The latest addition to a relatively young industry, blockchain gaming has yet to lose its mystery. Many are still unsure what to make of it, and the ever-changing gaming ecosystem does little to help.
However, those deeply involved in blockchain gaming believe its promise of player-owned assets and circular token economies are the natural evolution of entertainment, one that will change the way the world views gaming.
One such person is Anthony Yoon, a general partner at ROK Capital. In an interview with CryptoSlate, Yoon said that he believes the future of gaming is on-chain, which is why his fund has backed several blockchain gaming projects that want to enter the Korean gaming market.
The fund has backed play-to-earn mobile esports organizer power up tournamentswhich also functions as a streaming platform with payments in cryptocurrencies and NFTs. CyBalla soccer-themed P2E blockchain game, and nine chroniclesa fully decentralized RPG, they also make up ROK’s GameFi portfolio.
And while Yoon’s optimism about the market is hard to beat, he is aware of the challenges ahead.
One of the biggest challenges of GameFi projects is their attempt to compete with established games from big studios. Yoon said that there has been an increase in emerging GameFi projects that want to take on AAA games from Ubisoft or EA, almost all of which are doomed to fail.
“The number of on-chain games that warrant the coveted AAA badge can be counted on two fingers,” he told CryptoSlate.
Yoon and his fund are aware of this and have taken a completely different approach.
Instead of trying to find GameFi projects that can compete with well-funded games, ROK Capital is looking to bring traditional game studios into the blockchain space. Yoon says that there are many “cryptocuriosity studios” interested in blockchain games.
“AAA studios that released games for millions of users and generated hundreds of millions or billions of revenue from those titles are now interested in exploring how to integrate crypto.”
With Yoon’s native South Korea being the fourth largest gaming market in the world, even the smallest increase in GameFi adoption could boost the nascent industry into the millions. The country is a mecca for game developers, most of whom could easily transition to blockchain gaming.
“We are excited for the world to see strong Korean developers in crypto coming from a space that Korea does best: gaming.”
Crypto is here to stay, just like GameFi
But, despite the unprecedented growth of the GameFi segment of the market, most of the projects competing in the space won’t arrive until the next bull run. While Yoon is aware of this, he also believes that cryptocurrencies and blockchain technology are not going anywhere. As an investor, he sees value in the industry and hopes that traditional venture capitalists will become increasingly interested in the space.
“From a capital allocation perspective, blockchain and crypto are here to stay,” he told CryptoSlate. “My advice to non-crypto venture capitalists looking at the space is to treat crypto as an emerging asset class where it is worth allocating some capital from traditional asset allocators.”
Yoon believes that the Darwinian nature of the crypto industry, in which only the best ideas and strongest companies survive, is what will sustain it for years to come.
“If cryptocurrencies can survive the market crash and lender crash of 2022, they will surely be able to handle anything else that comes their way, from overzealous regulators to predatory hackers lurking north of the Korean border.”
The influx of talent into the cryptocurrency and blockchain industry will further strengthen that foundation.
“In the 2018-2019 cycle, we saw a lot of tourists coming and going, but in this cycle we are seeing a lot of technical talent over-indexed in construction. We have also seen native crypto funds that have been around for a while extraordinarily well and now have larger balances to deploy in the space,” he explained.
Yoon believes it will be another year until we see what the blockchain gaming industry is capable of. Only when more GameFi projects roll out their alphas and we see more AAA studios enter the space will the industry reveal its true potential and show that it’s here to say it, she said.