In this Crypto Corner episode, John Osvald, President of Games at Gala Games, joins your host Niko to talk about Gala Games’ ambitious vision of building a web3 interactive entertainment brand for the mass market.
If you would like us to discuss any other gaming-related topics, do reach out at [email protected]. We’d love to hear your general thoughts and feedback too!
Passing the Torch to the new Niko: [00:14]
Today we’re passing on the torch to some highly capable new hosts. Let’s introduce yourself
Been a big fan of the show. It was sad to see the old Nico go but this is a great opportunity. Naavik is one of the greatest content providers so I’m very thankful to be here.
It’s been an amazing ride and I wouldn’t be where I am without the metacast. Would you mind sharing a bit about what you are doing?
I’m a founder and CEO of the Blockstars web3 game on the Solana blockchain — a music simulation game. Nico & I met at theNFT NYC event, and we had many mutual friends from the industry.
Yes, we hit off quite well. And it will be great to have host who is actually building games. I do have another question: What is your favorite game?
Football manager. A game out of UK that I’ve been playing for 30 years. A very deep football (soccer) simulation game. I’m a management sim nerd
Love it. As an investor, I like to look for a good founder-product fit. And that was definitely the case with you. Can you give us a bold prediction for Web3 games?
- Great and hard question because of how fast things change. Anyone who pretends to know where the space is going is not gonna be accurate.
- But one bold prediction is that almost none of the projects being built now will not be the “big hit” of the future. I used to say the FPS would never work on mobile… I was wrong but it did take a whole lot of failures to get there.
- So my bold prediction is that we’re at the very beginning and we’ll have many generations of games. And it will take a lot of time.
I also agree that intellectual honesty is important. I also personally see it difficult for a shooter to work in Web3.
This is not the last time you’ll hear my voice because we’re doing a co-host situation with four hosts total (Aaron, Maria, Niko, and one more).
As a long time listener, thank you so much. We’ve seen you guys grow from the ground up and will have you on as a special guest star sometime in the future.
John’s Gaming Journey: [8:59]859
We have a great show today with John Osvald, president of Gala Games. Gala was founded by the same founder of Zynga and the godfather of data-driven product management. Gala Games has experimented with music NFTs with Snoop Dog, art NFTs with Frank Miller, has their own coin, and are now in the web3 game publishing business.
So, you’ve been involved in a lot of early-stage companies and would love to hear more about your journey in gaming and into Web3.
- I’ve been in gaming for 15 years in free-to-play, starting at shockwave and then zynga. My favorite part is creating completely new monetization models for games. After some startups, I worked at EA where I met Eric from Zygna and began talking about some partnerships.
- The more I learned about Gala, the more I knew I had to join. It’s a fascinating problem: an industry where users pay hundreds of thousands of dollars for digital assets they don’t end up owning… Knowing these users, it seems like a no-brainer that if you could own those assets, why not?
Gala was very early to the space. Can you tell us more of how Gala got started? And where you are now?
- Eric & I did the previous start-up together. Eric had been thinking of Blockchain gaming since 2017. When he met Wright, Wright had the tech background and Eric had the use-case ideas…which is how Gala started
- Mike McCarthy (creator of Farmville 2) knew Eric from Zynga and Mike had created the Townstar blockchain game… So Eric acquired Townstar and that’s how Gala started
- We started as a game developer and want to become a self-service platform. It’s hard to be that platform without demand, so we needed to make Web 3 games. We made the MMO Mirandas and more to garner interest in Web3. And currently we’re in the middle ground between developer and platform by being a Publisher.
Games as a use case [14:33]
Lots to unpack there. So “games as a use case”.. With gaming, it tends to become the flywheel of additiona consumer adoption cuz people want to have fun. Can you tell me about Gala’s thesis for gaming as a use-case for entering Web3 and blockchain?
- Gala has a background in gaming so yea it’s a natural fit. Among all the entertainment vectors, gaming is by far the biggest industry. There’s so many types of games you can bring to market and things to test. Free to paly and mobile are the biggest driver.
- The use-case of where you’re striving to play to own digital assets and spending incredible amounts of money to do so…it fits very well to the idea of true ownership in blockchain. The tech of blockchain is a perfect match to this use-case
Obstacles to mass adoption [16:45]
I agree but of course many do not agree.
What do you see as the main obstacles to mass market adoption of web 3 gaming? And how do you bring the market to Web 3?
- I find the skepticism bizarre in some cases. The skepticism is not just from users, but also in hiring and our developer outreach. About 30-35% of devs we contact want nothing to do with blockchain. It especially doesn’t make sense when they come from the free-to-play world…
- If you think blockchain is bad, you think it’s a money grab that’s bad for users…but with free-to-play you’re already accumulating digital assets and spending massive amounts of money on them… there’s absolutely nothing you can do if things go bad. Just adding that ownership aspect from blockchain would solve this.
- To overcome the skepticism, it’s best to just make great content. Not much of an advantage to call it a blockchain game when you go mass market.
- How an it be a bad thing if you’re playing games like usual and then suddenly realize “oh i can actually sell this stuf if I want to”?
- Showing that Blockchain has this altruistic element is one way to overcome this.
Entertainment vs Investment [20:45]
I think of people as usually having their entertainment budget vs their investment budget. Blockchain seems to blur this boundary. How does gala approach this?
- Gala’s strong opinion is that their users are a Venn diagram of gaming fans and crypto fans…lots of early adopters come from the finance world. You need both. Their communication is clear that you should only buy if you want to play the game for fun.
- It’s time for Gala to go to mass market. It’s nice to have NFTs go up in value, but that is not Gala’s focus because long-term it does not work…especially without the large demand
Play to earn [23:36]
Yes, the play2earn meta fizzled out. How has Gala approach the play to earn phase?
- We actually switched Townstars to a play-to-earn game when we watched the industry. We learned a lot when that test failed. There is no way to create value from nothing long-term. Long term value must come from somewhere. In hindsight, it sounds ridiculous to have companies (guilds) based on extracting value from your system. It ultimately ruins the experience for the fun-seekers.
- Gala is now leaning much more into earning in-game NFTs that enhance the experience. They’re doing battle passes and mechanisms to earn NFTs without th whole crypto wallet obstacles of buying NFTs.
- On the premium side of NFT ownership, it tends to go toward a zero sum model. And the way to earn is only by being really good at the game. But there’s plenty of ways to put that value back into the system — just like free to play.
Gala’s other endeavors [27:57]
You’ve done a lot other non-gaming experiments at Gala too. A lot of other initiatives. How do they all fit together?
- They’re not exactly experiments. Gala views itself as a Web3 entertainment company. That means going after games, music, and films. We’re a game developer first company. Every team member has worked for game publishers and also game startup. That’s a lot of grinding.
- Our developer contracts are very clean where developers keep their IP, and designed to get the best game developers by giving them what they provide. The current industry is a bit broken where creators don’t get their fair share.
- When we look at film and music, the creators are not getting paid fairly… Most money is made from touring and very little on the digital side. It’s the same problem as games: How can we apply absolute ownership to connect creators with the users and give creators their fair share? Deals with Snoop Dog, for example, are for our platform awareness.
You’ve got some big names. Will wright from Sim. The Walking Dead IP. Snoop Dog.
So how do you evaluate your deals and balance big names vs smaller names?
- This is my favorite subject because we’re quite proud of our portfolio. We have 27 games in our portfolio that will all come to market by 2025. Next year we may be releasing a new game every month.
- We looked at a genre matrix to see the best games across all platforms. Then made sure we had good bets in the most important ones. Sometimes it’s dependant on budget. We look at track record as well. And their level of flexibility to work with us is another criteria because Gala spends a lot of time with the games — Gala does tokenomoics, NFT distribution, etc.
Epic partnership [37:40]
You have 1.2 million MAUs and now a partnership with EPIC games that has 200 million. How are you thinking about this deal? And how was EPIC thinking about it?
- It’s amazing that Epic is on board. When we think of Gala as a self-serve platform, we view that for NFTs and blockchain tech — NOT for distribution. The game we bring to market are simply free-to-play games with an added aspect of ownership. We are even thinking of having some games having both the ownership and free-to-play version. That way players will realize “Oh, if I just play on Epic’s platform, I could own these things as NFTs”.
- They are opening access to users like us but not adding an NFT marketplace. I think they’re in a wait-an-see phase but open minded to evolution over time. I see all platforms (Sony, Xbox, etc) moving this way, even though Axie made it harder. Gala’s model is simply letting palyers own the things they get in games.
It’s hard to disagree with the idea of owning your digital assets. But what about a tokenized economy with tradeable coins that can extract value from game economies? How do you think about the economy?
- Having the game’s coin on blockchain is still an experiment. Free-to-play games already has in-game coins. The test is giving ownership of that as real money. Coins are like the oil that makes the engine work — it’s primarily for using in the game. Supply only grows if usage and demand grows. Not a big revenue stream.
Have you thought about cross-game currencies?
- A couple games use Gala. But for now, the in-game coins are not interchangeable across games. This was a conscious decision because the in-game coins are still a test to find out what works. After we find a working model, then we might experiment cross-game coins…. Plus it adds a whole lot of risk to our developers.
What about interoperability? How are you thinking about it?
- Everyone loves that word. We have Voxverse, which is a generalized metaverse. And we have two other games that are experimenting with interoperability. We think of how to bring in all these big PFP projects. How do we blend our music and film stuff into games? WIth Snoop Dog, we launched tanks and when you die in the game, it plays tracks that Snoop Dog made. It’s something we’re always thinking of
Governance and DAOs
Sometimes tokens give you voting rights. What does Gala think of DAOs?
- It’s a complex topic and most of the time, I just listen to those conversations. We have considered it but don’t have an official position on DAOs yet. Although we did let the community vote on a spider tanks game. They came up with “Shooty Booms”, which the devs weren’t a fan of.
Yes, sometimes the devs know best. One last topic.. Starbucks announced that they’ll integrate with Polygon for NFTs. What gets you excited from other companies experimenting with digital ownership?
- One of our partners is NBC universal who launched NFTs to reduce waiting lines at parks. Anything that drives a consumer to make a wallet is a great thing imo. It’s such a huge hurdle to adoption cause it creates friction.
Yes, it makes things difficult. We’re still at the financial motivation vs entertainment aspects.
Yeah, the speculation has driven a lot of the prices. Once games are live, that changes. You can then see the actual demand of things.
Yep, we’re launching Spider Tanks in Q4 which is a mobile brawler on our own blockchain that auto-creates your wallet. Superior is a superhero game that can likely stand on its own and drives home the message that we’re making great games!