Blockchain Gaming – Flavien Defraire – GAMEDEV INSIGHTS #8

Blockchain gaming – when people hear it, the majority snap to judgment with an almost reflexive ‘It’s a scam!’. But beyond the knee-jerk reactions lie a complex landscape filled with myths and misconceptions about what blockchain gaming truly entails and the potential it holds. To navigate through this maze of myths and uncover the truths, we turned to someone deeply entrenched in the world of blockchain gaming – Flavien Defraire. Known for his extensive knowledge and pivotal role in the development of the Blockchain Game Association, Flavien is guiding the charge towards understanding and harnessing the power of blockchain in gaming on a global scale. Join our Senior Recruiter Ljubica Garic as she sits down with Flavien to explore the realities of blockchain gaming, debunk the myths, and delve into the sector’s burgeoning business potential.

What is Blockchain Game Alliance?

Ljubica Garic, Senior Recruiter, 8Bit

Welcome to Gamedev Insights, the podcast where we dive deep into the dynamic and ever-evolving world of game development. Today, we are thrilled to have a special guest, Flavien, the Director of Global Development for the Blockchain Game Alliance. In this episode, we’ll explore the cutting-edge intersection of gaming and blockchain technology, unravelling how these two fields are changing the way we play and create games. Flavien, welcome to Gamedev Insights! Let’s start with actually telling the public more about what the Blockchain Game Alliance is and what are its primary objectives.

Flavien Defraire, Director of Global Development, Blockchain Game Alliance

Thanks a lot for the invite, Ljubica. I really appreciate the opportunity to talk about blockchain gaming, try to tackle down the different things around the definition of it, and I’m very happy to be a part of it. My name is Flavien Defraire, but you can call me Flav, and I’m Director of Global Development of the Blockchain Game Alliance. It’s a nonprofit organization committed to promoting blockchain within the gaming industry. Our role is really to promote blockchain within the gaming industry, saying to the gaming industry that blockchain technology is changing something. It is aiming to disrupt our industry and the way we see it, not only for game developers, game publishers, but for players as well, with new thinking and new ways to see how to play games as well.

Our role is first to gather a strong network of professionals involved in this ecosystem. We have 500 companies in the BGA right now all over the world, and they are developing blockchain games, developing blockchain services products, they are lawyers, they are VCs, anyone involved in the blockchain gaming is welcome in the Blockchain Game Alliance.

Our main focus is to help those individuals meet with each other, to do business together, to drive growth in our very tiny ecosystem as compared with the gaming industry, which is blockchain gaming. And the other part of that is education. This is pretty new. We exist since 2018, but actually, we are still in the early stage of blockchain gaming. And our goal is to educate our network, and educate the gaming industry about what does it mean to bring blockchain within gaming.

Blockchain Gaming Myths and Misconceptions

Ljubica

Thank you so much for sharing more about the initiatives that you have at Blockchain Game Alliance. There are a lot of misconceptions about blockchain, cryptocurrencies and blockchain games overall. Could you maybe share a few that you encounter the most?

Flavien

As I said, we are in the early stage and it’s not easy to apprehend what is blockchain gaming, especially related to the technology behind. We actually released a report to explain a lot of different things and actually what misconception our ecosystem is actually fighting for. The main thing I would say, 70% of our respondents said blockchain gaming is seen as a scam.

Obviously related to the fact that most of the people see blockchain gaming as something relying to crypto, the crypto markets. And that’s why we also had 46% of respondents said that most of the people think it’s related to the dark web.

So I think it’s really based on the fact that there is misunderstanding about what is blockchain gaming and only thinking it’s based on what crypto is. Obviously in terms of the kind of news we see in the mainstream media, when they report what is crypto, I think there is also misconception behind that. But that leads everyone to also translate what is blockchain for gaming, the same way what is blockchain as a technology.

On our side, actually, in terms of technology, mainstream media reports crypto being used for crimes, but can be an advantage to law enforcement in tracking, tracing crime relating to transaction because you have some transparency thanks to the blockchain technology.

I would say these are the main misconceptions: “it is a scam, it is dark web, it is a bubble” as well, because of relating to the price of the crypto.

And the other thing is, “blockchain games aren’t fun”. Most of respondents think that the definition of blockchain gaming is being just not fun games with not a good incentive. And that’s one of the challenges of our industry to explain on case studies we have, what you could actually do, what kind of experience you could have with gaming and blockchain technology.

We know why it is, it’s because it’s early and you don’t develop a game in two years. And actually the blockchain gaming market was booming in 2021, 2022. It takes time to develop a good game. And unfortunately, the definition of blockchain gaming is really related to that for now. But in 2024, a lot of examples to say that is not true.

How to Bust Myths about Blockchain Gaming?

Ljubica Garic

And how does actually the Blockchain Gaming Alliance work to dispel these misconceptions about blockchain technology and blockchain gaming overall?

Flavien Defraire

First, our main target is to talk to the gaming industry, talk to ourselves as well. I try to bring opportunities inside the ecosystem, but also using the expertise of our members to educate the gaming industry. So every time, online as an example, we do a lot of online videos, online panels to talk about what’s possible for blockchain and gaming. Everything we could talk about. It could be related to payments, it could be related to user acquisition, it could be related to new gaming experience things in blockchain.

We do a lot of communication on our side based on the expertise of what’s done in terms of experiences from our members. And the other part will be offline events like we were fortunate enough to attend a lot of different gaming conferences and we have a booth usually and we just display our members. We invite our members to be at our booth and to explain through the games they are developing right now the reason why they think blockchain is actually changing things and challenging the way we are seeing our industry. So it’s really based on those activities.

Blockchain in Games Industry: Benefits

Ljubica Garic

Could you share a bit more about the benefits of blockchain technology, especially when it comes to gaming? What benefits does blockchain actually bring to the games industry?

Flavien Defraire

First, we can think of one big advantage which will lead us to liquidity.

Liquidity in Blockchain Gaming

We are bringing more liquidity to a game with blockchain technologies. Gamers can actually buy and sell digital gaming items within the game, but without the limits, the restriction from the game publishers. Like we all play different games and the ability to sell and distribute and exchange items that’s not new, but the new things are the ability to not rely on the game publishers to actually transfer your digital items outside the game, which is completely new and made possible also without blockchain technology, but it’s more secure the way we do that with blockchain technology. The players benefit from a global permissionless liquidity layer, so they can actually build these, be a part of this big marketplace they have within the game. Also they can bring it outside the game with real world value, like you can exchange the in-game value you got from a lot of different items you win or you pay within the game, but also bring those values outside the games to other games, which is one thing, but also to the real world, like just with fiat money as an example. So liquidity would be the first.

Scarcity in Blockchain Games

Scarcity is the second one. Players can bring their scarce items with them to other applications. So that’s possible to actually have some scarce items to one games and translate the scarcity of these items to another game as well. You could see that as imagine if you actually were so good at playing one game, taking down one boss in a specific way with your team, acquiring one NFT (so – blockchain technology), one digital item related to an NFT. You claim the ownership of this NFT. This is yours, not the one from other players. And it actually could be translated to another utility to another games because the other games could actually see the value of these items within his own games.

So permissionless, the ability to build different layers across game, across experience is something really interesting to consider. Related to self-custody, you claim the ownership of these digital items. They are yours because they are a part of your wallet. They are not part of your game launcher. It’s really another way to collect the different item you have within the game.

Transparency and On-Chain Reputation

And you have also an on-chain reputation, like the ability to, because everything is transparent, the blockchain make it easier for every games, permissionless again, to make it transparent in terms of transaction, in terms of digital items for every player.
This is an opportunity for every games to say, these guys, these players, really good at one game and I have a similar games, I want these players to play my game as well. So in terms of targeting these player, this is easy. And you bring the on-chain reputation, the reputation of these players to your own game as well. So, many things to consider as well.

Decentralization

Maybe I can finish with decentralized governance, like the ability for a community of players to decide on one game because they actually own some digital assets, NFTs, within it. And you see different games doing that as well. So it will be among many things you could consider when you talk about blockchain and gaming.

Are Blockchain Games Fun?

Ljubica

Previously we’ve touched the topic of the misconception of blockchain games not being as fun as traditional games. Could you maybe share some real world examples of successful blockchain-based games and also what is it that makes them stand out? What is it that makes them wildly popular?

Flavien

I think we are in a very early stage, so it’s not easy. If I had to tell you that you have so many successful games, I don’t think we’re going to be in a discussion when we say that there is still a lot of challenge in our industry and a lot of conviction to share to the industry as well. It’s a challenging time to our side in terms of adopting this new technology. So saying that you have so many games will be alive for sure, but so many games are coming with the thought of bringing blockchain layer within a game. And in terms of giving you some names, cool games you could actually play – what is a good game? What is a good looking game for everyone? Like everyone has his own translation of playing a beautiful game.

But to be fair, for understanding your question as well, you have different games with AAA games. I’m thinking of Spider Tanks, which is kind of mobile eSports game. The idea of the game is you can control your tank and obviously the objective of this is to smash out the other tanks in one battle.

How is this different from other games? You actually own the tank. It is yours. You pay for it. If at some point you want to sell it because you don’t want to play the game anymore, you just go to any marketplace that’s possible to sell the items because it’s based on the blockchain used for these items. You can do it. You can just sell it. You buy something and you sell it on the marketplace. And because actually you play so many games, the different items within these tanks are very valuable. Like, you are killing it with that. And you are very good at the strategy behind this thing is really good because of different things.

The value of this tank really increased over time. You actually made money in comparison with the purchase of these in-game items at first. This is one way to see. The other way is you don’t have any time to actually play the game, but you still want to not sell it. You could actually say, I’m going to let anyone borrow my tank in exchange with some tokens. So you don’t play, but you actually win something because one of the players, they see the value of using your items, they see the value of using your items, paying a little bit. And actually it’s for you to generate some revenue without playing anything. So that’s the idea of the game, but you can have a lot of different examples based on the different genres of games available in the market right now.

Blockchain Technology Overview

Ljubica

You mentioned how blockchain technology actually enables you to better target the users, the user group. Could you share more about how the blockchain technology like overall is affecting and changing now digital marketing strategies?

Flavien

Blockchain equals transparency. Transparency equals trust. You can verify everything. In terms of digital marketing strategy, you can see that opportunity, especially in the advertising ecosystem. When you pay for advertising, for advertising as a publisher, as a brand, this is not actually very easy to say that you are targeting the right people, that it’s very, very obscure. And should I say ‘people or bots’, like you don’t even know. In terms of transparency and trust, you could expect using blockchain, and we have some members working on that, an ecosystem relying on the blockchain to actually suggest a marketplace for any advertisement possibilities. But actually you see exactly the kind of people you could target.

This is very visible because again, transparent means you see the wallet, the wallet address, you see the NFTs within the wallet. So you have so many information about this specific person without knowing them as well. What I love about the Web3 thinking, the vision of Web3 and blockchain is today we are sharing our data, like in gaming, but every kind of industries. We are sharing who we are. And the idea of Web3 and blockchain is actually to share what kind of things I have in my wallet, the kind of things I would like to share as well. I could say I don’t want to share those information to anyone. I’m going to block that as well. So the ability to claim the ownership, the freedom as a user to say, I’m just going to use those, the information, so marketers can actually use that, that’s a new thinking and a new way to see advertising. And because it’s blockchain, it’s cryptocurrency, there is a sense of tokenization as well. When you say tokenization, you also say possibility in terms of incentivization.

So how to incentivize the use of the advertising platform for advertisers, for publishers and for viewers? You have some models right now where actually viewers can be rewarded by the time they’re put in watching some ads in exchange of some of the data they will be willing to share as well. Because it’s blockchain, it’s secure in terms of data privacy, in terms of targeting and personalizations, that’s different. In terms of targeting, you’re targeting one person based on who he is, but not based on what kind of information, personal information you could know about, like the name, the address, email, and everything.

It’s just based on what kind of behavior he’s having in the internet without knowing anything about him. That’s another way to see it.

Loyalty Programs in Blockchain

Ljubica

You mentioned the the tokens and how these loyalty programs can actually enhance customer engagement. Do you have any good practices to share regarding that?

Flavien

In terms of loyalty program, it really depends on the kind of behavior you see from the different consumers. Again, not related to the personal data, but related to the thing you could know about the people you’re targeting. It’s really powerful in terms of targeting opportunities. You have things in the web-free world, what you call the PFP world, like the profile picture, like the apps you’re seeing in the news, but obviously not only that. Because everything is transparent, you can actually see what kind of NFTs you could see in the wallet of one person. As a company, you could use this information to grow your own ecosystem. You can acquire more users because you could actually say, ‘I want to release an NFT to every one of the owners of a specific NFT, because for me and my business it means that they will be interested in me for sure, because it’s related to fashion, I’m a fashion brand, and I know that these community of NFTs, they love fashion and I want to target them’. Releasing an NFT is trying to communicate with them, because I know that they have the behavior of be very interesting in these specific areas, I want to target them in a different ways. And that could be related to the use of NFTs. So that could be a way to acquire more users to grow your ecosystem and to have different marketing strategy as well.

Play for fun od Play-to-Earn?

Ljubica Garic

Coming from like a very traditional gaming background, whenever I discuss the topic of blockchain gaming with other people, one of the arguments against blockchain games is Play-to-Earn model. Could you share more about like how the P2E model is transforming the game industry and what are your arguments for implementing this model?

Flavien Defraire

It’s a solid question. Obviously, you shouldn’t define blockchain gaming as Play-to-Earn models. Play-to-Earn is a part of what’s possible with blockchain and gaming, but it shouldn’t define the whole ecosystem. We understand that. You are in the gaming industry yourself. I’m a gamer as well. The incentive of winning money just for playing a game – that’s not the reason why I play a game. I know for some people it is, but I’m not playing a game because I just want to win money. Playing to earn more, that really means actually that you convert non-fungible tokens. When I say non-fungible token NFT on fungible token cryptocurrency you can actually exchange that against real world value.

So this is possible. As I said, liquidity. This is good. You have the freedom of using your time to play a game and translate the time you’re putting and the effort you’re putting to play a game into real-world value. That’s game-changer. It’s really powerful. But should it define the only objective of playing a game? I don’t think so. Playing to earn is possible. But it shouldn’t define the main way to see this.

It’s giving anyone the freedom of processing financial transactions. In gaming, you see that when you interact with money within gaming, you interact with a lot of different people you don’t see, obviously, a lot of different third parties. At some point you don’t interact with anyone, you just interact with the platform. You just take the value of this game. You just process this transaction, financial transaction within the game and you do whatever you would like to do. You don’t have any bank transaction fees, you don’t have any fees from PayPal and everything. It’s smooth, it’s seamless, you got the money directly.

So you see the value of talking about that obviously. But there are so many things you could do and you could explain when you talk about blockchain gaming without the need to say what is Play-to-Earn. I agree with this statement and that’s why we try to say see what’s happening you could actually do more than just play to earn model.

Blockchain Gaming Trends 2024

Ljubica

You recently published the Blockchain Game Alliance 2023 State of the Industry report on what has been happening in the blockchain space in 2023. What emerging trends and innovations we will be seeing in 2024?

Flavien

It’s interesting to see that you could build a game fully on-chain. What does it mean? Everything which is happening on the game, is recording on-chain in the blockchain. Obviously when you release a game, you develop a game, you rely on infrastructure for gaming. A lot of different parts, a lot of different parties involved. And it’s the backbone, the structure of your game, depending on the features you would like to have on your game. Some of the games we’re seeing, but it’s only 5%, they went fully on-chain games. That’s very interesting because you see that as a need to give transparency and security to the players.

You can see that everything’s happening in the game actually very far on-chain, which actually leads you to think that the players should expect fairness, that the ability to win without seeing any control from the game publishers. You’re giving more control to the players as well and the ability to win something. Especially used for the trading card game. Obviously everything you’re doing when you actually put a card on the board, this is very far even on-chain. So there is no way you could shift the system based on what you’re doing as well. That’s one thing. You have a lot of different games that are building their own economy and providing interoperability between all the games economy as well.

You could expect that one thing in one game would translate another thing in another game. That’s very exciting. As a player you see your involvement in game A could be translated to another thing in game B. That’s very powerful in my opinion. The other thing I really like is about creators, like the creative industries. They could be involved more in the gaming side. We see so many partnerships with the music industry right now. I think Web3 and Blockchain, they will help and they will support this initiative because games like The Sandbox, it’s the ability to develop a game very easily, also to provide some NFTs you could actually use in the game. Thanks to that, these NFTs could be items, digital items made by artists as well. It could be artists from the fashion industry. It could be artists from the music industry. You sell it, you win something as a creator. It’s a new creative model, revenue model. And that’s perfect, in my opinion.

Imagine if you see Roblox as the opportunity as a creator to win a part of the revenue based on the experience you’re developing. Imagine the same but with blockchain technologies, which are more secure, more transparent. That’s something I’m really passionate about.

And I would say the last thing is the merge between the ability to live a digital experience and also translate this digital experience within the physical world. And for me as a player, that’s something very exciting. Your action in one game could actually lead you to do something in the physical world.

I can give you an example with that. You have one game and you’re playing a specific mission. Like you have one mission in one part of the MMO. And actually this is a mission with a music artist. It already happened. I think it’s Watch Dogs. And I think it was an artist from London. And this artist gives you a mission to do. Imagine if you did that mission, it translates to your ability to win 30% in the merch of these artists offline. And because you have NFTs, you can claim the ownership of these NFTs, it is yours. You can bring these NFTs and say on the website of the artist, I play your mission, I can have the 30% off for your merchandise. It’s very powerful because we are always saying digital, digital, digital, but I think blockchain will actually make it very more exciting for people and players to merge their digital identity with their physical identity.

Is Blockchain Mainstream?

Ljubica

Beyond gaming, you’ve already mentioned a couple of other creative industries that could greatly benefit from from from from from blockchain technology. So Flavien, how does the roadmap for this mainstream adoption of blockchain technology look like?

Flavien

That’s such a difficult question because a very early stage again, and when we released the report, it wasn’t a surprise to see that the biggest challenge of our industry is to onboard players, to make it easy to onboard players in the web-free world in the blockchain, with the use of blockchain. And we know why. Because can you imagine as a player having to create a wallet, understand what is a seed phrase. So the seed phrase is actually the password you need to think and remember and put it somewhere very safe, very safe, because it’s actually gathering every digital asset you could have.

At some point if you lose it, you’re going to lose everything. And that’s the ability or the way you can actually see that everything you do, some of the things you do translate into a transaction you have to sign. It’s very boring. You just want to play a game. You just want things to be seamless, you don’t want to learn about Web3 or blockchain technologies by playing a game. And that’s the challenges of our industry. So onboarding players.

But things are coming in terms of tech. You have a lot of things that make it easier. First, for the players to be onboarded without the hustle of learning everything about the technology. But also, and most of all, the ability for game developers to release a game with the blockchain layer within it as well. Again, you can focus on the game, game mechanics, the way you see gaming, the same way you see gaming, but also if you want to have ownership of digital assets for your players, you could actually have a lot of more and more opportunities and activities that make it easier for you to involve blockchain within your game.

Blockchain Gaming Regulatory Landscape

Ljubica

So it’s coming, but there is a need in terms of education and obviously that’s where we are and where we try to be. Also, one of the challenges of blockchain is the regulatory landscape. Could you shed more light on how this landscape for blockchain and for digital assets is evolving?

Flavien

You have so many jurisdictions depending on where you are and where the company is based and how this country on this region is seeing digital assets with blockchain technology. A lot of things are happening right now. You have some countries like the US who are very protective in the different game tokens you are suggesting to your audience. Should it be seen as a way for players to just speculate? That’s one part of the discussion a lot of different countries are having.

You have things in Europe with France leading the way with some jurisdiction and it’s very good news. They’re not seeing blockchain games and blockchain items as gambling items. This is completely separate and for the best, obviously, because you’re not buying an in-game asset just for the sake of having more. There is no financial risk. It shouldn’t be financial risk to actually play a blockchain game. It’s not gambling.

And you have also part of the world, like especially in Dubai and countries around where it’s easier to actually build a blockchain company there. Also Hong Kong was really welcoming a lot of companies like that. Our role is to give awareness.

We are very fortunate to have companies like PWC and a lot of different companies to bring visibility to that. But that’s challenging time. And that’s obviously one of the biggest challenge of the industry. We will see how it will go for the for for for 2024 and beyond.

Ljubica

How is BGA involved in this regulatory topic?

Flavien

Not so much to be honest, because it’s not easy and we are small. Obviously, we try to grow more and more, but we try to have a voice more and more as well. That’s one of the objectives I think we will have for the next month and the next years as well. But that’s not easy, especially to be involved in such conversation is not easy as well. I think we need to prove ourselves that we are a very powerful community.

You can see that a lot of different actors in this space, they struggled a lot based on the fact that in terms of funding and opportunity to be funded, you see the blockchain gaming as, unfortunately, the crypto market as well. So if the crypto market is good, you have awarness about blockchain gaming. Unfortunately, a lot of things are tied up like that. So because we just left two years of what we call the crypto winter or the bear markets. So the market’s very, not very good in terms of pricing. That’s not easy for us to gain awareness about what we could do with blockchain for gaming. But actually that’s two separate things in my opinion. So we will see for the next year for sure, but it should be more exciting.

The Role of Blockchain Game Alliance

Ljubica

Looking back on the things that you have done, could you share some of the success stories or case studies where the BGA itself has significantly contributed to the ecosystem and actually changed something for the better?

Flavien

We hope that we are changing something with the reports we released because it’s a way for our members to use it and to say, this is our ecosystem right now. One of the thing I loved, 78% of the respondents said they will work in blockchain gaming for the next 12 months. So in terms of confidence and trust in the industry, it’s big because we know that we’re going to change something. But still a lot of challenges regarding that.

The other thing we try to do is to listen to our members based on the challenges they are having. Based on that, we try to do something in terms of online or offline events. I could name different things we did in terms of activation, but just giving a one is Gamescom, one of the biggest gaming convention where we were, GDC San Francisco as well, where we were one of the very few companies we actually talk about blockchain gaming.

I think it’s good for the industry, especially because we bring our own ecosystem. That’s one thing, but based on the challenges of our members, you see challenges in terms of raising funds. It’s not easy. On our side, we say, at least you should have a conversation with VCs and see how it goes.

But the kind of thing we did for this year, last year, and we’re going to do double our effort for next year will be organizing matchmaking events. To strengthen our relationship with VCs and bring our own ecosystem with the organization of offline events. We did that in New York, we did that in Paris last year, we’re going to do that in 2024 in different countries all over the world. We try to impact things depending on the request we have on our side from the industry.

Ljubica

And how can actually one become a member of BGA?

Flavien

Any individuals who values of being a part of the BGA because it’s going to improve their visibility in this ecosystem, they can become a part of the BGA. We are a non-profit organization, so we don’t have any stakeholders, but we do ask for membership fees because this is the way we actually organize things on our site. We use that money for the sake of our members and the individual members could actually be members for 100 euros per year. As a company, you could have the willingness to be a part of the BGA because you want to improve the visibility of your company and your products and your services and your game. And you know that the BGA will be helping in promoting your company. You can actually go to the website to apply to be to be a part of the BGA. We review the application, we try to understand who you are, what you do, making sure that we can see people behind the wheel building something. Based on that, we have an onboarding process to do that. So I would say going to blockchaingamealliance.org and you see how to join us.

Ljubica

Okay, awesome. And Flavien, you already mentioned some of the goals that BGA has for 2024 and some of the focus areas. But could you tell us beyond 2024, what are your plans and overall goals for the future? Where do you see BGA?

Flavien

I’m so excited for 2024 already because I know a lot of games will be released. When you have some feedback saying that games are not fun in blockchain, we’re going to have a lot of use case and custody to say otherwise. I’m excited because we know it’s a game changer. And I love the philosophy of Web3 and being a player, I think Web3 and blockchain will change things in gaming. For me, I have no idea what to expect, except saying that I’m very glad to be a part of this ecosystem. I have the feeling I’m in the right place at the right moment, but need to be patient for sure. And thanks to people like you at 8Bit Recruitment and just giving us the opportunity to say what we do and how we try to do things. and how we try to do things. I think it’s wonderful to capitalize on that as well.