Nicolas Pouard (Ubisoft): "We're exploring in real-life conditions".
Subscribe to our smart subscription to read this report in full
The director of Ubisoft's innovation laboratory looks back at the gaming giant's Web3 strategy.
What is Ubisoft's experience of Web3?
We began by looking at infrastructures by operating numerous nodes on blockchains. This ranged from so-called 'layer 1' solutions like Tezos or Chronos, to Aleph or Ultra, which specialises in gaming. For us, this was an excellent way of exploring partnerships. At the end of 2021, we launched Quartz, our NFT distribution platform. This was a major technical test that gave us a real-life opportunity to do free NFT drops. Finally, our start-up programme has been a success because we've incubated a number of great companies in their early stages, such as Sorare and Oxya Origin more recently. Ubisoft has also invested in a number of Web3 projects.
What interests Ubisoft most?
We are innovators and we explore all new technologies as they come along. The difference with many of them is that Web3 involves launching projects on the market, otherwise you miss out on the community aspect. So it's an exploration... under real conditions! Secondly, we share the values of decentralisation and better redistribution of the value generated by a game. That's what we tried to convey when we launched our Quartz platform: players can contribute to adding value and it's only normal that they should receive a portion of the value generated.
What are your next big projects?
We'll soon be releasing our first game using Web3 technology, called "Champion Tactics", a tactical RPG. It has been developed on the Oasys blockchain, on which we have been operating a node since 2022.
What have your investments in Web3 gaming start-ups brought you?
It was important to get closer to the Web3 pure players. To understand the motivation of the entrepreneurs, the way they approach subjects, etc. But we didn't invest haphazardly, we focused on projects where we were confident of success. These included Horizon Blockchain Games and its Sequence development platform. They were of strategic interest to us because their wallet is really dedicated to gaming. Secondly, we really like the approach of Cross The Ages. Even before talking about Web3, they have a high-quality game.
Cross The Ages is getting a lot of buzz, what accounts for its popularity?
I think they've been better than a lot of others because they deliver what they promise. There are no announcements that aren't followed by the facts. Many Web3 projects promise a lot, like Star Atlas for example, but struggle to deliver.
What explains the inability of some projects?
It's quite logical when you realise that crypto and gaming operate on very different cycles. Crypto's is frantic in terms of technological evolution. It is also totally erratic financially. Gaming, on the other hand, follows much slower cycles. Making a good game takes time. It has to be tested, modified and so on. It requires a huge number of different skills. To take the example of Star Atlas, a game like that takes at least four years to develop. The advantage of Cross The Ages is that they arrived with a working game and didn't try to pre-finance themselves by selling NFTs.
Cross The Ages also sells NFTs, how is that different from the others?
They did sell NFTs, but it didn't arrive at the same stage of development. When Cross The Ages offered them, the game was already there. The proceeds were used to improve it and take it to an even more successful version, but there was already a lot of concrete work before that. Who is doing this in Web3? Not many people... A lot of projects rely on the community to fund them without having the outline of a game.
Where do you place the cursor between the game experience and innovation?
From the start we've said that we need real games first. It is only in a second stage that Web3 will be able to provide interesting functionalities. Nevertheless, it's crucial that Web3 start-ups continue to explore the possibilities offered by on-chain gaming. It's very cutting edge and won't interest many people, but there are avenues to be explored in decentralised gaming. In that sense, the Autonomous Worlds projects are really exciting.
What's stopping us from having games that are truly decentralised in their operation?
Technology now makes it possible to develop more solid on-chain projects, but we're still a long way from the standards of traditional games.
When will we be able to see Web3 in major licences?
Not for another five years I think. On the other hand, we should probably see the emergence of some great new licences from the Web3 world sooner. That's all I wish for very ambitious games like Shrapnel or Star Atlas. Some very good independent games have come out in recent years, so this shows that it's possible.
What are the difficulties faced by the traditional gaming giants?
First of all, there's a problem of access to the crypto world, because before you can buy the NFT of a game you need to have a wallet and for it to be loaded with cryptos. Imagine the process for a user who has to create an account on a crypto exchange, buy the necessary amount, before they can actually play. It's not at all satisfying in terms of the experience. And when you see what happened around the collapse of the FTX exchange platform, it shows that this is not a world for gamers. Even if some people are interested in cryptos, we can't say that they're the majority. And as Ubisoft, we have to provide a very secure environment for our players. But things are moving: I think the "direct to NFT" or "NFT checkout" concepts (which allow you to acquire NFTs with a simple bank card) like we're now seeing on Sorare, are a great step forward.
Account abstraction also seems to be one of the keys...
This is evolving quite quickly at the moment and that's a great thing. With account abstraction, wallets can be 'hidden' behind regular user accounts. So players don't even need to know when they start a game. We can imagine free-to-play models where NFTs are introduced into the game at a later date. That's what Mythical Games is offering with NFL Rivals. There's a classic game experience and the user is guided through it progressively. At no point are you told that blockchain is a great technology that will revolutionise everything. We simply point out that there is the possibility of reselling your gaming assets and we simply explain how to do it. That changes everything!
Isn't the solution for blockchain to be democratised in gaming ultimately to talk about it as little as possible?
I think the more we disassociate ourselves from crypto and the market, the more positive it will be for gaming. A gaming asset cannot respond to the same logic as an NFT from the Bored Ape collection. The sword I use in a game can't be worth $100,000 one day, a million the next and $10,000 the day after that. It wouldn't be tenable for players... Of course there will always be a small link with crypto because everything is built on the same infrastructures, but the economic models and the value offered are very different. Crypto is there to take on the world of finance, whereas in gaming Web3 just wants to offer players better gaming experiences.
Just so, at the launch of the Quartz platform some of your community criticised you for wanting to financialise gaming. How do you view this episode?
We did hear this fear, even if it wasn't entirely well-founded because our NFTs for Ghost Recon were free. All these criticisms were levelled at Web3 gaming in general and we perhaps served as a symbol because we were the biggest player. Everything we build now takes into account this fear of seeing games that would only appeal to an elite or adopt mechanisms based solely on money and not the pleasure of playing.
But there is necessarily a form of financialisation if you can resell your gaming assets...
I think you have to distinguish financialisation from speculation. People like Yat Siu of Animoca Brands believe that financialisation arrived long before with free-to-pay models and in-game purchases, which only benefit game developers. But with Web3, we can ensure a better redistribution of value, and I think that's positive for gamers. Today the models are not yet totally clear, but there will be solutions to prevent excessive speculation.
The big players like Ubisoft cannot undertake without clarification of the regulations. Where do you stand on the JONUM regime?
The cursor is very badly placed and could destroy French Web3 gaming. It's a regulation built around gambling to prevent certain players from using Web3 for that purpose. It is not at all suited to players like Ubisoft, or even to players like the Web3 'pure players'. Protecting users is obviously laudable, but it prevents us from developing games the way we'd like to.