Michael Rubinell on Web3 gaming and NFTs at WAX

0:01i'm ashton addison from block west capital for investment pitch media and today on the Crypto Coin Show we have michael rubinel the chief gaming officer of wax studios michael welcome to the show and thank you for taking the time ashton thank you for having me it's a pleasure to be here likewise excited to dive into your insights into the inner workings of

0:22wax more importantly and nfts where they're going how gaming is evolving into game phi and the incorporation of owning items in the game and hopefully incorporating blockchain in different ways to add value for the players and the game studios so let's kick off the conversation i'd love to start with a little bit on yourself and what you're doing at wax studios in

0:48order to make all of these talking points real and create the future of gaming yeah thanks so i'm a kind of traditional game developer i've been in this business for quite a while i've worked at companies like ea and thq and capcom and disney and whatnot and i've i've lived through a lot of you know platform transitions and business model transitions you know sort of you know

1:09cartridge based to disk based disk space to downloadable you know kind of pay to play our freemium to free to play and whatnot so we see a lot of kind of history lessons you know you know being perfect perfectly consistent that's kind of the nice thing if you're in my position it's like how's this all gonna go like i've seen this show before i

1:26know exactly how it ends and i know what the path to success looks like and so we're really excited to bring kind of greater kind of you know ownership and you know kind of dominion over your assets from into the players hands allow them to kind of reap the financial benefits of what that means in this web 3 based gaming world that i think we're

1:45absolutely heading into without question incredible and yet to have that kind of experience it must be exciting to see everything becoming digitized and just more accessible and creating more ownership for the players who are actually doing a lot of the work grinding out in the games yeah ashton you know not to oversimplify but there's a couple things that have

2:05really served me very very well in my career one is just make the best game possible like which is easy to say and hard to do because you know making a great game is a little bit of a dark art and you know i've seen great games not do well and i've seen terrible games do well and so you never quite know what the formula paradigm for success successes but also when you over index

2:24on the player experience or things that are beneficial for the player your game tends to do better and i think a lot of publishers and developers think this is a zero sum and i've got to get as much as i can as long as i can but in reality if you show that you're player friendly or player leaning you know they're going to understand that and they're going to

2:41going to be retained more they're going to be more engaged you can be more likely to quote unquote invest in what it is that you know you're selling and so i think the web 3 movement and kind of crypto based gaming has a lot of those things at its core because that's what the formula for success looks like and groups that do that like wax you know you know we're going to be the market

3:00leaders we're going to create that north star and kind of a final point on all that is that you know you say gosh it must be exciting to see all this the thing that we say is to live a meaningful life right you have to find a cause greater than yourself and we find building a world or an infrastructure an economy that really really benefits the player like

3:17that's a really compelling cause for us right like that's the players are the cause greater than our own cause and if we do that then everything else should take care of itself incredible i love it when you put it that way michael and i would love to hear about the current you know initiatives of wax and what you're working on the gaming side because

3:37i've been following the wax blockchain for a long time and i know that they've been an early pioneer in nfts and the asset exchange and you know this was like before i feel like before large games started sort of incorporating game fight nfts there was like the profile pictures and the gamers were going in the in the niche blockchains where all the gamers were

4:00sort of getting together on wax before people were trading ethereum nfts on openc as the people who were actually excited for this technology and i feel like gamers just as they sort of did with bitcoin and digital currency they sort of lead the innovation you know the nerds know what's coming up first and they're interested in super technical stuff

4:20yeah and look i think the thing that is really easiest to map to if you're a little bit of a historian in the in the internet space is like we look at this as very much kind of like you know 97 98.99 it's web one and you saw a lot of companies come out you know etoys and epes and everything was edis and e that right and you could take the whole notion of everything was

4:39e and you look back in the 50s that everything was motors right and there's the automobile industry and everybody kind of this gold rush to kind of take advantage of a of a of a movement but yet you didn't always know kind of what the monetization play was and so a lot of people in the web one world goes oh this is this is a scam and nobody can make

4:56money on the internet you know you're giving things away for free this will never work and people thought that web one was you know beanie babies right it's just huge fat it was just going to come and go boom and bust in reality it was stuffed animals right and so you look at web one and a lot of things failed but you know amazon came out of web one ebay came out

5:15of web one google came out with one there's a lot of these success stories that were born out of web one and even if the obvious business model wasn't clear to everybody it emerged and a lot of people almost like this crowdsource movement found a way to make that technology really benefit their business right it was it was incredible accessibility to customers like we'd

5:34never had before right you could shop from the comfort of your own home you could stream you could learn you could consume you could engage you could do all these things with very little friction and that was a really positive and powerful thing we see the same thing in web3 we see a lot of you know nft collections come in we see alt coins we see cryptocurrencies

5:53we see all these things taking place and there's the naysayers going this is a scam or this is a fad and whatever sustained but then you have people like me who say okay well what does this technology this platform you know allow us to do and the challenge is a lot of people conflate you know you know entities without utility or a sinking you know

6:12cryptocurrency price is like oh games will never work see because ethereum is crashing or bitcoin is way off their highs in reality those things aren't as directly linked as i think people think they are the thing that we love about web3 technology that we think is super powerful is that you know what here's an asset we can sell it to you or you can

6:31craft it but then you can do it the way you want and this walled garden that developers and used to build and prevent gamers from sort of taking control of things that they buy like that's going away and that's a really really powerful thing we know if you look at the last 30 years of kind of gaming history players have bought and sold assets on ebay on

6:50opskins and all these other digital marketplaces sometimes they bought gold from gold sellers inside of role-playing games they've met in these digital dark alleys and made this transact like they've wanted to transact this way forever and publishers have found those accounts that banned them they've they've outlawed in their terms of service but this is a natural player behavior like

7:07and it's overwhelmingly like a thing that people want to do and so one three allows for that to happen kind of in the daylight in this open and permissionless and trustless way like that is a sea change that is coming and the companies like you know electronic arts and others that are building a bulwark around an indefensible business model they're the ones going to be buying

7:26these web 3 companies later going oh we get it we're all in and it's it's after the fact right so at wax what we're doing is we're building a north star of what does that gameplay paradigm tied to web3 technology look like and really leading the way by example love it and with that i think you're right about you know the big game publishers if they

7:47don't jump in they're going to be buying up companies that have successfully proven that this is the model of the future and about those gray markets and dark markets you're right about players in online games and people that grind to get items and they just sell them on outside of the game in sort of shady circumstances where you know it's a it's a market that's existed

8:11for decades already might as well legitimize it make it safer for the players and the game publishers can probably get extra value of that in a cut of it as well you know if they're using royalties or you know secondary market commissions to further bring revenue streams to the game publishers to bring that money to help grow the game even more i feel like

8:34you're fighting against a battle that's that's gonna happen anyway you might as well join in yeah you use a couple of interesting kind of terms or thoughts there one let's talk about grinding right like players like you know very famous game world of warcraft you used to have to log in and do these 25 daily quests and it was two hours of your life just to get a gold

8:53currency and as me as an individual i go okay two hours of my life you know i make this much or my free time is worth this much like it wasn't helping me play the game or progress anymore just giving me a currency but for literally a couple of dollars like literally like two to three dollars i could get that same two hours worth of quote-unquote grinding activity removed

9:10now i don't need to do that because two hours of my life is worth way more than two dollars so i would gladly do that and that's my choice and that's my and i have free will so i love that was available to me even though blizzard very much looked down on that like removing the grind is a very positive thing for a for a gameplay like experience right like i want to play the

9:28fun part not the grindy part and so if two bucks i can get right to the fun i can run instances and raids and kill people with my friends like that's enjoyable to me like and that keeps me retained right that keeps me engaged i think the thing too that is really important to keep in mind is that i think a lot of people think like oh this is you know an additional revenue

9:48stream for the you can figure out how to do kind of market share and rev shares with players and so forth really the benefit truly is if players see that publishers allow them to and developers allow them to own their assets that they can monetize and they're maybe not making a profit off those items but they're getting something back like now more players

10:06going to opt in because their overall investment is less right it's not like you know gee i played world of warcraft and i did pay a 15 month subscription or i bought all these things on the secondary market that i couldn't sell it's just some cost now all of a sudden you're you're getting a little bit of roi or a little bit of money back on your investment so

10:23it lessens the burden and that's such a powerful thing for a consumer to come in and know it's not like oh well like we know that players spend you know you know six figures on some free-to-play games and the game gets shut down tomorrow you have nothing to show for it well in this world you actually do right and so that's i think that's such a powerful thing once players wrap their

10:40heads around that it's going to really help with user acquisition it's going to help retention it's going to help with engagement and it's going to be this very positive thing great insights michael and i have another question about you know you spoke about the large game developers making acquisitions of game fi nft companies that are doing it successful

10:59how quickly are you seeing this transition of the gaming world that you've been a part of for so long in that these when you know some of these major labels should they try it out or should they just wait for the acquisitions you know when will we see call of duty or blizzard or aaa games you know sort of test the waters of adding in nfts and how should they

11:18approach that yeah you know it's really funny you know like i said you know history is really consistent when companies it was all about 2d gaming and they didn't know how to make it into 3d like corridor shooters or things like that so they bought you know companies like id got bought by activision and so forth and so on you know and we saw it in free to play

11:36like none of the major publishers got into free to play got into mobile got into facebook games so companies like supercell were born in scopely and zynga hundreds of billions of dollars in revenue that the big publishers you know because they didn't know how to do that and i would tell you that there's two things that i know that i think are unassailably true

11:55right one is these big publishers will not venture into the space because they perceive it's too risky and they don't have that appetite for risk like they just not they think about how do i make seven percent more every single year right if i happen to make 10 to 12 because the market's great good if the downside doesn't make 45 so what i'm still making

12:14money and that's a better place then let's go into a business that i don't understand that may be a fad it may be a scam and maybe this it may like risk risk risk risk like they're just so risk-averse and they're never going to do this right so it's just not in their dna but if they were to do this right because they're not native in this space they don't have those muscles they don't

12:32know how to like when ea tried to get into free to play around sim social on facebook this is a massive commercial failure for them just massive because they didn't understand how to acquire players in free to play they understand the economy of free-to-play they didn't understand the monetization live ops they didn't see any of these things so they don't have

12:45those muscles companies like wax though we're very much in the space and if you look at our product portfolio blockchain dollars and music mobile and then you know all these things that we're doing everything is informed by the last thing we did and so we're learning these lessons natively every single day and so those big companies will wait until there's a

13:02true north star and go oh wed through gaming is real look at these you know 17 examples of games that are hits look at this business model now we get it now we're going to buy these groups that show that they understand it so they can teach us it really is kind of the tail wagging the dog so yeah that happens consolidation it very transition like i expect that the

13:20next kind of two to three years you're going to see a massive adoption of these native web 3 companies getting bought by you know the eas the warner's the 10 cents of the world if you will yeah no that makes total sense and i want to go back to what you spoke about in the sort of business models and how the sims social failed because they didn't understand free to play or freemium

13:42subscriptions and now with blockchain technology there's there's play to earn and play to own and sort of moving away from this free to play to now you're actually earning can you talk about that transition and where that's at and sort of the benefits for both parties to be transitioning into you know this kind of i don't know what you would call it

14:07it's a brave new world and look i think that you mentioned plato own which is something and it's how we see the worlds how we speak about the world we have you know kind of you know play to earn or pewdie is verboten inside of our digital hallways at wax it's a very dangerous thing to think about things we talk about things as play to earn we know that the play to earn space is

14:27wrought with you know things that are not great projects they're not healthy consumer experiences and the thing that we see all the time is that in the play to earn space what the paradigm has conditioned people to care about one thing making money right like full stop you know and it's really dangerous because if everybody shows up to do the same thing

14:48every single day for the exact same reason with the exact same expected outcome you're going to have this optimized race to the bottom right but what we preach at wax what we do is we want to build a really great game that you know has a really great community and you know has true kind of you know progression loops at its core and all of a sudden you've got

15:08all these people you know coming into a game and they're doing things that don't focus on the roi right they don't focus on how much am i making like because i think you know play to earn gaming and you know win lambo and all that stuff i think that is such a farce it's such a fairy tale and it happened a little bit when people point to wax or axia infinity and they're like oh

15:27look at this i'm like right well also look at the massive crater right like look at all the people that got just cleaned out you know trying to be a part of this fat so for every one person that made a bunch of money and did really really well congrats you know it was probably you know 200 people that you know lost everything and that's not healthy and that can't scale and that's

15:45not sustainable what is sustainable though is now you know i am taking assets that i've earned or i've crafted that have dropped for me and i'm you know i'm you know monetizing those i'm using them or i'm selling them when i'm trading them but i'm not using them to get a lambo like that's just so unrealistic and i think that fever dream of this game this singular game's going to

16:07help me retire like there are no get-rich-quick schemes in life and you know gaming isn't you know any different than any other what's too good to be true kind of perception right and so have the right perspective going in and the power for us is here's a game it's really fun to play and you get to own everything and if you want to sell it to another player you

16:28can and we allow for that and web 3 allows for that and that's really how we see the world great insights and i feel like there's that balance between you know obviously focusing on the gameplay and the user experience and as you said at the beginning making sure you have a good game that people want to play and having that functionality for the marketplaces you know that existed

16:50in the past in gray markets but incorporating them into the game but not making that the focus otherwise people aren't playing the game for fun they're playing it you know to just to make money and sell it and they don't really care what they're playing and it sounds like that's unsustainable that you need to have this great technology to

17:10allow extra value for the players but not make it so much of the focus yeah and we always say that you know making money is a result it's not a goal so if you play long enough and you have a good time you will accumulate assets just by the nature of how you know our features and our gameplay works you'll accumulate things over time and at some point you'll look

17:32up and you're wow your inventory's filled with lots of things that have real world kind of value to them and what you do with them is completely up to you like that's a really powerful kind of pivot if you will and so the thing that i think that you have to keep in mind is that you know you may get something dropped for you that's unbelievably rare right

17:50that it's like because again the way that we build things scarcity is a is a gameplay trap that we adhere to and so things that are legendary or epic or have you know certain traits that are highly desirable you know that construct exists and if you happen to get it great not everybody will but some people will and so for those some people you got

18:07luckier than others great you know lottery slot machine call it what you will but the point is that you know there are there's rarity to keep in mind but this is not the same for everyone but hopefully you know whether that drops you or not it doesn't matter because you're having fun what you're doing right and you're engaging the community and you're doing things

18:23collectively it's it really is like this very intentional thing that we want to try to lead the way in terms of this is how this works and part of that is managing expectations right and so when players come to us like tell me about your project i'm like well first of all my project is a game okay so let's talk about like a game it's like well i'm an investor well i'm

18:45looking for gamers okay well you know when can i make my money back i'm like see you're you're coming at me wrong like here's this world that exists and i understand we have a token attached to i understand we have nfts and i understand those things are linked but let me tell you about why this is going to be fun for the next you know one to three to

19:00four years of your life and let me tell you about what we're building and if you believe in the vision of the title then you will have things over time if you converse that with world of warcraft right like so they have and all role-playing games do a time and game like you know thing on your account how many hours have you been in this game and a lot of times

19:16it's months or even years of real life and you have nothing to show for it i can tell you that is that is soul crushing as a player to like you're you're hovering over the time and game button you don't really want to click it but you kind of want to click it you're like you're more really curious god i don't really want to know because what that represents

19:36is potentially time not that well spent right so if you've ever had your mother or your significant other yell at you in states stop playing those gd video games right like you're like look this is now a measure of you know monetary value for me and that's a really really nice kind of you know flipping that whole notion on his head and that's that's something

19:56that we want to bring to the players aloud and say yeah i may have three months of my life into this but look at my inventory it's got all this really cool stuff that i know that i can sell or more importantly i can give to other people and that's the thing ashley and i think that a lot of people don't really take into consideration they go oh well you know

20:11you own these things you can sell them isn't that great it's like well yeah but also there's a philanthropic side that we all have it's like but i can also give to my friends or my guild mates things that they know have real-world value but i'm going to give them to them right they're so good at its course so that's super valuable like let me give you literally 200 worth of things that i

20:27will never use and i don't care yourself just go ahead and that makes me feel good about me right and so that's a really powerful thing that webtree allows for as well is giving things to people it's not just like oh here's something random like no here's something here's money i'm giving it to you and i feel good and then as a receiver of that you feel good because

20:43oh look at my friend gave me something that they could have sold right and that doesn't get talked about a lot but i think there's a there's real power in that exchange as well definitely and i'm very guilty of you know before before the days of blockchain having that hovering over that time button and seeing how once we're in the games and i'm sure many people really don't want

21:03to know you don't want to know but you kind of do it's yeah it's yeah i feel like a lot of people that are currently in blockchain and cryptocurrency you know before it really existed they've also accumulated quite a few weeks and months in games and that's why they're using this technology now to make the gaming industry a better place

21:24yeah the thing that's really interesting that we found right because we just published our first you know 13 game back in late march but everybody that came into our game had so much scar tissue right so much kind of internal soul crushing levels of defeat rug pulls project craters you know people kind of up in the middle of night just leaving and end up scouting with

21:46you know all their all their currencies it's really really terrible and yet that's the audience that we like they came in completely distrustful us what makes you different you know you guys are all the same and we really had to earn back their trust and that's something that i didn't anticipate on day one it's like well i'm mike rubin and i built all these great

22:03things over my entire career you know 50 game of the year you saw this stuff they're like yeah we don't care we just lost a ton of money in this game or that game or that game and you know we've heard this all before i'm like yeah but i'm me i'm undocked so i'm very public you can look me up i'm on linkedin i have my gameology like oh this is like okay that's a good start

22:19now what right like that was like just the foundation of building that trust and you have to do it you know every single day many many times a day you have to be present you have to be you know sensitive you have to listen to them and then you have to respond with the features that you're building and how you communicate them shows that you hear them and that you're

22:34paying attention that you have their best interests at heart it's this really kind of interesting exercise that we engage in kind of many many times a day and that's really the only way you know trust is earned right so we try to earn their trust with each thing that we do i think that's a great approach michael and we don't have a lot of time left but

22:52there's so many different aspects of the wax blockchain and nfts gaming that there's more information for people to learn about and to get involved hopefully in the blockchain gaming ecosystem what is the best way for people to learn more to follow on the games and the nfts and the updates for wax yeah the thing i will tell you is people

23:14like well gee you know should i you know set up a meta mask you know wall should i set up an anchor wall a wax cloud wallet should i go on this chain or that chain in reality all these things in the future are going to be gone right you know you're going to have your wallet whichever one you feel comfortable we think the wax cloud wall is the best wall in the world so if you go to wax

23:31dot io and you set up a wax cloud wallet it uses oauth so any single sign-on or social sign-on that you're used to facebook connect google off discord id twitch id things that gamers are used to you can opt in and create a wax cloud wall with two clicks it's pretty simple and that really is your consumer interface to all these different you know you know decentralized

23:51applications so get a wallet you're comfortable with and then figure out a chain but know that in the future every project and game is going to be cross chain every wall will see each other's wallets and there'll be some sort of you know kind of analog or kind of you know porting of assets and so utility will exist on a chain liquidity will exist outside the chain

24:10but at some point you know it'll be very much just like using it today you know if you think back in the kind of the mid to late 90s was like mosaic and netscape and all these different browsers there's this huge war on browsers and search engines but in reality it's like people just want to show up and have stuff work and that's the world we're heading into

24:26and that's a very web 2 approach which is exactly what wax does so if you look at the cloud wall that we built if you look at all of our adapts like we very much have this highly kind of you know consumer-focused experience where it's frictionless we don't speak to you in phi terms we don't talk about block emissions and you know deflationary measures we talk about you know hey

24:45here's a great experience and click here to do this and we hold your hand every step of the way so if you want to learn about blockchain gaming you know go to wax.io open all cloud wallet and there's a whole dashboard of all of our adapts available and pick any one of them you'll have a great time incredible looking forward to it i'll leave the link in the description box

25:02below for the viewers as well thank you so much michael for the insights into the future of gaming and everything wax is working on let's follow up in the near future for sure it was a ton of fun i appreciate you having me on thank you