Douglas Gan says we’ve only scratched the surface of the fantastic potential Web3 gaming can bring
The Web3 gaming industry is at an inflexion point.
The transformative Web3 technology is coming soon and could open the doors for more business use cases in 2023. There is a constant flux of innovation due to the COVID-19 pandemic that led to blockchain businesses developing better-personalised user experiences faster in the past two years.
“We will see these innovative Web3 technologies come to light in 2023 as decentralised alternatives become more desirable and Web3 services become ready for market launch,” says Douglas Gan, Co-Founder of Froyo Games. “One of the immediate ready markets would be in the usage of gaming.”
Gan, a serial entrepreneur and founder of OhGenki, PureHosting.net and Global Wiz Internet Solutions, launched Froyo Games to provide quality digital asset games with intrinsic value and utility.
In this interview, Gan shares his thoughts on the Web3 gaming landscape.
Excerpts:
The past year has witnessed a spurt in Web3 gaming in Southeast Asia and globally. However, the likes of Axie Infinity have seen a downward trend of late. What does this trend indicate?
The declining trend may indicate negative attitudes and perceptions towards NFT games with token and NFT values that have crashed. This could be due to myriad factors, from games becoming stale due to repetitive gameplay to development teams lacking long-term vision.
However, we need to understand that many Web3 games were built haphazardly within the last two to three years to cash in on the blockchain gaming hype quickly. This trend could change as the quality of games improve across the industry.
I believe AAA games will make a huge difference in reversing this trend. Games like Grand Theft Auto, Diablo, Warcraft and Final Fantasy as examples.
Are Web3 games popular only because of the NFT aspect? Will a possible regulation of NFTs impact the future of Web3 gaming? Do you think NFTs need to be regulated like cryptocurrency?
Web3 games were popular due to the association with play-to-earn (P2E), where people were motivated to earn and profit from trading and selling a valuable game NFT or converting in-game earnings into other cryptocurrencies or cash.
However, there has been a paradigm shift towards P2E, with the “play” aspect emphasising gameplay that engages and entertains.
So while NFTs are here to stay in Web3 games, games should aim to have sustainable tokenomics and ecosystems, where token value is maintained with healthy trading volumes. Most importantly, the longer-term game plays with sustainable user economics, as seen in AAA game franchises.
Also Read: UST, Luna crashes: Can regulation alone restore investors’ confidence in cryptocurrencies?
Regulation would undoubtedly pose challenges to the future of Web3 gaming. A good case study would be the banning of StepN in China when the Web3 game couldn’t comply with the new IP and GPS regulations in June of this year.
Aside from games, NFTs have also been used as a disguise for real estate tokenisation and other real-world assets, which means “securities” in traditional terms.
NFT regulation could help with adoption as digital assets are deemed safer to own due to regulatory oversight requirements.
There has been a massive infusion of funds into Web3 gaming in the past few months at unreasonable valuations. Is this another bubble in the making? Do you foresee a course correction in the recent future?
The COVID-19-led crypto bull run in the past two years contributes to today’s sky-high valuations.
I believe many Web3 projects will cease to exist without a long-term strategy and prudent financial management. The few that do will emerge better than ever and become pillars of the Web3 space in the coming decade.
How have the UST and Luna crashes and plummeting popular cryptocurrencies like Bitcoin affected the overall Web3 sentiment? How is it playing out?
I have personally lost millions directly related to the UST and Luna crashes. Its widespread impact on Web3 projects like Three Arrows Capital, Hodlnaut, Celcius, etc. has created a partial bear market accelerated by the US Fed policies.
Also Read: What the fall of Terra Luna and the Asian financial crisis have in common
Web3 projects have many applications outside the finance industry that make them more resilient in a bear market. Web3 has exciting possibilities for social, authentication and other real-world solutions, with gaming taking the quick lead in bringing NFTs and blockchain games into a cohesive environment primed for innovation and growth.
Regarding crypto regulations, do you think the vague legislation introduced by several countries is enough to curb possible misuse and scams? What is an ideal way of regulating cryptos?
Innovation almost always happens because of regulations. I believe the approach would be to educate and address the market on identifying misuse and scams versus emphasising regulatory authorities implementing time-to-market regulations.
Investment DAOs are gaining momentum. How will this affect the overall Web3 gaming investment landscape?
Investment DAOs are all about inclusivity as opposed to traditional VCs. You and I can both invest in an investment DAO and help push for such projects.
This will significantly impact how investments will be made in the future and how an average consumer can now appreciate double-digit returns compared to handing that mandate to a VC and having multiple parties share those returns.
Can you talk about Froyo Games? How is it different from other web3 games?
We play an active role in developing and curating Web3 gaming content and explore new exciting ways to implement gamified finance (GameFi) into existing and new games via a mixture of in-house development or co-development with partners from established games development studios.
Also Read: The 27 Web3 startups in Singapore that show crypto is more than Terra Luna and stablecoins
As a Web3 games publisher, we have a strategic partnership with the Australia-listed firm iCandy Interactive, which lends access to a consortium of award-winning game studios (and Web 3 game development capabilities) across Europe, Australia and Southeast Asia.
Two of our studio partners are:
Lemon Sky Studios: It has provided game art and animation solutions for a long list of AAA game titles, including Call of Duty, Final Fantasy, Diablo II, The Last of Us II, Marvel’s Spiderman, and Mortal Kombat.
Flying Sheep Studios: It has in-house HTML5 developer capabilities for cross-platform and accessible video games. It has since successfully delivered over 200 cross-platform games to world-renowned clients, including DreamWorks Animation and Lego Group.
What is the future of web3 gaming? Where do you see this space five years down the line?
We have only scratched the surface of the fantastic potential Web3 gaming can bring. Post Grand Theft Auto’s announcement on its new game foray into Web3, I foresee other major studios, including the recent Blizzard-Microsoft acquisition, to bear fruit to a significant rise in Web3 games.
This is a similar inflexion point like the gaming console to PC and PC to mobile gaming.
Here we will see Web3 games materialising in the next five years, infused with finance like an injection needle, boosting the entire gaming ecosystem.
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