SXSW Gaming: Semi (Fun!)gible Times
From a human behavior perspective, it turns out that people don’t crave something that is the only one of its kind and has no reference point. For example, I inherited the previous homeowner’s garden gnome and had no problem with clearing it out to make space for new landscaping. But had I inherited one of these garden gnomes, I might have thought twice about it.
Mythical Games’ Head of Blockchain Rudy Koch had a very simple, yet powerful, announcement at the end of the March 5th developer update on dGoods, a blockchain standard for in-game assets. The update introduced a new concept in the NFT / unique digital asset world of video gaming, one which we think will become standard: SFTs, or Semi-Fungible Tokens. While it is clearly early in the evolution of this technology, it represents a mental brownie (data)point for technology that fits human behavior in a “video game first” approach. In blockchain land, I am as guilty as the next person of being really excited about the use cases for Non Fungible Tokens (NFTs) because each one is unique and I can own it! Yet it turns out that in video games (and elsewhere in life), having one unique thing with no anchor in terms of value might not be as powerful as having one of 1000 similar, but limited edition, items in a collection.
Stepping back, our first post introduced the concept of Non Fungible Tokens (NFTs) and the use case of Cosmetic Collectibles. Then last month, we went a little deeper, detailing the surmountable hurdles to deployment, such as a lack of metadata standard, few developer tools, and transaction speeds too slow for immersive gaming. On a more positive note, we can imagine a world in which brand new peer to peer marketplaces and economies spring up and dip into very large buckets of spend, such as the $125 billion US Television ad budget.
In short, owning an NFT, aka unique digital asset, is for the first time exactly like owning an analog object. And in the same way that we want to express ourselves when we head to a holiday party, we will want to express ourselves at the Mario party — I want to bring my Gucci bag with me!
On the challenge of a metadata standard and as in-game economies shift from B2C to P2P, there is a opportunity for a digital marketplace standard to emerge with exponentially greater volume than anything we’ve seen to date. Mythical Games’ standard, “dGoods”, is clearly in the running given the many wallet and other partners they already had signed, and more importantly, the video game designers involved from franchises like Call of Duty, World of Warcraft, Skylanders, Club Penguin and others.
In addition to the SFT announcement, the central message of the developer update was flexibility. Why? While it is still early in blockchain tech, this platform aims to support mass market games. This means it needs to support a very high number of assets which will be bought, sold and traded (i.e. high transaction volume and speed required). Additionally, dGoods is working on a storefront for developers to maximize the value of their creations with an inviting interface for display and organization from every game and every app available.
It would seem that this platform will have to ultimately be supported by many blockchains, which will be the next topic of this continued discussion. Game developers have based their initial blockchain efforts across a variety of platforms: Mythical with EOS, Loom Network with Ethereum, etc. The partnership announced this week between Ripple, the company behind XRP, and Forte, a self-described blockchain videogame incubator, for a $100 million fund adds yet another player to the fray. If video game studios are to develop on top of these experimental networks, they need to have a backup plan (or three) for migrating the ecosystems they develop in the event that they bet on the wrong horse. For this reason, we believe Mythical and its partners have taken the correct approach in building dGoods as a universal — “blockchain agnostic” — standard.
It is clearly early, even if only evidenced by the number of times I reference “blockchain” in this post. Whether the future is games built on public blockchains, like Ethereum or Tezos, or games hosted in walled gardens via AWS and Azure, we will be getting closer to “arrival” when we drop this word altogether — it will all be happening in the background and metrics like transactions per second on the network will be supplanted by ratings, impressions, and click through rate on the platform.
Ok I’m finally getting to the new thing that came out of SXSW today — a new Blankos trailer! This is one of the games that will be bolded and highlighted on our radar as we watch this nascent technology evolve.
This report was written in collaboration with Maximilian Fiege, whose prior blockchain research was published by the Council on Foreign Relations. Angela’s stroke of luck happened in meeting Max at a Solidity bootcamp in SF, which they both attended just for fun.
