At least 800 million Chinese people are now actively using the Internet. The data, released by the China Internet Network Information Center in late 2018, shows that close to 60% of the Chinese population is now online, with nearly all of them exclusively using their mobile to access the Internet. This makes China the country with the most Internet users in the world by far. It’s also what drives something that I call the split Internet.
On one side, you have the English-speaking Internet, representing around 25% of all Internet users, primarily driven by the US, where people have access to all the Western social media channels (FB, LinkedIn, Twitter, Instagram,...) as well as apps such as Uber, Tinder, and all the apps of the Google ecosystem.
On the other side, you have the Chinese-speaking Internet, representing around 19% of all Internet users, controlled by the Chinese government, where people have access to giant apps such as WeChat, AliPay, and Didi (the Chinese version of Uber).
Moving from the English Internet to the Chinese one is relatively easy. The big Chinese apps tend to have English versions that work great. I lived in Shanghai for six months in 2013 and found WeChat in particular to be an incredibly versatile app the likes of which the US and Europe still don’t have (and WeChat has only become more powerful since).
Moving from the Chinese Internet to the English one is somewhat more difficult, particularly if you’re actually in China. The government blocks most popular Western apps, so you’ll need a good VPN to get through the Great Firewall of China. It’s not impossible, but it’s not easy either. When in China, you’re likely to resort to popular Chinese apps.
The split Internet makes it difficult to understand how China is progressing from a technological point of view. There’s both the language barrier and the limited adoption of popular Chinese apps in the US and Europe. I thought this would inevitably have an effect on the blockchain industry too. After all, the split Internet makes sharing knowledge difficult, so we could potentially be missing out on incredible Chinese blockchain projects.
That’s why I was eager to interview David Johansson. Although raised in Sweden and France, David lives in Shanghai, where he’s the CEO of Blocklords, a medieval strategy game on NEO, TRON, and soon Ethereum. I asked David how he ended up creating a blockchain game in China, how (and if) blockchain projects differ there from in the West, what it’s like developing a game on different blockchain platforms, and where he sees the future of DGaming.
From Hollywood to Shanghai
After having grown up all over Europe, David decided to pursue film at the San Diego State University in California. Although he loved playing games, he didn’t think it could make a career. Back then, it wasn’t the viable career path that it’s turned into now.
When he graduated, he worked in Los Angeles for a few years. He started as a script reader, then producer assistant, and then creative executive, walking the typical Hollywood career path for script executives. But his visa ran out. Foreigners from a US university typically receive a two-year visa after they’ve graduated. David could either get married or leave. Given that you can’t marry at the snap of your fingers (although some do), David decided to leave.
He emigrated to Shanghai, where he’d received a job opportunity from a friend in film advertising. He produced ads for brands such as Cadillac, Nike, and Ferrero. But the ad industry is tough: eighteen hours on set for little money. Eventually, as anyone would, he started doubting whether this was really the career he wanted to pursue.
So he switched jobs. He moved into the gaming industry and became the Content Creator and eventually the Creative Director for Yoozoo, a casual gaming company. He helped create League of Angels, one of the first Chinese games making much of their revenue from Facebook. At this point during the interview, I grew confused. How (and why) would a Chinese company use Facebook, a US company blocked by the Chinese government, to market their game?
David told me that much of what he did back then was localize Chinese projects for Western markets, helping Chinese game developers reach foreign users. He explained that many Chinese companies make the majority of their revenue from foreign users. The Chinese market is complicated and hard to crack open, because it’s both dominated by the gaming giants Tencent and NetEase, and because it’s split into so many smaller markets that are difficult to reach.
The Android market is a perfect example of China’s fractured gaming markets. Because the Google Play Store doesn’t work in China, there are an uncountable number of Android app stores. In that sense, the Western market is much easier, because it’s much more centralized. It’s all Steam, it’s all GOG, it’s all Facebook, it’s all Google’s Play Store. That’s why many Chinese companies avoid China and chase foreign users.
After Yoozoo, David followed his boss to Forgame, where he became Creative Director and helped create Liberators, a Facebook browser game that was selected as FB’s best game of 2016. It earned the company between $2-3 million in revenue every month and had over 500,000 active users at its peak. The game was produced with a measly $3 million budget.
The early success of the game saw the company scale from eight to over ninety people in six months. But the growth wasn’t well managed, something that David said is quite typical in China. He was suddenly in charge of several projects and had to travel from studio to studio all the time. No longer was the emphasis on crafting a great game; it was all about pushing content through the pipeline.
There was one incident where another gaming company that David was working for was halfway through the beta development cycle of a game, when it was decided that all resources should be made worthless to increase the monetization of new users. At that point in time, several early gamers had already spent plenty of money acquiring those resources. It enraged them, but that didn’t matter. The focus was on acquiring new users and the strategy worked. Many new users started playing the game, at the expense of the early gamers.
It instilled a seed in David’s mind that early, loyal gamers should own something. They should get something in return for the time and money they spend on a new game. He quit the traditional gaming industry in 2017, right when Bitcoin was picking up momentum.
“I spent that year investing, researching, learning, creating some smart contracts. 2017 was all about exploration for me. [...] I knew games and blockchain would go hand in hand. I knew it was perfect. The direct ownership of assets, the easy monetization. I could see right away: the same technology used for Bitcoin and Ether could definitely be used for games.”
The Start of Blocklords
In a pattern I’ve noticed interviewing several DGaming entrepreneurs, CrytoKitties was the click for David. The early idea for Blocklords came packaged to him in the span of one week. He wanted to create a strategy game with armies, points on a map that players had to fight for, and cities that could impose taxes on the trade between players. It was CryptoKitties meets Risk, with the added element that players could earn passive revenue by owning a city.
Initially, it was hard to get the necessary financing. It’s generally difficult for indie games to win over investors, let alone a blockchain game at a time when the entire crypto market was crashing down like it was 1929. However, in May 2018, NEO announced its game competition, inviting DGame creators to create their DGame on NEO and win money.
By then, having spent several years in China, David knew the competition they’d have. He also knew a few people from NEO and understood what they were looking for. He knew that Blocklords would have a strong chance of winning the competition.
They came close. They finished second and won 500,000 yuan, around $70,000. It was the seed capital they needed to get started. However, NEO isn’t an easy blockchain to program a DGame on. At the time, the platform wasn’t very streamlined and didn’t have many tools to create a compelling game. For example, the Unspent Transaction Outputs (UTXOs) of NEO made Blocklords game progression slower and would cause many transaction errors.
For a young team that wanted to get out a product quickly, it was tough going. They started running out of money. After all, $70,000 isn’t that much money when you take into account how much it costs to hire good developers and artists. But they were thrown a lifeline. TRON wanted more DGames and organized a competition early 2019. David and his team had been approached by TRON when they won the NEO competition, so they knew they stood a chance as well. They came second again and won $30,000. It was the crucial last bit of money that they needed to finish the game.
The team quickly realized that TRON was well adapted for DApps, as it has fast transaction times and fairly low gas fees. They were able to make more progress in four months than they did working half a year on the NEO version of Blocklords. They considered developing the game on both blockchains at the same time, but quickly realized they were doing neither version of the game any justice. They went all-in on TRON and released the game there first. Then switching focus to the NEO version.
When they released the game on NEO a few months later, they realized that both blockchains have very different types of players. TRON gamers seem more focused on immediate returns, while NEO gamers seems to be more dedicated to growing their blockchain with better games and less interested in immediate returns.
However, even both blockchains together didn’t result in a huge amount of active players for Blocklords. It’s one of the reasons why David believes that the free-to-play monetization model doesn’t make sense for blockchain games. You spend a lot of money to create a game where 1% of your users give you thousands and thousands of dollars in return. It’s terribly risky, and definitely not the right fit for the small userbase of the DGaming industry.
Currently, Blocklords has a few hundred users on TRON and a few hundred on NEO. While that’s a great accomplishment for any DGame on those blockchains, David’s ambitions are bigger. They want more users, hence his decision to make the game available on Ethereum as well.
Blocklords on Ethereum
David’s team has learned from developing Blocklords on TRON and NEO. They’re doing things somewhat differently for Ethereum. Firstly, they’re placing a lot more of the game off-chain. Although you’d ideally want everything immutable and verifiable on a blockchain, the reality is that blockchains can’t handle large computations yet and that most gamers don’t care whether the game’s logic and its mechanics run on the blockchain or not.
Blocklords on Ethereum will see many new features. David was inspired by Paradox Games, the creator of the Crusader Kings and Europa Universalis series, as well as Total War games. He wants Blocklords to move from being a blockchain strategy experiment to a solid strategy game. Players will be able to own NFT heroes that they can trade or place on a map to strategically attack other players.
Additionally, players will be able to own cities and land. Any player will be able to pick a place on a map and build a little fort than they can expand from. They’ll be able to generate resources, which they can use to create new items. Owning older generation items will also increase the chances of crafting top-quality or limited edition items.
None of the above is currently possible in the NEO and TRON version of Blocklords. However, that doesn’t mean those players are disadvantaged. NEO and TRON players will be able to clone their heroes on ETH and give players the ability to either continue the game on ETH or sell their ETH hero altogether. Additionally, if players own items from the NEO and TRON version of Blocklords, they’ll receive a boost when generating new items since they will own original Gen-0 items.
In time, David wants to standardize the three versions of Blocklords into one. Already, he’s thinking of using Loom to create a bridge from ETH to TRON. While it might still be a while away, he eventually wants to create a game where it doesn’t matter which blockchain that players use. It should be invisible, but available for those who want to know more about it.
The Future of DGaming
David said that DApp enthusiasm is at its lowest right now, because BTC has seen a recent surge and the altcoins haven’t followed. Additionally, DGames aren’t good enough yet. They need to be a lot better before they’ll attract serious attention. However, he strongly believes that the ideas of owning assets in a game and being rewarded for playing a game are extremely powerful and will inevitably take hold.
He sees a future where earning money through gaming is no longer reserved for streamers and esports professionals. There will be ways for normal players to grind their way through a game and earn a salary with that. Maybe they’ll be employed by a wealthy in-game capitalist. As automation makes more and more jobs meaningless, this becomes an increasingly viable option.
Blocklords is set to release its Ethereum beta in November. Given David’s emphasis on rewarding early gamers (while maintaining the game’s balance) you might want to keep an eye open toward early access items and land sales.