Blockchain gaming groups are trying to shed the “fraud” label 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 the convention this week is occupied by a loan provider — for blockchain game players.

Philippines-based Yield Guild Games (YGG) is Asia’s largest provider of startup loans for people hoping to make a living from the new genre. He chose the show to launch a global marketing initiative to convince the industry, governments and the public that crypto-related games are not “scams”.

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

Video games have long included their own in-game currencies, but new cryptocurrency-based titles allow players to convert earned assets into real money through officially sanctioned channels.

High entry fees for games have led to the emergence of companies like YGG, which supply seed capital to people who plan to dedicate themselves to making money from games.

Part of the mission of YGG Japan and its local partner ForN is to convince the skeptical industry and public that blockchain gaming is as much fun as it is profitable.

“People think it’s very strange to make money by playing games, and some even suspect that these might be financial scams, but we want to change that perception,” said ForN marketing head Sho Miyashita.

“So instead of a global slogan of ‘play to win’, we promote the concept of ‘play and win’: we want people to enjoy the games first and then have the winnings,” he added.

In other countries, such as the Philippines during the pandemic, players quit their real jobs, believing they could make enough money fighting digital monsters in games like Axie Infinitydeveloped by Vietnamese studio Sky Mavis.

To get started, Axis required a $1,000 entry fee and YGG became an early sponsor of Axis players in the Philippines and an investor in the game’s tokens. It offers funding “scholarships” to users, taking a share of their revenue in return.

Blockchain games have been slower to catch on in Japan, Miyashita said, in part because of strict regulations that require foreign blockchain game publishers to register their tokens on Japanese exchanges to sell games in the country.

An even bigger factor is their image problem, he admitted.

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

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

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

“This shows that blockchain games provide a new option for professional sports clubs to earn money other than broadcasting rights,” said Kozo Yamada, founder of DEA. “Games are no longer for those who develop and play games. The surrounding economic zone can be greatly expanded.

Konami, one of Japan’s biggest traditional game publishers, also wants in on the action. Ken Kanetomo, who runs its blockchain business, said he believes the technology will “exponentially expand” the value that games can provide.

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

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

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