The current crypto decline may cause some game developers to have cold feet about venturing into the industry, but one Singapore-based studio is ploughing ahead.
SkyArk Studio is a Singapore-based blockchain gaming studio that's backed by cryptocurrency exchange Binance. It currently has over 36 people currently working on its upcoming project, SkyArk Chronicles.
The game relies on the concept of play-to-earn games that allow players to make cash via Non-Fungible Tokens (NFTs) and cryptocurrency.
Leveraging on blockchain technology and a team of crypto experts, SkyArk believes it can incorporate blockchain technology alongside traditional gaming development to create the next digital ecosystem.
Rather than using the traditional play-to-earn model that most crypto games utilise, however, SkyArk's business model revolves around a play-and-earn strategy, letting players earn lucrative rewards when playing instead of doing it solely for the sake of earning income.
"Game companies are telling the public that if they play their games, they earn money, which means that they won’t have to work anymore," said Chris Ng, SkyArk Studio's founder.
"They are telling the public that they can earn US$100every day by playing the game, which is just impossible."
One reason is that the current play-to-earn business model is not a sustainable one. Game companies that rely on this model are telling the public that they don't have to work if they play their game, Ng added.
Despite this, there have been numerous concerns from critics of crypto gaming on whether such games operate on a “pay-to-win” model whereby players are heavily encouraged to fork out cash to progress further into the game.
Video game developer Valve (publishers of Dota 2 and its multimillion dollar tournament) has even outright banned the use of cryptocurrencies and NFTs on all games available on their digital storefront, Steam.
Not his first rodeo
Ng founded SkyArk Studio after deciding to venture into the world of crypto gaming following its rise to prominence back in 2020.
He previously worked as a financial analyst before co-founding XII Braves, a local gaming company.
SkyArk Chronicle’s play-and-earn model is designed to reward players with collectables in the form of NFTs, whereby each hero and character they collect is uniquely different and individually numbered.
This creates value in the NFTs acquired as each hero is different from the other.
The idea of converting the heroes and characters within the game into NFTs came about after Ng and his team realised that the process of converting pre-existing art and assets from the game into NFTs was a relatively simple one. They could use this as a substantial form of income, especially for the artists.
A matter of motivation
With more than 2.5 billion people in 2022 playing games worldwide, the number of blockchain games has gone up by 71% since last year, now numbering over 1,000.
However, with the recent crypto crash causing cryptocurrencies such as Bitcoin to drop in value from US$68,000 in 2021 to US$24,500 as of as of 15 August, the world of NFTs and crypto remains highly volatile and unpredictable.
“I feel that what drives the crypto gaming craze isn’t the game design itself, but the extrinsic motivation of earning NFTs that pulls gamers in,” said Nash Lin, a Game Design and Development Lecturer at Temasek Polytechnic.
"If the NFTs created have no real value in the virtual or physical world, I believe the craze will soon die down.”
Though they may have become a breeding ground for exciting innovation, the future of crypto games is still uncertain.
It's not as simple as turning everything and anything in the game into an NFT, SkyArk's Ng said.
“You must be innovative and create rewards that players feel incentivised to work towards. It is also crucial that you understand your audience and reward the game’s dedicated players and collectors, rather than treating them as customers,” said Ng.
This story is the work of student contributors working with Yahoo Southeast Asia.