Tokenised In-game Collectibles (NFT’s) are a Fundamentally New Type of Digital Goods

you hi my name's Tony Pierce I'm the co-founder of a gang studio called reality gaming group thank you very much for joining me this afternoon I'm gonna talk about why in-game collectibles known as NF TS which stands for non fungible tokens will be the next hundred billion dollar business for the games industry what before I start this does anyone know what NF T's are on non non fungible tokens I guess a few I guess one of how in-depth I should go but barely in depth so um content is king so back in 1996 Bill Gates penned an essay and said content

is king and and back in 1996 there are about thirty to thirty five million Internet users which is the most they were on dial-up and that's roughly about what there is today in the blockchain gaming side with about thirty to thirty five million people having crypto wallets and what Bill Gates were saying here is that if you have content now the Internet's around it's going to be extremely cheap and easy to send that content and he was right except [Music] two decades later Jonathan parables buzzfeed when content is king but distribution is Queen and she wears the pants and what he meant by that was that Bill Gates was right you know content is

important but without distribution you can have the best content in the world but if no one finds it then what's the point if you take you know what's happening now you've got Game of Thrones without HBO that wouldn't be around to Angry Birds without the App Store's that wouldn't be around pokémon without Nintendo that wouldn't be around basically content today is being strangled by distribution but where this is changing is with the blockchain and thanks to the blockchain we're now switching back to where you the content owner is important so before I get into this let me tell you what I do so I'm the co-founder of reality gaming group we are a game studio that has developed two platforms the first platform is an augmented reality geolocation platform similar to what you see if you play pokemon go or The Walking Dead in our case reality crash

is a map based game and the second is a digital asset trading platform which which basically is connected to the blockchain and token eise's limited edition in our case weapons which can then be used in the game or withdrawn out the game and played in other games or sold to your friends and they are basically n FTS non fungible tokens so NF T's are a game changer NF T's are a new asset class and NF T's are true digital asset ownership so let me give you an example today if you played for tonight you go in there you buy some V cash you spend 20 pounds on buying different apparel for your avatar hats t-shirts whatever you actually own any of that so when you finish buying fortnight and you're bored of the game basically your items stay in

that game there's nothing that you could do with them I mean if you can imagine today if you went into H&M or Topshop or whatever co store you have here and you pull a shirt and that clothes store went bust your shirt would disappear in the way that games work today but you've spent money on that shirt you spent money on those in-game items why can't you take it out the game and sell it to your friends why can't I take that t-shirt out or that weapon and play it in other games this is what's happening with NF TS this is where those in-game items are tokenized and locked on the blockchain and when you buy them they physically are yours forever you are the owner so let me just explain lft standing for non fungible tokens what that actually means so what does jabal mean so fungible is an item that can be

exchanged for something similar so a 1 pound note can be exchanged for another 1 pound notes a Bitcoin could be exchanged for another Bitcoin it doesn't matter what the value is or that you can exchange one for another what a non fungible item is it's completely the opposite characteristics so as an example take a plane ticket that plane ticket might look exactly the same but actually it's unique because that plane ticket has different passage your names on it different destination different departure times different seat numbers it's a non functional item you cannot swap one for the other it's unique and belongs to you so let's talk about how that works in games so a non fungible item in a game is a digitized in-game asset collectibles in other words so they're best known as being for collectibles they're rare they're scarce just low Oscar was talking about and and

each item when you buy it is assigned to you you now own it so therefore I can take that lights up and start to play it in different games but gamers when they're finished with it can then sell it on to their friends but potentially even make a profit because if they're rare and they're scarce and there's only a few around and the game becomes really popular I really want to have that because it looks really cool so NF TS give players real ownership of in-game items all items are logged on the blockchain confirming validation the blockchain confirms it's unique players can sell trade or use their init NF T's in different games and as I said before excuse the pun but they are a game changer so these are some rare examples and real examples of what digitized items are trading for today so gods

unchanged this Hyperion card sold for $60,000 Magic the Gathering the Black Lotus card sold for eighty seven thousand dollars f1 Delta four months ago that Formula One car had a unique skin on it sold for a hundred and ten thousand dollars and probably the most famous if you're into blockchain gaming this crypto Kitty that particular exact Kitty sold for a hundred and seventy thousand dollars the reason because there's only one of those in the whole world and gamers want it because actually they think it might go up in value so it's a shapeless so um for decades gamers have spent billions on in-game items with no actual ownership rights or control so my company reality gaming

group of changing this so we've developed two platforms as I mentioned earlier we've developed a geolocation mobile AR platform and a digital asset trading marketplace for rare digital items that is powered by blockchain technology so let me explain the game and the reason for handing down the cards is this game is now live and you can play it so the first feature title that goes on our platforms is reality crash it is the world's first AR mobile combat game combined with in-game digital item trading so think Pokemon go meets call of duty with tradable items you can challenge your friends you can go into full AR combat you can navigate a 3d world of your city and you can build and customize unique guns which if they're NF T's you can then take out the game and sell to your friends so here is

a quick video trailer which only what to point this out they're back one that will display that yeah okay that's not working yeah slow motion

yeah oh you just downloaded it down together yeah so just while we're fixing this the game itself now is what's called an MVP which is a minimal Viable Product so it's a soft launch has been out for two months the soft launch is to text servers so you can see a map of your city for about two and a half kilometers and you'll see where the enemy is and you can go into combat with those guys but when you go into combat you but it's an avatar you doing exactly what you do in real time so if I move forward my avatar means

forward if I go back my avatar goes back [Applause] [Music] you can see that my website should be jumpy you can see the idea so it really is kind of groundbreaking in terms of the payoff but what makes us different is that Apple have approved where you can buy in-game items that are the same in the axial so the way that you buy these energies is through our website we buy them and then you can trade them with your friends or play doing other

games or you can connect it to your book to be to the account that you have on they instantly download so you might be really get from the axle anyway you can get it to come to our website and fight these are so these that these are the guns that are actually on our website so we've um we've sold about 7,000 since we launched they're all limited edition so if you look here there's only 30 of these that we make there's nine left once they're sold out we will never make them again hence it has that rare ability and that scarcity these 400 are CC that stands for reality crash coins the RCC is like a virtual currency but actually it's a crypto token that you can buy from us with a credit card or through exchanges where you buy bitcoins and people if we

put a gun up it is sold out within a week or even in a couple of days in some cases and people are then reselling them through secondary marketplaces and actually making money you become a virtual arms dealer in this case so you buy them before they sell out once they're sold out they're never developed again reality cash players are speculating if the price of the weapons will go up or down each gun is logged on the blockchain with a proof of purchase when you buy one of these off our website it then goes to the etherium blockchain it locks it there and then emails you back a certificate with a stamp on with a picture of the gun and your unique serial number the gun then appears in your account on our website where you can see it in 3d and then you can either download into the game or trade it yeah so you can trade these guns in secondary marketplaces or on our website and make real money because the RCC coins can then be traded back for fiat currency through exchanges where you buy bitcoins

or and this is the key thing which I mentioned you can download into the actually downloading these into the game and nine times out of ten people that have downloaded the game don't know these exist or when they see one it's like wow where'd you get one of those hence that's how you find out about these be some exclusive weapons so 75% of all our gun sold out in the first 24 hours we've had one point four million reality cash coins spent in our store and 7,000 guns have been launched or sold since launched but this is where it gets really exciting so we create those guns and we tokenize them but what if you as the player were to create your own guns and sell them in our marketplace for people to use in the game that's when it takes it to another level because you're

engaging that user they are actually making the gun we are tokenizing it we're putting it into our marketplace where people are buying them and they're getting a revenue share on each sale so we're creating what we're calling reality crash gun factories and basically this allows you to download a weapon creator and allows you to create your own guns and and create your own skins we then approve those if they're approved we then decide how many we want to sell and they're uploaded to our store so you at you as a user actually are now making in-game items and this is the quick trailer that we've recently put together [Music]

[Music] so you're now not only playing in the game you have the choice of buying our guns but you can actually create your own weapons and then because they're tokenized on the blockchain you can then take them off and sell them through secondary markets so this is not our store this is another marketplace that allows users to buy tokenizer NF TS this is a store called open C which is one of the biggest crypto connectable nft marketplaces there's thousands of items up there that are tokenized if you come on to here each one of these guns have been bought on our website and withdrawn to this marketplace it's like

an eBay for NF TS and there are thousands now being traded daily not just of our guns but just of everything else like those crypto kitties and digital cards so the other great thing about NF TS is that they can be used in other games so we've built reality clash as a mobile game that's exciting in its own right that you can download these guns in but hey I've now I own this gun I'd like to go and play in other games so we're building minigames such as a tower defense game we're building sniper practice games where you can download the guns that you bought and we're now talking to other developers that are creating their own games that users of our weapons from playing because they're tapping into a community where we have hundreds of thousands of players there all these guns and going we want those players we want them to take their content their items into our game so it's a great way of other games

companies getting our community and our players almost for free by offering them the ability to to use their in-game items in their game so this is the digital asset trading platform that we bought this is open to license to any games company now and we spent two years building this so if you have in-game items we can tokenize them for you so we have all the tools that we can give to you each item is secured on the blockchain we're blockchain agnostic so a theory of Tron AOS are are three of the most popular gaming block chains we can track the history of that item so with the weapons that we have those guns we know when it was sold how many players it's had and how many kills it's had and we

literally can tell the history so in ten years time we can tell if one guns really really popular how many people have owned that and you as the new owner can find that out in our account you can go into your trading history and it will tell you every player in the world that's ever had it on what price it was resold for we create the wallet for you so when you come on you don't have to have a crypto wallet you don't have to go through any of that we actually build that for you on our site and we have payment solutions so you can buy currency with credit cards with ether with bitcoins you can withdraw items into other games and we build marketplaces where you can trade and sell them so that's all part of the DAT platform so let me just leave you with this and I think Oscar kind of tapped on this the size of the market so the market now is almost one hundred and thirty eight billion dollars of which 70 billion is mobile games but what's amazing with

that 70 billion is that actually it's only made up of three percent of people three percent actually spend money in your game I mean that's quite incredible you know ninety-seven percent of people do not spend money and the way the markets going in a last year it's gone up five ten percent so you can add probably another either five ten billion onto next year but we truly believe that with NF teens and the fact that you now own something the fact that you can take that around different games and then sell it on to your friends we think this is going to increase the market by fifteen to twenty percent and that's why when it goes back to content content is back being king or y/n FTS make this a new hundred billion dollar market thank you maintain it's great and obviously I'm

biased cuz my bottom lip but and I think this the thing you said is really important to me is this idea that the uniqueness that happens with a digital assets just captured on the blockchain and do people really understood the the power of that yet actually what we're trying to avoid is the word blockchain we don't we don't want anyone to to be confused by that so the whole idea is in fact NF TS are confusing name what we're saying is the item that you buy is we say wrapped tokenize and it now belongs to you how that works in the background if people want to delve into the technology and how it connects to the blockchain and and gives it its own personal serial number is fine but but from a user's point of view they just want to know I bought this item it's now mine and I can do what the hell I want with it and and in the next in the next three to five years I think gamers will start demanding from

the bigger games companies why they've just spent 50 pounds in that game and actually I'm now bored or that games now gone bust where's my items and I think it's independence like arson and other blockchain companies that are allowing users to own it that will that will start to make the bigger guys think actually you know we've got to start offering this because game is to start going well I'm not gonna play your game because I'm never going to get those items out I'm gonna play this one so I think it will speed up and I'm looking forward to when EA and Activision and they're fake and all those guys start to offer this but in the meantime is for us obviously embraces as well which is interesting and I mean basically we've tried their attempt as well but it's different subject I think it's a an interesting position that we're in which is the in some ways the success of blockchain will be when we stop talking

about it yeah because it becomes normal because it's just the way that the back end of the game operates to ensure that you get the assets you own and in some ways it's simple way to think of it it's just a distributed way of communicating you know who owns what is that affair yeah no exactly so so I mean you know the games industry invented virtual currency we started this market and now we're coming on to currency that is Toki's tokens is it's crypto currency where you can start buying them outside of the game and selling them back into the market will move on in a second but I think it's really interesting kind of thinking about this process particularly because it's where the gameplay meets the assets there are things powerful I think your experience where you're you're now start to build mini games just starting to encourage other developers to use that I mean how is

there an education process that you're you're finding for people to understand the reasons to use your assets right versus creating around but it's gonna sit so we need to make reality crash a success so so people just go and play in its own right and then find out about the fact that you could own these digital tokenizer items and then the fact that you can go and start playing them in these little mini games or there's another games company that allows you to take these in and I think that's gonna happen over time it's it's it's not there now but we're we're inventing this market you know we were saying the other day we tokenized these weapons 18 months ago and that's before we'd even heard of anything was no NF piece when we didn't serialize numbers for each of the assets yes so we we we were literally making this up as we went along and now I think more more more blockchain games are coming out with their own limited-edition rare assets and this is

um this is great you know this is educating the market I suppose well we actually went further we built an API call into the Tokyo yeah yeah which we haven't even seen anyone used the idea of that yeah and I can't wait to see what people do with it yeah Dave you either cuz Mike and I thought the it's it's an incredible concept and I thought the fact that you're introducing user-generated content with the weapons factories essentially is another great way of handing the game to the players and democratizing that but the game player in me wants to ask how do you maintain balance within the game if people can create their own assets isn't there a risk that people will flood the game we yeah it's gonna kill the weapons or cheap weapons or something like this what's your model there so we will only we have we haven't balanced it out yet so we will we will license those factories too and there be three or four factions per country and maybe maybe even the game asked to pay a license fee

for the factory we don't we haven't worked that out and then we will decide how many we want to relaunch and approve that process otherwise exactly that you know you can never be too many out there I mean the data design of the weapon tokens themselves and particularly the stats we used had a series of tiers built into it so there should be some boundaries within those tiers that allow that to be relatively straight for but I say it's not what we've done yet but here's the other cool thing in reality clash when you look at the map and you see your town there's this certain places you have to go to to get resources the next version which comes out next year you'll see boxes down certain streets until you walk down the street and you point your phone at the box and that that's like AR and you see the box spinning around and then you shoot it with your gun and then it explodes but inside the box is an NF T is a it's a tokenized item now that could be a hat it could be a t-shirt it

could be another weapon but you've now what you've now stumbled across this digitized item now you need to get it back to your camp it's a bit like getting the flag in paintball back to your cap and you need to get it back without losing it without going into combat but when you get it back you can then withdraw that NFT to our marketplace and sell it so you're now that in the game you're finding digital content that has real-world value that again is something that's quite quite groundbreaking and because we have this deal with Apple now way we can where you can take stuff in and out of the game it just it's the next level in terms of gamer engagement as a massive set for you know particularly the initial resistance that they they have in in the print yeah yeah on that note we can say thank you Tony that was great I think well hopefully what you've learned from that is that there's lots of things that we're now experimenting with blockchain or tokenizing so forget blockchain is

just the mechanism tokenizing assets which add whole bunches of opportunities you