Blockchain gaming groups are trying to shed the “dodgy” tag in Japan

In a sign of the rapidly changing times since the Tokyo Game Show was last physically held in 2019, one of the largest booths at this week’s convention is occupied by a loan provider – for players of blockchain games.

Philippine company Yield Guild Games (YGG) is Asia’s largest provider of seed loans to people hoping to make a living from the new genre. It chose the show to launch a global marketing campaign to convince the industry, governments and the public that crypto-linked games are not “dodgy”.

The Tokyo Game Show in Chiba, one of the main gatherings for the global video game industry, has been twice canceled by the pandemic. During the break, blockchain gaming has become a new growth sector.

Video games have long incorporated their own in-game currencies, but the new cryptocurrency-based titles allow players to convert the assets they win into real money through officially approved channels.

The high entry fees to the games have led to the rise of companies like YGG, which provide seed capital to people who plan to devote themselves to making money from games.

Part of the mission of YGG Japan and their local partner ForN is to convince a skeptical industry and public that blockchain gaming, in addition to being lucrative, is just as much about having fun.

“People find it very dubious that they are making money playing games, and some even suspect that this may be a financial scam, but we want to change this image,” said Sho Miyashita, head of marketing at ForN.

“So, instead of a global slogan of ‘play to earn’, we promote a concept of ‘play and earn’: we want people to enjoy games first, and have an experience afterwards,” he added.

In other countries, such as the Philippines during the pandemic, gamers have quit their jobs in the belief that they can earn enough money to fight digital monsters in games like Axie Infinitydeveloped by Vietnamese studio Sky Mavis.

To get started, Axie required an entry fee of $1000 and YGG became an early sponsor of Axie players in the Philippines and investor in the game’s tokens. It offers “grants” to fund users, and takes a portion of their earnings in exchange.

Blockchain games have been slower to catch on in Japan, Miyashita said, in part because of strict rules under which foreign blockchain game publishers must register tokens on Japanese exchanges to sell games in the country.

An even bigger factor was their image problem, he acknowledged.

“Many players of these games today are speculators . . . The blockchain gaming industry will disappear in the next couple of years unless Japan, which is said to have a gaming population of 40 million, mass-adopts these games and simply finds them interesting as games ,” Miyashita said.

Digital Entertainment Asset (DEA), a blockchain game publisher at another booth at the show, said its products could provide financial support in other ways.

In one example, Belgian football club KMSK Deinze has purchased non-fungible tokens (NFTs) for DEA game items using funds from sponsors. It has lent them out to fans, who can earn money from the games and use them to buy merchandise from the club shop, as well as match tickets and even a seat on an away bus.

“This shows that blockchain games provide a new opportunity for a professional sports club to make money, other than broadcasting rights,” said Kozo Yamada, founder of DEA. “Games are no longer about those who develop and play games. A surrounding economic zone could be greatly expanded.”

Konami, one of Japan’s biggest publishers of traditional games, is also looking to get in on the act. Ken Kanetomo, who oversees the blockchain business, said he believed the technology would “exponentially expand” the value that games can deliver.

The publisher behind conventional hits such as Castlevania and Silent Hill has yet to give a date for its own blockchain game launch and is also struggling with the balance of making fun games while allowing players to cash in on the trend.

“If the world’s understanding of blockchain does not catch up, it will be perceived as a game to make money, which is not our intention,” Kanetomo said.