Accelerating blockchain games with Hashed Labs’ Ethan Kim
We catch up with Ethan Kim from Hashed Labs about just how the blockchain gaming world has changed
Last week amounted to what can only be described as a crowded hour for the blockchain gaming world. With the concluding discussions at Blockchain Gamer Connects Hong Kong serving as the perfect exclamation point on a truly ‘Spectacular!’ Event.
Among the star-studded speakers and panellists taking the stage in Hong Kong was Ethan Kim of Hashed Labs.
Be sure to check them out by visiting the website right here.
Hashed has fostered a strong reputation as an accelerator programme for any companies really looking to leverage blockchain for their business.
Among which industries gaming stands out to Kim and the team.
We were fortunate enough to catch up with him during the event to get his impression of the market as it’s evolved.
How has the landscape changed for blockchain game developers over the last few years?
Much like the early days of online and mobile games, the early blockchain gaming market is dominated by gambling games.
The launch of CryptoKitties in November of 2017 put collectable games on the map and introduced NFTs to gaming, taking blockchain games one step further.
Non-gambling games emerged on the market as contenders, and we are currently seeing a flood of games incorporating the smart contract feature and NFTs.
On the blockchain platform side, in the early aughts of the blockchain game market, games showed their potential on top of the Ethereum chain.
However, CryptoKitties, currently the most recognized Ethereum-based blockchain game, highlighted the limitations of Ethereum as a platform for gaming.
We’ve seen EOS, a competitor of Ethereum, host a number of games, as well as TRON, which has now jumped into the gaming platform race.
We’re seeing many new platforms emerge, but the prevailing opinion is that since Ethereum is the best base for NFTs, it really is the platform most suited to games. We’ll have to wait and see, but if Ethereum solves its scalability issues with the Layer-2 solution, we think it might have a chance at having a more secure footing in the market.
While we have now seen a ‘maturing’ of approaches towards funding, has this caused a ‘maturing’ in the blockchain gaming world in your opinion?
We think it’s a little early to say that it’s “maturing.” The funding going into blockchain games is still highly experimental.
Because the blockchain industry itself is still a new one, its games are also new and experimental.
Most investors believe that while blockchain games as content have the potential to start a new wave of innovation, the blockchain industry itself is still in its early aughts.
If the market sees a couple of games with killer content that can prove the true potential of blockchain gaming, it will help bring in more prospective investors who are currently studying the market.
Hashed Labs is in a pretty unique position, being an incubator initiative based in S.Korea, what major trends has the team noticed over 2018/19?
We need to talk about the existing Korean game market before we talk about how things have changed in the Korean blockchain game market. In the last few years, the game market became increasingly polarized as the mobile game market grew at a rapid pace.
Only big corporations like Nexon, NCSoft, and Netmarble, and a handful of small studios remain. There is a sense that mobile gaming is a saturated market, and small game companies are not as willing to take the risk in creating new games as they used to be.
With this in mind, Hashed launched Hashed Labs, an accelerating program. There aren’t many traditional game players trickling into the blockchain game market yet, but gamers in Korea have seen the explosive growth of the Korean game market.
As such, when we introduced the concept of blockchain games and the potential market it could have, game developers, investors, and entrepreneurs showed great interest.
90% of the Korean messenger market is dominated by KakaoTalk, a messenger app similar to China’s WeChat.
When KakaoTalk introduced gaming to its platform in 2012, the mobile game market experienced explosive growth. With this in mind, if one blockchain game generates revenue in Korea, countless game companies will be quick to follow.
Korea already has a wealth of experienced game developers who have seen numerous games go through their life cycles. Hashed Labs was started with this advantage in mind, and we intend to position ourselves as prominent investors of projects who want to step into the Korean market in the early stages.
With all that’s happening in blockchain gaming – what projects have stood out in your opinion?
CryptoKitties brought on the NFT boom by introducing collectible games to the blockchain game market. EOS Knights is a successful project in Korea, built on top of Ethereum contender EOS.
We saw these two cases and made our way into blockchain games with our accelerator program.
The Axie Infinity project stood out among applications to the program. Axie Infinity has a thriving global community, although the development team is based out in Vietnam, and is progressing rapidly.
The Axie Infinity project also had an impressively thorough understanding of NFTs and blockchain gaming, and maintain a unique position in the market.
The Sandbox, another Hashed’s blockchain game portfolio, incorporates user-generated content and incentive schemes to create an independent blockchain ecosystem.
Being an incubator/accelerator initiative – what are some of the limiting factors for blockchain games seeking out mass adoption?
The issues that blockchain games face today are issues that the blockchain industry faces in general. The biggest issue is that currently, barriers to entry are too high for mass adoption.
Users have to go through a complicated process in order to play blockchain games, and we lose a lot of players this way. Unless there is an innovation in wallets that lowers barriers to entry, we think that mass adoption is unlikely.
We believe that companies that already have many users and an accessible platform such as KakaoTalk, Facebook, or LINE may create blockchain projects that could solve most of these issues.
What are some of the ‘virtues’ and ‘vices’ of blockchain game projects looking for support or funding?
The virtues of blockchain gaming are that there are many teams that want to incorporate blockchain and smart contracts into gaming. Adding blockchain to games doesn’t necessarily make them more fun, but these teams are putting work into maximizing the entertainment factor.
That game developers who come to Hashed looking for investment want to take advantage of crypto incentives to make a community-driven game is also encouraging. Community has always been a big part of online and mobile games.
But players have had little to no loyalty in the mobile game market, thus lessening the impact of communities in mobile games.
The teams that are building games on top of blockchain are well aware of the importance of communities, and are working to court and educate users.
On the business side of things, the projects working with us for investment are mostly early-stage startups in a neophyte industry, and therefore have a low burn rate. This offers many opportunities for investors.
The drawback is that there aren’t many games as sophisticated as those available online or on mobile. The user is less concerned about the value of innovation than what user is actually playing.
The fact that it’s a game on the blockchain is of no value to the gamer unless the game is entertaining and well-crafted.
We need to think about how to solve the UX hurdle within the game, but there aren’t any results on that front yet.
We need more games that draw in users with solutions of their own.
What are some pieces of advice that you would offer developers who seek out a mass audience?
The core value of gaming is still entertainment. Back in the days of DOS games, which were even less accessible, gamers found a way to play, even with the many technical hurdles.
If the game is fun enough, people will find a way over these hurdles. Developers shouldn’t be distracted by cryptocurrency or blockchain and lose sight of the essence of gaming, which is entertainment. Blockchain game companies should produce games that would do well on the overall game market, even without the blockchain factor.
As we’ve said before, Kakao, Facebook, and LINE will produce gaming platforms incorporating social media. Creating games on this platform will become easier.
The incorporation of social media and cryptocurrency will solve many UX problems, but by then competition will be fierce. Ultimately, projects that have their own strategies and focus on what’s truly important will be able to succeed in a larger market.
What have been some of the big take-aways from Blockchain Gamer Connects?
We felt that there are many more projects with great programming power than before in the market.
There are many projects with strong teams and truly fun games that aren’t just about blockchain.
Another good sign was that there are teams that are thinking about how to incorporate the unique aspects of blockchain into games.
Additionally, investors were paying more attention to the blockchain game market’s growth as a way to encourage growth in the entire industry.
It seems like investors saw blockchain games as an opportunity to court mass user adoption, which is crucial in developing any widely used service.