Sign up to our Substack, follow us on Twitter, and connect with us on LinkedIn.
In the latest episode of his Blockchain Gaming World podcast, editor-in-chief Jon Jordan talks to NOD Games’ director of business development Dan Lee about how the South Korean developer is adding interoperability to its mobile/browser 4X game League of Kingdoms, as well as its move to become a publisher, also working in an advisory role with companies such as NHN in terms of their future web3 strategy.
This transcription has been edited for length and clarity.
BlockchaingGamer.biz: So what’s been going on recently with League of Kingdoms?
Dan Lee: League of Kingdoms is an MMORTS game, but we usually go by a 4X game genre. Build your castle, build your own army, fight other people on your continent – and during continent versus continent modes, which is basically like the server versus server mode, you get allied with everyone inside your continent and you fight other continents. If you come out victorious, you get rewards for it. The game concept is as simple as that.
We’ve been trying to add a lot more web3 features onto it, so we started at what people mostly call a web2.5 approach. Have a game first that’s similar to a web2 game and from there we started integrating web3 features like our token, native token, and our NFTs.
We started with a land NFT, but a very small amount, just to announce that we were a web3 game studio. From there, we’ve mostly been developing the game itself as a playable, interesting, enjoyable game. About one and a half to two years into it, we launched our LOKA token and then we added resource NFTs and the Drago NFTs.
First of all we try to put utility in our NFTs. I mean, the land NFT is pretty self-explanatory. The resource NFTs is a pretty interesting concept because in 2022 our resource NFTs were the most frequently traded assets on Polygon. They’re less than a dollar, and it’s for the ease of trading between users, so it’s like a P2P trading. We’re enabling that.
Why did you introduce this P2P resource trading?
So we’re sacrificing some of our in-app purchases revenue for that because one of the packages we sell are resources, but it’s so much cheaper to get the resources via P2P trading. Because our users know that, they go on and trade the resources on marketplaces like TofuNFT and OpenSea.
If you use blockchain technology, P2P trading is going to be easy. We just enable the ability for users to mint these resources into an NFT, then users put it on-chain and trade it and then bring it back to their games and use it. That’s one of the most intuitive usages of NFTs and it’s been a very integral part of our gameplay.
When we announced our Drago NFTs we tried to give a lot of buffs for the users who own these dragons, and we’ve been trying to develop a mode only these dragon holders can enter and get some other extra value when they’re using these dragons.
The game’s been live since 2020 so how have you found that experience?
Let me correct you there, our game actually came out in 2018. So it was an even quieter market when we started building when nobody really cared about web3 games. They thought it was all about DeFi and infrastructure, which seems to be the case right now. In 2020 and 2021 games suddenly became the hottest topic in web3 and then everything crashed. Now we’re back at the place where we started.
Back then, we had this idea that we’re not finance guys or we’re not like, layer one product guys, we’re just gamers – game builders – so we found that there were a few features or aspects where we can use blockchain technology to augment the gaming experience.
We’re still building even during this market situation, and I feel like there’s a lot more people who also empathize web3. A lot of other gaming studios in Korea are also very interested in building web3 products. That’s my approach to web3. Forgive me if you were expecting something like decentralization or player ownership. It’s less about those philosophical things and more about what blockchain technology really enables users to do within these gaming environments. And that’s why we’re still here.
What role does interoperability play in League of Kingdoms‘ expansion?
Interoperability is a very important piece. It’s more of a practical usage to bring out some of the items and then be able to use it in other games. The real roadblock to that is that if you want to use an item that you farmed at PUBG and want to use it in Fortnite, for that to be happening you need Epic Games and Krafton both working on some kind of partnership and allowing these items to go to each other’s games.
We’ve got to try out whether this really works or not before we can move on to the next stage. We’re trying to develop a new game that’s a completely different genre from League of Kingdoms, but still succeeding much of the look and feels of the game itself and trying to basically migrate most of the NFTs and all of our native tokens over to the next game. More of a proof of concept.
At the same time, we’re also trying to make a fun game. We can’t just tell our users to sacrifice enjoyment and fun just because of this high value of testing out whether interoperability really works or not. We think that sometime in 2024, earlier rather than later, we’ll come up with a new game that succeeds the whole League of Kingdoms IP. I don’t know if we’re going to use every single NFT that we’ve used, but we’re definitely going to allow the use of Drago NFTs. We’re trying to see if this fund and asset ownership can continue on to our next title.
What sort of game is it?
It’s an idle RPG, dungeon crawler style game. We’re gonna have heroes and units. We’re gonna fight and it’s mostly gonna be PvE, but we’re looking at more PvP, like MMO utilities within that game.
That doesn’t mean that we’ve completely abandoned League of Kingdoms, we’re also working on adding some more mini games. Not like some bullshit games that nobody’s going really enjoy playing. I think that’s one of the mistakes a lot of game makers do.
It’s good that there are other modes for users to enjoy, but once it becomes not fun but like very rudimentary, it’s just wasting a lot of development efforts. So we’re trying to find some of the mini games that actually work really well with the 4X genre itself.
What about your new publishing business?
Right now there are a lot of players in this field trying two approaches. One is the usual web2 publishing approach where you contact the studios, you find ways to finance them and try to help them out with their user acquisition. Basically the distribution part and do a rev share in that sense.
The second part is the less traditional publishing route, but it’s more of a Steam/Epic Game Stores kind of route where you have a platform, you try to onboard all these games. Those are the two types of approaches that I’ve seen so far in web3, and I don’t think anyone is coming out as a dominant player yet. Also because the industry is so young, we are taking more of the former approach where it’s similar to what web2 publishing looks like. But we’re trying to do this in a more web3 way than web2.
A lot of the reasons why a smaller gaming studio would want to come into web3 is because of the funding issue for especially user acquisition. Nowadays, it takes more money to do distribution than to actually develop a game. That’s why a lot of the gaming studios come to publishers in the first place. But now a lot of the gaming studios are coming into web3 because they feel like it’s a lesser cost in user acquisition and gives you a more, I would say efficient approach for a fundraising part. This is probably not the right reason for gaming studios to come into web3 because it just means that it’s a repetition of a lot of moral hazard issues that we’ve seen so far in the industry. But I think it’s a start.
Can you talk about the blockchain scene in Korea?
So the interesting thing about Korea is that if you make a list of gaming studios that make over $500 million revenue per year, there’s around 30 to 40 gaming studios. Every single gaming studio on that list has their own web3 development team, which was really surprising to me. This is one of the reasons why we’re starting game publishing.
A lot of the gaming studios actually approached us asking if we could help them or we could become their bridge between web2 and web3. I think they liked the idea that we’ve been around for a very long time and we didn’t leave at the peak. Even after the first market crash, we were still building and sustaining our numbers, our metrics, our DAUs and our MAUs and our ARPUs and all these important metrics. So that’s why they came to us and asked if we could become their advisors or publishers.
In the Korean market, I think the biggest factor driving gaming studios to go into web3 is that they want more global exposure. But only a couple of these game studios would ring a bell for people outside of Korea, because we’ve been mostly focusing on the local market. Even if we do expand, it’s more of the Asian region rather than the west.
There are definitely amazing game studios who made a presence in the west, like NCsoft, Nexon, Netmarble, Krafton and Smilegate, but they were building on IP. A global IP is still a very hard job. If you do it the right way in web3, it might be one of the secret sauces for these gaming studios to create more global IPs.
Our first deal is with a company called NHN. It’s a powerhouse for social casino and web board games in Korea. They used to be called Hangame. They had their poker series and other social casino/web board games related IPs and now they’re trying to come into web3. I feel like these types of games and web3 are very intuitive. The next one is called Reality Magic. It’s a smaller gaming studio but they’ve been a pretty sustainable powerhouse in AR/VR games and traditional web2 games.
Next year we’re trying to focus completely on the publishing efforts instead of the sales effort. Right now the interest in the career market in web3 gaming is very high. It’s interesting how most of these gaming studios are not talking about money or revenues upfront, because they think of this as an investment. As an opportunity to learn something that’s not been there before.
And if you look at the Korean industry landscape, the service or the infrastructure or the comms especially, Korea’s very fast to adopt new things.
Tell us more about the Korean approach to blockchain.
That’s what’s making me a little more optimistic about gaming in the blockchain space. I wouldn’t blame these larger gaming studios if they just decided to back out. They’re publicly traded companies in Korea and they have these risks with regulations and policymakers and even law enforcers. If they’re in here for a short term trying to do shady stuff, the first thing they would do is pull their feet out, right? But none of them are pulling their feet out. Yes, their launch is being postponed, but understandably, because of the market situations and complications in the Korean regulatory landscape, but they are still very enthusiastic about it.
Maybe a few years down the line, not at the market peak, there are going to be products that are continuously launching. It’s not maybe not their first trial, but if they keep on continuously coming in and challenging the doors with their products, at some point one’s going to at least make it.
Also I think NFTs fit really well into the MMORPGs that Korean companies focus on.
I think from here and moving on there’s going to be two types of NFTs. NFTs are resources or like our Drago NFTs that are more available for people. And even with our Dragos, if you upgrade them to a certain point they become more rare, which makes them more expensive.
I think that’s a very simple fact a lot of people forget about when they’re coming into web3 and gaming. If everybody can have it and it’s a widespread thing and people can just mint it into NFTs, there’s no way it’s going to be expensive.
And we do think that at least for MMORPG, which Korea is really strong at, play-and-earn has been a very big aspect of gaming even before the concept was conceived during the wake of Axie Infinity. People farmed and if they had rare items and people wanted them, people would sell it. So I think the first type would be one of the more utility-based, non-rare, cheaper, but P2P-allowing NFTs, and the other one is going to be more expensive.
For games, a lot of people have high standards, but I feel like it’s really similar to TikTok and YouTube. They do rev shares, right? But they don’t do it to every single one within the ecosystem, they do it to the highest value-adding creators.
In the long term, if these users can bring in more users and more revenue and actually grow the size of the pie, game studios won’t be too worried about tapping into their revenues and giving it away to the value creators because it’s a win-win scenario. A bigger pie, lesser percentage, but still more in absolute value.