Immutable’s Web3 Roadmap for 2024

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Harbor is a foundational technology loved by millions of Gamers and integrated into the communities of the largest mobile PC and web 3 gaming products on the market to learn more about this Flagship product simply head to harbor. or check out the details in the show notes and with that let's dive into the episode hello and welcome to the novic gaming podcast I'm your host nicori we have a great episode for you today and a fantastic guest uh we've done a lot of looking back at 2023 in our end of year episodes so today we will be leaping into the new year with gusto and taking a forward look at the web3 gaming space with none other than one of the founders of immutable Robbie Ferguson uh immutable is one of the leaders in the web 3 space and I think it might be Australia's fastest growing Company Robbie will correct me if I'm wrong on that later on um they raised about 400 million auss dollars uh in funding and most recently were valued at 3.5 billion which is about2 and A5 billion in US

Robbie founded the company with his brother James in 2018 when it was called fuel games and they developed and published the trading card game Gods Unchained which I'm sure longtime listeners will have heard about if they follow this space and we actually talked about it quite a bit uh about two weeks ago in an episode when we did an overview of the state of web 3 tcgs so if you're curious about web 3 tcgs be sure to check that episode out uh the company then rebranded as immutable in 2019 and added nft trading uh among other products which we're going to talk about uh in depth today and given their perch in the ecosystem immutable gets to see a lot of what's going on in the space and that's why I'm very excited to have Robbie on the show today Robbie welcome to the Pod awesome great to be here Nico fantastic all right well with that out of the way let's get right into it uh so why don't we start with a bit of background on immutable as I mentioned in the intro you started out as game developers uh as is often the case when these things pivot into other things and then you took a bit of a turn so whyn't you tell us the story of immutable

of course I think as a bit of background uh I'm a massive video gamer Growing Up So been playing games since I was a kid have thousands of hours in in RuneScape in League of Legends in a bunch of other MMOs so does my brother and uh I guess we we got obsessed with the idea of real value in gaming actually pretty early on so I've been building startups with my brother for the last uh decade now both originally software engineers and the first startup we ever built was a betting application or platform for League of Legends where you could wager on your own matches against your opponent and we had this idea that if you could have skin in the game players would be engaged and retained with statistically far higher uh certainty than with without this and it could kind of be this new horizontal layer of Engagement and eventually you know Riot games shut it down due to approaching terms of service but we were still obsessed with this idea of value inside of games and then we got into crypto in 2014 with Bitcoin um and we became

completely obsessed with ethereum in 2015 because it was pretty clear that if you could write I mean early on there was this uh application called etherol and it was very basic and it was a basically gambling Vice application where you could say bet on a dice roll and it would probabilistically reward you with a small house Edge and the reason we were obsessed was in 200 lines of code someone had made redundant what the Australian government spend tens of billions of dollars doing every year which is they they go and heuristically test slot machines to see if they're paying out what they say they'll pay out between 88 and 92 cents in the dollar H and they a up all these machines that they can't be sort of broken or corrupt or updated to code later on and then they did something that the government could never do which is they took the profit streams and they gave it to every player who used the game and and this idea I think of cooperatively being able to own companies was the thing that we became really interested in uh and as a new way to grow companies by giving away

a share of the p in exchange for faster growth and also how sort of network effects over time for a lot of traditional modes could become things that were communally owned and value could be distributed sort of more equitably and so we started building uh trading Bots initially on poniac and then on decentralized exchanges and then we got into nfts when the first ever nft came out in 2017 called crypto and we saw these and said this will be how Gamers own in game items to us that was the most obvious category of mainstream adoption in gaming now it's taken a while to get there but I think we're basically at the year we're going to start to see tens of millions of users on board to web 3 fire gaming and uh we we actually started by building the first ever onchain game which was called etherbots I think it came out in December 2017 uh and all the logic of this game was completely decentralized uh it was very expensive to run so I think we

learned a lot early on around there was demand for this I think it made you know $2 million in Revenue the first few months but it was almost impossible to build an ethereum and it was impossible to use or scale ethereum I mean we were effectively building on Punch Cards of of computers um it was that rudimentary and and the documentation was that P so we realized there was demand but there was also this problem and someone needed to make a platform and actually our vision from day one was always to create a platform we just knew until we could showcase to the world with a really strong game why this matters in the same way that steam really got to become this dominant platform for trading bya creating Counter Strike go that we we wouldn't be able to do a successful job otherwise and and and the second thing is I think if you're building a platform the first thing you should do is be your own customer otherwise you end up building something that is very abstracted away from customer needs so we started by building Gods onchain which to me was the most obvious mtic fit for a web three game you have magic the Gathering cards you have Yu-Gi-Oh cards where hundreds of millions of

dollars are spent every year on on trades right the estimated secondary market cap of magic cards is 10 to2 billion dollar and then you can have the convenience and the distribution of a digital card game like Hearthstone which broke records and was a category defining game when it came out I think in what like around 2010 and we said well why don't we merge these and and create a a card game the other reason is we had raised a couple of million dollars from coinbase's first ever uh Venture check and and from a few other funds but that's not enough to make a AAA MMO it is enough to make a really high quality trading card game um so that's how we got started gson chain was you know really successful 15 million us Revenue in the first year I think kind of was a prototypical game that a lot of other things have been built on and that really allowed us to start focusing on building out this this platform and you know immutable today has more than 250 games building on us we have 70 to 75% market share of of all web three games in in the space roughly 300 people around the world uh and you know we expect more than half of these to go live this year with the launch of

aable zkm yeah I think Robbie the point you made about um you have to be your own first customer and dog food your own product I think that's just so true and it just resonates very deeply with me um there just aren't really name me one platform player who hasn't done that first been their own first customer done all the things wrong that they're going to do realize where the pain points are and then actually solve the problem um I mean it's the same for epic it's the same for you know as you said steam it's it's just it's a kind of a universal truth so so I really do appreciate that you guys were very much one of the very first to go out there and try and build something uh again thematically trading card games make a lot of sense that's why we did an entire episode a couple of weeks ago covering the web 3 um ecosystem there and of course Goda and change was was heavily mentioned there um so we've touched on a lot there in the intro um and so I'm just curious to hear what are the other things that newable is now involved in you know you you've told us the Journey of where you came from from and where you are now uh

and now you have your finger in a lot of Pies um you know you still obviously got Gods and chains on the gaming side you've got immutable X which is your ethereum layer to you've got nft trading what else do you have going on in the space so I categorized the big buckets of immutable as we have the studio which builds and publishes web three games and uh that's led by Justin hog you formerly read right right red games Asia and the reason we do that is so a we can have these successful prototypes but B so we know exact how to help the games on our platform every piece of Ip we invest in how do we do a successful long-term economy design for web three assets how do we have a successful toomics launch how do we have a frictionless user experience gets shared with every other game on our platform and I think that is one of the core reasons that we've been able to have the market share we've had especially before a couple of years ago we weren't nearly as well resourced as the other major blockchains who we were typically competing with and I think the reason we were able to compete toe-to-toe is everyone has kind of of come to gaming because they see well clearly the

next 100 million users to web 3 are coming through gaming this is going to make my blockchain the most used blockchain in the world and this matters in terms of adoption and metrics so let's staff it let's fund it we've been purely focused on web three gaming as the only category want to touch we said no to pfps we said no to defi we said no to Collectibles and I think that's meant the DNA of the company both at a intellectual property level the way we understand things but also the product level is is fundamentally optimized for for gaming the core part of the business is the mutable platform and uh this is now very broad so our our goal is to be the One-Stop shop platform if you want to build a web three game you shouldn't have to really know what blockchain you're using you shouldn't have to know what even a blockchain is you should be able to incredibly easy onboard deposit funds purchase assets and experience the value proposition of web three gaming now with the launch of mutable zkm which is going into you know main net Early Access beta end of this

month uh and then sort of full launch uh end of March with with a bunch of games we're able to have Smart contract compatibility with CK briefs so that's really exciting and that's obviously a huge effort over the last year from us as we've been building that with the polygon team we also though have a bunch of other products our Global Order book means that you have unified liquidity no matter what Marketplace you trade on which is one of the biggest problems in the space today because liquidity gets fragmented every single venue you trade on it's also much better for marketplaces because they get access to far more listings that they can fill and take fees on on their platform we have enforcable royalties for every single originated asset on the immutable protocol which is guaranteed the protocol layer which for us is a very important philosophical component if you can't guarantee royalties I think you're breaking one of the main value propositions of of trading in web three we by the way I I'm just going to jump in on that one I I think 100% I'm the idea that you wouldn't enforce royalties I I mean I'm I'm very much on your side

in this debate I know it's there's a philosophical disagreement um among some of the purists and non-p purists and you know that's fair you can make Arguments for both sides but 100% if you Cann enforce royalties like what is the point of a Marketplace there is no point um so thank you for for doing this this debate has been a lot of the people who say well philosophically we're taking this ENT really it's not a philosophical argument it's a it's very difficult to do it a smart contract layer aler if you just try and enforce it at smart contract layer people can typically write smart contracts but just right around it as you've seen with you know blur or xd2 it's a race to the bottom and that's part of the reason why we think it's so important to enforce the protocol levels that everyone is in the same playing field yeah but I I completely agree I think it's sort of an axom of people being able to have successful monetization yeah um the third thing we have a mutable checkout which is you can pay with any currency with any funds on eel one on eel 2 and and and the idea is just incredibly

compliant simple payment routing for you know anyone trying to pay for for a game weable passport with currently two million uh people who who've signed up to that which is our uh self- custodial uh wallet product where you can on board with email or iOS or Android or sorry Gmail and the reason why uh this is so powerful is it's blending the user experience of hey literally just signing in with say apple plus self custom um so we're not taking uh users assets on on that front so we have a very broad Suite of of products but our vision is if you want to build a web 3 game and make it successful or you want to play a web 3 game will'll Connect you or will build the product that you need to to do so in and on the the games front our vision is barell strategy you should be able to build completely customized s smart contracts you can just copy and paste them from eel one with mutable zkm or you can just build with apis and never have to touch smart contracts under the

hood and I think that's incredibly important because so many of the developers that are going to be on boarding over the next one two three years as these games go mainstream aren't even going to know what a smart contract is what re-entrancy bugs are I think we're going to prevent many of these people from successfully developing unless we make a strip like into face we got to build yeah yeah I mean I completely agree you know I've been in the web space for for a number of years now and went through the Euphoria of you know 2020 2021 into 2022 and you know it's there was always a promise like oh it's so hard to build it's coming it's coming it's coming hadn't come you know these tools that you're talking about these tools that you're building they weren't there yet and they're still not there yet quite frankly I think across the board so I'm curious to hear what is your view of the overall web 3 gaming space right now it's it's it's had a lot of false starts and some um you know made some promises that it hasn't quite been able to keep at least not yet uh so I'm just curious from your perspective you know you oversee a lot of it the ecosystem what is your view of web3 gaming as we enter 202 for and moving forward uh is there

is there more pain to come or is it turning a corner the number one question I get is why are there no mainstream web through games and there's two answers to that the first answer is up until six months ago the infrastructure didn't even exist for these to go mainstream there is no good way to abstract gas from players the user experience on boarding to metamask killed 99% of conversion for any end user and this is not a you know a paino against that metamask and crypto wallets are product designed for hardcore crypto users if you're trying to on board the incredibly competitive Performance Marketing target audience of say mobile or casual games you need a product that is incredibly easy to on board with and then people also forget that a lot of this existing infrastructure has already had hit hun content to help people jump the hurdle of on boarding the first time you sign up to Apple's ecosystem and you decid to deposit your credit card it's not a frictionless experience you've got to do a bunch of things and but now that ecosystem exists and so we're really

getting over that S curve of of bootstrapping things from scratch and that's why we need hit content but I think that is now in place you know IM mutable passport is live we have done a tests and it converts you know 4 to 600% more efficiently than uh standard wallets we have uh full gas abstraction we have mutable ckvm which is smart contract compatible but also fully scalable I think the info is now finally that the second question is content and the reality is the vast majority of games have funded two to three years ago and games take four to six years to build so really we're only starting to see these games launch now and we track pretty much every game in our pipeline we track the expected value of success which we bucket into Bas on funding game design track record play testing Etc it's almost an internal Venture team and we track when they're going live and obviously you have to add on some delay typically to these games but there will be 50 to 100 highquality games that launch this this year I mean if they're 250 the average funding size is seven

figures with these are all managed customers we're not even tracking the sort of IND the self- serve applications these are all major games um like one of the ones we one of the last uh week which we we'll announce soon I mean uh I think more than1 155 million us do in funding uh they have a team of 120 full-time people that's kind of the average profile of of um one of these games that we've been seeing and so really the problem is lines and these games are now going live I think the other reason is given the market the last two years there was no real urgency for these games to ship it's not as if they could have made it on the money through primary sales or speculation or or launching a token the rise in web 3 gaming fundable tokens has put a huge shift in urgency for the timelines for many many of these games to ship they're all trying to get tokens out there they're all trying to get play tests and nvs and and start to win the narrative because right now there's obviously this huge burgeoning narrative for for web three gaming yeah you know something you said I actually use the exact same example um

uh which is the example of hey if you're trying to set up your credit card for the first time on on Apple pay or whatever like there's a ton of friction there but there's also an incredible amount of value on the other side waiting for you and that's why people are prepared to do that and I think that's exactly what we've been missing uh for the financial side of things there has been value right so you set up your metamask you set up your coinbase account like there's money to be made right when there's money to be made people are ready to jump through a bunch of hoops and do the hard work and then once it's done it's done right you don't have to do that onboarding ever again um but with gaming there just hasn't been that big valuable hit game on the other side of all of this Hoops that you got jump through and that's in my opinion very much the same vibe that you're giving off here which is once that good content comes and there's a clear and obvious reason to do the hard work of getting your wallet set up or whatever and of course everybody's making like you guys are making it easy and easier with time more more frictionless um like a strip like interface which you also

mentioned um it will happen right and so I'm still very bullish long-term on web 3 sounds like you are you have to be given your your position um so you've alluded to a couple of uh big announcements you mentioned polygon already um so why don't we actually start with that um getting into some of the other stuff that you're talking about but all of these announcements I think are made and all of these deals are made Partnerships are made with the view of making web 3 gaming more accessible and more you know easily uh on boarded for the mass market so why do we start with the polygon side I think that's an infrastructure type deal uh what is all that about so end of 2022 we really had one major competitive the space and and gaming was effectively a two horse race you had polygon and imal with roughly 35% market share each and uh I I remember there was this report by uh I think it was uh Deli digital which was analyzing the market share of blockchain by looking at the funding attributed to games building on them and

IM mutable and polygon had roughly a billion dos each which was two3 of all sort of funding for for games in the space and we were competing viciously you know the the amount of Grants going to games was Rising rapidly uh we were both massively Staffing up teams and I remember um Sunday popped on a call with me and said you know at the end of the day you guys AR on a scaling protocol and and we're not a a gaming platform so there's an opportunity for us to really simplify the user and develop choice and to form a default platform for gaming by by joining forces and that's exactly what we did so we built a m zbm which uses uh you know the polygon Prov and and their technology at the scaling uh level that they acquired three teams back in 200221 in in what I think was probably one of the more successful examples of m&a in the space and the second thing is we really joined forces on the on the go to market side um and and since then we've seen our win rates in our our market share sort of jump from 35 to to rough uh 70% which is what what we expected uh

so that's been fantastic and and more importantly I simplified the choice for developers you know the number one comment we got from that was well I was originally choosing between polyon and imut now I don't have to decide and I think that's incredibly important because there is so much energy in the space dedicated to what blockchain you're going to use what platform wallet we really need game developers to be obsessed with just how do I make my game more successful more fun the user experience better rather than you know you don't spend that much time agonizing over whether you use AWS or gcp uh in if you're pulled out a web two game uh so that that's been really uh successful where you know they're a fantastic team to work with um and obviously we we've sort of continued this trend of these strategic Partnerships with uh Merit Circle beam which we announced roughly one month ago uh which is the largest web three gaming down in the space uh building a ton of stuff on on amable and we're really excited to working with that team as well fantastic we'll talk about B more more about in a second but uh I think one of the things that is

underappreciated by uh people who are looking from the outside in who have not had to work in web 3 and do all the the plumbing um we had an episode right before the end of the year uh game seven had done a state of uh gaming web3 gaming report and we had them on to talk about I thought it was a fantastic report by the way go and check it out uh if you haven't already and uh I forget the number now but it was something like there are 700 different blockchains now uh and most of them are dedicated with the or you know like they're dedicated to gaming they're trying to say hey we're the best blockchain for gaming and and that's just Madness it's like if I'm choosing to to develop a game um say there are 700 unities out there or there are 700 unreal engines or there are 700 app stores to choose from between like Apple and Google that's Madness everybody can tell you that's Madness so I I do think it's actually in my opinion it's a good thing that there's some consolidation happening obviously competition is always good for Innovation uh but at some point rationality has to Prevail and you can't

have an ecosystem of 700 different blockchains I make up I think it shows the promise of the category right it does though it does yes people realize how much product Market fit and how big this is going to be there's $150 billion spent every year on in-game items yeah and if we can translate that into value that is open and tradeable on an asset ecosystem like an open blockchain and then you can add on derivatives in secondary financial instruments the opportunity here is quite literally half or trillion or trillion dollar Financial Market annually because that's typically what you see in terms of the value of secondary financial instruments built on top of primary sport volum yeah yeah no 100% you're preaching to the choir there um okay so you mentioned Merit uh Circle I know them them well the they're the largest gaming Dow out there I'm curious to hear what the thinking behind that deal is and uh what you guys are doing together again this was a real opportunity for us to say well uh Merit Circle and immutable were

competing in markets we were both you know and sort of going in and and bitting up grants for Games Etc and at at the end of the day I think there's a huge opportunity for uh the leading gaming platform which is immutable to partner with the largest web3 gaming down on the world which is uh Merit Circle and form joint infrastructure that makes it exceptionally uh easy for games to be successful uh so they'll be building a ton of that infrastructure with us uh but B just to simplify again the choice for developers um and I mean Merit Circle has I think a $100 million cash treasury uh they have obviously an enormous native treasury um they're a team that I think has been really phenomenally obsessed with with gaming and we've already seen of the games that we've been working with uh together people are incredibly excited for what they're going to bring to the ecosystem so they're building uh publishing infrastructure Community infrastructure marketplaces on top of uh utable and will'll be working a ton together on the on the go to market side so again um I

think this is probably a a much bigger deal than people initially sort of people heard the polyon announcement like oh great interesting another partnership that there's there's many of these and really that was actually a fundamental shift in in terms of uh the topology of web 3 gaming and and resolving the the number of choices that game developers have to go to I think this is the same thing yeah I get the Merit Circle treasury uh update email every month and uh they have a lot of a lot of capital to deploy and they obviously serve a lot of uh Gamers and uh uh bring a lot of player liquidity potentially um into again 10 seconds I actually thought this was a really interesting partnership and to your point that maybe they you know Outsiders looking in again are like okay it's a it's a dow like I thought Dows were you know for buying the Constitution you know CA 2019 or whatever right if you remember that the constitution Dow project um but I actually think it's a bigger deal than than maybe people give it credit for so um so yeah I'm interested to see what you guys do together okay a lot of great news a lot

of great announcements uh all of them of course meant to move the web three space forward and I think uh one of the biggest ones biggest announcements that you've you've made which I thought was really interesting is uh doing something with one of the largest Legacy gaming companies by Legacy I don't mean it in a derogatory manner I mean it in a this is a big deal big company uh Ubisoft what are you guys doing together so we are building a frictionless experience called the future of web three gaming together uh there'll be more details to be shared on that in the coming months uh but we've been really excited to be working with this team I think they're actually deeply committed to the space uh they are yeah I mean of of all the the big companies out there I think or certainly in the west we're going to talk about Asia Pacific in a second um but uh yeah I'm I'm really impressed by how committed they have been throughout the crypto winter as well not just in the the good times but also through the bad times and so yeah I'm excited to see you guys doing doing stuff there sorry to in Dr up but I just want to give them a shout out because they really are doing great work I I I totally agree so this was I mean a year in the works uh

of of negotiation and going back and forth and you know us flying to France Etc but I'm I'm really glad we got this over the line uh there will be you know a lot of things coming out around this uh and things you can use this year um so we're we're very excited for for this partnership and what's going to bring the space fantastic so yeah um lot of big announcements uh and of course each of those is big in their own right um but collectively hoping it's going to move web 3 gaming forward um but I do want to talk about adoption a little bit more here uh we we kind of touched on this earlier a little bit um you know we we need that big hit game to come out we need those bets that were made two or three years ago to start actually coming to Market uh we need some of this infrastructure that you guys are building and others are building to come online and becoming even more frictionless um than than they are now um but do you see there being some kind of seminal moment for web 3 gaming uh you know how do we how do we honestly get more Gamers into web 3 games uh from

where we are today uh it's it's been the same group of people uh who've been kind of hanging out in web 3 for a while now we haven't really seen the numbers go up uh it seems like there's not a lot of curiosity on the outside uh looking in and so I just want to get your perspective on how do we get more Gamers into these web through games short of like obviously hit games that's that's an obvious one um but I do think there are other things that we could be doing to bring more Gamers into the ecosystem I I don't think there's an answer outside if get more hit games and i' I've said the same boring answer for the last uh three years but um I think it's you have to build games that are invisible to end players that web 3 is even a component certainly at least until they're reasonably engaged and then you have to deliver a value proposition of them being able to trade and sell for real value things that they otherwise couldn't and I think the first time you have a game with 10 million players where a reasonable chunk of those are converting the first even one tenth of Counter-Strike GO which does $15 billion in annual gmv per year of uh

trading skins I think is the moment you have this inflection point where you've proven the category every single time you've had a major successful uh you know game which is been millions or hundreds of thousands of players in the space so far you've had this inflection point of investment Etc even the last three months we've seen investment and velocity of of deals done probably 5x so it is pretty clear that the entire space is waiting for these hits now I think the privilege position we're in is we get to see everything building we know there is more than 100 high quality games going live on immutable alone in 2024 uh so you know we feel very quietly confident there's going to be multiple hits uh this year I think with you know a million players I think uh on a monthly basis would be my my kind of minimum uh definition of a hit and I think we'll see things hitting and exceeding that some some confident predictions I like it I like it um not many of our guests are quite as confident as you are but again you do

have a unique position in the in the ecosystem where you do get to see all these so uh I mean you heard it here listeners like that's a big number more than a 100 games you said more than 100 high quality games are coming to Market in 2024 did I hear that right yeah wow so we we've got roughly I mean 250 building on the platform and and uh just to give you an example of the pace we onboarded 27 games in December uh in the last uh 10 days have already onboarded another nine so the pace at which we are onboarding these games is uh exponentially accelerating at the moment so you know we're we're seeing more and more things and and and these are all optimized for their credible games they have high levels of funding and they're also launching this year yeah wow okay well listeners that's that's that is big news I think it sounds like 2024 could really be a inflection point uh and next brings me nicely to my next question which is uh what about web 3 I will I will cave at that there's going to be a very high failure rate gaming already is entirely hit driven uh the you know there's going to be 90% of these games which ultimately don't succeed but you

only really need one uh for for the entire space to take off yeah no no absolutely of course I mean games is totally hits driven and a game that looks and feels good in in soft launch may not work for any number of reasons and we see that all the time in in any gaming whether it be web 3 or otherwise so no no of course that that goes with the same but but 100 high quality games are in development I think that's the key Point here like a lot of the early games that came to Market and have been in Market now in web 3 weren't highquality games you know they were crypto enthusiasts who thought they could become game designers overnight and youing yeah exactly so that's there's far more than 100 that's just what we're confident will be shipping this year based on our existing pipeline so not even including games where we're about to un Point got it got it okay um so yeah again my next question very nicely uh dovet Tales into this this conversation which is what do we need to see for web 3 investment to rebound you know VCS to get really excited again I

feel like basically what I've been seeing and hearing from from the VCS I talked to they're kind of all sitting and waiting for that hit game to come out and that's the Catalyst that they're waiting for as well uh is that is that the right read do we do we expect investors not to really get involved again until there's a a really big reason a big Financial return I would say web through gaming investment is already back uh I don't think it's necessarily the peaks of what you saw in 2021 but we've already seen the velocity of deal making sort of four to five over the last three months and that's because gaming tokens are doing incredibly well right now even with games being in the early stages uh so there's not obviously a growth investing Market that typically isn't a growth investing Market for games because games either are profitable or not they don't typically need to raise a lot of capital Beyond say Sera but they we are seeing a lot of early stage deals get done so I think you you'll pull gasoline on this flame as soon as you have hits but right now there is I I I think it's one of the best times to be building and raising a a web three game if if you're trying to we're seeing deals get done in a week that struggled to raise or three months

um prior and and uh you know we we we think that's pretty exciting yeah well that's that's great to hear um yeah there's there's some there's some green shoots showing you know for sure I I think so as well in in gaming in general as well not just web for cor 3 okay uh one of the things I keep hearing from guests on the show uh is how much more Forward Thinking Asia Pacific tends to be on web 3 um and I personally don't have terribly good exposure to to that region or to what's being built over there so I always like to ask our guests who are experts in the area and have obviously I mean you're in Sydney you're in the Asia Pacific region um and obviously you get to see a lot of probably Asian developers as well um what are they doing differently both from a regulatory framework perspective but also from an encouraging Innovation perspective in Asia Pacific compared to the US or or Europe the biggest thing is probably wck uh especially around launching of tokens I I think there's a massive chilling effect if you're a US domiciled entity trying to launch tokens

at the moment uh the second thing I would say is from a cultural perspective and I don't necessarily have the root cause of this apart from Japan and Korea have actually always been the vangard of shifts in gaming you had the first gcha games emerge out of uh Japan you had Korea really leading the the charge into free to play and I think they view this prisoners dilemma or this innovators dilemma of who should move first to switch the model to an open economy or who will be able to experiment successfully disrupt the incumbents as something they can win rather than hedged strategies like the west where they'll say well we're very happy to buy you know as many of the largest games companies in the world L their responses are we're happy to you know play around a bit but ultimately you know we're just going to buy the winners and and we're just going to buy our way into the space once this emerges because that's they're happy to pay right these are multi hundred billion dollar companies uh I think in Asia in in Japan and Korea

in particular you have a risk appetite that's much higher and you also have and this is very common amongst uh Korean and Japanese developers a true obsession with delivering what players and a lot of these people are just sold that you give players more value when they can actually earn assets uh which I think is phenomenal and obviously the best M motivation the third thing I would say is the gamers themselves are used to paying for power in games they're used to having more financialized assets and economies and so I think it's a much stronger native reception from the audience there than it is in the west where you have a lot of uh sort of you know discourse around free to play around exploitation of Gamers and really a resentment of any new form of monetization and so the the the Playbook there is you have to be much more cautious around branding you have to really make sure you're delivering value from from day one in a way that's incredibly obvious and you probably also have to make the web three side as invisible as possible whereas in a you can almost be talking about nft a feature or Pro of your game so I think those are my three insights obviously we're we're really excited to be based

here even seeing a lot of fans being built out of China at the moment one of our largest games um is is built out of there and uh with $50 million of funding and MMO coming out later this year um there's a ton of games which are being developed in China that're being published globally because it's not actually legal to publish a game right I was going to say yeah to a domestic audience so there's this interesting sort of sort of global publishing strategy that that's imagine that interesting interesting yeah I think there really interesting insights there um yeah it's it's always been the case you know free to playay mobile was was is a great example where mostly the W especially early on when you know people were still figuring things out um there was still kind of a land grab and a Gold Rush going on um it was always the case um when I was at Zinga you know during the early days of mobile that we would look to the Asian markets to see what interesting features were being launched and released um obviously we couldn't understand the games because you know the language barrier but we could look

at the mechanics and we could kind of uh reverse engineer as product managers what they were doing and then Implement some version of that into into our own games uh and I think that's always been true I think there's just always been a lot of really interesting Innovation um around especially around monetization I think you're exactly right there um in the Asian markets compared to to the US and the European markets um so uh is is that is it your view then that uh I hate to use the term Western but but n non- asia-pacific developers should be looking to Asia right now at some of the games that are are launching for inspiration do you think they're going to be more successful than some of these other games that we're talking about not necessarily I think I think there certainly games uh with rest audiences that are going to get it right they'll probably just be different genres you'll probably see uh a lot more mobile and Casual games uh in Asia Pacific a lot more you know Gat driven economies and MMOs which are incredibly popular there you'll probably see more fpss uh perhaps

more trading card games uh things that you know Western audiences are more used to uh and also a lot more desktop based titles um in in the west so look I think both will be successful but I think that uh from a branding perspective it is probably easier for Asia Pacific to be to be shipping right now gaming is a global business so Mo most of these people when they're targeting distribution they're not you would not exclude the us you would not include Canada uh and and and vice versa if you're in the west you're not just publishing to to the US or Canada you're also selecting Japan and Korea and and these incredibly High arpo countries and so yeah I I think it's probably more around uh this the genre of games that are going to be popular and the and the distribution strategy But ultimately everyone planed FL LLY yeah okay uh and I'm glad you mentioned the word distribution because that was my next question anyway here uh so we all know as game developers at distribution and by distribution I mean getting the the game into the hand of the target gamer

right like that is my definition distribution here uh that's really hard in games it's very expensive UA has gotten you know obviously ridiculously expensive over the years only the very biggest most um successful games can afford to pay uh you know the cpis that are required these days on mobile and uh good luck getting discovered on Steam um even though it's easy relatively easy to publish there so I'm curious to hear your thoughts on uh distribution for web 3 games specifically where is it going to be the traditional channels that we always see is there going to be a whole new Performance Marketing uh field that's gonna I mean adtech and gaming are always the two first things that show up on any new platform or any new technology and so blockchain I don't expect to be any different gaming of course is the one that we all talk about and then adtech will follow Performance Marketing will follow what do you see having to be done differently in web 3 distribution and marketing compared to more traditional uh channels that we

know about the fundamental laws of Performance Marketing won't change which is your customer acquisition cost has you less than your aru the clv you make from that customer and that has been impeded by poor user on boarding which if you're killing 90% of your users converting you're making it 10 times more expensive for you to acquire customers now people are competing at the margins in Performance Marketing for gaming you have incredibly competitive um ad spent and and audience spent and this is making it impossible for people to compete on that basis so I think that's just fundamental that that has to be fixed and and that is getting fixed but I think the more interesting question is what unique advantages does web3 provide to web 3 games that allow them to compete more efficiently and I think the answer here is probably uh two things one is our thesis on well when a gamer is spending on assets they can later sell they're going to be retained better because theyve skimmed the game and there are f is going to be way

higher and if that thesis holds true it's going to make it much easier for people to justify the spent but I think the most interesting thing is the killer value proposition of crypto so far which been proven which is erc20 tokens as capital formation and incentive formation and we are you know very obsessed with this idea of if you can create an asset that is worth a lot of value and then you can give that asset away in order for people to join your ecosystem almost as your Performance Marketing budget we have an incredible competitive Advantage where you can be sharing the future value and the future economy ownership of your game with players in exchange for bootstrapping growth and I think that was why we came into the space in the first place is this idea of being able to take whole chunks of company value Give It Away through efficient programmatic meanss and everything has to be measured with return on token span this is not some magical hey we do an air drop in and we suddenly have an audience but if you can get that right then you have this enormous budget that you can be using to

to drive acquisition uh of of audiences faster and I think that's what the killer differential is going to be H that's interesting um so I'm gonna play devil's advocate here for a second uh if every game has their own token uh and every game in web 3 has to this date generally had a token um wouldn't that dilute the value of any one given token massively right I mean axi Infinity was so successful early on is because they were the only game in town pardon the pun um with a token that they were giving away and then people were legitimately making money off that and of course that will then cause it to rise in value and and in the end of course we all saw that that wasn't sustainable um I mean it still has value sure but it wasn't sustainable at the levels that it was was trading at and so I'm just curious to hear your thoughts on what's different this time around versus you know early Axia days which which of course kicked off the original boom um you know in web 3 gaming in

particular uh what is different this time around why do you see these tokens being able to hold value at scale across an entire ecosystem I think the difference is the many first off many of these tokens will fail many of these games will fail and that's okay it's just they're sharing value in exchange for players to join and and and and that means they have this budget you still need to be able to have a game that is sufficiently retentive sufficiently good but it means that the winners can win harder and win faster without having to raise tens of millions of dollars to to pay for Performance Marketing and I think it could replace and obsolete a lot of the Google spend like the Facebook ad spend where really it's just an intermediary rather just sharing Direct Value and audiences and the second thing is that you know the game quality there's games which unless your game is willing to be played and to be successful as a web through game it it it's not going to be successful as a web through again so all of this is augmenting and and ways of making the economy bigger making it more interesting sharing value more effectively like I I I just think of for these things it is like Frequent Flyer

points on steroids where you can create incredible loyalty systems and give away value programmatically incredibly efficiently more than any previous system in history but there there's nothing new Under the Sun it's just a way of sharing value in a way that has to be measured eventually this will get arbitraged out and and you know the the most successful games will be able to do it faster it's just a more efficient model than I think the current I spend um okay so uh I I'm curious to hear what's on the immutable road map for 2024 obviously you've made a bunch of these announcements most of those happened towards the end of uh last year 2023 and obviously you're going to be working on those uh in 2024 um but what are the most uh exciting initiatives in your mind uh for what's on the immutable road map so I think 2024 will be by far our biggest year yet uh we obviously have immutable zkm launching uh which will be uh the endgame scaling product for game developers to built uh and we have uh I think more than 110 games out of our pipe committed to launching on KVM which is incredibly exciting uh we have uh a ton coming out on gaming

Partnerships um as always where we'll be able to share more soon a lot coming out on the tokenomics side as well so yeah I I can't share anything too much yet but um stay tuned over the next few months as uh we we roll things out and then um really the plan is just to continuously iterate our products and and continue expand uh and help games get live uh I think that the Coe thing is how do we get passport as frictionless as possible how do we make the marketplace user experience as good as possible for for marketplaces building on our ecosystem how do we make the uh success of people launching tokens and ELC 20s as successful as possible on the ecosystem um so we're really just fully obsessed on we've got this pipeline of games let's make them as successful as possible in in 2024 fantastic all right well that's great to hear and uh really I mean fingers crossed and I'm rooting for you for the entire ecosystem I've been big believer in web 3 for a long time and

it's just like I said at the start it's had a lot of false starts and some uh you know broken promises along the way but uh I feel like maybe we're at that breaking point now where you know we we we get that Finish Line in sight and actually get over it um with with one or more great games that are that are actually hits okay um so final question for you I know we're coming up to time here um this is a new question for 2024 inspired by if anybody listens to Ezra Klein New York podcast uh he always asks his guests uh three books that they're reading that they would recommend to others uh and so given this is a gaming podcast I would like love to know what all of our guests are playing and what they'd recommend so uh Robbie what are three games that you're most excited by at the moment or or playing yourself uh I would say uh first off alivian uh order battler uh so alivium Arena I think it's one of the best games I've played in the space I'm actually a big Auto batt fan TFT um I think this is going to be enormous this year and and that team is incredible um I'll do one nonb three

game uh I played quite a bit of Boulders gate uh oh nice that's on my list actually I haven't got to that yet haven't had time but nice fantastic game fantastic well that's good to know um yeah uh very very I was very impressed by how they wo the D and roll mechanics into something that feels seamless and then the final thing I would say is Guild of Guardians is going to be a monster uh this is coming out in uh a couple of months on for launch we just shifted in in Canada for testing in a very high Apu spend audience and the early retention stats on this uh day one of I I think 67% and a day seven of 46% from memory and I mean this is well beyond world class now there's some discounting of to do based on goldon cohort but this is over a thousand people so I mean I think this is going to be enormous hit this year we're really excited about bu Guardians fantastic well good Lu good luck with that that and good luck with all your other initiatives as well uh so that's a great place to end so Robbie

want to say thank you so much for coming on the Pod today it was an absolute pleasure and welcome back anytime if you have any other exciting news to share we'd love to have you on the show and a big thank you to all of our listeners we'll be back next week with more interviews more insights and more analysis from the weird and wonderful world of web 3 and the metaverse so until next time friends stay crypto curious and feel free to send questions guest recommendations and comments to me my email is nn. if you enjoyed today's episode whether on YouTube or your favorite podcast app make sure to like subscribe comment or give a festar review and if you want to reach out or provide feedback shoot us a note at podcast nov. or find us on Twitter and Linkedin plus if you want to learn more about what navic has to offer make sure to check out our website www.nic.edu us to learn about our wide ranging Consulting and advisory Services again that is www.nic.edu

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