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Exploring The Future Of Gaming At KBW With Kyu Lee From Com2us And Won Suh From WeMade
The world of gaming just keeps getting better. Add to that the revolutionary aspects of blockchain technology, the future becomes even more exciting. In this episode, we take a look at the future of gaming as seen from KBW (Korea Blockchain Week). We have not just two but four amazing guests who are both shaking up and shaping the gaming world. Kyu Lee from Com2us shares the amazing growth of their company and their unique approach to Web3. Ed Chang, the Head of Gaming for Ava Labs, shares some of the highlights they are looking forward to, going beyond just being an NFT and gaming platform. Won Suh from WeMade takes us into their history, becoming one of the forerunners, not just in Korea but also globally, using blockchain in gaming. And Justin Waldron from Storyverse talks about how technology can connect people in many ways, specifically how blockchain enables collaboration and creates a unique platform for independent creators. From Asia to the world, today’s show is proof of the growing impact of blockchain technology on the gaming world.
Listen to the podcast here
Exploring The Future Of Gaming At KBW With Kyu Lee From Com2us And Won Suh From WeMade
We are in Seoul, Korea, with Kyu Lee, the President of Com2uS USA. It’s great to have a chance to talk to another Angeleno over in Seoul, Korea. I’m sure you’ve been here many more times than I have.
We have to travel all the way around the world to meet. Thank you very much for having me.
It’s a pleasure. I’ve known some members of your team for a long time and have been excited to unpack your story a little bit more for our audience because it’s interesting. We can go back to the origins of Com2uS and how you got into the mix and became CEO of the US division.
I joined straight out of college. Com2uS was called Gamevil back in the day. Gamevil was formed in the year 2000 by graduates from Seoul National University. We decided to build a game company. We have the best shot to make the first mobile game company in the world. Our business was struggling. We had to work with all of the carriers around the world. That’s when I went to the US to establish relationships with the carriers back in the day. I went out to sign deals with AT&T and Verizon.
When the App Store came around, that’s when mobile gaming went to the next level. Our business started growing. We went public. At that time, the number 1 and number 2 player in the market was Gamevil and Com2uS. Com2us was a company that we acquired. They were also a public company. We bought the founder’s shares and created a hit title called Summoners War. It is still in service for the past several years. We’ve generated more than $3 billion of revenue from that mobile game.
It’s over $1 million a day.
We’ve expanded beyond gaming. We started acquiring media companies, like the App Store brought all of the local Korean developers to the global stage, and made them unicorns. We were thinking that all of the OTT platforms like Netflix, Disney+, and all of those companies are going to do the same thing. We started rolling up a lot of entertainment companies.
In Korea or globally?
It’s in Korea. We’re making investments everywhere. We have five public companies and about 40 companies that we directly control in the gaming and entertainment space. Because we’re heavily invested in digital assets, it’s obvious that we’re interested in blockchain.
It makes a lot of sense. I appreciate all that context. You guys are keeping busy. Tell me a little bit more about the throughput in terms of the games you’ve created. Let’s fast forward to your choice to create your own Layer 1, which I thought was a bold decision. It makes sense in the context of how you guys look at the potential here and what results have occurred there in terms of the types of games that you’ve created and the launching sequence.
In the beginning, we started investing in a couple of blockchain and crypto companies. We own the second largest shareholder of the third largest crypto exchange in South Korea called Coinone. We were learning the market. When we saw Axie Infinity and NBA Top Shot come out, we thought, “This is going mainstream.”
NBA Top Shot was what inspired us to do the show in March of 2021.
We have the number one MLB baseball game on the App Store. When we were looking at NBA Top Shot, we thought, “If that becomes a game, would the users play a game with digital asset ownership or without digital asset ownership? This is a huge threat to our business.” When we looked at Axie Infinity, Summoners War is a turn-based RPG game. Our game looks much better and more sophisticated than theirs.
If with more capital and human resources and if the game eventually gets better, it’s going to be a huge threat to our business. We thought, “This is an obvious move that people will choose games with digital asset ownership over games without digital asset ownership.” We thought, “We’re going to take this seriously. We’re going to up our game. We’re going to go all into Web3.” We said, “We’re not going to be in the L-1 business.” We chose Terra.
It sounded like a good idea at the time.
Yes, because they didn’t have a good gaming partner. We thought we could be the gaming arm for them.
They had a loyal, strong global fan base. The people talk about, in retrospect, the writing was on the wall, but the writing might’ve been on the wall, but it was an invisible ink.
The tech wasn’t wrong. Cosmos was a great ecosystem that they worked on. It was a next-generation Layer 1. We betted into that. When the whole Terra collapse happened, we thought, “We’re a big enough company. We’re still early in the Web3 era. There are going to be many years ahead of us.” We have a lot of experience doing live operations, like running games as a service. If we can apply that knowledge, bring in the right people, learn the Web3 language in the proper way, and partner with a lot of good companies, we could do our own Layer 1. It is the conclusion that we came to.
You are calling it what?
It’s XPLA. It’s the abbreviation of explore and play.
How many games have you launched so far? What are the plans?
We migrated the games that we had on Terra previously. The platform was called C2X. We migrated those games over and launched our new games. We have nine games already. The approach that is different from all of the other games in the market is we’re not Web3 native because we still believe in the funnel approach. You have to go out and get the biggest amount of users.
If we’re targeting 10,000 to 100,000 users, that’s not fun for us. The reason why we come into the blockchain industry is because we want to convert everyone. We want to convert millions of users. Our approach is to start with all of the users that we have in the Web2 business and move them all over. Eventually, it will take longer. That’s what we’ve been learning because the Web3 native games are focused on traders rather than gamers. What we’re focusing on is gamers and educating them to be traders too.
What are the results? Can you talk about some of the early numbers on adoption?
We learned quickly that these are two distinct groups.
You have a lot of data to back up what you’ve learned.
We didn’t want to overdo it. When we were moving our business from a package business to a free-to-play business, people needed time to adapt and learn. There are paid apps, and there are free-to-play apps. In between, there are paid plus in-app purchase apps as a middle step. We’re taking the same approach. There are Web2 games and Web3 games. What we’re doing is Web2.5 games. We’re mixing Web2 and Web3. We’re giving a flavor of Web3.
What’s been the biggest success among the nine games so far?
We have a title called Summoners War Chronicles. That’s been a big successful title. Even out of all of the games that we’re servicing, it’s the third largest game that we have. That game has done well. The amount of Web3 users is still a small portion of the whole game because you have to play quite a significant amount until you start being exposed to the digital ownership part. It’s also restricted to a lot of countries due to the regulations. We’re collecting a lot of data there. We’re noticing what the hurdles are and where we have to improve. It’s been a great experience. We’re familiar with this because we had to go through the same steps when we were doing free-to-play.
It’s an iteration lean startup. What I’ve learned from this short time with you is, as I’ve done with my businesses, you guys follow an iterative Lean startup process. You approach every new business opportunity as almost like starting a company over from scratch. Is there something specific that you can point to that surprised you in terms of what did work in terms of the adoption where you didn’t expect that to be such a powerful mechanism?
What we did learn is we didn’t know the two groups would be that distinct.
It’s like twins from a different mother or father.
We also learned that certain countries, especially Korea, they’ll go through many hurdles. There are certain countries where you throw a game at them, and they’ll put out an Excel sheet with all of the odds of the got-you boxes. Korea is one of those amazing countries. They’ll do all the math for you once you launch the game. It’s a great test bed. Even for blockchain games, it is a great ground to learn from user behaviors.
What’s next, and how have your plans for this migration over to Web3 evolved moving forward over the coming quarters and years?
One of the things that people don’t know is there are two things I want to point out. One is it’s hard to make a successful game.
If you could replicate your first game again, you would’ve done it by now.
We would’ve done it over and over.
You’d be bigger than Google.
Yes, but the fact is the biggest game that we created is a game that we created several years ago. Look at how many flops we went through.
You have more resources now, and you learn more. You’ll get there. You’ll do it.
The second thing is how long it takes to develop a game. When we first started mobile, we would develop six months to a year, and we’d pump out one game. Now, it takes three years to five years. For the better games, it’s closer to five years. If you look at all of these Web3 startups that got funded in 2022 or 2021, it’s great that they got funded with plenty of money. Those good games will take time to come out to the market. You’ll still need to wait maybe a few years to see good Web3 games coming out to the market. That’s when the healthy cycle of Web3 games is going to come out. I’m not saying it’s going to take that long. They might have better teams. They might be leaner and meaner.
You are releasing new games. Is there one personal favorite among the games coming out soon you’re excited about?
One game that we launched is a game called Minigame Party. It was one of the biggest casual franchises in Korea. It was a collection of thirteen hyper-casual games with cute characters. One of the things that I like about that is how I love mobile games because it’s hard to find a gamer. All the kids, young or old or male or female, are able to play these types of games.
That’s the beauty of mobile games. That’s the reason why mobile games are more than 50% of the total gaming market. Blockchain games also have to address a huge market. The core audience may be easier to educate, but games that can reach a bigger audience are where it will bring blockchain more to the mainstream. We released that game, and it’s a great game. I’d love everyone to check it out.
We’ll share on our socials with our audience and encourage folks to check it out. This has been insightful. I appreciate the opportunity to get to know you and spend some time together. Where should folks go to keep tabs on Com2uS and what you guys are doing and stay in touch with your company?
We’re present on X. We have a handle @XPLA_Official for EXPLA, and we have to @Com2uS.
We’re grateful to spend this time together. Thank you very much.
Thank you.
We are at Ava House, which is on this dope floating island. It was cool to come over here, besides the traffic and getting to know someone special in that ecosystem today, which is Ed Chang, Head of Gaming at Ava Labs. It’s great to hang out, Ed.
Thanks for having me. This is exciting.
For those of you at home, Ed brings a wealth of experience to the team. He has a background as a Senior Director of Partnerships at Electronic Arts, head of business development at Streamlabs, and the founder of Basikz Agency. He’s well-equipped to navigate the industry’s evolving landscape and drive innovation adoption in the world of blockchain gaming, Ava Labs. Gaming has been the talk of town for this trip. It’s easy to appreciate that with all the iconic IP and gaming history in Asia. It’s worth asking this question. Why did you guys decide to do this event in Asia on this dope floating island? How does that relate to your focus?
When you look at the progression of how Web3 gaming has developed, you’ve seen a lot of investment from the Asian publisher side, especially in Korea and Japan, where you’ve got publishers like Nexon and Neowiz, Netmarble, Square Enix, and Goomy. These are storied publishers. They’ve bought into this crypto Web3 ethos more than their Western counterparts. Alongside a lot of the regulations and things that are being adopted and a general sentiment towards crypto, we think it’s ripe for scaling up in terms of mass adoption. We were targeted as a company and not in gaming on the Korean and Japanese markets.
You’ve also seen that in the moves that we’ve made. The team traditionally has been in the West, but our first international expansion was in Korea. We’ve got Justin as our head of Korea and Roy as our head of Japan. They’re doing a great job of spreading the word about Avalanche and bringing on some solid partners.
I’m excited about the gaming aspect. One of the companies that is doing something cool is Shrapnel. I got to experience playing a little bit of that game plan. It’s a taste of a lot of cool gaming that’s coming this way. In addition to the gaming and everything else, you have a ton of awesome content that’s coming out. What are some of the highlights and things you’re looking forward to as far as some of the things that Avalanche is moving forward?
It’s great because it’s not just on the gaming side. We announced a couple of big partners in Japan. They were focused on the loyalty point system across the 200 million potential users being represented. The tech and scale that we’re excited about because we feel like you can only do that on Avalanche. We’re announcing a DeFi protocol called Cavalry.
We’ve also announced a new NFT platform in the marketplace called Hyperspace coming to Avalanche. We’re also going to be on stage announcing a new partner for a gaming program that we have called Arcade, which allows us to broker and bridge the connections between traditional Web2 publishers who want to learn more from native Web3 gaming teams and vice versa.
You also have a partnership with Rumble Kong. I’m a fan of the sports genre of gaming. It was an old-school Madden fan. Tell me a little bit more about Rumble Kong and what you guys are doing there.
We like that team. One of them was a cofounder of Sandbox, and the other one was a crypto native and NFT rental platform alongside other things. We’ve had a good relationship with them. We’ve been talking with them for a while. I also grew up playing games like NBA Jam, which is similar.
I played a lot of NBA Jam.
It’s like an ape-like theme. They’ve done a good job building a strong brand, traditionally on Ethereum. They’ve brought in some well-known influencers like Steph Curry and Paul George, who have wrapped the different gear and logos. They’ve got CA sports on board. They built a rabid following. As they’re transitioning away from an NFT collection to an actual game, you need the scale, speed, and transaction fees that something like Avalanche can help with. We’re excited to announce them coming aboard. It’s going to be a gradual transition of how to get all the assets over. We’re working a lot with them over time on figuring that out.
With the gameplay experience there, does the rarity of your ape have a lot to do with their performance on the court?
There are a lot of things to figure out. Gaming has moved towards more of a traditional free-to-play, even on the Web3 gaming side. The early games were like, “NFT is going to gate your access to the game.” If you’re a game publisher, you don’t want to limit that potential success. You need to hit critical mass. It’s about how you get that top of the funnel as wide as possible. You can add on premium or premium features with NFTs.
Future Of Gaming: If you’re a game publisher, you don’t want to limit that potential success. You need to hit critical mass.
I have picked up on that theme in conversations, especially with regulations varying by country. Some folks are making that experience around blockchain come later in the process, where you’re already hooked in the game, and now you can take another level of stickiness to the experience.
When I started here, the conversation was similar to what Axie Infinity did with two tokens, and it was one token. Now it’s like, “Do you need a token right for the game? Can you use a stable coin or the native coin of the platform?” A lot of interesting considerations that we are stepping through with all of our partners these days.
It’s cool to see the evolution of even from what you’re doing in gaming and figuring out how to bridge these pieces, making it more seamless and having that good experience. You have other initiatives going on. One of them happens to be the Avalanche Vista. There have been some great announcements that have been coming out with that. Can you tell us a little bit more about that?
The blessing and the curse of Avalanche is that we’re not just an NFT or gaming platform. There are six verticals that we try to excel in. There’s institutional, DeFi, and enterprise. Morgan, who leads our institutional efforts, has been doing a great job. There’s this concept of RWA, which stands for real-world assets. We’ve announced a program with KRR, the massive private equity fund, about tokenizing one of their funds and putting it on-chain.
It’s exciting. You have instant settlement and way cheaper transaction fees. You can think of a world where everything is on-chain and tokenized. You can easily transact those things back and forth. Vista is our first large initiative to help spearhead that, help handhold a lot of these large traditional finance companies, and bring them into this new age of Web3. With the toolset and the tech that we have, we’re one of the only chains that can enable this at scale. It’s exciting with all the efforts that Morgan is putting in.
In the South Korean market, besides gaming, you’re also working with SK Planet. You had a big partnership there.
SK Planet, going back to this loyalty use case, has a loyalty program called OK Cashbag. This is something where it’s got tens of millions of people who are using it in the Web2 world. They’re bringing that into Web3. They’re slowly onboarding all of these KYC users like actual, real use cases of your loyalty points on-chain. You can transact for other things and sign up for merchants.
That loyalty use case is massive in Asia, even more so than it is in the Western world. It’s the start. There are a lot of other things we’re talking to that team about. SK is one of the biggest companies in Korea. It’s a great first massive announcement to the world that we’re taking this market seriously and we’re going to be here for a long time.
Loyalty use case is massive in Asia, even more so than it is in the Western world. Click To Tweet
Thank you so much.
When did blockchain come into the mix?
Why did you start just in Korea?
Thanks a lot for your time.
Thank you.
It’s great to be here.
Games are broad.
What’s next?
Thanks, Justin. I appreciate your time.
Thanks for having me.
Important Links
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@XPLA_Official - Twitter
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@Com2uS - Twitter
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@AVAX - Twitter
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@GamingOnAVAX - Twitter
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@EdC - Twitter
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Yat Siu – Past Episode
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Twitter – WEMIX NETWORK
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@Storyverse_xyz - Twitter