CHEN Haozhi, Founder of Cocos-BCX: View the Development of Blockchain Gaming with A Five-to-Ten-Year Insight.
It is said that gaming industry is the area where killer applications are most like to emerge. But it’s a shame, the more expectation, the more disappointment.
In November 2017, CryptoKitties landed on Ethereum chain. In terms of features and experience, CryptoKitties was not “fun”, but a digital cat ever cost as much as $110,000 and once blocked the network. However after the user explosion in December last year, current daily active has dropped sharply, from a high of nearly 15,000 to less than 200 per day. Except for betting games, it’s similar to CryptoKitties that blockchain games lack gamers, and almost all blockchain games are confronted with common problems of small user scale and limited DAU.
Cyyptokitties usage down 98% since it’s peak. Less than 200 DAU
However, CHEN Haozhi, founder of Cocos-BCX has different opinions. He said in an interview with ChainNews” Ten years ago, some people declared that high-quality games would never run on mobile. But after iPhone appeared, this voice slowly disappeared. In 3G era, people asserted that PVP products could not be well on mobile devices, because the network environment limit. But as 4G came out, esports project of 5V5 proved it incorrect and the voice was gone” Haozhi explained to ChainNews “ Current blockchain is in the same situation now. There’s limit to define what products it fit in the future with current technology evolution. But if you see it with a five-to-ten-year insight, and there’ll be no difference between it and the development of Internet games. It’s at the stage of technology evolution now.”
Investors share common views with Haozhi that they think the current difficulties in front of blockchain gaming do not limit their expectations for this field. Following a $15 million financing in March this year, CryptoKitties obtained another round of financing with $12 million recently. Prestigious investment institutions including Andreessen Horowitz, Union Square Ventures and Google Ventures are all involved in the investment, showing these leading institutional investors’s expectations for future of blockchain gaming.
Recently, a Los Angeles-based blockchain gaming startup Mythical Games completed $16 million round A financing to develop a line of PC, mobile and console games on the EOSIO blockchai, with prestigious agencies including EOS VC Fund(owned by Galaxy Digital), Fenbushi Capital and OkCoin involved in.
Compared with Cocos-BCX founded by CHEN Haozhi, other hot blockchain companies even including projects represented by CryptoKitties, are slightly inferior in term of financing scale.
In mid-September 2018 year, Cocos-BCX announced the closing of a $40 million financing, in which investment institutions including Binance Labs、NEO Global Capital and 500 Startups are involved. CZ, founder and CEO of Binance gave a high voice to support this investment. His Twitter reads “ Gaming is an obvious use case for the crypto. Let’s make it happen” .
CHEN Haozhi told ChainNews that for the development of Cocos-BCX, his first step is to create an environment for developers to help them quickly adapt to blockchain games without changing the process and technology accumulation. The second step is to provide basic services for current wallet and MinChain, and to launch products and services for C-end users by end of 2018.
The team Haozhi leads is an excellent group of talents striving from traditional mobile games to crypto circle. Chukong Technologies, the mother company of Cocos-BCX, once developed and published a serial of hot games including Fishing Joy series, The Legend of Qin, SPACE HUNTER, etc. Cocos, one f the world’s most used game engines developed by Chukong Technologies, has attracted over 1.3 million registered developers distributed in more than 200 countries and regions worldwide.
How will Cocos-BCX develop with the large investment? How do you Think of current difficulties blockchain game industry is confronted with? What’s the very development opportunities for blockchain game circle? For these questions, Cocos-BCX founder CHEN Haozhi sincerely shared his thoughts and practices with ChainNews.
Haozhi is a serial Internet entrepreneur of 20 years in China, with extensive experience in global gaming and developer community since 2009. He founded Chukong Technology, a leading Chinese game developer and publisher with operations in US, Japan and Korea. Chukong is the main sponsor of Cocos2d-x, the №1 game engine in Asia and №2 worldwide by market share. Since 2009, 1.1 million developers registered on Cocos community, while 3 million developers are estimated to have used Cocos engine. The ad network arm of Cocos covers 14 million daily active users and 605 million devices globally. Prior to Chukong, he founded Yeeyan, XCar and Joyo.com, all known as the leading startups in their time.
Cocos-BCX founder CHEN Haozhi’s interview with ChainNews
Q = ChainNews, A = CHEN Haozhi
Q: You have very rich experience in entrepreneurship, you preciously founded Yeeyan, XCar and Joyo.com, all known as leading startups, but why did you finally turn to game field?
A: Briefly speaking, it’s the principle of Internet entrepreneurship that I had always followed for all what I have done. When I stepped into Internet field in 1998, it’s said an opportunity for the poor to turn a good life. In that social environment, if you have no background, no money, no enough social resources, then Internet is something that can change your destiny by imagination or personal input. That’s the general consensus of that time. For XCar, Yeeyan or mobile Internet that I dedicated to afterwards, it’s in fact the principle of being with the Internet.
Besides, as my personality indicates, I like fresh things, so I chose game industry. Basically, all my affairs are relevant in business forms, and share similar logic behind: XCar is a community, Yeeyan is also a community in fact. So you can say that we got started with community. Open source software is a community too. So in a word, we are building communities all the time.
By background, Internet community is the trend. Since 2009, the company that has grown up from the PC Internet is MeiTuan, actually it’s the only one. So the moment we founded Chukong Technology, we had decided to give up PC products. But it’s not wise to build community in mobile Internet circle, especially in 2009 when the user scale was relatively small. In 2008, there were only 3 million iPhone users in China, the same situation as today’s crypto circle. The total number of Internet users reached 400~500 million in 2008, but it’s unrealistic to build a user community if you were just to make a niche market. So in mobile market, what we build in mobile market is developer community. Basically, the choice at each stage is based on market demand. The blockchain we talked about today is essentially “community + open source.”
Q: When did you decide to enter blockchain game field? What’s the opportunity for the transforming? Or when did you start focusing on blockchain?
A: I think the emerging of blockchain is not to subvert the world, but to solve more problems. In the earliest time we never imagined something like blockchain in the world. It’s around 2016 that we focused on VR games. As VR game is scenes-based that has unclear profit models, we wonder what can make VR commercialized. Suppose you are in a virtual reality society of VR, AR or MR, in fact what you concern most is the ownership of assets. If your wealth, your props or character can really belong to yourself personally, then value of the VR game will be greatly enhanced.
In fact we reached out to this topic in 2016. By 2017, we began focus on blockchain and found that blockchain can solve this problem, because its inherent attributes match digital-related assets well. So by mid-2017, we start panning fund raising with token created on the basis of Cocos game engine.
This is our concept of last July. At that time, some people said that ICO was not reliable, so we gave it up, and late the “Sep 4th” regulations was released later. Until last November, the emerging of CryptoKitties made us closer to our ideal scene, because it basically enabled non-homogeneous props, which allows game props be truly differentiated and exchangeable with limited total amount. So we realized that it wasn’t late if we get started. At the end of last year, we started to raise fund while our technical preparation kicked off from second half of 2017.
Q: Game is an important application on the Internet. However, the network effect and user scale of blockchain-based games are still very small now. What is the necessity for industrial-level games on blockchain?
A: If there’s any concept of free users in traditional game market, then what’s more interesting is that there’s only paid users in blockchain game circle, which is totally different from that of traditional market. In today’s blockchain market, it’s not necessary to be upset for lack of users, because a scale of 30,000 active users is even great. The current status is that EOS market worths about $5 billion, with around 360,000 active addresses.
Of course, every blockchain-based game project will experience a very awkward situation at the early stage: Most players are in concentrated in blockchain circle, and it’s hard to attract traditional players. At present, there lacks good products blockchain industry, especially products with game experience and mechanisms.
There’re two bottlenecks for game industry: user concentration and user value deviation. Nowadays, a user’s mobile device is installed with 30 APPs on average, while only a small part of the Apps are frequently used, in which the users are concentrated. So it’s almost impossible to produce an isolated game and acquire users independently. Secondly, most of the current gameplay methods are scams. Players’ essence of joining a game is to relax, to seek excitement and for the pleasure of psychological experience. But now the fact is that to-pay is almost a must. This will lower players’ expectations for the game, and the value of the user deviates from the value of the product. These are two core causes for the difficulties today’s game industry is facing.
But in blockchain game, if different game props are labeled a value with some certain dimension, and as long as logged in via blockchain wallet account, it will be available to use the props in different games permanently. Different from the past, developers don’t need to start from scratch after a game cycle. The worldview always exists as long as the props exist and are traded by users with room for appreciation and price fluctuations.
At present, some teams at home and abroad are positively exploring integrating their proven IP to blockchain to develop some extended versions. Cocos-BCX is also preparing to create some products for more developers for references.
Once these products enable gaming experience and when the blockchain mechanism can be fully utilized in the gameplay, ordinary game users will be extremely likely to enter the field of blockchain games. This may be achieved soon within half a year or later in the first half of 2019. With a million-level user scale, it’s worth of our expectation very much.
On the basis of blockchain, developers can also issue their own digital assets to raise fund to guarantee successful operations. If there’re IP support and successful work to form a cognition in the market, the props could permanently exist, and the life cycle of developers will be much longer than it is today.
Q: In this process, what role does Cocos-BCX play? And what does Cocos-BCX do?
A: Cocos-BCX is actually at tool level. It’s a platform for producing, managing and trading distributed applications and digital assets, providing game developers with complete blockchain game infrastructures. In short, Cocos-BCX generates blockchain game while game create digital assets. Character-type digital assets may exist for a long time while item-type may be consumed. Game is the environment of both generation and consumption of digital assets, and the essential is to promote the items exchange.
For example, Cocos-BCX introduced the concept of “Smiths”, which means “the governance committee composed of game operators and game player representatives”. Only agreed by the two parties, will key items generated by the “Smiths”. The game operator singly has no authorization.
If you want to capitalize the content of the digital world and make the items valuable, the first is to provide users with good gaming experience, and secondly to you should make it effective only on more than one single blockchain. As cross-chain requires being supported by the matching blockchain and wallet, Cocos-BCX is working collaboratively with parties of blockchains, wallets, developers and IP holders to push this into action as soon as possible.
Q: How do you think of the regulations? Will there be obstacles to digital capitalization involving token issues?
A: We believe that in China, there’ll be legal models for blockchain, while these models remain to be proven. Historically, from the time mobile game appeared, the government took almost 4 years to consider governance or supervision for mobile games. I stepped into the Internet filed in 1998, and it was five years later that I got the ICP certificate for my first Internet company. The government always deals such issue with the style of post-regulatory, which usually make the industry develop freely in the early stages, while there is a bottom line for such free development that pornography and gambling cannot be involved in. And we believe that the data capitalization we are dedicated to is different from violative ICO. They are two couples of different things.
Q: Dose every game work well on blockchain ?
A: In the medium and long term, this is not a problem. In the mobile era when everyone was using Nokia, some people declared that there wouldn’t be any good experience with games on the Nokia smartphone, because of the complicated operations, slow response, too low pixels and other limits. Ten years ago, some people affirmed that high-quality games would never run well on the mobile. But after the appearance of iPhone, this voice slowly disappeared. In 3G era, it’s asserted that PVP products could not work well on mobile devices because of limited network environment support. But as 4G came out, esports project of 5V5 proved it incorrect and the voice was gone.
It’s the same situation for current blockchain. There’s limit to define what products it fit in the future with current technology evolution. But if you see it with a five-to-ten-year insight, it’s similar to the development of Internet games. Today, for the question of “what’s the future form of the ultimate game experience?”, most people have the same answer: It’s Ready Player One. Its that right? All motion sensing clothing in the VR environment, while all the virtual assets in it are related to you individually. There’re different gameplays in the parallel worlds, and assets exchange between the real world and the virtual world is available. Today, if you see this ultimate game with a five-to-ten-year sight, all the scenes will be available. Now it is at the stage of technology evolution.
Besides, the development of blockchain game can be divided into four stages theoretically: 1) Paying by token directly, 2) Game items generation, 3) Key game algorithms on blockchains, 4) Whole games on blockchains. Now because of performance issue, it only supports the so-called dApp, while its essence is to migrate all logic to blockchain. Although it has spanned the development stage, the actual game effect is still relatively poor.
Today, to generate a blockchain game requires integration of 3D scene which cannot be replaced by the blockchain, but be handled by GPU/CPU. Massive non-logical calculations, such as props explosion coverage requires off-chain computing. Take another example, only the card generation logic is required to be on the blockchain for an independent card game, and each card is a token which can be stored in the wallet. There’ll be no problem as long as the logic is on the blockchain, and other parts related to judging logic of winning or losing can also be migrated to the blockchain.
Only the necessary parts should be migrated to blockchain, especially the parts related to numerical changes and token transfers, including trade guild organizations, shopping malls, voting mechanisms, cancellation, all of which may not all be migrated to blockchain in the future. Assuming that it’s a blockchain with extremely high performance that the very high performance can be realized through chip-level processing, then integrating to blockchain is just a matter of process.
Q: Currently hot blockchain games bear shadows of gambling more or less, So in your expectation, how long will this situation get changed? What type will the next explosion be?
A: Let’s see it in another sense. In today’s world, if you go to App Store to search game Apps, you’ll find that half of them are gambling. In fact this is the very saying that small gambling is an entertainment or a odds product that human all over the world needs. Such products is typically represented by Chinese card games such as Landlords and Mahjong. These are typical cases, which requires probability and skills. So I don’t think this is a very strange phenomenon. In fact, what people in the circle of token are looking for most is profit.
I think it’s at the early stage now, but this category will exist for a long time, and it will actually expand. From the point view of practicability, strategy type SLG, business simulation, monopoly and construction types do not require high blockchain performance. Games with strong digital attributes are likely to be hot. Personally, I think blockchain-based type that most likely to be hot is similar to Minecraft.
Large MMO(Massively Multiplayer Online) game will emerge within two to three years that it should not be the theme of today. There are two relations in large MMO: man-man and man-props. If it’s based on blockchain, output of the all game props and transactions are required to be transparent while the amount is fixed, which improves potential of props trading. This is our vision for blockchain games.
Toady we evaluate a game by it’s monthly revenue, but in the future the measure may be the assets of props transaction behind. Game operation models in the future will be strikingly different from they’re today, because game industry always develops at a high speed. From card game that features scale and rates of payment, to charge-free Lion’s Glory, a mobile game that earns more than RMB10 million per year by relying on the 1% pay-for-use users who pursue social value identification, it took only 2~3 years.
Q: Can you talk about the future development plan of Cocos-BCX?
A: Our first step is creating an environment for developers to help them quickly
adapt to blockchain games without changing the process and technology accumulation. The second step is adopt basic services to current wallet and the MainChain. These are what we’ve done before Q3, and it’ll be available to be open to C-end users by Q4.
Q: How did you know about blockchain? Can you share your secret of quick access to blockchain?
A: Blockchain industry really makes people stressful. If we say that Internet technology reforms every three years, when it comes to the mobile Internet, the product model is basically updated once a year. And in blockchain industry, the know-how basically gets updated every three months, which is the place where the biggest pressure lies.
In this field, knowledge updates and information explodes with high speed that all practitioners are confronted with challenges every day. In fact, learning is not hard. Firstly, read daily news express. Secondly, follow some communities that worth your attention on the social media, track the whitepaperer, other important updates, and even the node meetings. In this way, you’ll be clear about what they are really doing. This is actually very energy-intensive. Thirdly, keep tuned on emerging of new models. There is no skill for the matter of learning. What matters is constant accumulation.
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