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Ryan Wyatt first heard about NFTs when he noticed an influx of venture capital flooding into the traditional gaming space from firms and hedge funds last year. Sequoia, Tiger Global and Andreesen Horowitz all invested millions of dollars in the gaming space in 2021 alone.
Wyatt was YouTube’s head of gaming for upwards of seven years and said he had never seen VC interest of this caliber in the industry. NFTs (non-fungible tokens) then quickly caught his eye for their “long-term” use cases in gaming, particularly as a way to prove “verifiable ownership.”
Last month, Wyatt joined Polygon Studios as the blockchain startup’s newest CEO. Polygon is a “protocol and a framework for building and connecting Ethereum-compatible blockchain networks,” according to its website. The company has had big-name partnerships with NFT artist Beeple, Dolce & Gabbana, DraftKings and OpenSea.
Blockworks’ Morgan Chittum spoke with Wyatt about emerging NFT use cases, the value of blockchain integration in gaming and what makes a play-to-earn game financially sustainable.
Chittum: How do you think play-to-earn projects and gaming companies can ensure players stay interested without the money taking over as the players’ sole interest?
Wyatt: Blockchain gaming is in its early stages, and there is natural volatility that comes with that. When you take an open and free market like this, it comes with a lot of good and bad, but look at the alternative right now. The alternative is cash in and cash never out.
I think things like having governance tokens and allowing communities to really weigh in on developer decisions, macro level decisions and having users feel like they’re a part of things can help. Over time, this could help that user base build up and provide more stability.
Chittum: What other use cases for NFTs excite you the most right now? What emerging trends are you noticing in the space?
Wyatt: This is going to be a big year for music NFTs. You have the ability to have an NFT and put utility behind it now, whether it’s discounts on tickets, meet and greets or whatever the case may be, and that artist finally has the autonomy to do so. NFTs create less of a reliance on big music studios and publishers.
I think the music industry is fundamentally flawed and at a disadvantage to the artist. So much of the spirit of decentralization and Web3 is giving power to users and creators. This is the opposite of a lot of the mantras of Web2.
Chittum: Farmville creatorZynga said that they will launch a blockchain-based game this year but plan on making a separate studio to prevent any confusion with players. Ubisoft, additionally, had reports of employees resigning over the possibility of having in-game NFTs. Where do you think this potential tension and desire for separation between the two comes from?
Wyatt: There’s some necessary context of why they are separating church and state inside of these companies. Objectively, there is a subsection of the gaming market that wants blockchain games, and there’s a section that’s trying to preserve what they love. I think all of that is okay.
I think the big mistake around a lot of the polarizing conversation I’m seeing is people are thinking in absolute terms of what blockchain games are.
There’s a lot of things that we need to do as an industry in Web3, particularly with carbon footprints and with making sure we’re addressing scams and underlying issues that are happening in the NFT market. However, what I think we’ll see over time is all of these studios will aspire to launch a blockchain game. It will most likely be new intellectual property or a new franchise entirely. Studios will eventually be able to serve the total addressable market of gamers.
Chittum: When was the first time you heard the word NFT? Where were you? What was going through your head?
Wyatt: It was about early last year. I started to see a lot of developers fundraising from big venture capitalists. For the first time really in the history of the gaming industry, you saw a lot of capital for video games coming from big venture capital firms. There are a couple edge cases for this, but the influx of capital was pretty significant. So much of the gaming industry, in the past, largely came from other game publishers funding those studios.
At the same time, Covid also showed how much people were spending in digital worlds. Call it the metaverse, video games or digital worlds. People were spending more time in these immersive digital environments. And so then, I started to really think about what are the implications of that? What are the pros and cons? One thing that struck a really big interest of mine was ownership. Humans love peacocking, and they take a lot of pride in showing off what they own. You already kind of see this in video games with skins, but largely, players don’t really own them. The arrangements that users have with game developers is a licensing, and in most cases, that item is illiquid. I became pretty enamored with this idea of digital ownership after that.
Chittum: What can we expect to see from Polygon in the upcoming year?
Wyatt: You’re going to start seeing us bring in big talent that comes from traditional games and big tech. I can tell you that I won’t be the last one that comes over. And that I think that encompasses how many individuals that are in Web2 are excited about what the future of Web3 can be.
You’re also going to start to see some of our tech rollout that we acquired in the past year, as well, so more developer tools to build off of. You’re going to see more partnerships that are going to continue to emerge from Polygon.
This interview has been edited for length and clarity.