The gaming series part 3: how Web3 can transform the gaming industry
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20th Jun, 2022

In part 3 of our gaming series, we talk to Manish Agarwal, CEO, Nazara Technologies, Thomas Purtell, Co-founder & CEO, Omlet, and Anirudh Pandita, Founder, Loco,  about the rise of Web3 and how we expect it to impact and transform the gaming industry.  Tune in to find out.

Salonie:

Hi and welcome to Matrix Moments, this is Salonie and you've tuned into part 3 of our Gaming content series.

On this episode we talk about the rise of web3 and how we expect it to transform the Gaming industry - joining us in this conversation are: Manish Agarwal, CEO of Nazara technologies, Anirudh Pandita the founder of Loco and Thomas Purtell Co-founder & CEO of Omlet as well as Tarun Davda, Ayush Chamaria and Rahul Chugh from the Matrix team. Tune in.

Ayush

Maybe quickly we can touch upon another topic which is there in everyone’s mind and that is Web 3 and how Web 3  really affects the e-streaming and e-sports space. Manish, would love to get your views first given you’ve been a very big proponent of this space how do you see Web 3 really transforming the e-sports industry?

Tarun

By the way, I came back, I met Manish, this was 2-3 weeks ago and I literally felt like a dinosaur because he said things that I had never heard about and I quickly came back and I said please send me links to all the stuff you were mentioning. So, Manish, we would love to sort of get some insight, and again a lot of these things are right now we all recognize it’s very early and there’s a lot of buzz, right, so would love for you to just break it down and what opportunities do you see there?

Manish:           

So, Tarun, if you look at -- we have heard a platform guy speaking, right now we’ve heard a tool guy speaking right now. The value is being captured by Anirudh in Loco, the creators are getting whatever money they’re getting. They’ve tool, Omlet has created a lot of people might have contributed as a community in bug fixing things whatever it is but the value is being captured in form of equity by Omlet. I think what fascinates me is the process of disrupting it, the process of disrupting the value creation is happening by the community and the sharing of wealth should happen between the community and not just one who is aggregating it and I think that’s the promise of Web 3 which if executed with the right teams and right intent is what I’m very, very fascinated about. 

And which is where creating streaming platforms which kind of really has co-ownership with the creators with the viewers and everybody is kind of really getting a common alignment, it’s like what we say when if all of us are Nazara shareholders and all of us will think of one line is that how the share price is moving and we’re all swimming or sinking together. Similarly, if there is combined ownership of viewers, creators, and developers on to that platform then everybody is kind of really benefiting or not benefiting and then the channelization is happening and I believe that’s a disruption which is going to happen in the e-sports streaming platform, in the tech of it, in the viewership of it, in the front end of it, content creation of it all aspects because it’s a long tail business fundamentally. 

That is where when the long tail businesses like whether I’m sitting in Karnal or Coonoor if I can create my fandom I should really kind of and such more heroes will emerge because that’s the nature, that’s the nature of this business, you can’t control those mini heroes or hyper-local heroes to emerge. And if you can really kind of get them on a platform where they’re also getting the economic interest that’s what is going to happen. I will not use the jargon of Metaverse or I will not use the jargon of NFTs but that’s the fundamental thesis that a blockchain can transparently solve excites me.

And I think Ani and team have put in the most capable ten blockchain guys with the right Loconomics experts working on how to resolve this, I’m sure TJ is thinking about how do I kind of adapt to this new developer ecosystem which is coming and co-creating the next version Omlet can solve all the problems on mobile which we spoke about because I truly believe if PC and Twitch can solve some of those things why can’t mobile can solve and I’ve been working on some of the things. So that’s what my thesis is, not just get carried away by crypto exchange, tokens, and speculation. The value extraction from what we can deliver from the first principles is amazingly possible here. 

Ayush

TJ would love to get your thoughts, I think some parts of it are already there on your platform and you have -- please.

Thomas:          

Sure. I mean we just actually have been embracing the blockchain market because I think that like from a fundamental level blockchain is about opening up the borders of your economy to the borders of other economies. So I think the very first stuff you see people do everything is in the blockchain, you know, and so the applications are really simple. We’re not that interesting and you can speculate on them but if the games get more interesting it’s more like your wallet, your collectibles that are in there and those can migrate elsewhere they can be used outside of the world or won from outside events and things like that.

What we see is that as games open themselves up to this they have an opportunity to incentivize their influencer community to do much more for them and on a much bigger a scale because they can get people signed up to be able to offer the kind of giveaways that people like to do to grow where it’s either in-game resources, things that can grow in value over time that are tied to the platform itself and they actually can be exposed in a way where it’s open so that the content creator earns these for how much viewers they have and then they can distribute them to their mini games or discords or custom kind of channels that let them build the support within their community base.

I think that that’s not happening like right now like you’re not going to go out and see that, you know, we do have some blockchain stuff but that’s not in there right now. But that’s the promise and I think that it’s something where it’s a big problem today like if you want to launch a game you’re going to go sign up and pay a bunch of people a lot of money upfront in contracts and you’re going to 8 out of 10 will crack, it didn’t work out. However, two of them work awesome and they watched your game. So now you can think about how we deal with a hundred people that didn’t cost us anything really but if we go big then all of them may now win big.

That’s where we’re excited about and why we think we have to be like in that space so we have gone and like built a blockchain into our fundamental account system so we have a wallet and right now it’s polygon based but versus sport all the other gaming central chains and we started to go down the angle of looking at how do we help creators monetize. So we let them issue NFTs to their fans so that they can start to build the community stronger amongst themselves and I think there are lots of ways that NFT ownership can translate into community engagement and a thousand things like that. So there are so many opportunities here but basically, it’s early on mobile, like super early, like blockchain is very early so that tool plumbing infrastructure needs to be there and that’s what we’re kind of laying out the groundwork for so that we can help connect the influencer community bubble games. 

Manish:           

Sorry, just to comment there, Rahul, your earlier question on Web tools what TJ just described is the right space opportunity. 

Rahul

Yeah, yeah.

Anirudh:         

I wanted to just from our side like we’re also very, very bullish on Web 3 and from a fan perspective more than anything else which is like I would joke on this that I’m wearing a Liverpool cap and Liverpool dies tomorrow I still have the cap. So and we all know being in the -- all of us are early stage people like things are not perfect day 1 so the criticism that I’m seeing for most of the stuff is for something that should be just a perfect product. And we’ve seen a bloody week, two weeks, in crypto but leave aside cryptocurrencies for a second because that’s a separate podcast and I’m happy to join that but the fact that you can validate through a public ledger your ownership of something I think that’s a fundamental game changer for economies where gamers like having virtual good chain.  

There is a very simple way of knowing that okay, like let’s say if I sign with I’m a big streamer I sign with a publisher they’re going to make a skin on my name. How do I know they’re giving me the right, I’ve no way of auditing, zero ways of auditing. This is just a fundamental thing that is there whereas if you wanted to add a new way of showing support to your favorite creator from a fan point of view that is something you can do today whether you can do it through somewhat of an NFT inside a game, outside a game with merchandise and look these people are streamers and viewers both live in the virtual world. 

In a virtual world, how do I even show that I own something, right, and stickers are like people if you see our chat sign in lots of stickers? But what if you had that big sticker that only the top fan has, for example and how do I know you’re the right person who has it. 

There is these sort of interesting use cases that they’re going to come up which is from a viewer’s point of view you can be much closer to the streamer, you can show your support if you are someone who wants to be an e-sports Scout, for example, you collect collectibles, they go up in value you can show that to any guy in a job interview today just like you could if you wanted to be an investor and say okay, I only invested at 10,000 rupees but research is just as good if it’s a $100 million trade, maybe the trading itself might be different but the thesis might be the same. And today how do you do that, you find it through small tournaments that are running on Loco, the small 5000 that may be rupee turn over, or maybe where there are 10 people, 20 people watching the Scouts will start going there. And they’ll say okay, I’m going to start buying up something maybe I cannot buy a contract with this guy today. 

If you’re a gamer it just created a streamer a completely new revenue opportunity for you that you never had before, you’d have to go to a publisher and say, hey, man, do you want to do a partnership and we know how B2B partnerships work, they take forever and by that time this guy’s career is probably over. So I think you’ll see a very interesting new form of kind of fan support that’s going to show up. New jobs are going to show up and I think they play to earn is a very bad term personally I feel because it makes it sound like a job. If I don’t have the play element, if I’m not enjoying the game then I’m just earning and it’s just like a job, and I’m using it negative way. 

Tarun

Anirudh, that’s a great point you make, you know, one of the things that I think to your earlier point one of the criticisms that are going around today is in this whole sort of pay to earn, play and earn whatever the wordplay has been flawed. A lot of this is just, you know, the reason why some of the like you see Dream 11, you see any of these sort of large gaming these are fun games where people enjoy spending time, there’s an entertainment element to it. Yes, there are ways to make money but if it’s just money and the entertainment is removed none of these will sustain. 

Anirudh:         

Right. I think you’ll see with and Manish will know these projects better, they’re good projects that are coming and I don’t think the whole game needs to be on the blockchain ideally. Like you can even have partially some part of the treasury is NFT, some part is not. And I think ultimately when we think of Loco I think of like a prime bundle where I can offer you a subscription across games where you could have certain goods in these different games and they can be traded. There are new business models which these people have never cooperated before -- 

Manish:           

Tarun, the first phase the value extraction is coming from exchanges, the value extraction from goods coming out of time and effort productivity that is now coming. So when you have time, effort led value extraction you will have more sustainability in the business models, when you have value coming from exchanges it will be short lived like any other project. So but the exciting part is at least the games which came and created they’ve created an amazing amount of if I may say propensity and proclivity to the firms such as yours to put in money into now right project. 

Second, it has also said what not to do. This is what Ani is saying that some outstanding projects coming our way as of my understanding there are 500 such projects are being developed as we speak, 90 percent of them will still be driven from a speculation exchange value creation point of view but there is 10 percent which will come in and I’ve seen this in 2010-11 when Freemium came from pay to Freemium this was the same journey. So some of us were around it, we have seen that journey happening and that journey you will -- the only thing which you should take out silver lining is there is a very strong in and end consumer insight for this to really. If you can go deeper and are able to understand and spot those people you will succeed in the mid to long term.