In the first part of our interview with Robby Yung, CEO of Animoca Brands, we explored his journey into the gaming industry, the vision and mission of Animoca Brands, and the company’s strategies for expanding its global market reach. We also touched upon the innovative technologies the company is exploring and their investment strategies.
In this second part, we continue our conversation, diving deeper into the future of Web3, the challenges and opportunities it presents, and how Animoca Brands is positioning itself at the forefront of this transformative space.
Quick-Fire Questions
Shuab (GM Games): Ok, ready for our next set of Quickfire questions?
Robby Yung: Yes, let’s do it!
Shuab: Mario or Sonic?
Robby Yung: Mario.
Shuab: Apple or Android?
Robby Yung: Apple
Shuab: Boxing or MMA?
Robby Yung: Probably boxing, as I haven’t watched enough MMA.
Shuab: eSports or real sports?
Robby Yung: Isn’t eSports real sports?
Shuab: Real world or Metaverse?
Robby Yung: You can’t have one without the other. We’re already in the Metaverse with how much time we spend on smartphones!
Shuab: That was great! Its brilliant to get under the hood and really get to know the real Robby. Ok back to the longer questions.
How do Web3 ID systems and gamification layers encourage community participation in events?
Robby Yung: The idea is that we’re really trying to build and codify network effects in order to share value proportionately with participation. One of the big problems with Web2 is that we, as users, have been providing our data and our activity to all the centralized platforms, but we don’t get anything in return. Yes, we get a free product, but as they say, when it’s free, you’re the product.
The goal in Web3 is to share value more broadly between all participants in the network. For example, if everyone in a game ecosystem holds tokens in that game, the value generated by playing and engaging in that ecosystem is more equitably distributed. When you play a game and add utility to its ecosystem, you’re essentially creating value in those tokens, not just for yourself, but for everyone involved, including other players, developers, and investors.
This system fosters a more balanced and fair distribution of value, as everyone’s contributions help to grow the ecosystem. It’s about creating a sustainable and equitable environment where all stakeholders benefit proportionately from their involvement and contributions.
Shuab: Many people, both outside and within the industry, express concerns that there aren’t any fun games in Web3. What would you say to that?
Robby Yung: I think it just depends on what your definition of fun is. It’s similar to how lots of people say there’s nothing interesting to watch on TV, yet others find plenty of interesting content. Fun is highly subjective and varies greatly from person to person.
Web3 gaming is still in its early stages, and while it may not yet have produced a blockbuster hit that appeals to the masses, there are plenty of games that cater to niche audiences. For some people, the most fun part of a game is the financial incentives it offers. In Web3, this could mean playing games that reward you with tokens or NFTs, which can be traded or sold for real value.
This financial layer adds an entirely new dimension to gaming that some players find incredibly engaging. Just like how some people are fascinated by the stock market or collectible card games, there’s a segment of the gaming community that loves the idea of accumulating and trading digital assets.
Additionally, early adopters of Web3 and crypto tend to enjoy the strategic and economic aspects of these games. They see the potential for creating value and are excited about the new opportunities Web3 games present.
We’re already seeing games with relatively small user bases that manage to monetize effectively and sustain themselves because of the high engagement and spend levels of their players. This suggests that Web3 can support a diverse array of games catering to different tastes, much like how YouTube supports content for every conceivable interest, from painting garden fences to car mechanics.
In short, while Web3 gaming might not yet have widespread appeal, it offers unique experiences that many players find rewarding and enjoyable. As the ecosystem matures, we expect to see a broader range of games that will attract an even larger audience.
Shuab: Sure. You could say it’s the same people that are saying the metaverse is empty and a waste of time. Do you have a response to that statement?
Robby Yung: I mean, it’s like anything else. Every place, when you first build it and it doesn’t have many people or much activity, is empty and a waste of time. You can say that about any city on the planet because it was empty at a certain point in time. It’s just that some of them have been busier for longer than others.
We always see more value in human connection. The more activity and engagement of people in places, the more exciting those spaces become. But I don’t think that means that places are inherently good or bad. The beautiful thing about Web3 is that it allows us to place a value on all of these interactions because we have token values and financial values associated with everything.
So, it doesn’t mean that places are good or bad. It’s just that some have more value than others. This ability to assign value in Web3 is what makes it so powerful. We need to educate people who see the metaverse as empty because they might not yet understand this potential. As more people engage and build in the metaverse, its value will grow, much like how cities grow and become vibrant over time.
Shuab: You recently created the Motorverse. How do you see interoperability within Web3 games taking off?
Robby Yung: I think that interoperability is one of the superpowers of Web3 because, as an open-source community, we have the opportunity to create playable content that can work across different games and environments. It’s a huge opportunity that we can’t squander. However, creating standards for that is very difficult because the standards don’t exist yet. The only standard we have is the exchange of value, primarily because we have fungible tokens to coordinate value.
For playable content, the reason we created our Mocaverse initiative was that we had several games featuring the same content genre, which is motorsports. We saw an opportunity to harmonize the playable content, such as cars and motorcycles, across these different games. It’s relatively straightforward compared to an MMO where you have orcs, swords, dragons, and all kinds of diverse content. In the motoring genre, everyone has a car with four wheels. While they are different, they all share the same fundamental characteristics.
Starting with something as tangible as cars makes the idea of interoperability a bit easier to manage. We decided to start with our own projects first because it’s much easier to establish these standards internally. Once we can open-source the standards we create for interoperability in our own games, we can then work with other developers and third parties. We are now collaborating with third parties to incorporate our standards into their motorsports games. This way, they can use our same playable car NFTs and benefit from the established standards.
Shuab: How do you tackle things like brand association and supporting assets in different ecosystems within the ecosystem? What about the brand association conflict? How have you kind of enforced that or helped that along?
Robby Yung: Really, I think a lot of these questions are red herrings. If we were talking about a physical product, you wouldn’t ask the question. For example, if I’m Gucci, I’m not worried that someone might commit a crime while wearing my hoodie. They own the hoodie and can do whatever they want with it. The brand owner can only control so much.
Selling a unique digital good is no different than selling a physical good. If someone buys a physical Ferrari and decides to burn it and post the video on YouTube, there’s nothing Ferrari can do about it because that person owns the car. Most of the time, there’s a financial disincentive to doing that, which acts as a deterrent.
We think the same thing applies to the digital world. People could destroy their digital items just like they might destroy physical products. There’s a financial disincentive, and it’s going to be a minority of cases. It’s not something worth dwelling on because the opportunity far outweighs the risk.
This issue is actually beyond our control. Asking this question often shows that the person asking it doesn’t fully understand that digital items are unique. If you only make 5,000 digital hoodies and they are unique, then there are only 5,000, and they won’t be everywhere in the world.
We need to educate more people about this because there’s still a stigma around crypto. For 20 years, digital goods had no copyright protection, so it’s hard to train people to understand that digital things can be validly unique. The real financial value there acts as both an incentive and a disincentive, helping to maintain the integrity and exclusivity of digital items.
Shuab: That was a comprehensive discussion on Web3 and gaming. Thanks for sharing your insights, Robby. It’s clear that Web3 holds tremendous potential for redefining value and engagement in the gaming industry.
Robby Yung: Absolutely! It’s an exciting time to be in this space, and I look forward to seeing how it evolves.
Wrapping up
Our conversation with Robby Yung shed light on the transformative potential of Web3 in the gaming industry. From the integration of financial incentives in gameplay to the promise of interoperability and the evolving metaverse, Robby’s insights underscored a vision where value is equitably distributed and player engagement reaches new heights. His perspectives on community participation, the unique appeal of Web3 games, and the future of digital assets provide a compelling roadmap for the industry’s future. It’s clear that as Web3 continues to develop, it will open up unprecedented opportunities for gamers, developers, and investors alike. Robby’s passion and expertise are truly inspiring, and we look forward to witnessing the innovations that Animoca Brands and the broader Web3 community will bring to life.