Yield Guild Games: Web3 gaming adoption needs a local touch

YGG’s head of ecosystem development described subDAOs as “sort of its own economy, that has its own treasury and its own token” with its own characteristics depending on the country it’s located in.

The blockchain-based gaming industry will need to look at localized strategies to attract Web3 gamers, says decentralized gaming guild Yield Guild Games (YGG).

Speaking with Cointelegraph at the 2022 Tokyo Games Show last week, Andy Chou, YGG’s head of ecosystem development, and Brian Lu, partner of Taiwan-based venture capital firm Infinity Ventures Crypto (IVC), gave a rundown of YGG’s plans moving forward, including how it is using its subDAOs.

YGG was initially launched in the Philippines in late 2020, but following an early-stage investment from IVC, the duo teamed up to expand YGG across the globe via subDAOs, initially starting in Southeast Asia.

As per YGG terminology, SubDAOs act as a “specialized, miniature economy that interacts with a larger, all-inclusive economy” under the YGG umbrella. They were introduced into the YGG ecosystem around July last year.

While many may associate YGG with its Philippines-based outfit that offers scholarship programs for play-to-earn (P2E) games such as Axie Infinity, the guild has gradually been expanding to other countries and regions such as India, Japan, Brazil and Latin America through the use of subDAOs. 

Chou described the idea of a YGG subDAO as “sort of its own economy, that has its own treasury and its own token,” adding that each subDAO has a different setup and business partnerships depending on what country it is located in.

For example, Chou noted that while the concept of YGG scholarships — in which players people are are loaned NFT assets so that they can earn from games — has been a key driver for Web3 gaming adoption in the Philippines, he doesn’t see this necessarily being relevant in the context of YGG Japan.

Instead, Chou suggested that tapping the long list of beloved Japanese “gaming IP” is the best way to attract people to Web3 games in Japan, while Lu confirmed that they are focused on “helping market Japanese games” as opposed to offering scholarships there, stating: 

“Japanese IPs are something that everybody covets. [...] You have [companies like] Sega, Bandai Namco, all those gaming companies want to pivot and come into Web3.”

Questioned on what Chou thinks is currently holding back Web3 gaming from mainstream adoption, he outlined that the onboarding process is still a complicated process for new users, something that their YGG Japan subDAO has recently been moving to address.

On Friday, YGG Japan announced a partnership with IVC and Web3 tech firm KryptoGO to develop a wallet specifically targeted at blockchain gamers. While details were sparse in the announcement, the trio aims to create a simplified interface for users to access blockchain games and host all their assets in one place.

Chou said other barriers included a lack of knowledge about what nonfungible tokens (NFTs) represent, as many critics still argue that the assets are worthless as they can just right-click and save the NFT’s associated artwork:

“That whole process of just onboarding, once that gets more smooth, will help bring in more folks. I think even at the education [level], just explaining what it means to actually own a digital item. As opposed to being like “oh, I can just copy this and get it.’”

“Having that digital ownership of those digital goods. It's something that just hasn’t really been explored. But as the world gets more and more digital, you know, I feel like that’s where a lot of things are moving,” he added.

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YGG was co-founded in 2020 by Beryl Li, blockchain developer OwlOfMoistness and Gabby Dizon, with the latter also being one of the founding members of Oasys, which is tentatively set to launch a gaming-focused blockchain later this year.

As of June, YGG’s network across the globe had more than 30,000 scholars. For loaning out their NFTs, YGG offers 70% of in-game earnings to the players, 20% to scholarship managers and the remaining 10% goes to the specific subDAO.