone through value situation

2020 2021 was essentially the year of like play to earn around 2018 2019 what was quite trendy was like to do a pre-sale of your digital asset as nft try to sell out everything at the beginning and then continue to live on without more Supply and today there's uh some change towards those aspects where we are going more to like skill base like we are seeing more competitive aspects where players all the players are entering leaderboards and only the top players will be winning reward does they engage nfts have much more immediate utility and the game that launched them to have already a playable

product before before they actually even introduce like a digital asset and ft that they would sell because like also the market has grown more mature users are becoming less impatient and they expect more utility directly from the content that they're acquiring I still believe that one of the core incentive around web freeze to bring back uh Power in the hands of players and in the hands of creators who contribute to like the success of those so um Community Driven incentive are still essential and we're seeing still important innovation and contribution by communities but still around like games that are solid

gameplay solid and VP in place and teams that are more experienced as they develop those game and iterate faster over it Millions users so what can you see from those Millions user what do users like to uh play on your application yeah so I think I mentioned about um like finding really the blockchain based incentives with user Behavior I think that is something that is quite unique to um blockchain games per se um we definitely are seeing quite a few other um peers that we're trying to do um say like some of the mobile game they

would just do the game itself like stand alone without any blockchain element and then having on top of it like you have an nft trading on top right that that could be one approach but um in our in like opinion really we believe that having the token incentive weaved into guiding user behaviors and also adding a bunch of syncs that you wanted to guide them to kind of do certain interesting gamified tasks right to your points skills skill based request related things um that's something can be done quite well related to highly relevant to how why we're using blockchain today so I think like that's that's absolutely number one that's how we also initially

bootstrap step in however I think the next step is about how you bring externality into it right obviously people generate health and happiness as they are also doing a lot of the offline social like through knowing each other online but I think at the same time like later on we also need to add like some of the skins for example like that's like some of the um partnership that we've been doing with a lot of the IPS for example the Japanese one I think last time we were in Tokyo and that was like right after we announced a partnership with ghost in the show so I think a lot of the Native the non-native users they are very into this type of things and I think that can

really bring a lot more users external to what we already have like which is like relatively small group um who who who would be interested in coming into the space and experience you know how you can leverage certain user and like blockchain base incentive to guide the behavior so yeah you're targeting more like very heavy gamer because you know yeah competitors yeah I think I'm like I think you know they're saying the same thing I'm saying I think we're all talking about skill I think we're talking about meeting Gamers where they are I think we're talking about understanding the economies of games like you know we have something called a paragon which is like a leader for your your parallel which is like a faction in our world and like Paragon

skins Paragon emotes um so I think we're talking about understanding game economies I think we're talking about uh meeting customers where they are and demonstrating value by including blockchain to do uniquely possible things so I think in our in our uh game obviously outside of the cards there's a number of Cosmetics there's a number of other things that we're working on that are you know the public is probably aware of if they follow us on Twitter but um yeah I think like you know what's happening is uh there obviously some some sentiment towards I think we've got to be super transparent and think about Mass Market there is obviously some sentiment towards blockchain that isn't entirely positive from a gamer's side and I think what we're seeing is games

blockchain games in particular adapt and learn as to what's working and what's not and start to design Solutions whereby a person who's a traditional gamer can come into the ecosystem play and maybe earn a card and choose to Mint it or choose not to Mint it in our case or understand the value of a transferable or tradable uh you know Paragon skin or a paragon emote but I think we're actually all saying the same thing and just maybe in the context of different products yeah yeah I totally agree and like no still like a very crypto native or into uh crypto games but you usually it's not I'm still still out there so what's your strategy to

onboard the new user especially like gamer web to user not just so native like yeah go ahead well I think like there's something to take into account that he's like we're not necessarily trying to convert existing Gamers to play new games like every time I look at like the evolution of technology and gaming when you launch a new platform and you console that you define a new format of entertainment new control new way to interact this allows to create games that do not exist like on other platform that bring wider audience like more casual more agile Etc we've seen that with from the 3DS through the switch to Wii U to smartphones always and larger markets we

see the same at sandbox basically like the way you play an experience in sandbox you have an avatar it's Avatar Centric it's the first social experience where you interact with other users you explore your discover and then there are like quests and gamification and sometimes like multiplayer like racing parkour Etc and leaderboard but I wouldn't say like it looks like a traditional game from whatever I've played for 15 years and and yet we're able to bring new users who are not accustomed to that kind of gameplay and can get hooked because of that our strategy has been very clear like we want to we have two aspects one is the user generated content I believe like

the future of gaming is around like allowing people to create their own characters on level their own world and extend the life of their favorite game and ugc is an essential board 90 99 of the content of metaverse will be ugc and on the other side is like onboarding users from the favorite brand wherever they are in the world so when I mentioned 400 brands in the world they are top IPS from Japan like tour animation Captain tsubazar fees of the North Star but also from Korea from China or from the US and those brands of ips they appeal to like local population who then get attracted to places experience participate create their own experience by mixing and remixing

content and explore other content as well from the rest of the world so we bring local content to our Global and we Define a platform where the audience are truly like Global like 40 percent of our users are in Asia 30 percent in Europe 30 percent North and South America which is something that's not really typical when you look at how traditional game approach or traditional UC platform approach it always starting like let's grow big in the US first and then maybe later we'll expand into other like Regional markets yeah I imagine like a Korea there are so many creators the first visit yeah I think that they can totally make sense they can bring a lot of retail users so

yeah sure yeah I think like the parallel is a bit different like you actually don't need to own any cards it's a free to play game you don't need to have a wallet you can literally just go in and play and I think this is like it's a very fun and competitive game and this is what's worked for us is that people come into the game they're you know just like you could in Hearthstone and Magic they're able to just grind their way play the game and enjoy it and as they enjoy the game they're over time met with these opportunities and those opportunities are if you win a ranked match at parallel and you have a 40 card deck depending on the number of cards in your deck you win the erc20 prime and so it's a competitive and skill based kind of ranked ladder that that people are

fighting over to win this erc20 but Prime but beyond that you know like you have this battle pass just like you would have in any other traditional game you can grind and in some of those opportunities if you unlock a card in a battle pass it says do you want to Mint it or not and so if you don't mint it you might watch that card once that season's over and say hey I should have minted it because I'm watching people trade this card and I could have used it to play the game more that I'm already enjoying and earn rewards and use that that reward to buy more Cosmetics for myself or buy more cards and so I think you know the way we approach it is like we want people to just I think we want to be to understand where consumers are

today from a gaming standpoint and say if you're you know you want to play a great game you want to compete it doesn't matter if you're coming at it from web 2 it doesn't matter if you're coming at it from web3 or whatever you want to call it traditional gaming or crypto gaming what matters is that it's a really fun game in that it's competitive and if you enjoy it and you fall in love with the game then you're probably going to want to participate in the ecosystem and our job is to create opportunities for you to do that and present them in ways that are helpful in translating why it's beneficial to use blockchain and the answer typically is scarcity where provable scarcity on chain um and like this is it you know for the most part quite absent from a trading card game they should all be called

collectible card games not trading card games but we do still refer to them like that but like scarcity is completely absent like you really are you know very hard-pressed to understand or cite any um addition size of a card from uh don't give me I'm a huge collector of these things I love them but like Pokemon magic all the modern sets like there's really no sense of scarcity around how many cards actually exist from any of these recent sets and so that is absent from card games you know as of recent and really what blockchain does is fundamentally bring that back to digital card games and make them tradable yeah always you know remind me I I was playing uh with a Michael Jordan card when I was young and also Mabel for sure so yeah in addition to the other two

panelists I think um a few things that we've done it was quite unique um first of all I think like we highly rely on our um real human referral so what it means is like we didn't do anything incentivized what it is it's like there's two part mainly one is that we have this non-incentivized referral code system where people are really sharing not because um they want to get Rewards or anything but rather because they enjoy the product and then they felt like oh I gained health or I gained from this good habit formation um so I would like to invite my friends and family with that actually these new people got on board like the person who invited them will teach them Hand by

hand that how do you you know think about see phrases like we're stepping we still have to see phrases and everything and then like teach them how you you can buy tokens Etc right that's like one part the other part about this real human referral is comes from our ambassador program where we recruited a lot of people not the crypto native kols but rather it's like a lot of content producers on Instagram on um Tech talk on Twitter or whatever but they're like in the past they were non-workery Native users and these people actually generated a lot of interesting content to attract other people to come over and then they also have Regional offline events and that really kind of bring I know this is like not very scalable it

sounds like but you know when when like Paul granum used to say like do things don't scale and I see absolutely the kind of a fit here I think in addition to what I just mentioned I think another important case is that um we realized that c first is really really hard for people so we were looking into eip4337 for a new game so with with smart contract wallet or it's it's not a full-blown smart contract wallet but it does have the the module of gas prepayment and everything so people actually could enjoy you know not having the need to remember like right down their sea phrases like sepan did and then they also don't have to worry about like knowing which gas token it is versus like GMT or whatever in-game

token so I think that's also another thing that we want to do last but not least I wanted to mention the the Apple pay integration that we had um so what we did with Apple pay is not like we don't we never sell any uh Stephen shoes in the past so it's always P2P trading so what essentially we were doing with Apple pay said while you're selling you're listing with like a GMT um price for third sneakers the seller is actually receiving at GMT but the buyers with pay obviously you have to pay the 30 Apple tax but then like once you buy with Apple pay you can essentially buy with Fiat with your credit card with X and Y and Z and then on the other hand the seller still

receives GMT so we are in the middle like doing that um it's heavy but I think it's worth it because obviously a lot of people who in the past cannot enjoy the marketplace inside Apple now they can enjoy that so I think that's another point of user onboarding yeah I was very surprised that like you know around us even the web 2 Gamers all like walking around with a step-up application and getting HTTP token so yeah I think a really good move so uh next question is like no still there's a lot of limitations so blockchain with integration with the blockchain uh still uh the users are a little bit hard to get in so what what what no uh the blockchain space I mean

applications have to improve in terms of like technology wise also user Behavior wise what is yeah what's yourself so definitely one point that's been mentioned is like the accessibility of like creating a wallet for the first time interacting with it I think like as a game developer a creator of a decentralized application you choose a wallet you choose a blockchain but you don't necessarily want to reinvent the wheel so you try also to rely on the other developers that participate to the network to the ecosystem to solve those solution rather than yourself because we are we built originally on ethereum then

we move on polygon because those things existed openc existed metamask resisted wallets have been improving over time there and like if you start today in blockchain gaming like there's plenty more solution available from other launch limitable sui Etc which are much mature already and provide all those Solutions I think like what people often forget as well about blockchain gaming is like zietos of like web free web free is bringing back the power in the hand of the player is very Community Driven and unlike what we've seen in a web tools like we are not competing with each other when we work on game actually like we are supporting each other by growing

the ecosystem attracting players and there is a network effect that that happens when another game becomes successful is they bring more users to the network who have their wallet those users can actually enter and play and interact in other application and game with their digital asset whether their cards their shoes or their avatars and something that work really well for sandbox is when we enable any of like the 15 most popular NFC collection to become playable in sandbox it actually benefited both to the community to attract some users from sandbox itself and this Versa it brought a lot more users from those Community to start

playing in the metaverse with an nft that instead of being just a 2D image became a 3D character thanks to interoperability so sometimes it's also about like understanding like this idea of collaborating working together not necessarily always only solving the ux problem but trying to see how do we get players where they already are where they are already using and interacting with uh blockchain but interest them to play in a diff or to interact in a different way continuously adding value in a win-win situation yeah I think we're arriving at a place where like with you know l2s and app you know app chains I think we're arriving at a place where like the

throughput problem is not an issue at you know I think you can scale uh you know uh a game to you know like almost like a traditional game and decide what's going to be on chain that's relevant data to you know have on Chain versus not and not have a throughput issue so I think like we're at a place now where we're ready for good games like really good games and when I say when I say when I say what I mean when I say good game is like someone that's really fun that any traditional gamer would say like that's awesome and I'm enjoying this and I want to keep playing it I want to stay up all night playing this game and that's what we're after I think obviously we have technical limit there I think there's still some usability

um opportunities let's call them around wallets and I think you can obfuscate things by having non-custodial Vault contracts and you can have just different ways to handle things but I think inevitably your objective like the technology is now there and inevitably your objective is to again make it very clearly demonstrated what the value of the technology is and then after that value is clear to the consumer or to the player of your game then educate them to be you know be understand what the benefits of this technology is and how they can you know become more involved and More in control um I think like you know maybe the same way we could think of like not your keys

not your coins like not your these not your cards if it's in a custodial contract um but to to begin to interact with the customer that way and they'll see that these cards you know maybe what they got a really rare card and it's gone up in value and now they have an incentive to take that card and put it onto open C which means that they're going to have to start interacting with wallets they're going to have to start interacting with uh you know uh third-party applications like marketplaces if you're not running your own native Marketplace um but I think like the the message I would leave people with is like we're finally arriving at a place where the throughput problem is not an issue for at scale games um especially if you're having some level of discretion around what you're actually putting on Chain versus what

you're not not everything in games needs to be on chain in my personal opinion um but I think and it depends on the game You're Building I should say actually but generally speaking uh I think there's still lots of room for opportunity to improve from a usability and customer experience standpoint particularly at the wallet level and and having custody of your cards or whatever assets you're playing with um and probably um you know there's there are some solutions and kind of leaps forward that have been taken into space around uh transactions on networks and having you know uh gas fees be you know uh not a prohibitive function within moving assets on chain so there's a couple things we have to work on but I think

we're in the right direction and I think we're starting to see some you know we're starting to yield the results of a lot of people's effort from an infrastructure standpoint and I think that's going to be particularly good for gaming yeah I wanted to talk about this question um with our own experience like very recently so we were actually choosing the the settlement blockchain for new game it's an SLG well it's not a traditional SLG but we just call it SLG and then um so like there's a few things that really you have to kind of think about and trade-off right like you got you guys said um app Ching so appjing is obviously a performance wise it's great but then you lost the global State obviously for a lot of the other l1s

right even for L2 like you kind of lost that but it's you know still not as much as like the app chain you lost that so if you want to keep the global State then you would have to kind of sacrifice some of the performance and then with a lot of the the L2 currently um it's still highly contingent on ethereum's performance so I think this is not something that I have a solution yet but obviously we were talking about today's say polygon like they were trying to do the polygon 2.0 where like they want the ZK validium and then like you know with each essentially like one application running one Roll-Ups and then with even if like let's say you run a roll up yourself and then you have ZK proof and everything you can essentially even just decide to do offer gasless chain

um because obviously if you are the operator of the roll-up then like you have to charge and this and that right there's a lot of this kind of interesting things that we are observing um but still like you know when it comes to like your appointed High freak whether there's like a high frequency transaction that's happening which parts goes on Chang which part can't like you know be sacrificed is there a middle ground right in the past we will say like we'll probably just put all of these like centralized but now maybe you can just put it in a contract and let user deposit into the contract and then like they can just um leverage the stake token per se in game and they can spend it but then without that thing specifically happening happening real time on chain like that's like one solution that's

we're exactly adopting this approach for our new game so like basically like if you meant a new asset that's like really core like then you make it immediately on Chang versus like some of the a high frequency spending you can put it with the stake token so I think we are right now at a like a turning point of the history where a lot of the applications are really actually thinking about like how we can align the blockchain use cases with a lot of these incentives and this and that and then um I think the next step will be quite interesting for the next like one or two years with all the um like Roll-Ups like Solutions going up and also like some of the other um solutions that even like Cosmos were offering like you're seeing a lot of the app change per se on on Cosmos so we're

definitely interested to see how that plays out yeah thank you for sharing uh your insights and it will be uh it'll be very helpful for the audience and before wrapping up last question is like so now Singapore is kind of center of Asia and also we talk about like uh token 249 is getting bigger than consensus I guess so what's your uh thought about you know what's your plan for the Asian Market expansion and what's your peak of your product this shirt so Mabel we can start I can I can start thank you yeah um I don't think like so we actually base here like half our team is actually in

um in East Asia and then the rest is like either Europe or Australia so um we actually are more local and then what we've been seeing is that um obviously first of all like Japan is a really large Market um we've talked about it a lot and then we benefited a lot from that as well like both on the IP level as well as the government level um it's really compliant um sorry regulatory friendly these days um another thing observation that we are seeing is that um because like we also run our own Venture fund um from our own treasury so we're seeing a lot of Builders coming out of the great Studios from China greater China right yeah so it's like the large companies like tencent like not East there's a batch of talents that are coming out who are

trying to seek for you know obviously adventurous kind of project and then um they their experience running a high like large scale games as well was like some sort of social apps or like Marketplace it was quite fascinating um so I think like in terms of that like we are also trying to capture some of those Alpha through investing in some of them and also working with them um through Synergy exploration um I think from like from not just the East Asian perspective right like from also like southeast Asia we're also seeing a lot more like guild-based kind of um um exploration from some of the other local Dao's and I think those are highly relevant to how these people are trying to make a living not saying that like

you have to adopt like extra earn or whatever but definitely with the integration of smart contract wallet and everything um I think there's a lot of things that people can actually do with you know getting payment through anching and just spend it through US dollar instead of holding a local currency I know it's a little bit far stretch but um I think these are some of the observation that we are seeing okay yeah I think as a trading card game I think Japan's like a very critical Market um you know I think a lot of great you know there's a huge community of players in these in like Asian markets for for just trading cards in general and games in general right I think like we've seen a massive Gaming Community in Korea enormous Gaming Community in Japan um I think the thing we focus on most is

distribution right I think um because we kind of fit into this category of like if you if you saw parallel if any of you have seen parallel like you'd look at it and be like this game looks really sick like just like any traditional video game looks and um you know I think like because of our ability to to allow anyone who is non like who doesn't uh you know it doesn't have a wall it doesn't have you know crypto to play the game it allows Us distribution opportunities and partnership opportunities to reach Gamers where they are today and um so I think there that's where you know I would focus um is looking at who has the greatest reach within which Market that you want to be in and what does an arrangement

look like whereby uh Gamers who enjoy these types of games can can be a part of your ecosystem and uh what does the conversion look like over time for them going from a traditional game to being a participant and an owner of a piece of the network and that to me looks like owning cards owning Prime winning it from competitive play I think also tournaments are a massive thing uh streamers that was a huge piece of you know a part of how games are distributed you know people people mostly learn about games from either their friends or from twitch or YouTube and I think um so these are all things that we're factoring into uh where we want to grow and how we want to grow um and I mean we're still in closed beta and obviously you know in our game you

know people have played 300 000 games of parallel in 38 days so like and each game takes like 10 minutes so people are ferociously playing this game and so I think we've got something that's really special and we know it and I think we want to be really careful with who we work with and how we enter different markets uh and I think that what for you know the what precludes that to be able to do it correctly is two things translation localization of language and stability of servers like map for scale no one really talks about is like you know a lot of the expertise around games and one of the hardest parts if you're like building a unity game or an unreal you know a ue5 game is like the server scalability and so I think I think those two things are what we want to solve

first and then work uh work towards distribution via Partners in Asia that's good the way well first you have to take consideration sandbox is not a game it's a platform and when we started fundraising for sandbox in 2018 like there was something that really already like inclined us toward Asia like our First Investors after like pitching 100 different investors around the world and getting no no no no each time the first would step in was harsh in Korea and then the second step in was query Nix in Japan and after came a global fund from Singapore and ultimately an imoka in Hong Kong so that really led us to think maybe there is something in Asia that we should look more than because I come

from a background in Mobile gaming San Francisco Silicon Valley kind of investors focusing on those countries so what that's what we've done we started to set up a team in Korea at back then was just one person today we have offices across almost all Asia Japan Korea Hong Kong Thailand Singapore and also India and turkey to there and it represents more than 40 percent of the activities in sandbox and we're not looking only at players in case of sandbox we are looking every time we look at the market we look first at other creators like do they have artists or an Indus or people who can become create like can create experiences or

already in the game industry and can move from other platform to sandbox we look at Brands out there like interesting IPS contents that are more Regional but have the potential to grow globally and we can help to grow globally are there players of course and are there like investors people who understand or what the metaverse is about because it is a virtual world there is a virtual map virtual map means like there is land land is like virtual real estate and Asia gets it they understand the value of virtual real estate much more than older territories and that's why like we've seen in so much growth and in this region of the world

we uh and yet you have to consider as well like you mentioned sandbox is we we just we're still in beta as well actually we have even in Alpha we open the publishing just two months ago to the creators more than uh 24 000 land owners uh we had over the past 12 months 1 million unique players were explored and sandbox is only on PC and Mac we haven't yet opened mobile so I still believe that we have that capacity to bring many more creators and many more users as next year we will be on mobile as well and so that's why that's one of the reasons like being one week in Korea with Korea blockchain week being here in

Singapore and spending a lot of time in Asia will continue to help grow the sandbox and the blockchain gaming space in general okay thank you for sharing your thoughtful opinion and size and thank you for hearing our discussion thank you