YGG co-founder says play-to-earn is future of gaming
When Yield Guild Games (YGG) Co-Founder Gabby Dizon was three years old, his father brought back a Commodore VIC-20 from his US trip. Little did both know this would ignite Dizon’s burning passion for gaming, which he is now bringing to the next frontier with his Philippine-based blockchain gaming-focused startup. YGG, the play-to-earn gaming guild which he co-founded last year, is a decentralized autonomous organization that has raised US$4.6 million in a financing round led by venture capital firm Andreessen Horowitz (a16z). This is the first time a16z has invested in a Philippine startup.
“I didn’t have any Nintendo consoles. I always had PCs, growing up with role-playing games like the ones early BioWare did and Ultima. The games back then were super simple, like Hangman, Stargon, and really blocky games. I didn’t really have consoles because my dad thought that if I was going to play on the computer all day, I might as well learn something while doing it,” Dizon told Digital Life Asia.
YGG and play-to-earn revolution
And learn something by playing on the computer he did — from game development, to blockchain, to play-to-earn.
For many people in developing countries, however, such as Filipino couple and sari-sari store (small neighborhood store) owners Lolo Silverio, 75, and Lola Vergie, 65, play-to-earn is a godsend that lets them earn an income amid the hardships of COVID-19.
Lolo Silverio and Lola Vergie are two of the members of a small community in Cabanatuan, Philippines that have been playing the NFT game Axie Infinity, a Pokémon-like game that enables players to collect, raise, and battle fantasy creatures. Simply put, when you win battles in Axie Infinity, you are rewarded with Small Love Potion (SLP) tokens, and you can use these SLP digital assets to breed the digital pets known as Axies to win more battles and earn more SLP. You can then use a cryptocurrency wallet to convert your digital wealth to real-world money.
It is precisely the powerful potential of play-to-earn as a way of using technology for good that led Dizon to co-found YGG in 2020 with Beryl Li and another individual known as “Owl of Moistness”, who is represented by a plush toy owl.
Games and financial inclusion
Imagine harnessing the power of gaming for financial inclusion.
“The interesting thing about play-to-earn is that through the act of gaming, which billions of people around the world can do, you can actually enable financial inclusion by the element of having NFTs that earn yield.
“What excites me the most as a gamer is that there are so many ways you can express yourself by playing these different games. There are just so many games to look forward to and so many creative ways to earn an income.
“Another interesting thing to look at in the play-to-earn phenomenon is how many people outside of crypto are getting pulled into the space because you don’t learn crypto by trading, learning derivatives, or doing enterprise blockchain. Here, you are learning it through gaming first, so you actually learn by playing a game, and when they earn a token, and it is time to cash out, then you can be sure that they are motivated to learn crypto. This is why Axie Infinity has experienced such tremendous growth because most of the users are actually new to crypto, and are being connected to the crypto economy, so it is growing the tide for crypto and gaming considerably,” Dizon said.
Metaverse of possibilities
Gamers are no strangers to living in virtual worlds, and playing games has been a source of income for some time now for certain people, such as professional gamers who compete as e-sports athletes. Play-to-earn, however, gives people from all walks of life the ability to earn an income by playing these blockchain games. People who were previously non-gamers, or who once had no interest in cryptocurrency, are now becoming part of a growing movement. And if you consider how much time players have spent on traditional games, and how much money they have shelled out for virtual items, getting financially compensated for playing games sure sounds appealing, as YGG is proving.
“I think blockchain games have a slight advantage because you are taking your game economy and putting parts of it on the blockchain so that your players can own those assets and easily trade them among themselves. That is the truly groundbreaking thing about Axie Infinity. We want a metaverse of virtual worlds with underlying economies, assets, items that are built on open standards, and open digital asset ledgers. That is what I am working towards and that’s also why I like seeing the economies of these worlds build on the blockchain or distributed ledgers because that allows for a level of interoperability, the ability to transport your assets between worlds, and that honestly is just not possible if you are using databases between different big companies,” Dizon said.
Blockchain and the art of gaming
As part of the Anino Entertainment team that launched the first Philippine-made PC game Anito: Defend a Land Enraged in 2003, Dizon is no stranger to being a pioneer. Through blockchain gaming and NFTs, he believes that the time has come for Filipinos to lead the way in building and populating the metaverse.
“I found out about crypto in 2017, in the context of gaming when we heard about smart contracts and Ethereum, and tried to see how we could apply them to games. While doing our experiments, CryptoKitties came out and brought down the Ethereum network. This is what introduced me to NFTs and I have been in love with NFTs ever since.
“Since 2018, I have been preaching about how NFTs would revolutionize games and put all the game items on the blockchain. Even though games with NFTs have come out within the last three years, I think it is only recently that the rest of the world has started to notice,” he said.
Here we are now, entertain us
Games, however, are a form of entertainment. In fact, gaming has become even more popular during the COVID-19 pandemic as community entertainment. How, then, can the developers of games designed for play-to-earn balance making the game entertaining as well as a source of income?
“It is quite complicated, because on one hand, you have these big game companies that know how to make polished games and are learning the basics of crypto, and are trying to add NFTs to their game items, but they are doing it conservatively because they are not crypto-native. On the other hand, you have crypto or DeFi-native companies that are doing DeFi with a gamified layer. And for the DeFi-native developers, their challenge is creating a polished game experience as compared to traditional ones.
“It takes a lot of work on the game design and tokenomics front because you have to understand not just game economies but also tokenomics to figure out what makes for a good play-to-earn game. The main thing that they should focus on is providing an experience that immerses people in the economic world that these games and assets bring and the community as well, which is one of the most important parts. With the early state of blockchain games, you might not see as polished games as you would see in a typical Xbox or PlayStation game, but these developers do have to innovate on a different front, which is the economic model,” Dizon said.
Still, these are early days, and after all, it wasn’t so long when traditional gaming was the new kid on the block but already capturing the imagination of players.
Even with blocky games.