The CEO of Enjinstarter touches on the meteoric rise of GameFi and how games will continue to build beyond the current downturn.
Community, community, and community – that is the key to building a successful GameFi ecosystem in Singapore and beyond according to the CEO and founder of Enjinstarter, Prakash Somosundram.
A combination of the term ‘Gaming’ and ‘Finance’, GameFi exploded in popularity with the success of blockchain games like Axie Infinity after non-fungible tokens (NFTs) became a new asset class in the Web3 space. Its Play-to-Earn (P2E) model is seen as the next step to current game economy models such as pay-to-play or freemiums, and it envision players having ownership over their in-game assets in the form of NFTs while earning by contributing their skills and creativity to the game economy.
All game economies need games to function, and Enjinstarter is taking the lead by launching Web3 games. The platform is a blockchain gaming launchpad that aims to accelerate the development of gaming, metaverse & P2E projects on the Enjin blockchain, and they have successfully nurtured over 50 projects to date with more in the works.
As the CEO of Enjinstarter, Prakash is no stranger to blockchain gaming. Having immersed himself in Singapore’s growing tech and Web3 space, he has been providing marketing and strategic consultancy to different crypto projects and organisations after building up Yolk PR, a digital advertising business.
We speak to Prakash to find out how Enjinstarter fosters upcoming games in the local & regional ecosystem, and on the future of GameFi as a whole.
As an entrepreneur you are experienced in setting up new initiatives in the crypto & non-crypto industry. What attracted you to the GameFi space?
It all started when I was given an opportunity to invest in Efinity, which is a new blockchain that Enjin1 is building on the Polkadot network. They are an early pioneer in the blockchain gaming space which wrote the ERC-1155 standard used by many NFT projects to mint non-fungible tokens. To be given an opportunity to work with Enjin was exciting for us, and being early pioneers in the blockchain gaming space we felt that they needed a dedicated launchpad.
I come from a lot of experience in ecosystem building, and we preach about building an ecosystem that is not focused on one chain, but a multi-chain approach. We started with blockchain gaming which was very hot during the bull market, but as early as November 2021 we started going into entertainment. That’s primarily because a lot of the early GameFi and blockchain gaming projects could build and raise capital, but they struggle to get people on board.
And that’s where we built our investment thesis around fandoms. What we’ve been doing is to look for music and entertainment because regardless of the market conditions, people will continue to support their idols. We believe that Web3 will be built a lot around entertainment. While we saw Web2 being focused around e-commerce which became an integral part of our lives, we feel that entertainment is going to be the main driver for Web3.
And what are some Web2 communities that Enjinstarter is working with to migrate to Web3?
Music is a great example. We’re working with companies who has upcoming artistes looking for a big break. Some of them may need to raise capital, some of them may need to grow their community and fanbase; and this is where we come in and develop a strategy for them.
We’re also working with brands that sell physical products to communities, and we are creating new revenue opportunities. One interesting project we recently launched is an incubator projects called Swallow, and they are bringing tools into the metaverse to help tattoo artists create new revenue opportunities. They are bringing this into the metaverse where your avatar can have a tattoo; you can wear a brand as a tattoo; and you can interact with a range of brands by displaying your tattoos. That’s one of the key projects we are currently focusing on.
We drew inspiration from millennials who spend money on skins to flex the designs they own. The more desirable it is, the more expensive it is to purchase. So that’s where we saw the opportunity to work with tattoo artists to create a range of skins which could also be a limited edition, or customised one-on-one. And it could be something that you flex in a digital environment like the metaverse.
Enjinstarter has successfully launched several blockchain games, metaverse, and marketplaces since its inception a year ago. How has the GameFi ecosystem changed since then?
The journey has been a rollercoaster ride. We started the company in April during the pandemic, and we were quite fortunate to raise $5.5 million via our token sale with $5 million more from private investors. Everything was done virtually, and we couldn’t even meet them in a lot of these meetings. We built a platform where we hosted our public sale in October where we raised an additional half a million from the community.
Regarding the challenges, we actually were hacked a day before the actual IDO2 and our corporate site was under a DDOS3 attack. The hacker wanted me to pay half an ETH4, but I refused to pay as it is our principle that we do not pay bribes.
We moved on and continued building the company and conducting the sale despite not having a corporate website. A part of the community did come after us saying we were doing a rug pull5, but we showed them we could deliver on the promises made and we grew the company pretty quickly. Within the month of December we did about 20 IDOs on our platform, and that itself was a record in terms of number of IDOs initiated on any launchpad.
The current bear market is the biggest challenge for us to deal with as the token price has dropped quite a lot. But this is where we have to show the community we are in this for the long term, and we have to show that we will lead the front in terms of ecosystem building.
Since March 2022, I have been traveling extensively. We started out at NFT LA where I went alone to understand what the opportunities are and how some of these events are operating, and subsequently we started bringing projects on our own as a collective.
We did that in New York, where we had an event called NFT NYC which we showcased a few projects from Southeast Asia as a collective. We did the same recently in Bali, where we were title sponsors for Coinfest and we brought five of our projects in. Most recently we fronted Web3 Matters as well.
In the past when it came to a bear market, a lot of projects cut their efforts and teams while going into hibernation to survive. But we see the bear market as an opportunity to build, and it’s a lot easier now because the cost is lower and it’s easier to get the attention of people. That’s why we are going to continue building regardless of how long this bear market is going to be. But as an ecosystem we need to bring more partners together to achieve a collective success.
It seems there’s more events like London Token2049 on the horizon. Will you also be going there to present as well?
No, for Q4 I will be travelling to Dubai. We are in the process of establishing ourselves in Dubai, and it is quickly becoming an important crypto hub. We are definitely looking at having a sizeable presence in Dubai.
We are also looking at Portugal where we are going to be attending the web summit in the first week of November. At this point in time London is not a place we are ready to invest, primarily because I feel London is going through a major upheaval. We will visit the UK subsequently, whereas we’re looking at other potential gaming hubs in Portugal and Turkey as potential European enclaves.
We see a great opportunity with helping companies transition from Web2 to Web3, and we would be launching more initiatives on helping brands and corporates to do so. There’s a substantial shift that we are bringing into the space as compared to going fully decentralised on Web3. A lot of projects are going to struggle with execution or adoption, and the way we are trying to solve that is to work with brands which helps us bring more new people into the space.
How different is the state of Singapore’s GameFi space compared to the rest of Southeast Asia or the APAC region?
Singapore traditionally does not have a large development background. We definitely saw a lot more opportunities coming out of Vietnam, primarily because Axie Infinity originated from there and it inspired game development studios to create independent games that became blockchain-based games.
We are seeing the trend now with a lot of Indonesian projects we have been speaking to, and there’s a lot of game developers in Indonesia coming into Web3. But I would say a lot of Southeast Asian projects are registered here in Singapore, and we could continue being key connectors for capital and talent to come together. But in terms of talent development, Singapore doesn’t have the ecosystem yet even though there are small incubators and development studios coming into the space.
Once you shift the focus into the broader picture of Web3, Singapore will definitely take the lead. What we’re starting to see is a lot of IT-based projects coming to this space where licencing is a key aspect, and a lot of people want to conduct licencing deals here in Singapore because our legal regime. If we play to our advantage, a lot of projects will be based in Singapore but built around the region, and that’s the approach everyone should consider.
You spoke about collaboration between gaming fandoms being key to onboarding new gamers during the MetaJam summit. How do you see that playing out on a regional level within Southeast Asia or the APAC region, and how will Enjinstarter play a major role in building these collaborations?
At the end of the day, it is all about communities. We need to find ways to incentivise the community to participate, and we believe the focus should be on value transfer. It needs to be very upfront, and people need to see the value they get from each community.
The way we give value is to provide content which is engaging, and the ability to monetise their time. Being able to share good games and quality content way upfront becomes an advantage, but what we are now looking to do is to work with gaming guilds like Play It Forward6 to cross-promote projects so that we can progress collectively.
This includes educating consumers; this includes having our consumers play in tournaments; where it is collaborative, and so on and so forth. So that’s primarily what we’re looking at; we believe there is going to be a new generation of Web2 gamers coming into Web3. We need to be able to guide and protect them, and we will be able to succeed with collaborations.
And how will Enjinstarter implement these protection and guidance for the players in the community?
We always have community protection policies for every project that wants to list on our launchpad, and they need to adhere to that. If they are unable to keep the prices at a certain level, we will refund our community; we are very strict on those aspects. So I think this is the level of trust that we need to bring into the ecosystem in order for us to scale to the next level.
GameFi has allowed gamers in developing Southeast Asian countries to earn an income via play-to-earn games like Axie Infinity. How else is Enjinstarter creating opportunities to support these communities?
A lot of these games need a support ecosystem, so what are doing during the bear market is to focus on gamer acquisition. We have a database of 250,000 gamers that we can target, and each time any of these games want to launch we connect them to game tester communities. People would test the game and give feedback on the gameplay and game experience, and a lot of these games are able to leverage this support to take things to the next level.
Next, we have also partnered with gaming guilds which provide different aspects of the gaming process. Some of them have tools that are able to provide data, and some provide actual players to play the game. And again, these are some of the ways to support games in their early days where they need a lot of support and people to come in, play the game, and stay committed with the game on a long-term basis.
At this point in Web3 there is very little loyalty, and this is one of the key things we are trying to fix. We need to incentivise the community such that they will be a part of this process. If the games are ready to launch, we can help scale on marketing platforms or bring these games on tours to help them reach the next level. We also look at ways where our portfolio companies can also partner up, which is a key bear market strategy. We are constantly looking at new ways that we can help these guys.
What are some examples of portfolio partnerships that Enjinstarter has been exploring?
I spoke to you about Swallow being one of the projects, and we have another project called AlterVerse which is a metaverse project that came out of Binance. We brought Swallow into AlterVerse where it has a presence as a tattoo studio, as well as an armoury where you can build skins for your guns, and that’s one way we brought two of our projects together. Currently we are exploring a whole lot of that where we are trying to bring smaller projects to partner with some of the bigger projects, and that’s one way we can grow collectively during this bear market.
Large game platforms like Epic Games and Ubisoft are jumping onboard the metaverse. How do you foresee this playing out in the GameFi space between large platforms and smaller blockchain games?
We always welcome these incumbents who have large communities, and when they come in with their communities the entire industry is going to evolve. Plus, a lot of consolidation will happen; some of these larger companies will look to acquire upstarts in the Web3 space, and I would say that’s another way the industry can mature.
I think once the larger guys start coming in and creating greater utility for the tokens, we will start seeing greater adoption, and that’s what all of us are hoping for – a wider adoption for Web3, tokens, and NFTs to have a greater utility within the games we play. That’s why we need to collaborate and work together, and we always welcome the larger guys coming into the space.
If larger game companies do acquire smaller indie games, won’t GameFi turn into the centralised state of games we are seeing now in the game industry?
Good question. I would say we believe in the need for everything to be decentralised, but we will go through a Web2.5 process where certain functions still need to be centralised. Even with some of the DAOs that we are working with, we believe that in the initial stage it will be a centralised approach that brings us to the Web3 space. I think the world is not ready for the big jump to a full decentralised environment.
What are the traits of a successful Gamefi project?
The key mistake a lot of people is that they focus too much on the play-to-earn aspects and they forget that games need to be entertaining first. During the bull market everybody came up with a play-to-earn business model, but they all focused on the grind. And the people that are coming in to grind, they are not really gamers. There are just there because they want to supplement their income, or they were stuck in COVID; but that doesn’t apply today. I think today we need to remind ourselves that it is play-and-earn that is going to succeed,
That’s where we are actually starting to see the big shift where everybody is focusing on entertainment. And you really, really need to focus on games being entertaining first. And if along the way, you can make some money out of it, then great! But It’s not the other way around.
How do we move a fully developed game with a large community into the Web3 space?
I guess the key value proposition to decentralised blockchain games we are bringing is the true ownership of the digital asset right? So you can build and spend a lot of money on Roblox for example, but fundamentally, you don’t own any of the assets because it’s stuck within that environment. And you’re never going to be able to truly own it. On the Web3 space you can move it from one game to another. The economic value of the asset follows you depending on which game or which metaverse you’re looking at spending your time on, and that opens up a true economy to be built upon.
Do you see most Gamefi projects lasting through the current crypto winter?
No, at least 30% of our portfolio will fail. We will definitely see a lot of consolidation with some games combining and becoming part of a bigger ecosystem. I think who will succeed are games that see themselves as a platform. Whether they are using the game to create a community, and if the community will scale and become a lot bigger. Some of our NFT communities succeed because they all focus on the community as a collective. I guess in every bear market this cycling happens; you know projects will leave, and new projects will come into the space, and a big part of it would be consolidation. That’s where the big opportunity comes in for a lot of companies.
Does that mean the ecosystem is one where community is king, followed by the entertainment and the game economy?
I would say community and entertainment comes in collectively, and it’s all built around value creation. Where there is clear value creation, the community will come and thrive. In the past it’s either one, right? You either try to build a value proposition then you look for a community, or you have a community then you try to look for a value proposition. In Web3, that happens simultaneously.
Let’s take a break from the hard questions. Do you play any games yourself, and what is your favourite game?
Not me, unfortunately. My team do, and my son is an avid gamer too. I come from an agency background and we built games in the past, but I currently can’t afford the time to be a gamer. My son’s favourite game is definitely Brawl Stars, that’s a game he’s most excited about. The creator of Brawl Stars was in Singapore this week, and my son was really excited that I know him.
Sentiments from players of traditional games are generally negative towards GameFi. What do you think it will take to convince them to play Web3 games?
I would say it’s about education; a lot of it is a lack of education. I think if we can start communicating the true value of what NFTs can bring, that it is not a cash grab and true value is retained in the hands of the gamers; I think a lot of these gamers will start to understand the benefits that NFTs will bring.
At this point in time it’s about who can make the most noise. But over time the community will start to see the value and things will slowly evolve. But it needs a lot of work in education and convincing people of the true benefits that Web3 can offer them. What we are limited by currently is the quality of graphics. In Web2 or traditional games you will still see a lot more higher quality when it comes to the game mechanics and experience. That’s something the Web3 community needs to fix and that’s going to take some time.
We’ve seen a flurry of metaverse-related news such as DBS hopping onto the Sandbox and the Sandbox wedding hosted by Smobbler Studios. What do you think is the turning point for the metaverse to become a necessity for the average Singaporean?
When Web2 came about, social media was seen purely as a distraction and a waste of time. But as we started to spend more time on the digital environment, it starts to take over our lives and the way that we live, work and play evolves. The same is going to happen in the metaverse for the way that we live, work, and play, and even learn. For my kids, it’s going to change and that’s where the metaverse will slowly come into our lives.
And this time, I think there’s an opportunity for us to allow the technology to serve us, rather than we serve the tech. We have become slaves to our technology where they are taking our data but not giving back any economic value. This is where Web3 is going to come in; it is going to change business models. It’s going to take time, but it will be inevitable.
And what jobs will we see in the metaverse other than just avatar-building?
There’s going to be a whole lot of new job opportunities that will come about, with virtual influencers playing a key role. I think a lot of people will start developing non-playing characters that will walk around the metaverse and be a guide, and people will monetise some of these virtual influencers.
A lot more of it will come about, and it will be very inclusive. A person could be physically disabled in real life, but he or she could be doing everything in the metaverse in a very inclusive way, and that’s where we believe the metaverse has a key role to play
What can we see in the GameFi space moving forward?
We are going to see a lot of entertainment and brands come into the space. We are going to see a lot of brands we grew up with as kids getting a Web3 reboot, and I think this is where for me as a parent, I could play a game and show my son this is something I used to do as a kid, and now I’m connecting with him and bringing things to a whole new level. That’s what Web3 is going to offer, and it’s going to be very interesting.
1 Enjin – a software project that allows NFTs to be created on the Ethereum blockchain
2 Initial DEX Offering – a crowdfunding technique that let’s cryptocurrency projects introduce their native token through decentralised exchanges (DEXs)
3 Distributed Denial-of-Service – a malicious attempt to disrupt the normal traffic of a targeted network
4 Ether Token – The native token of the Ethereum network
5 Rug Pull – a malicious act where crypto developers abandon a project and abscond with investors’ funds
6 Play It Forward DAO – A blockchain gaming guild management platform
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