In the dynamic landscape of gaming, the fusion of cutting-edge financial technology and innovative incentives is shaping a new era of player acquisition and engagement. Host Devin Becker leads an insightful discussion with Ben Cousens, Chief Strategy Officer of ZBD, and Paul West, Founder of Fumb Games, on the transformative power of Bitcoin rewards in gaming. Delving into Fumb's utilization of ZBD technology, they both unveil how this synergy propels gaming retention and LTV through examples of successful games harnessing ZBD’s Bitcoin Lightning Network service.
Exploring the intersection of financial incentives and traditional user acquisition (UA), the conversation navigates how rewarding players financially complements conventional marketing strategies. Addressing pressing issues in mobile UA and retention, Ben and Paul dissect the system's efficacy in mitigating challenges and fostering sustainable growth. Strategic considerations, such as player segmentation and reward frequency, illuminate the nuanced approach required for optimal results. We explore how this approach manages to be cost effective for game developers by rewarding amounts that are a fraction of LTV while still strongly motivating players.
Navigating the complexities of fluctuating Bitcoin prices and the potential for alternative reward forms, including NFTs, tokens and other networks, the discussion forecasts the evolving landscape of gaming incentives for games and potentially gamified apps. As the prospect of moving from free to play to rewarded play becomes potentially more prevalent, the episode raises thought-provoking questions about its trajectory and the ensuing competitive landscape. Join Devin, Ben, and Paul for a compelling exploration of the future where gaming and incentives converge to redefine player engagement.
We’d also like to thank Lightspeed Venture Partners for making this episode possible! With its dedicated gaming practice, "Lightspeed Gaming," the firm is investing from over $7B in early- and growth-stage capital — the by far largest fund focused on gaming and interactive technology. If you’re interested in learning more, go to https://gaming.lsvp.com/.
This transcript is machine-generated, and we apologize for any errors.
Devin: Hello everyone, I'm your host Devin Becker, and today I'm delighted to be joined by Ben Cousins, Chief Strategy Officer of ZBD, and Paul West, the founder of Fumb Games, maker of Bitcoin Miner. ZBD itself is an API for rewarding players with Bitcoin using the Lightning Network, which is a pretty cool thing that we'll be talking about a little bit.
And today in general, we're going to be exploring the potential for games that provide financial rewards to players. So why don't we just go over backgrounds a little bit here. So Ben, why don't you start and go over your background a little bit and the origin of ZBD as well as what you do today.
Ben: Sure. Thank you, Devin. So I've got a background originally as a teenager in games development, I moved into finance in my early twenties for my sins and spent about a decade. Helping games companies raise money and then later investing in games companies at a VC fund called Lakestar. And it was at Lakestar that I met the founding team of ZBD and I led their seed in Series A before becoming so bullish on the business I actually joined it after the Series A.
And now I help game developers on board to our technology.
Devin: Awesome. Paul, why don't you tell us a little bit about Fumb how your background, how you ended up starting it and what you guys are doing today, maybe besides Bitcoin Miner as well.
Paul: Sure. Hey Devin. And hello to all the listeners. So, I'm Paul West.
I'm founder of Fumb, as you said. Fumb Games is a mobile game studio that makes idle games. We'll get into that a little bit more detail later, but my background is I've been in mobile games for about 13 years, but probably like all your listeners, a player of games all my life. And I founded Fumb Games about seven years ago, I believe, to yeah, to create chart topping hits was the idea, portrait, mobile, simple games that give you real rewarding sessions, short snappy ones.
And yeah, and then we're a Zebedee partner, a very happy one. So I that's why I'm here.
Devin: Cool. I'm sure people are wondering why you two specifically, and obviously it's that connection that you guys are using ZBD. So why don't you just tell us a little bit about how's Fumb’s using ZBD and what, how that's worked out, benefits, things like that.
Paul: Sure. So we use ZBD across a couple of games. Bitcoin miner is our biggest one that people may know of. So it's a very simple integration where basically. Players can earn real Bitcoin as they play the game. So they're micro transactions, very small amounts of Bitcoin, but we send thousands a second out to players who are playing the game.
That's one of our games with it. We've also got another integration in a game called spacey, which is like a space mining game, which has a. A very similar integration, and that's also an interesting one to look at as well.
Devin: So why don't you just give us a broad overview of some useful case studies and things like that for ZBD, Ben and, outside of just BitcoinMiner, who else has been using it successfully, and what have they been able to do with it?
Ben: Sure, yeah when we got started ZBD was a general purpose Bitcoin API. It was, and we were bringing it to the games industry, really looking for the product market fit for the technology. We knew it was powerful. And we had ideas of how it could be used it was only in starting to work with game developers that we really uncovered the most popular use cases And where the market has pulled us is really into bitcoin rewards in mobile games similar to what paul is doing, you know The vast majority of developers on ZBD are sharing, revenue back to the player in exchange for more retention and more engagement in their games and We've worked, we've got, probably over 70 developers building on the platform at the moment.
And we're on, hundreds of games out there powered by our technology. It's pretty consistent across the board now. And we're feeling really confident there in the technology in so far as essentially every game developer has experienced double digit uplift in player retention and engagement from from Bitcoin rewards.
And that ranges from Merca Games to Square Enix to Thumb, you know, and Paul on the call. And we're continuing to expand outwards, hopefully we'll be announcing some very exciting public partnerships in the coming months.
Devin: Awesome could, for those of you or for those out there that aren't necessarily familiar with maybe some of the technical terms or the aspects of what you guys are specifically doing with the Lightning Network, could you just give a very quick, you know, short explanation of what the lightning network is and how it enables specifically what you're doing.
Ben: Yeah, definitely. We're on a mission to make sure that all of this crypto stuff is is demystified. And one of our rules around that is keep it simple. We only use Bitcoin because it's the most popular cryptocurrency. We don't have to actually, market make for the cryptocurrency.
We don't have to bolster it ourselves. We just use it as a tool. Historically, Bitcoin's been known for being quite slow and clunky. The Lightning Network is a layer two on Bitcoin to use crypto terminology. Very importantly, it's not a blockchain. It's like a big pool of liquid Bitcoin that can be spent instantly.
I hope that's understandable, but you, hyperbolic. It essentially enables Bitcoin to move at regular internet speed. So you're able to do, millions of transactions a second. There's actually no upper bound. It's bandwidth constraints rather than like blockchain constraints that limit lightning.
And it's very good for microtransactions, which is why it's well suited to the games industry.
Devin: Awesome. And I know that Bitcoin in general has still been kind of a hot topic through this year, with the prices going up the ETFs and even the recent halving, definitely very interesting to see a good use case for it in games specifically.
And from the game developer perspective, Paul, how does rewarding players financially fit in with like traditional user acquisition? Which is generally like marketing, right? It's just a fancy term for advertising. How does this really fit into that?
Paul: Yeah. So it's an interesting one because when we integrated Zebedee, we expected to, in our marketing message, earn free Bitcoin would be like a no brainer.
Okay, our cost per installs will. Crash to rock bottom prices. And it will be super high click through rates and very effective. That actually wasn't the biggest needle mover for us. It was roughly like the same price or maybe even slightly a price increase. But what we did see was like the other side.
So once the users had installed, they were very sticky. Like retention was through the roof. Double digit, even triple digit, like numbers. It wasn't an exaggeration when we integrated this. So that's been the biggest needle mover for us. Another thing that. Is relevant when it comes to talking about marketing is, of course, you mentioned the ETFs, the halving and all the things that have affected Bitcoin in the past 12 months that's helped us significantly as well, just more people getting awareness, getting educated on the subject of Bitcoin, and that makes our marketing more, it converts easier.
We see when Bitcoin hits like, you know, all time high. More people want to install our game and that, that's on the marketing side that we're paying for but also just organically of users discovering the game search in the app stores. It's been like a win, not the win I expected, but to be honest, better.
Devin: Does other people using ZBD actually have any effect on the user acquisition, meaning like competition in that sense of advertising, free Bitcoin rewards? Or is it beneficial, where kind of people can see, oh there's multiple games doing this is like maybe a more legit thing? I
Paul: would hypothesize yes obviously Zebedee is a platform which promotes the games that they have on the platform.
So naturally, if a game comes in from another game, and they discover, oh, BitCore Miner looks cool, or Spacey looks interesting, that user is probably the friction is much lower to try us. Yeah, we do see users coming from the product itself. As in the Zebedee app and they're obviously great quality because they're almost primed and ready to play.
Devin: So you said, it may sometimes maybe make user acquisition, maybe slightly more expensive, but it's improving retention a lot. So I guess the question then is when you're improving that retention, are you seeing like boost LTV and actual benefits from that retention? And if so is that really compensating for.
Just, not just the increase in UA for you specifically, but the broader UA problem is it just fixing that for you, or is it more just You're having to juggle both.
Paul: Yes. So my background I probably should have touched on is also ad network. So I worked for ad colony in Europe for quite a few years.
And that was very much like a CPI battle, even then, like how can we get the lowest cost per install to, to drive the most amount of volume to reach chart positions or whatever it was. And what we've done as a business and the industry as was way ahead of us on this is actually pivot from, we don't really care what the CPI is, as long as the return on ad spends there.
Yeah. And that's been a bit of an industry mindset shift. So now we don't even look at CPI. I couldn't tell you what they are in the U S for us. When we do UA, we just look at, okay, X out, Y in and is Y bigger. And fortunately most of the time is yeah, definitely I'd uplift on LTV from integrating this.
We talked about retention. That's a great indicator of LTV, but we actually dropped a stat. I think in this case study we did with Ben, which is. If a user successfully withdraws Bitcoin from our game, they're seven times more valuable to us as a user in terms of retention, in terms of ad monetization, in terms of in app purchase.
So it's a no brainer. It's actually our gold metric for us, for our business is to try and get users to work with Zebedee and integrate integrate a wallet into our game.
Devin: So I'm curious that if you're seeing an uplift in LTV from giving out financial rewards, which and then you're actually giving out money You're seeing more money coming in.
How is that like increasing? Like how are you giving away? How's giving away money specifically getting them to spend more?
Paul: My belief is it's a psychological thing. 99. 9 percent of the games you play won't give you anything back But when a user plays our game and says, Oh, wow, I've actually earned something.
And we're talking like fractions of a cent. Sometimes I'm not talking like life changing money in any way. Nothing we do in Bitcoin money is going to change your life. Do not quit your job. Disclaimer in here. But what we do, what I think it does do is break someone's the third wall with the player, Oh, I've got something back, like straight up front without even watching an ad, without even spending any money, this is a cool thing.
It's a revenue share with the player. This is what was promised. So I think that, that helps. And then you have the belief, right. and most of our revenue comes from advertising. So users are sticking around and they're engaging with more ads because we're sharing that revenue back with the player.
It's kind of a self fulfilling prophecy, maybe, in that sense, it's just, that for me is the biggest attraction. As a player, that's how I would feel.
Devin: Cool, I guess in that sense, rewarded ads might mean just more than just in app items, right? That's definitely a good way to look at it where you're returning some of the ad revenue to them, even if it's just a fraction of it, right?
A lot more motivating to watch an ad and less of kind of an annoyance. Especially if they're opting into it. But I wanted to get a little bit more into the strategic stuff. So from a strategic perspective, when developing the game or deciding how to use the ZBD platform, how are you deciding what to reward, who to reward how rewards get distributed, because obviously you can't just give away everything, right?
Because this is not in app items where you could just give away infinite because it's Infinite items. You actually have to decide, okay, we're giving away this much money for doing this kind of action to this kind of person. How are you strategizing all that?
Paul: Yeah. You'd probably expect a really scientific, sophisticated answer here.
I may disappoint you. So how, basically when we set this up we put in what we thought would be a sensible amount to not break the bank, right? That's what we wanted to do. Okay. How much can we, how much can we give away? and sustain growth. We actually launched globally with this every country that was supported by Zebedee at the time.
And we found the biggest learning was, it's not equal what everyone contributes to the game, right? It's not rocket science, but users in the U. S. will contribute a lot more than some of the kind of emerging markets. So then we had to do almost like a country level distribution for the Bitcoin.
Certain markets that contribute more will. Earn more as they play the game faster. That is the only level we go to, we don't look at, okay well, this user spent a thousand dollars in the game. They deserve more Bitcoin. For me, that starts to move towards people are kind of, you know, it's getting closer to like almost an exchange level.
Okay. They're almost buying Bitcoin at a sense. So we just keep it very level. The only, literally the only difference we have is country touring, and even then it's very primitive. So it. Yeah we tried to educate the players that it's a fun thing for it. It's a fun game. First, it's almost a USP that you get Bitcoin as a side bonus reward.
This game is not about making lots of money. This game is about learning about Bitcoin. I think we estimate like 75%. I would definitely do this survey, but like 75 percent of our players are new to Bitcoin. That's really cool. That for us is like, Oh, we were, we're pro Bitcoin. So that's that's a exciting metric for us.
But it's about little snippets of micro fractions of Bitcoin to almost like a dopamine here of, Oh, cool. I got something back, which, I've played thousands and thousands of games and it's a bit of a unique novel thing, I think.
Devin: I guess this is a quick question.
Like you're talking about other countries outside the U.S. which, there's a lot of ones that are usually targeted for user acquisition, but don't tend to spend a lot. Are you seeing any benefit to this in terms of actually increasing the spending in, say, tier two or three countries that might be more difficult?
Paul: Yes, we do see an increase globally when we've, when we launched this, no doubt. The challenge is the balancing of it. And realistically, I think some inside data, if we add up country, if we rank our countries by revenue and add countries two down to ten, that doesn't equal one U.S. So just to see in terms of scale.
The U.S. is the one we've just primarily focused on. And the other thing I would say is it's a, you can almost see a different player mindset in emerging markets versus the U.S. I think that the users in the U.S. kind of get what we're trying to do, which is a fun game with these non life changing rewards, whereas, and this is new just for the economics, but if you go to some of the emerging markets, people will play, in my opinion, too much and I don't even mean we're losing Bitcoin now, it's just, people will have multiple devices on all the time doing it while they're working constantly, just trying to mind the game, which obviously then you're not playing, it becomes something else. So that's one thing that we've had to be aware of. I didn't, in fact, certain markets have actually had, we've disabled just because it was not, it was net loss for us as a business because it was mined so much, but also it just didn't seem super healthy.
How much people were going to bot farming it. That's why when we share our numbers of our like, DAU, people are surprised as a, as almost like a web three studio that is all in the U S cause that's typically not what you see of web three games. Yeah. We've got 40, 000 daily active users. I think it's 85 percent of them are in tier one markets.
That's a bit of um, we're always like the ugly duckling of web3.
Devin: I was curious to like how it's received in a country like El Salvador, which had that whole thing, if I remember correctly, of trying to like make Bitcoin or part of the economy where now that is more money to them and not some abstract thing.
But we don't have to get into that, especially if you're not targeting that market. But he did bring up something that I think is important to address. When you're talking about net losses and things like that, obviously with financial incentives brings more incentive to do things that are not just playing the game.
So there's, bots, there's multi accounting. Obviously, this is going to be a little more on the Android side of things, but that's also where, especially when you're getting outside the US, you're going to be hitting a lot more of that. So Ben, how are you guys on your side, especially trying to handle this, or even advising the game developers on how to handle.
Botting, multi accounting, especially when there's emulators and all kinds of things, especially with idle games, right? Where they're just can leave it running on their computer and things like that.
Ben: Great question. Yeah. Paul and I have put heads together very often on dealing with game security. I think there's the way I would contextualize and frame this is yes, indeed, when you give out free money, along come the bots and the exploiters.
And we. Very much and very consciously chose to tackle this head on rather than act like it wasn't an issue. I'm sure during the first or the last cycle as Web3 gaming became popular, you saw a lot of the headlines around how 40 to 50 percent of traffic was estimated to be bots. We, fortunately, I don't think we got as bad as that, but we definitely saw a lot of botting in the early days, and we treated it as a learning a learning phase in the company.
One of the co founders of ZBD, a guy called Chris Moss, has been developing Bitcoin games since about 2013, and he's very clued up on what players do to try and crack the games. And we've spent, I'd say this is going to be an ongoing thing for the rest of ZBD's time, but we've spent the last 18 months in particular.
Investing very heavily in security. We don't talk for obvious reasons publicly too much about what we do, but I can tell you that there's security at every layer of the stack. From account creation, to verifying code integrity, to making sure things like the phone is in someone's hand using the accelerometer, making sure that tapping on the screen is actually happening.
We're doing a ton of things behind the scenes and Paul has very graciously and very patiently worked with us on this. And I, nowadays we're very confident saying we've got botting down to single digit percentage points on across the whole platform. We, we're really actually quite proud of this.
This is why we talk about it openly and we're going to continue to, make security and providing high quality real users to games developers a core part of the product.
Devin: Yeah. I'm sure Paul's a bit of a guinea pig. Like I said, being an idle game makes it even more of a target, right? Because there's a lot of ways to participate without actively doing things all the time.
And I think that's, Not just, in that market, there's also like a lot of like RPGs, especially coming out of the East tend to have like a lot of autoplay and things like that, and they've tried to dip into crypto and it can get really tricky. Like I've seen that with the mirror games, especially running into problems with being a very bot centric game, just due to the like autoplay sort of thing, that's a bit more of RPGs out there.
But the other problem that I imagined that, I wanted to talk about a little bit that especially now after the having becomes even more of a question, which is. Handling of instability of price, right? This is why some people sometimes are maybe a little worried about using crypto is, as much as I'd love to say, the dollar is stable.
It's stabler than, something like crypto. And because of that, you're giving out money that actually may change in value the second after you give it out or the second before you give it out. In general, obviously you guys are giving out small amounts, but how are you guys handling or thinking about, and we'll target this to you, to Ben first that fluctuating price, especially when there's like these bull cycles, where it can go up very rapidly or down very rapidly, just sometimes even in flash crashes.
Ben: Yeah I'll definitely let Paul speak to specifically what they do as, we do enable developers to manage things themselves if that's what they want, but we also offer to manage and handle the Bitcoin rewards for developers if that's preferable. We can, we've built the system in such a way that.
You can fix dollar based prices and the Bitcoin becomes the variable there. That's probably for the majority of developers the path they should opt for because you continue to operate and think in dollars. And, the Bitcoin just adjusts accordingly. But other, some developers do want to pay out fixed amounts of Bitcoin and they think about, first in, first out accounting or first in, last out accounting.
We provide transaction exports and, we can help with a lot of that. Our SDK, which is coming out is all dollar based. So that there's again, mitigating that volatility, but I w I would say that we do encourage developers to. think and reward in Bitcoin because it is what is attracting the players.
And if you, yes, Bitcoin is volatile, but if you look at it on any time horizon longer than, say, 18 months, it's had a compounded annual return of 70 percent since its inception. I think Paul actually tweeted the stat that the players who've been playing Bitcoin Miner since the beginning of the integration, They've now made something like north of 250 from the game.
And a chunk of that is price appreciation. That's what Bitcoin's good at. It's a safe haven against ever inflating fiat currencies. That's, that is the appeal. But I hope that answers your question that, there's, it's, we try to cater for both sides of the equation.
Devin: I guess in some way, then you're almost saying that playing Bitcoin minor these things could be seen as investment in time that could pay off bigger later, assuming you just hoard your rewards and how Bitcoin price goes up, Paul, how do you think about this?
Paul: Yeah, sure. In terms of the security, in terms of the price fluctuation side we've had it quite clear in our heads of how we wanted to handle this, which is almost regardless of the price of Bitcoin.
The players technically earning the same fiat uh, at the, at the time. So when Bitcoin rockets in price we lower the rewards, which is Satoshi's we get obviously fractured. Satoshi is a fraction of a Bitcoin a hundred millionth of a Bitcoin. So we lower the payout rates of those.
When we launched the game, it wasn't even server side authoritative. It was client. It was like, it was out of the wild. And that was when it was. Yeah, you should have played it then because you could have explained that bit then, but but since then loads of security updates, but also the ability to react to the market almost live.
So we, we're not as sophisticated as in reaction instantly when the market prices change, but we have controls internally, which can go, okay. The price has tripled in the next, in the last 12 months. Therefore we need to, divide the rewards by three. But that's, it's a, it sounds like a challenge and a bit of a headache, but actually it's quite a fun part of this, like managing this product because it like Ben highlighted on my tweet, it really did, does reward people for constantly playing the game.
Like you play it through the lows and you play it through the highs. And then actually we're always much more when you play in the lows because hey, when there's high again, obviously you're seeing the appreciation. So that's what's quite been a quite cool thing about this. This game actually is seeing the players who have been around since the start and react that way.
The other thing I would add is there is a, we like to say we're a very player first studio. We try to do everything for the players. So communicating suddenly, Oh, the Satoshi rate has dropped. By we never do it straight to a third is a very big jump. But. And even when you see it go down, players instant reaction is, Oh, why am I owning less?
Oh, it's a money grab. All that kind of reaction. But what we found is, we've got 150, 000 people in Discord now, like who replayed the game. We've got 2 million players. They are they explain the logic. Look guys, if the price goes up that high, To sustain the product, the payouts need to go down.
That's just the reality of economics and the business model of this product. What's been great is just seeing all the players like who play the game, defend it when we do it because it's logic of why it's happened. And that's what's quite cool about our community, I think.
Devin: So I guess that brings up the question, and I'm not sure if this would be for you or Ben in terms of how it's handled, but the timing in terms of when you give out those rewards, right?
There's delays, I would imagine. So it's like, if I'm seeing the price of Bitcoin going up, for example, I can't, I would assume, go in and start playing the game and try and quickly get rewards to try and catch it on the on the up and be able to like, suddenly make more than, I was because you were giving out a fixed dollar amount based off of where it's at right now.
Okay. How does the timing work? Is there like delays to suss out, suspect behavior? Is there, reward schedules, things like that?
Paul: I can take this one better, but feel free to add after, but I we don't delay payouts. Like you, you can download the game and earn Bitcoin within 30 seconds.
If you've got a Zebedee wallet already, definitely you can. I don't know how long the Zebedee sign up flow takes, but it's not very long. So basically we don't have like minimum withdrawals or like we need, And that's quite the benefit of the micro transactions, right? Just for context for your listeners, the maximum you can earn from Bitcoin miner a month based on current Bitcoin prices as of today is around just over 10 a month.
And that's if you're maxing. So just, I just want to give that context because it also takes a while to get to that point to be able to do that. So this isn't your, maybe your typical like coin token that could go crazy. And then people are going to make, earn like thousands from an NFT price boom.
That's the reality and we set that expectation as early as we can really with players even in our marketing It's like you're not gonna get rich playing this game So and with that said that's why we're not that fussed about being super reaction to the pricing because Players are earning cents and it sure if all the US gathered together and meant let's hammer it today Yeah, because the bitcoins react, you know doubled in price that could be an issue.
But yeah, but maybe that's a good thing that happens.
Ben: We'll get more players just to add a little more color to what, Paul says are the, where the lightning network is just fantastic is around the instantaneity of it. And, coming back to that micro transaction piece as well, and how you don't get rich, playing these games, that is the whole point, wave one of.
Of web three was like, Hey, this is going to make you absurdly wealthy. And it was totally unsustainable economics as we've all learned. And now what we focused on instead was, the gaming market that rewarded things in games are a huge component of game monetization, whether it's ads or IP or in just gameplay to incentivize behavior.
And it's linked to, the human dopamine response. You feel happy when you get a prize. So we strongly encourage developers and most of the system is built this way to reward instantly. And that's why we've also built the amount of security we've built around the product system, mitigate the risk of any payment fraud or exploitation of the platform.
So we can continue to give this instant payment, instant dopamine here and feeling that actually the game is doing what it's promised. If you compare Last thing I'd say on this is if you compare You know, real money, reward, games, cash based bingo, whatever it might be. The gotcha that tends to lead these games to have one star reviews in the app store and stuff is that you see that you've got say 5 and then you go to withdraw and it goes, Oh, actually, you've got to wait till you make about 30.
And you realize that's about 24 months of gameplay. And so you rage quit and delete the app on one star it, these games do what they say they do. They give you Bitcoin in 10 to 15 seconds. Like Paul said it's real. It does what it says on the tin. And it's very simple. Okay. And I'm a big believer that if you give people, what you say you're going to give them, then they reward you with their loyalty.
Devin: And this is probably a question for you, Ben, then following up on that, which is around Obviously, you can't just give bitcoins for nothing, right? You have to have bitcoins to be able to give those fractions out and things like that and then dealing with price fluctuations could affect this even more, which is how are you guys looking at having this pool of bitcoins to give rewards from?
Because you're having to give rewards for all these different games. Like how are the games then paying? Like, What's the relationship and how you're managing that sort of Bitcoin capital to reward out? Because I imagine it's coming from your guys side. Or is it like the actual games themselves have their sort of individual accounts that they're distributing from and you like top them up?
How does all that work when it comes to managing the Bitcoins for these games?
Ben: Sure. So a couple of things I've touched on there, Paul, for example, manages their own wallet account, but the way the Zebedee platform works is you have a master developer account. Think of that like your company checking account and then you have game wallets.
So per project, per game, you have a wallet to that game and you move funds between those so that, things are secure and you've not got a big honeypot. In terms of funding the Bitcoin to those wallets, as I mentioned before, we can do that for you and the reward payout we don't just drain our Bitcoin, that would obviously be an unsustainable business and we wouldn't be around very long.
Everything has to be linked to revenue generation, just as a Bitcoin miner is linked to revenue generation. So we, we feel very confident managing the rewards for the bulk of casual games within mobile. If we were to deal with a developer, who's got a player LTV, north of 50 or something, then we're going to strongly advise that they handle the payouts themselves, because we're not going to be able to sustain sufficiently high payout rate.
To match user expectations of what rewards should or could be. So developers who do that do tend to opt to manage things themselves. And, in the long run, as any relationship with us develops, we encourage developers to move that way because it gives you more freedom and more granularity around, optimizing your LTVs, optimizing payouts, et cetera.
I don't know, Paul, if you have any different perspective there, but that's how we see it on the ZBD side.
Paul: No, yeah, exactly. I think you, you touched on, earlier winning trust and attention. Like that's the two things that we try to do. And, I would say Web3 Games so far hasn't always delivered on that trust and attention building at least sustainably.
So we're trying to take that approach of, If we can under promise and over deliver, we will win that trust and when that player's attention and loyalty, which is the main thing we're after. Yeah that, that's kind of our, our approach to how we do this.
Devin: Then this question is for you, Paul, like kind of the game developer side.
Then obviously a lot of this talk has been around Bitcoin specifically, and I think some of that's due to, the advantages Ben sees on the lightning network side. And just maybe as he's mentioned in some other past interviews, familiarity with Bitcoin. But what potential do you see, from the game developer perspective, for rewarding players in forms other than Bitcoin, like NFTs or other layer ones like Ethereum, Solana, whatever, or even Layer 2, that might be a little cheaper to reward out or even just like, specific game specific tokens.
So it's just these other forms of rewards that are still somewhat financially related, but maybe aren't Bitcoin. What, What potential do you see there?
Paul: Yeah, I for us it's it's a demand supply thing. If you go to anyone in the world who knows crypto and say, what coin would you like?
I think people would say, most people would lean to Bitcoin personally. 'cause it's just more of the sure bet at least in my view. That's why we chose Bitcoin. It's the poster child, right? It's the first, it's the digital gold. It's the standard. That said, we get many requests, Oh, please, can you do a Solana miner, please, can you do a Doge miner and for us, that's a that removes our focus of what we're trying to do.
We're just trying to build and maintain being the biggest Bitcoin game in the world because we think, the Bezos thing is what's around in five years, what's what, rather than what's going to change in five years, what's not going to change in five years. Bitcoin's still going to be here. It's probably going to be worth more than it is now.
That's not financial advice, but and also it's, games need to be fun. So that's kind of our approach on it. Not to never say never, but the, the world doesn't need another token in my view. A gaming token will never be something that we do. NFTs are interesting.
Like I, I'm not against them in any way, but I don't see the player value ad for us as a game right now. I think we're as a studio in this space of like web 2. 1. So when the really kick ass web three games come out, like I said, I believe there will be one and it probably, it probably have all these things I've just mentioned.
I see almost as us like the way to help get to that, we could be the advertising platform for those games. That's what, more what we're interested in building because we have the. Probably the highest concentration of crypto curious players. Yeah, that, so from my sense, I think there's promise there, but I don't think it's been delivered yet.
So I'm curious to see what smarter people than me will do.
Devin: We'll see if we'll see if beds, one of those cause I'm curious what, from a business perspective, then like from the top down and like, I imagine you guys continue to. Explore and see what other spaces make sense for you guys to do.
I gotta imagine you've looked into that, right? So what are your kind of general thoughts at least, both right now, and maybe a little forward looking on what the space looks like for rewarding players, maybe outside of what you're doing, even if it's just, Oh, Hey, is there something the equivalent of the lightning network for that other thing?
Ben: Yeah, that, that is a good way to frame it. I'd say so we, how would that, so I'm just trying to collect my thoughts We have, I have no issue and we as a business have no issue with, folks paying out other tokens, ETH, Solana, whatever in the same kind of system as a reward. This is where I have to become a bit boring and crypto y and technical though.
Like when you look at video game unit economics and you compare them to transaction fees to process things on these blockchains, this is why it hasn't taken off on the other blockchains, right? Like Ethereum gas fees can spike. And then if you want to reward a user two cents, it doesn't work. It might cost you 20 bucks to do that.
The answer then is, Oh there's layer twos. Okay. So you go up to layer twos and you look at optimism and polygon and these other networks. It's still about 10 to 15 cents a transaction. Sure. It's a like a hundred X decrease on ETH layer one, but it doesn't work for video game economics. And it's the fact that the lightning network isn't a blockchain that enables this.
I would, I would say that we're also a lightning company. That's our specialism, adding more chains and more tokens doesn't differentiate us. It can, it would actually bloat the organization and increase the security risks associated with managing that infrastructure.
We do, however, keep a close eye on the whole ecosystem. I'm very aware that this bull market seems to be punctuated by let's call it alternative Bitcoin layer twos I would say buyer beware on a lot of them. But we are looking at the ordinals market and what can be done there.
And something I'm certain your audience may not be aware of yet is the NOSTA protocol, which is like a decentralized social media platform. It includes the ability to give users badges. So think Xbox achievements. We're looking at that very closely. But most of this stuff. I have to say has very small addressable user bases.
Our mission is to go mainstream or be mainstream in terms of the audience. We're trying to speak to it's keep it simple. Stupid. As I said at the beginning, yes. Once you step into the world of crypto, you discover this thousands of other currencies, but ultimately that's not Zebedee's job.
ZBD is here to give users that first experience that demystifies Bitcoin a little bit teaches you it's not scary and doesn't make you buy it. It's a reward, it's fun. And you're supposed to enjoy the whole ride, if that makes sense.
Devin: Definitely. And I imagine you like, you, you mentioned that some of it's a technical thing and some of it's a business thing, and it'll be interesting to see if that evolves in the future is, maybe just competitors look at where they could find a way to do something a little different than you're doing, but also consider the reward space, because that's really what we're talking about.
It's like the, the sort of benefit is, but you mentioned something that I find kind of interesting, which is you're talking about video game unit economics, right? And so obviously, I don't see any way that your platform is necessarily limited to video games, and I've noticed a bit of a resurgence in interest in gamification.
Do you see potential here in usage gamification? If I'm like, Hey, I just passed one of these hard quizzes in duolingo. I can get a few sats. Is there a potential there for outside of games or even actually the potential for within games, but for say UGC type platforms, like if Roblox was to say Hey, Robux is too difficult to convert to dollars.
We're just going to reward people out in Bitcoin stuff like that. Like just other applications besides, what Paul's doing.
Ben: For example, do you want to join ZBD's business development team? The answer is yes. Uh, we do, We do that. The most, the best example I can give of that today, is we power a podcasting app called Fountain. When you listen to podcasts on Fountain, you send Bitcoin every minute to the podcaster directly, and the podcaster keeps 99 percent of their earnings. Also, during the podcast, as you're listening, if someone drops like a big knowledge bomb, your mind gets blown or whatever, and you want to say thank you, there's a boost button, and if you hit that, you can send even more Bitcoin with a timestamp and a comment, and that will show up in the Fountain app for people to see.
It's a super cool super innovative product. They've got, 15, on them now. Didn't expect to be shilling a fountain on this episode, but it, it is a great example of how the Bitcoin API we run is more versatile than just straight gain rewards. But otherwise, otherwise I'd stay tuned.
There's some stuff it's just not right to talk about yet, but we are looking, broadly payments in interactive mediums and in engagement.
Devin: That actually kind of reminds me of the, the steam network that eventually became like, Turned into, let's be honest splinterlands, but it was like that idea of like this social boy.
It still is a thing, right? Like sometimes players in splinterlands are trying to find ways to earn currency to spend in the game through blogging about the game. And, but the kind of weird circular thing, but it does lend itself to the interesting idea of other outside applications where like encouraging user behavior or engagement and Which is exactly what you're doing with the games, but outside of those, it'd be interesting to see, and I'll definitely have to check out Fountain, because it's, you know, an interesting idea, obviously, as we're on a podcast right now, so it's definitely relevant, so it's certainly not, not, not too off topic, but I, one of the things that I think is interesting is this sort of Situation we've gotten into with free to play in general.
And also there was that period where free to play was a new thing. And it was people figuring out, took a while to catch on. And there was this sort of a little bit of rejection from core gamers that never totally went away, but it did become ubiquitous, right? Free to play is everywhere.
You, some games even have to go from being paid to just turning into free to play just to survive. So I guess every year, starting with you, Ben, but I definitely want a follow up here for Paul. Do you see this sort of thing becoming, maybe encroaching on the space of like, business models to acquire users, because obviously we had to go to free to play because it was the only solution to, race to the bottom past 99 cents, you couldn't get any lower, you just had to go to free, and if we're still going from free, are we then going from free to actually paying people to play, right?
Like the next step forward. Do you see this becoming the, obviously you have a vested interest in that, but do you see that being like a bigger market or just this cool thing that people could do right now?
Ben: It's a good question. I think the, my answer or my thoughts on this would be there's a bit of both.
I do see that money transfer payments by call it bi directional. Games have traditionally just been money in, right? And that's been fantastic for the games industry. But increasingly with actually the rise of creator driven social media, there is an expectation of money out as well. And if you look at platforms like TikTok and Instagram they are really heavily positioning now towards paying creators.
And it's like the natural extension of what YouTube did with the partner program. Games are in parallel, also moving increasingly into community driven growth and user generated content. And that same demographic is coming into gaming and saying, okay, I've spent 10 hours doing this for you. I don't want just like more soft currency.
This was time is money. Everyone's broke and society's falling apart. Pay me. So I, I think that trend is going to continue. And I also see within the advertising world, rewarded video is the most popular ad format in mobile game monetization when it comes to ads.
It is fairly logical to take that reward one step further and make it monetary. So I can see both of those trends causing this sort of segment to continue to grow and become a meaningful percentage. Of let's call it the game monetization stack or the the game business model stack but I don't think it swallows everything.
I think free to play was a very different proposition versus a 60 Packaged product compared to say free to play with time rewards or whatever it might be. It's more like a subset and I do think one just to finish on the point. I do think one thing the Web three ecosystem mistimed was expecting to be able to essentially buy their way into the market and make it become a massive component of gaming.
And then I'm not surprised that the games industry simultaneously threw up all over that. It's, these things need to come organically. There needs to be player demand. We're riding the growth of this demand and we're very pleased with it. I think it has a bright future.
And what about you, Paul?
Paul: I think as an industry, sometimes as a specific talking about the games industry, we quite often make sweeping statements like free to play was a huge like shift, right? It was like you said, ubiquitous now, but I think there is there's definitely a growing demographic of player who are interested in getting something back.
That's a no brainer for me. And we see that as a as consumers of games, but we'll also see it. There's a growth in platforms right now where you download their app and you play games through their product and you earn back a currency for playing that game in another game, or, it's almost like this, almost like economy building there.
And we use some of those marketing channels for our game. And those are growing for sure. So it seems to be a segment of our industry that is increasing and that, that is exciting, but I don't think it will, like Ben said, swallow everything. There will always be players who prefer paid 60 bucks products because they're like, I don't have to pay that and I'm done.
There's different mindsets for these things. And I think that's cool. I think that's okay personally. Yeah, we're also riding the wave. We've just done our biggest quarter ever. So there is definitely demand how high it can go is what we're here to find out. Like I said earlier, in 10 years time, I believe that it will be bigger than it's ever been.
Yeah, that's what we want to be around for.
Devin: When you say going higher and higher I guess the question I have is if this becomes really popular, do you see an arms race for payouts? Meaning every game advertised, we pay out more than the other guy. Like the way casinos are like, Hey, like we have the biggest payouts at our slots and on the billboards and everything, because obviously like you're competing for users and if there's other, crypto minor games that are also offering this reward and you're suddenly having to be like, but we give out the most stats,
Paul: But this is the great thing about this in my mind is we're like, we won't compete on those things because those aren't the, those are users.
Those aren't players. If they're just coming to get the biggest amount of financial gain. That's not our, that's not a good user for us because we want people who, you know, who will play the game and engage with it and not just try and market and farm it as we said, naturally they will come and I'm sure they'll go to our biggest, the biggest payout games, but like we're still like entertainment business, we still make games primarily, like all of my team know how to make games and they're great in my opinion but we haven't got a clue about how to do all the infrastructure and stuff, like that's why we use Zebedee.
So we're sticking to what we're good at, which is hopefully making really engaging games and the financial things are a side thing. If it becomes a primary focus, I think we're just repeating the mistakes of 2001, 2021. Sorry. That's my personal opinion on it.
Devin: Cool. Like I, what one last quick question for you, Ben, just because I know like you're a little time limited is on the, obviously this is on paying out and not everyone has the means or the want to go to dollars out of this or whatever their fiat currency is.
Is there potential or is the app store restrictions too much for the ability for these sats Bitcoin, whatever you want to call them, to come back into the game and the way like people will take their winnings, so to speak and spend them back and reinvest them, is there any potential for that?
Or is this a case of it's just too complicated to involve cryptocurrency in purchases and games due to Apple's policies and Google's policies?
Ben: Yeah. So the. We've always, there's nothing restricting our technology from allowing people to pay for stuff with Bitcoin in games or, in any, in a web store or something.
There are we've done it on pc we actually partnered with split gate from 1047 games over christmas and we ran a tournament where we gave away half a bitcoin To the winners, but the more exciting thing from our perspective was within discord. We allowed players to do pvp basically wagering with each other okay.
Devin. I think I can go one on one with you Let's both pay in, 5, 000 sats. That's like a buck 50 or something. And winner takes all. And we saw a lot of engagement with that with during the time with that tournament. So we've got, proof points of showing that this is something that people will engage with and will do.
That being said, yes, you've got to abide by Apple and Google's policies. If you do start sticking pay with Bitcoin buttons in your game, they're going to flag you and say, no, because you're not using Apple pay. I think that at the same time, we're all aware of the DMA, the changing regulatory landscape, the ability to sideload apps, et cetera.
We're investigating it, but again, through that lens of got to stay mainstream. We're looking for, we're looking for normal users. We're looking for mass market users. They're more like, they're, if you look at where these upcoming changes in the environment are coming it's still very early doors.
The way. I think you'll almost certainly see a rush into doing app stores from many different platforms, many different sources. But at the same time, you've got Microsoft, Epic, Sony, et cetera, all likely to launch their own app stores. So there's probably going to be like a Cambrian explosion of app stores and then some horrible like drought and everything.
And a lot will just disappear. We're watching the space. I'm more, we talk about ourselves as being a payments company. I don't want to give too much away here, but. We're more interested in being within Apple Pay than trying to circumvent it.
Devin: In the meantime, people like Paul could just basically have a, another virtual currency in the game that they could reward and then that could be optionally cashed out to Bitcoin or just stay within the game and then be able to spend it that way as long as it never actually goes out to Bitcoin.
It doesn't have to come back in as Bitcoin, right? So I suppose there's alternatives there for that sort of cash out thing. But I do want to thank you guys both for joining, I think it's been very enlightening, and I know there's been a lot of talk from you guys lately, and a lot of just thinking about this space in general.
So I'm very interested to see where this goes, just because it does seem like, at least from a technological perspective, you guys have found a good niche that seems to work pretty well, and the numbers have at least been beneficial for now, right? I don't know if every game could get away with doing it, but it definitely seems like it's worked out pretty well, so I would like to see You know where it goes from here, but I do want to thank you guys for joining and of course, thanks everyone for listening.
But just real quick where can they find more information? I'll start with you, Ben whether to contact you directly like on a LinkedIn or whatever, or just to contact you through ZBD. Where's the best people place for people to find more information and your contact?
Ben: Yeah, LinkedIn's great. I will confess to being a LinkedIn junkie.
I'm on Twitter at bit spooky, like a ghost. And then ZBD's website is at zbd.gg, and if you're a developer, zbd.dev.
Paul: All right, Paul, your turn. Sure, so I'm also on Twitter. Paul West. The L is a 1, because Paul West was taken. And the best is probably LinkedIn. So I'm also a fiend on LinkedIn.
Yeah, feel free to, to message me there.
Devin: Okay, cool. And also to be clear for anyone who's just listening and doesn't see anything spelled, Fumb Games is spelled F U M B and not just F U M or F U M or something else. Just in case you're looking for, obviously you can look for Bitcoin Miner and find it that way as well, I assume.
But uh, but definitely thanks for joining you guys and I hope everyone gets a chance to check all that stuff out. Play the games, obviously it's free to play and, potentially rewarded, so no reason not to give it a, a shot, right? Why not? But uh, thank you guys again and uh, and hopefully Catch you guys in the future as well and thanks for joining and thanks to the listeners and we'll catch you next interview
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