The video game industry has always been on the cutting edge, but blockchain games are still widely viewed as an emerging technology.
In October 2021, Valve banned all blockchain-related games from its Steam platform. Meanwhile, in Axie Infinity, an NFT-based online game, new players pay hundreds of dollars to purchase mythical pets and love potions.
There is still a haze of uncertainty surrounding blockchain games, so we’ve reached out to several active investors in the space to get a clearer picture of where opportunities are today and what they see on the horizon. We asked them to share the advice they are giving their portfolio companies along with their thoughts on how future regulations could affect the industry.
Interestingly, at least one investor noted that growth wasn’t a key issue: “We’re telling our companies to really think about the missing pieces, especially in the gaming infrastructure,” said Banafsheh Fathieh, Head of Investments, Americas at Prosus Ventures . “What are the weak points that we can alleviate for users and builders? Growth is now less of a focus, usefulness is incredibly important in this phase. “
We asked:
- Anton Backmann, Headmaster and Kenrick Drijkoningen, General partner, Play ventures
- Banafsheh Fathieh, Head of Investments, America, Prosus Ventures
- Josh Chapman, Executive Partner, Convoy Ventures
- Eddie Thai, General partner, 500 startups and general partner, Ascend Vietnam Ventures
- Beryl Li, Co-founder, Endure guild games
- Rajul Garg, Founder and managing partner, Leo capital
Anton Backman, Director, and Kenrick Drijkoningen, General Partner, Play Ventures
What was your first reaction when you heard about Steam’s ban on blockchain games?
It wasn’t a completely unexpected move by Steam. The incumbents tend to be more cautious about adapting new business models and gaming is no different. As a young space, NFTs are littered with projects of varying quality, and we believe Steam wants to do some quality assurance and wait for the situation to stabilize before allowing blockchain games en masse. Interestingly, at the time of writing (Nov. 14), MIR4, a crypto-enabled MMORPG, is running on Steam with 88,000 concurrent users. It seems that there is still a gray area as far as the classification of these games goes.
What advice have you given your portfolio companies to help them grow? What kind of guidance and support do blockchain gaming companies seek from you?
We typically act as a sparring partner for founders on strategic issues. At blockchain gaming companies, we mainly supported the teams in navigating through the technology stack, i.e. which blockchains and / or scaling solutions to consider, as well as in the economical design of tokens. From our point of view, it’s important to take a crypto-native approach to building and experimenting with the product while involving your community in the process.
How do you see the regulatory environment for blockchain gaming? Does the uncertainty make you rethink your strategy?
No. It’s not the first time innovation has overtaken regulation, and we see it as a natural response to new consumer behavior and the way businesses are built. Similarly, Uber fought an uphill battle with regulators before eventually democratizing the taxi medallion system and providing an oversized improvement to taxi service end users. This does not mean that companies and projects should develop products that violate the law, but rather that they should have a healthy discussion with regulators as their products gain acceptance.
