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Big Time Studios is going big this week with a funding round of $21 million to bring nonfungible tokens (NFTs) to the biggest game economies.
The Los Angeles company was started by CEO Ari Meilich, who was previously CEO of Decentraland, and game designer Thor Alexander.
The funding comes in two parts: $10.3 million in a round led by FBG Capital as well as North Island Ventures, Digital Currency Group, OKEx Blockdream Ventures, Alameda Research, Circle Financial, and Ashton Kutcher’s Sound Ventures. And Big Time Studios is also in the process of closing an $11 million fund that it will use to invest in game companies that adopt its technology.
“We are creating all the technology to make it very easy for gaming companies to do this,” Meilich added. “But as a way for us to get to market, we are building the first game, the game. It’s a multiplayer action RPG where you can team up with up to six people and go into dungeons where you kill monsters, some of which are going to be dropping valuable loot. And the way the game is designed, people with zero blockchain experience are going to start collecting NFTs that have real-world value without having to have any previous knowledge about what blockchain technology is about. So ultimately, we’re trying to make the technology underlying technology invisible and just keep the value proposition for the users.”
Big Time Studios’ team come includes alumni of Epic Games, Riot Games, Blizzard Entertainment, Electronic Arts, and Decentraland. They want to triple-A game companies to adopt cryptocurrency and NFT technology. But to prove that their model works, they are first building their own action role-playing game that will enable players to acquire, hold, and trade NFT-based virtual items without the barriers present in most blockchain applications.
The NFT boom
NFTs are a hot commodity now, driven by the craze around cryptocurrency. NFTs can uniquely identify digital items as authentic and rare through blockchain technology, the transparent and secure digital ledger. NFTs have exploded in other applications such as art, sports collectibles, and music. NBA Top Shot (a digital take on collectible basketball cards) is one example. Built by Dapper Labs, NBA Top Shot has surpassed $500 million in sales, five months after going public. And an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million.
As the founder of Decentraland, Meilich was a pioneer of NFTs. After that company became a decentralized autonomous organization (DAO, run by the owners who bought its tokens), he left and investigated what to do next. He started Big Time Studios in April 2020.
“After we decentralized the project, Thor and I started working on this new company with the hopes of taking blockchain gaming to a mass-market audience,” Meilich said. “The learnings we’ve had over the past few years is that NFTs seem to have a lot of demand, but from a very niche, very technical audience. Scaling to millions of users — we learned there was no way we could do that with the current user experience that required setting up wallets, having people customize their assets, and perhaps lose them forever if they misplaced their private keys.”
Making NFTs safe for big game companies
Investors are pouring money into NFTs, but it’s a good question as to whether NFTs will become a little wave that gets your feet wet in the game industry, or they will be a tidal wave that will sweep through it all. Meilich hopes it will be the latter, but he sees obstacles that have to be overcome. Travis Scher, managing partner at North Island Ventures, said in a statement that the market for in-game assets is massive, but players don’t have the right to own and trade the items they purchase, for the most part. In-game NFTs can give players true ownership and that will bring the metaverse a step closer to fruition, he said.
“It’s a platform for other gaming companies to introduce NFT’s into their economies,” Meilich said. “We’re starting from the place of the realization that if you look at the Ethereum blockchain, there is a lot of data that shows how much people are spending on NFT’s. For the audience that has been playing first-generation blockchain games, we see that they’ve been spending up to six times more than people do on traditional free-to-play games. It’s a very compelling business case. It’s not only good for the players, because they have more control over their items, but it should also be good for the economy of the game studios, because was the items are transferable.”
The company’s flagship title is Big Time, an adventure across space and time. It starts at a school at the end of time that is run by headmaster Albert Einstein. The story puts the player in the driver’s seat of their own time machine, allowing them to collect legendary items from amazing historical battles, said Alexander, in an interview with GamesBeat.
“The gameplay is a combination of fast action gameplay from God of War, mixed up with co-op like in World of Warcraft and Diablo, with a lot of procedural loot systems,” Alexander said. “The world itself is split into three areas. You’ve got your World of Warcraft style, big space where you meet up with other players and show up all your cool loot. Then you’ve got these procedurally generated dungeons that you go into with a party of six. And then there is Epoch City, which is where you meet up in a big space. This gives us a varied set of gameplay.”
Meilich said the game industry is largely sitting on the sidelines and doing research and development on blockchain. They seem to have a lot of fear about the public relations risks of NFTs and failing to implement them in the right way.
“Everyone is waiting for someone to come along and launch a game that is of quality, and something that they can look up to that serves as a good showcase for the technology,” he said. “We’re trying to do that. But at the same time, we’re looking to put together some hard data on whether this monetary premium that you get with NFTs is really there, once you get past the 100,000 or 200,000 monthly active users. We’re dogfooding (eating their own dogfood) with the technology.”
The game team’s credits include some of the best loved franchises in gaming history including Fortnite, God of War, Call of Duty, and Overwatch. Being a remote-first company has allowed the team to combine their diverse passions to build a game world with evocative style and universal themes. The founding team includes Matt Tonks (Fortnight, Gears of War) as chief technology officer; Carlo Arellano (World of Warcraft, God of War) as art director; Brian Alexander (Overwatch 2, Defiance) as lead writer; TJ Stamm (Call of Duty, Medal of Honor) as lead level designer; and Tom Zhao (League of Legends, Sky: Children of the Light) as lead concept artist.
Development on Big Time is currently underway for Windows PC, with an announcement for the beta coming later this year. The game is expected to launch in 2022.
“By the time we launch the game in early access in early next year, we should also be ready to start onboarding third-party studios to integrate the technology,” Meilich said.
Big Time Studios will also start investing money into mid-tier PC game companies that are about to launch. It will provide them with checks as incentives for them to integrate the technology for NFTs. The team has about 25 people now. all remotely distributed.
How it works
Players will be able to earn or find high-value items in the game, like when you kill a final boss in a dungeon. Right now, Meilich said Big Time Studios won’t launch its own cryptocurrency token because it doesn’t want that to conflict with something that its possible distribution partners would use. Meilich said the company won’t focus on “pay to win” NFTs where players can use them to gain victory. Rather, it will sell only cosmetic items, not the items that give you gameplay bonuses.
“For a lot of multiplayer games, we see cosmetic items, skins, are what really drives the economy,” Meilich said. “If you add actual scarcity and the ability to trade those assets, I think it’s going to add fuel into the compulsion of people to buy more items and to collect them. So that’s why early on, we chose to work on a game that would not have any pay-to-win component, and where the items were purely cosmetic, and will provide no like extra advantage because you have more money.”
The tech is built on top of Ethereum, which has both smart contracts (programmability), good security, and mainstream adoption. The company will store records of items created or purchased in its own database, and it won’t automatically mint the NFTs on the blockchain in order to keep costs — such as Ethereum Gas fees, or computing costs that consume energy — low, Meilich said. He didn’t think Bitcoin was much of an option as people are keeping it and not transacting with it. Plus, the infrastructure isn’t developing as fast.
Users have a lot of funds on Ethereum, and the value of the NFTs is that players will be able to take them outside of the game and use them or sell them. They could fractionalize them — divide NFTs into parts so that the purchase price can be cheaper. Meilich said that Ethereum supports NFT marketplaces better, as more people are available to make purchases on it. But players won’t have to incur fees if they use the NFTs in a game or otherwise don’t transact with them. Players can store the items in an off-chain custody system that the company has patented. It’s a private database where both NFTs and regular items can coexist.
“This allows us to create hosted wallets and give them back to users,” he said. “The user experience of the vault is pretty much like having an inventory in any RPG. Players have the option to bring an asset from offchain to onchain at any point in time.”
The vault connects to the backend of a game through common interfaces such as Microsoft’s Playfab.
“It’s very easy to integrate and we built it in such a way that it is backend agnostic,” Meilich said.
If they want to sell them or take them outside the platform, then they have to mint them and incur Gas fees.
“Any game developer will be able to integrate it to their back end. So that’s one side of it. The items can be minted without paying the gas cost upfront. So this is done in a way that is economically viable, and we take care of the custody of the assets. There’s no more risk of people losing their private key, which is a problem that I’ve encountered repeatedly with Decentraland, where people will spend hundreds or thousands of dollars, and they will be very upset because they lost the private key. And there was really nothing we could do on our end to help.”
In this case, Big Time Studios is asking users to trust it with security for their items. Some people may object that Ethereum uses a lot of energy. Meilich noted ways to make it cleaner, such as the purchasing of carbon credits to offset the energy costs. At some point, Ethereum will move to a better form of verification, away from proof of work associated with heavy mining and computing costs, toward proof of stake, which uses much less energy.
The long run
Meilich said he doesn’t think the company will turn itself into a user-run DAO this time, at least not initially, as it creates a lot of extra governance work.
In the long term, Meilich said that if the demand materializes, the company will create ways for players to withdraw their assets and move them to any blockchain.
“I just don’t feel that the demand is there at this point in time,” he said.
The company will target North America first, as well as Europe, as that is where its core expertise is focused.
“We are really going after an approach that maximizes our chances of working with platforms and distribution channels,” he said.
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