We had the pleasure of interviewing Josh Williams, CEO of Forte. Forte is building end-to-end infrastructure solutions that enable game developers to more easily build, launch, and manage blockchain games. We discuss why blockchain games matter, how Forte works, the company’s vision and plans for the future, and best practices for designing blockchain games. This is an edited and abbreviated transcript. Enjoy!

Josh Williams
Source: Forte

On Why Blockchain Games Matter

Aaron Bush: Let's begin by setting the foundation for listeners who are unfamiliar with Forte. Can you explain what Forte does, who it's for, and what the company is aiming to achieve?

Josh Williams: We started Forte close to four years ago with the idea that in the near future it'd be feasible to create blockchain games. These games enable players to truly own the in-game goods that they purchase and provide new economic opportunities at a mass market scale.

When we started four years ago that was definitely not possible out of the gates, but we did a lot of research which led to starting Forte. We created a platform that makes it easy for developers to integrate blockchain technology into games in order to create new economic opportunities for their players, communities, and themselves. Forte also helps solve a lot of blockchain-related difficulties for developers: user experience, compliance, scalability, and token and economy design. First and foremost, we focus on gameplay and the fun of the player experience.

So, ultimately, Forte is an end-to-end platform that makes it easy for game developers to leverage the underlying technology, keep pace with all the changes in the blockchain landscape, and futureproof themselves while focusing on what they're good at: making games and managing their players.

What convinced you that the realm of play-to-earn and blockchain games was worth committing to? What does this underlying technology enable for the first time that made you think this was worth changing your career to focus on?

I got so excited about building Forte as an enabling platform for game developers around the world. Players around the world, including myself, spend lots of time, energy, and money in games today in the virtual worlds that they create. But, economically, games are pure entertainment experiences. All of the purchases that players make in games today, to the tune of close to $200 billion a year, are just entertainment expenditures from the players' perspective. Even if you spend a lot of time and money in games, you don't own anything or have any economic opportunity. 

As the world becomes more digital and our experiences become more virtual, it'll be more important to have real economies and property rights in virtual worlds just like we do in the physical world. What blockchain technology unlocks for the first time is a safe, sound, and secure way for you to be able to own digital goods. It can prove the provenance, scarcity, and ownership of goods that are purely digital.  While the cost of copying a good is negligible, you can still have a true history and provable scarcity for digital goods so that they can become commodities and have real value.

That was the big change that blockchain technology unlocked. It was so exciting to me, and I'm still excited today. I get out of bed every day to work on this stuff and hopefully pull the future forward a little bit.

Right now the industry is still very much in the watch-and-learn phase. Some pioneers are extremely excited and others still have big reservations. I want to throw a couple of popular reservations your way and hear what your rebuttal is. First, many developers think that games with embedded financial incentives, where players can earn some type of income, can no longer be designed purely for intrinsic enjoyment, which often leads to play-to-earn looking scammy or just becoming not very good games. What do you think about that criticism?

I think it's a good concern. If a game is using blockchain technology as a means of creating financial instruments, then it isn't really a game; it's a financial product with a graphical skin on it. For us at Forte, that's not what we're about. We don't actually use the term "play-to-earn" ourselves. It's a cool term, but it implies that you're only playing to earn, like it's all about the money.

What this movement is about is letting people that contribute to a community -- not just a developer, but also the players and streamers -- have economic opportunity in the games that they care about so much. The idea isn't that players are going to play to earn per se (it sounds like a job) but rather players are going to play to have fun. It's a game, first and foremost.

However, when players make purchases, they can actually own the things that they purchase. Players can trade with each other, which can provide even more value and enjoyment. It really has to be about the gameplay first and then creating an economy within the virtual world of the game itself, as opposed to just having tokens (financial instruments) with a game wrapped around it.

These are the early days much like the early days of the internet. In 1991, the first launched websites were super simplistic and explored what's possible with the new underlying technology. A few years later, it started to gain popularity, and it became clearer that you could have any form of entertainment work on the internet, in a web browser, and on any device. I think it'll be very similar in games. We'll see more and more real games -- that are all about the players and the community -- embracing the underlying technology to enable digital property rights for players. That's what it's all about.

If you had to rebrand “play-to-earn” to be something that's more representative of what you think this trend stands for, how would you rebrand it? Would it be something like play-to-own?

I'm not much of a marketer myself. We talk a lot about “community economics” because the idea is that everyone in a game’s community can interact with each other and contribute value to the play experience. Creators in the game who create mods or content, for example, are all working together to make the game a fun, enjoyable experience. If they can all have economic opportunities and own digital property rights in and around a game, that can align everyone’s incentives much more. 

Looking at the history of mods provides good examples. You had people who were super creative, diehard fans of a game -- like Warcraft 3 and Half-Life -- who created incredibly popular mods like Counter-Strike or DOTA but didn't have a way to be recognized as the creator and monetize directly off of those experiences.

What blockchain enables is a way for anyone who contributes to a game to be recognized for their contribution and to be able to truly own what they create, earn, or purchase. Then, once you own something, you can start to create all kinds of economies around that ownership and those property rights. Players, developers, and community members can now trade with each other, exchanging goods and services. I think we'll see a lot of what's happened in the real world over the last few centuries, with this rising tide of ownership, property rights, and economic opportunity, play out in the virtual worlds of games, too. 

Tackling one more criticism that some people have towards blockchains in games, what would you tell those who say that you can build player-owned economies and marketplaces with more standard development tools and bypass blockchains altogether? What in your mind does a blockchain add that literally couldn't be done without it that more developers should be excited about?

This is maybe a subtle point, but I think it'll become increasingly clear: The big difference that blockchains enable is an open but secure database. Instead of just the game developer operating the database and being the only authority that can write to the database and authorize transactions, players themselves can own the assets. Anyone in the world can write to the database and submit bids and transactions. 

The underlying innovations in blockchain are pretty powerful. This idea of an open database isn't new. It's been a concept in computer science for a long time. What Bitcoin and now blockchains more generally did is they introduced some mechanisms that make it possible for the first time to have this open database that anyone can write to. You can be assured that all the transactions in the database are secure and sound. That was the core innovation ten years ago, and it's the reason why you can do things like have an open blockchain that not just a developer controls, but anyone in the world can participate in and be assured that the developer or no one can take away the digital goods that they've purchased.

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On Forte as a Business

Let's shift gears and dig more into Forte. Forte offers an end-to-end blockchain tech solution for game developers, which, as you lay out on your website revolves, around three key elements: 1) seamless UX, 2) maximal liquidity and demand, and 3) full regulatory compliance. Could you break each of those points down a bit more and explain how your services help teams with each of those elements?

If you break each of them down, there are big sets of problems in each category. 

One, if you've played any early blockchain games today, tried any crypto applications in DeFi, or even just tried to purchase Bitcoin or any cryptocurrency (let alone tokens or NFTs), there's a pretty rough user experience to just get onboarded. If you compare it to the smooth, cohesive experiences players are used to in games today, it's totally untenable. If you go buy a cryptocurrency, or an NFT, or use a decentralized application today, there's a really rough registration process where you're providing your personally identifiable information or your KYC information. And if you use a decentralized application and hold your own private keys, you carry the risk that if you ever lose that piece of software, or forget your private keys, you'll permanently lose everything that you hold in your wallet.

What we created is a system that’s designed for games and for mass market applications. It's fully embedded, so it sits inside of a game as opposed to being in a separate site or service. It's fully white labeled, so there's not a Forte brand that you have to go to in every game. It really just onboards players into being able to own tokens, whether those are earned, purchased, or traded with another player, all seamlessly inside of a game application.

So registering and submitting transactions today is a rough user experience. You sign transactions, but you're not sure how long it'll take to go through, if it'll even go through, and what the fees might be. We simplified all that for developers so that they can provide a great experience to their players. That's the first bucket. It's all about putting the game and the player experience first. All the technologies under the hood, from scalability to compliance, help make that seamless and great for both developers and players.

The second bucket, the liquidity, is really important. If you as a game developer introduce tokens into a game economy, you're allowing players to truly own the things that they purchase and creating a community economy.

If you're a player, creator, streamer, or anyone in the games community that's participating in this economy, you want the same thing. You want it to be the biggest and best economy it can be. You want it to be as liquid as possible. That sounds great in theory, but to actually do that in the blockchain space today is really complicated. There are several dozen exchanges in the world, there are multiple Layer 1 blockchains, and there's fractured liquidity all around the globe.

That said, an individual game wants to be able to seamlessly connect its audience no matter where they are in the world. So we aggregate liquidity across exchanges and Layer 1 blockchains to provide the biggest possible economy for players, without having to worry about exactly where demand or liquidity is coming from. We think over time that most applications will have to do that.

The third bucket, compliance, is also important. Not everything in crypto is regulated or is going to be regulated, but there are things that are clearly regulated. Of course, companies need to take regulations seriously. When you have people who are trading or exchanging value with each other, that's very often a regulated activity, and you have to comply with things like money laundering and terrorism financing rules. From a player experience, you want to make sure that players aren't getting ripped off and are protected from inadvertently participating in economic activity they wouldn't want to participate in.

To support compliance, and do so in a scalable way that provides a great player experience and an easy to integrate developer experience, requires a lot of work, and that's why we started to work on it a few years ago. When we say we have an end-to-end platform, it’s that platform that takes all those pieces of the puzzle: the ease of use in onboarding, the ease of use in transacting and using goods in a game, all the compliance in the backend, all of the economic tools, liquidity, and demand aggregation tools to create the biggest and best possible economy. We do all that under the hood and provide developers a simple way to integrate and access it all.

To ground this more for people who are still trying to understand how those pieces work in practice, could you give an example of how studios are using Forte to make their lives easier and thrive?

There are a couple of different categories of games that are integrated and are either live or going live. One is games that are built from scratch. These brand new games are designed from the ground-up to leverage blockchain technology, create these community economies, give the whole community real property rights for the goods that are purchased, and create a thriving market or marketplace within the game, but with gameplay first. There are RPGs, casual games, competitive games, even user-generated-content-focused games. We've talked publicly about some of the designers and developers we're lucky to work with, including Jeff Tenell, Will Wright, and some other luminary names in the games industry.

One thing that's pretty unique about Forte is that we're also able to integrate in existing games that already have an audience and monetize in more traditional ways. We work with developers to introduce, for example, tokenized skins, loyalty systems, and crafting goods where you have more scarcity for a set of materials that can sit in parallel to the existing virtual goods and currencies in a game today. 

To me, it's really exciting to integrate in live titles. We just launched the platform after a couple of years of building it, and we've said publically we're already over 10 million monthly active users that have our wallet, are active in games, and are using tokens in games in the millions already. We've been super excited to see it working so well for developers early on.

Could you provide us a snapshot of Forte's business right now and share where Forte is at in its journey? I read that Forte hit a $1 billion valuation and is still pre-revenue.

The billion-dollar valuation isn't what we focus on. We focus on pulling the future forward and creating something that's better for everyone involved. Just like the early days of the internet, if you could've had foresight about how revolutionary it really could be, you probably wouldn't need to focus on how you're going to generate revenue early on. I think you could just create enabling technologies and a big ecosystem where there's a ton of value for everyone that leaps in and participates in it.

We’re focused on creating this enabling technology. We talk about progressing decentralization a lot. What that means is opening up our technology more over time, and eventually creating a fully free and open-sourced network and protocols that anyone can contribute to that we actually don't own. Even today, in order to align with that, we don't charge for the use of our platform. That would be antithetical to being able to open it up one day.

Over time, if we're successful, there'll be trillions of dollars of economic activity between and amongst players, developers, and the community around games. The crypto market today is a $20 trillion a year annual volume market with not a lot of use behind it yet. There's not a lot of purpose, utility, or value in many blockchain tokens today; however, they’re already in demand to the tune of tens of trillions of dollars a year. We think it's going to be really hard to imagine how big things could be when you're leveraging this really innovative, underlying, revolutionary technology of blockchains, but coupling that with real players, real usage, real applications, real games, and real developers. There's going to be a huge market there, and we’re excited to help facilitate it. 

You mentioned that over the long-term Forte is planning to decentralize its platform and potentially even dissolve itself as a company. Is that latter part true? If so, how does that work, and how are you thinking about that playing out over time?

That's true. We want to open up our platform. I think that we'll create sources of value for the ecosystem over time and potentially spin out companies that provide services that are in no way proprietary, but maybe are just really important. Those things that we spin out could have revenues, profits, and operate like traditional companies (where it makes sense to do that).

Other aspects of what we do today might be split up and be purely open source technologies where anyone can contribute to them and, hopefully, also earn value for their contributions. When people in the blockchain space talk about decentralization, it's this umbrella term. It's like a panacea for everything, but there's many dimensions upon which you can decentralize. We try to be super thoughtful about the way we decentralize while still providing great services for publishers and developers. How do you stand up this ecosystem that could be self-supporting and rewarding to everyone? There's an economic reason to improve the technology, or write more code, or provide a better and faster service, or create more liquidity.

You can have these economic incentives in the system. We, or companies we create, may participate in those too, but the core principle is to make it an ecosystem, not a walled garden that only we have access to. It's the publishers, the developers, the players, and their communities that create the value here, and we're just creating enabling technologies and services.

If it leads to Forte dissolving and decentralizing as a company, it's pioneering a new type of business model, especially in the realm of games. I'm curious how that jives with raising venture capital. Does Forte turn into a decentralized anonymous organization (DAO) and get tokenized? Many people in games are starting to understand how decentralization and tokenization can work on a games level, but can you elaborate more how that plays out at a company level? 

As blockchain technologies take off, they're incorporated into more real applications that use them in fundamentally important ways. More companies will shift to trying to figure out how to best align with the underlying technology and the users either in their marketplace or on their platform. A lot of that will result in people thinking less about companies and more about decentralized organizations of various kinds.

Just to zoom out a bit, the idea of a corporation is pretty new in human history. What it is in most jurisdictions around the world is this legal construct where you can have joint ownership and a common interest, but it's a very bounded legal entity structure. What I think is so cool about blockchain technology is it creates a new technology-oriented way to create economic organizations where anyone can participate. Even internally at Forte we really try to be careful about calling ourselves an organization, not a company. The idea over time is there may be companies that spawn in and around the ecosystem we're creating today.

We call ourselves Forte Labs for a reason: we can create this technology, spin up businesses around it to enable the ecosystem (if necessary), but in other instances do the opposite and create technologies that anyone can use and get access to. It's all new, and it'll be increasingly important for many companies to think about this. There's a lot of this research and thinking going on in the crypto space around DAOs and tokenizing things. That's one aspect of what's possible, and it's sometimes (but not always) the right thing to do. However, the idea that you can incubate technologies, foster an ecosystem, and then either create companies or protocols that provide services, and create value over time, will happen more and more.

I imagine that an end-to-end infrastructure solution can differ depending on the specific game being built but also on the specific blockchain (or layer of that blockchain) that a team works on. And there are an increasing number of options out there. How does Forte think about properly serving an ever-competitive array of blockchain options? Do you aim to be blockchain agnostic? Or do you want to double down on certain blockchains that you think will win? 

This is a brand new, fast moving industry, and we're nowhere near the end-state of blockchain technology development. We’ve long thought that there wouldn't be just one blockchain to rule them all. We thought it would be really important for publishers to have freedom of choice, to not be tied to just one blockchain or ecosystem, and to be able to future-proof and embrace more underlying technology innovations as they're born, come online, and see usage.

We’ve seen that over the last few years. There's a number of compelling blockchains that make different architectural design decisions and tradeoffs in the way that they're structured, secure assets, and the degrees to which they're decentralized. We think it's important to ensure developers can leverage all of the underlying technology innovation without having to do a heavy port job of their technology, games, communities, and the assets that players own across these blockchains. So we took a multichain approach from the beginning.

That said, we're not totally agnostic. To support an underlying blockchain, you have to deeply understand its technology and there has to be a reason to use it. Those reasons can vary across a few dimensions: what developers and publishers are interested in, what the ecosystem and market around the underlying technology looks like, but most importantly what the technology fundamentally does that's innovative and secure? If a blockchain isn’t secure or decentralized today, is there a clear path for the progenitors or the community to get it there? We have a minimum set of requirements around the security and scalability of a blockchain in order to support it. Assuming that's all there, then we support it, and we think that'll grow more important over time.

A couple of years ago you and Ripple announced a $100 million blockchain fund to accelerate the mainstream use of blockchains in games. Can you elaborate on how that fund works now that we're two years post-announcement? Can you speak to any progress or hits that have resulted from that fund?

The fund has been working great and is still working great. What these funds are really about is seeding an ecosystem, helping developers either derisk all of the complexity around not only adopting blockchain technology but thinking through their game design in a really thoughtful way that aligns with their gameplay and their player communities.

It's a lot of work, and there's some risk in it, too. What the funds are really about is creating a bigger, broader ecosystem faster. It gives developers the freedom to think deeply, and leverage the technology to create fun designs while working closely with their player communities to test things out. A lot of the traction we see is at least in part the result of ecosystem funds like that.

For games, we've got a number of live titles today. We let developers talk about their games, so we're not stealing their thunder, but there’s a bunch more in the pipeline, including new projects built from the ground-up, where a little bit of funding goes a long way.

On Best Practices in Building Blockchain Games

Let's talk about some best practices when it comes to making blockchain games. As you and your team have worked with various studios, have you picked up any best practices for how developers should begin to incorporate blockchain-based economies and technologies into their game… and then scale them up over time? 

This is where we spent the most time thinking about and working with developers over the last few years. Where it starts is with the gameplay itself. What do players care about in a game? Are there cool things that players would like to be able to own if they truly could? Are there ways that players would want to be able to trade with each other, whether it's for goods or services, within the game? If that's true, then there's a fundamental reason why a player may want to actually own some of the things they purchase, or earn, or create in a game. Then the next question is how can you create gameplay systems where players can trade with each other, collaborate in the game's economy, and open it up?

We talk about Animal Crossing. That's not a game that we're working with today, but at first blush, it actually could thrive with a blockchain-based economy. There's a lot of trading that happens in the game today, and players go to third-party websites in order to organize the trading goods and services with each other. The idea that players naturally want to own things in a game, trade with each other, earn different goods, ask each other for help in different ways, and reward other players for their contributions is notable.

The process starts with the game design, but in terms of rolling it out, we work with developers to take a really methodical approach where you introduce tokens into the game as gameplay goods and currencies that have real use in the game. It could be a cool skin that people care about, crafting materials, a loyalty system, or a new currency that's used for trading specifically. But you carefully introduce it, watch how the community reacts, and then methodically grow the economy over time if metrics and enthusiasm is positive. The player experience is, first and foremost, what's most important. Everything else about enabling more alignment with players, communities, and developers around a game is next.

Forte has helped developers optimize their token economy designs, which for the vast majority of teams making games is something entirely new to figure out. Could you highlight some learned best practices around what makes a token economy design successful versus unsuccessful?

Best practices start with the gameplay design itself. Then there's a modeling and analytical phase, which is a really important best practice for looking at things like how scarce goods are in a game, how players can earn them, being really careful about things like botting, and ensuring that earnable goods don't just become too much of a grind for players to get.

Also, there's a lot of careful balancing that has to happen. With the developers we work with here in the early days, we boil these down to what we call “economies in a box.” These are templates you can think about with respect to purchasable, earnable, and tradable goods and currencies, very unique items that are ultra-rare versus items that might be more common in a game, like crafting materials or commodities. We create token designs around each of these different classes of goods and help developers orient around how to integrate them, what supply should look like, and how they can help players create a thriving market over time based on the scarcity and of the goods. There's a lot of game design and a lot of modeling and analytics that go into it all.

It seems like most of the innovation in play-to-earn is happening with startups that are willing to take more risk and don't have to deal with legacy infrastructure, business models, and bureaucracies. When and how do you think triple-A publishers, like the Epics, Activisions, and Riots of the world, will publically enter this blockchain-based realm?

A lot of the innovation will come from small studios. But I’ve also been very pleasantly surprised that big developers, even the largest publishers, are looking really seriously at this stuff. We can't talk about it publically yet, but we're working with some of them today, including the largest ones. It's been really impressive.

One thing I love about the industry is it's so forward-leaning and innovative. It's an early adopter of every major technology that ends up impacting consumers around the world, whether it's microchips and computers themselves, or the internet, mobile devices, and cloud computing. Games are always very early in the adoption curve, and I think we're starting to see the same thing in the blockchain space today.

The other thing is game developers and publishers, including the largest ones, have a long history of adapting their business models to suit changing underlying technologies and become more aligned with their players over time. Going back to the arcade, with the introduction of the very first large scale integrated circuits, it enabled people for the first time to build computers that could be produced for tens of thousands of dollars. The games industry sprung up around arcades and the idea was that you buy this expensive machine one time, then you monetize it over time in an arcade, and if you have fun games, players will actually physically go into the arcade and pop quarters into a machine repeatedly to play. So the game design and the business model wrapped itself around the technology and the ways that players engaged with it.

Then the industry totally transformed itself and shifted again. The advent of systems on chips and CPUs, enabled home PCs and consoles. Games totally shifted both in their design and their entire business model to embrace retail distribution. If you zoom out and think about it, it's an incredibly disruptive change. But the industry adapted, and some of the old arcade players like Sega and Konami adapted well to the home console (while others didn’t).

Then, with the advent of the internet, you saw more digitally distributed games, more subscriptions and downloadable content for purchase, and then also free-to-play monetization. At each step the games industry transformed its business model and the way it engaged and aligned with players. If free-to-play the fact that you can jump into a game that might have cost 50 or 100 million dollars to produce, market, and distribute, and play totally for free, and have fun, and make progress, is pretty compelling, compared to the idea that you got to buy a game upfront for $60. It's just much more accessible to a player. This is just another step in that overarching progress for the industry.

Big publishers and small developers both are starting to embrace it, and they'll embrace it quickly. I think the industry also recognizes that this is a pattern now, and even the big guys pay attention to underlying change maybe faster than they did. I was around for the transition from digitally distributed games and retail purchase models, like with big upfront purchases, to free-to-play. Certainly in the West, most of the established game designers, developers, and publishers thought free-to-play was a total joke. But over time they figured it out, now internet purchases dominate most of the revenue in the industry, and free-to-play is a big chunk of that. 

I think we'll see the same thing in blockchain games that'll drive new designs, new innovation, and ultimately a new business model that better aligns with all stakeholders (players, developers, etc.) in the same way past innovations have.

Wrapping Up

What's the best piece of career advice you've ever received, especially when it comes to building companies and/or thriving in the games industry?

It's a very personal thing, but thinking about what you really care about is the best career advice anyone can have in terms of how you want to spend your time. For some people, that might mean they really care about creating change, or having an impact, or thinking of new ideas, and maybe they don't enjoy following a prescribed path. For those people, being more entrepreneurial makes sense.

If you're not entrepreneurially-minded, and you just really like the idea of creating really cool art in a game or solving technology problems in a game, also think about what you really care about. One of the cool things that's happening in the economy in general -- and blockchain tech will increasingly enable this -- it’s that people have more options for how they can earn a living, as well as create or seize opportunities. As that happens more and more, the most important thing is to think about yourself, what you care about, and how you think you could create something fulfilling with what you do with your time. So think about yourself, dive in, and be open to changing if you got it wrong. If you thought one thing would be enjoyable, and it turns out it's not, change it up.

Do you have a bold prediction about anything related to the future of the gaming industry?

In 2005 or 2006 I made a bold prediction at GDC that 5-6 years later most of the games industry will move to mobile and web games and be free-to-play games. That turned out to be mostly right. Today, I would say I think in five years blockchain games will be a huge part of the industry, and change will happen faster here than people currently expect it will. In a lot of ways the change will be even faster than it was in mobile and free-to-play.

We'll still see all kinds of games, all kinds of different distribution platforms, and various ways of monetizing. However, as people spend more time in digital experiences, including in and around games, it'll be more important for them to create and receive value from the ways they play, the ways they interact, the ways they contribute.

Ultimately, that'll create bigger and better opportunities for everyone, including developers. Once people see a few examples of that clicking, then everyone will want to figure it out really quickly. In five years, I’m sure Naavik and the industry will be talking much more about best practices around blockchain game design and token economy design, not just free-to-play design.

Josh, this was an amazing conversation. Thank you for joining.