Ex-Sony boss Shawn Layden advises Readygg as it raises $4M for Web3 gaming

Readygg has appointed gaming leader Shawn Layden as an adviser and raised $4 million in funding for its Web3 gaming business.

It’s a big move for Layden, as he has been a Web3 skeptic in many ways and has come around to seeing the value of ownership that Readygg is creating with its business, Layden said in an interview with GamesBeat.

Layden is the former chairman of Sony Interactive Entertainment Worldwide Studios. Not many people of his stature have supported Web3, as many game devs have taken stances against it as a scam or an overhyped tech that didn’t really work. Many Western gamers have taken similar views.

But Layden is pretty sharp and he has an independent streak. Readygg enlisted Layden because he brings such extensive experience to advance “ownership gaming,” as the company refers to blockchain-enabled games in the Readygg ecosystem.

“Shawn has so many ideas about what Web3 gaming truly is. He comes with so much experience from Sony and PlayStation. We’re selling this to developers to build Web3 games, and we’re encouraging players to come play these games as well,” said Christina Macedo, COO of Readygg, in an interview with GamesBeat. “He has a lot of experience talking with developers. What are developers looking for? What do players want to hear? What hasn’t worked?”

Macedo said Layden can counsel Readygg on monetization, ownership, the relations between developers and players and more.

“What intrigues me about what Readygg is doing with David [Bennhamun, CEO of Readygg] and Christina is they’re talking about tokenizing Web3,” said Layden in an interview with GamesBeat. “I looked at it from a different perspective. I believe that we’re moving into a new change in the video game industry, which is sitting on a business model that has remained unchanged for 40 years.”

The growing ecosystem

The ecosystem is growing as Readygg does partnership with Aptos Labs and others that expand its potential player base (not its actual users). Readygg’s network has already secured agreements with over 20 Web2 publishers, boasting a library of 2,000 games enjoyed by a 200 million monthly active users. Now the job is to convert them to Web3.

The funding comes from key partners including NeoTokyo and Delphi Digital, Merit Circle, Momentum6, Purechain Capital, Alex Becker and Token Metrics Ventures. The infusion of capital is will help Readygg toward its mission of mainstreaming ownership gaming. And Layden noticed this.

Layden spent decades at Sony and previously served as the president and CEO of Sony Interactive Entertainment America, contributing significantly to the success of the PlayStation brand. In his new role with Readygg, Layden aims to champion community-centric gaming that empowers players.

Layden said, “Ownership gaming has the ability to foster shared experiences, enhance in-game achievements, and unlock new opportunities for players who are rewarded for the hours they play. This model enables gamers to permanently own the assets, reputation, and profile they cultivate and leverage it to unlock new horizons for engagement.”

The funds raised will fuel the company’s ambition to make ownership gaming a mainstream phenomenon, fundamentally altering the dynamics of player engagement.

Layden will play a role in connecting Readygg with influential publishers and global game studios. He aims to raise awareness about ownership gaming’s potential to revitalize game economics and ensure fair player outcomes.

In addition to bridging the gap between traditional and ownership gaming, Layden will advise Readygg on go-to-market strategy and accelerating the adoption of ownership gaming as a standard in the gaming industry.

Ownership gaming

Readygg’s ownership gaming model, driven by Web3 technologies, has gained traction with the success of titles like Runestone Keeper, a roguelike dungeon crawler. The migration to a Web3 model has resulted in increased player engagement, retention, and time spent in the game, the company said.

Ownership gaming offers a solution to rising game development costs, providing developers with alternative monetization channels and significantly reducing user acquisition costs, Macedo said.

Readygg refers to itself as a game development Layer 3 within a collective gaming ecosystem, with shared ownership at its core. The platform incorporates decentralized decision-making, milestone rewards, cross-game utilities, blockchain technology, and NFT-based user-generated content to enhance the experience for game developers, players, and content creators alike. It basically makes it easier to launch Web3 games.

Dealing with the platforms

Readygg’s solution enables both Google and Apple to be paid their 30% cut for in-app purchases. To buy NFTs in the games supported by Ready Games, players will make payments to buy in-game currency through Apple or Google. Then they use those coins to buy the NFTs. That ensures that Apple or Google get paid.

The transaction also has to happen inside the game, not on a website away from the game.

This means that Web2/Web3 game companies can be in compliance with app store rules. Ready Games is also different from other companies when it comes to wallet integration, Macedo said. In this case, the wallet for the transactions is inside the game.

As an example, a player might want to craft a new NFT rifle inside a deer hunting game. But if the player doesn’t have a wallet for the transactions, they will have to create a wallet. The user will have to type in a long passphrase to access a non-custodial wallet. When they complete the wallet creation, they confirm the transaction, which happens on the blockchain.

At the time of that sale, Apple immediately gets its share of the proceeds. If someone resells a game item to another player, the transaction has to happen in game. In that case, the appropriate parties get a cut of the resale. If items are sold outside the game, then there is more risk the platform owners will crack down on it. At least that’s what has to happen for the time being.

“The traction has been amazing for us,” said Macedo. “We have titles that are getting ready to launch.”

The company is doing more marketing and it is adding more ambassadors like Layden from the Web2 world to help users make the transition to Web3 and validate the tech. Layden could help with the access to the triple-A developers, Macedo said.

“We want to own this concept of onwership gaming, where the player has their on-chain identity, their assets, and their data,” Macedo said. “Now we’re starting to talk to triple-A studios and larger publishers and larger studios about Web3 gaming or ownership gaming or on chain gaming. They’re starting to understand what we’re talking about and the business logic of it.”

Readygg has 19 people now. It will expand the team with the new funding. The company wants to tap into markets such as Southeast Asia, where Web3 gaming is very popular.

Investor interest

Laura Inamedinova, partner at Illuminati Capital, called in from our interview from Eth Denver, a crypto event that drew 50,000 people to the city. Dubai-based Illuminati Capital is one of Readygg’s investors starting just after its seed round

“When I see this, we’re in a bull market. We’re back,” she said. “We see a need for good studios to get help launching their games. This is what we really like about Readygg.”

Of course, the blockchain gaming industry has seen ups and downs. Last quarter, most investments by VCs into Web3 game companies dried up, as it did for the entire game sector. Yet Bitcoin is reaching new highs and cash-poor crypto enthusiasts are probably feeling richer again — perhaps enough to start spending in blockchain games.

“From the macro level, there are always these waves of the bull market and there is a lot of lag,” Inamedinova said. “We’re at a very early stage of this bull market. The biggest issue here is that games require such large budgets and it sometimes takes 10 years to make a game. Users want quick results. But from our investment perspective, we want to be in an industry where we can go in early. And this is an early stage for the blockchain game industry.”

Readygg’s mobile game development toolkit offers a one-stop shop for integrating all the necessary pieces of Web3 on-chain support. This includes integrated wallets, on-chain user profiles, on-chain interaction and a full dApp Store frontend stack to help easily launch successful Web3 games.

Macedo added that in the company’s first round of financing, investors were much more interested in the vision for the company. Now there is a lot more emphasis on key performance indicators (KPIs).

“We’re seeing a bigger demographic for our user base,” she said. “That is very KPI driven. If you have higher engagement or retention numbers, you have a better chance to scale. That’s the difference I am seeing. The bear market allowed us builders to build and now the bull market is allowing the energy to rise again. I feel like there is a reset happening. It’s about how the products are working.”

“Illuminati has been with us constantly and it is is great to have that support,” Macedo said.

Why Shawn Layden changed his mind

Layden said it was time to rewind the tape and go back to the different ideas behind blockchain and non-fungible tokens (NFTs). He said that the notion of whether there were more revenue streams to extract from gamers was never appealing to him. Even metaverse conversations were about “putting a layer of a new thing on top of the thing that we’ve been doing for 40 years.”

If a developer builds something for a platform, the platform takes 30% and the developer gets 70%. In the older days, the publisher did a lot of work, like pressing the CD in a factory and taking the CD in trucks to stores and putting things in GameStop. That was a lot of heavy lifting.

“But in the digital age, the playing field is a bit different,” Layden said. “That distribution doesn’t involve CDs and jewel cases and trucks anymore. It’s more about what digital store you use.”

Now there is almost no friction between the desire to buy something and the ability to buy it, removing the middleman along the way. It’s about reducing the number of parties eating at the trough, taking money from the developer.

Along the way, Layden said, “We’re creating a world where players can not only just play, they can be part of that. I hate to use ecosystem as it’s so overused. But they can be a part of that marketplace.”

Used games all over again?

That part reminds him of the sales of used games, which the console makers didn’t like and eliminated with the transitions to digital games. Gamers can trade their games or the items they buy. he said that the ownership tracing possible with the immutable ledger of the blockchain, which can track transactions across platforms and geographies — that’s not a walled garden, he said.

“It’s the latticework that goes from walled garden to walled garden, and tries to knit it all together again,” Layden said. “If it turns out to be something super clunky, then it won’t be successful. It’s about removing friction. How do we make transactions occur? If it requires 17 steps, it’s unlikely to happen.”

Layden said he was a skeptic as he saw in the past few decades the “fintech apparatus” would get set up to “allow value extraction without creating any sort of additive value.”

He is excited about Readygg providing value through rewards and item sales and ownership that can change hands from player to player.

“Go back 10 or 15 years and used games were such a hot button item. In America, it was pretty much a lost cause because if we can sell a used book or used car or used album, why can’t you sell a used game?” he said. “With digital media, every copy is identical. There is no wear and tear. Blockchain has its own challenges. I think scalability is the biggest one. It’s so precise to be inefficient. Do we really have to check millions of different ledgers to see if this transaction can occur or not? We have to find a way to streamline some of that.”

But if we can cobble together a system that enables the transactions to happen easily, people will resell their games or their items. And every time the item gets resold, the publisher or creator can get a percentage of the sale, which takes the edge off, Layden said. The blockchain also might be a way for developers to escape the fees of platform owners, especially in an age where they aren’t providing as much service as they once did.

“Everything changes, right? There was a time 100 years ago or maybe a little bit more than that where to go transcontinental you had to talk to the Union Pacific Railroad to make it happen. You had to take the rails….The railroads had a monopoly on getting you from east to west. And then they didn’t. And then there were cars. And there were airplanes, there were all sorts of different things.”

The startups take the risks

What does it take to get rid of that kind of infrastructure and get rid of the gatekeepers? The established players won’t do it, Layden said.

“That’s why we love startups. That’s why we love small, innovative tech companies who can say we can chuck that and we can solve that problem differently,” he said.

Meanwhile, the core of the game industry has stalled, with console and PC game sales slowing. Mobile games aren’t what they used to be either. Phil Spencer, head of gaming at Microsoft, noted how gaming didn’t grow and that there are consequences to that, like the mass layoffs we’ve seen. Companies are making moves to expand their market reach, with Xbox taking former exclusives to other platforms and other game companies looking at blockchain.

“You have to improve your odds by cracking the funnel open,” Layden said, like Sony launching Helldivers 2 on both PC and PlayStation at the same time.

Layden said that by embracing blockchain gaming, he isn’t stepping away from fundamentals.

“If it’s not fun, I don’t even care,” he said. “In the beginning is the game. And if the game is no good, I don’t care what NFT thing you’re running against it or what kind of crypto application you have. Or if it sits on the goddamn blockchain or the block lattice or the whatever they call it. If the game is not compelling, then I don’t care. So I like what the Readygg guys are doing because we’re talking not how do we force feed this new ‘Web3 mechanism’ into the gaming world? It’s how can these abilities augment your game experience. Let’s have that conversation.”

Layden said that big investments in Web3 games have been happening for years and now some of those products will come to the market, testing whether gamers want those games or not.