One in three people in the world are gamers but only a fraction of them are in Web 3.0 gaming. What will it take to bring them into blockchain gaming? And what’s missing from the current spectrum of blockchain games? Singapore-based gaming startup Ethla's CEO Wui Ngiap Foo talks about the gaps & opportunities they are spotting in gaming. And how they are looking to onboard the next billion users into crypto.
ANGIE LAU: Did you know that one in three people in the world are gamers and the gaming industry is set to hit $200 billion in revenue by 2024. And yet only a fraction of these gamers are in Web 3.0 gaming. So where are they and when are they coming?
Welcome to Word on the Block, the series that takes a deeper dive into blockchain and all the emerging technologies that shape our world at the intersection of business, politics and economy. It's what we cover right here on Forkast.News. I'm Editor-in-Chief Angie Lau.Well, today we are in conversation with Wui Ngiap Foo, he is CEO and co-founder of the gaming venture Ethlas, which just got its start a few months ago.
It is great to see you. It's a really interesting time to sit down with you. You are a former head of technology for a dec akorn, as they say in the biz for Grab here in Singapore. And now you're doing something very different.
Wui Ngiap Foo: A little bit very different. A little bit.
Angie Lau: Little different still in technology, but certainly in the future. Tell us what you're doing.
Wui Ngiap Foo: Thank you, Angie, for the introductions. What we're doing is we're trying to build a layer zero for games in the future, right. And and and I say future because games have existed for decades, right. And there are many, many very popular and very great studios. The difference, though, is they have never been able to crack two things. The first is how do you marry the financial aspects into the economy?
Most of the games are standalone games. The economy is contained when you earn something in game, it's not liquid, it's not cash. It's just tokens like virtual things and and DeFi or crypto, when it meets games, it suddenly unlocks this capability. And I'll talk a little bit more about it as we go through the interview.
The second thing is interoperability. And this is something that I'm particularly passionate about. So as a gamer, like let's say you invest four years of your life in a game, let's call it Clash of Clans, right? And you get really good at it. And one day you decide, hey, look, you know, I kind of like to play Candy Crush these days, right? What happens to everything in there? You lose everything, right? You start from scratch. And that's because assets are not interoperable.
And this is one of the biggest, biggest pet peeve of any gamers out there. I just go, what if levels experience items, rare things that I own in one game be transferred. And that is why I think that the future of gaming is actually really, really bright and that the concept of blockchain meets games meets finance. When you mash that together, it could be the start of a new digital economy.
Angie Lau: I mean, we call this space GameFi and it is getting to be a very crowded space. What makes you different? What's the thesis that differentiates what you're doing at Ethlas versus kind of the desimated environment that you see in Axie Infinity and others?
Wui Ngiap Foo: Right. So it's two things in my mind, if you draw an X and Y axis, the first one is whether you're building a single title game or you're building a platform. A single title game would be Axie Infinity. A platform would be something closer to a Roblox or a steam, right? And we are closer to the platform angle, and a lot of that builds on the marketplace builder experience that myself and my co-founders have had through the years. We came from large consumer techs. We know how to build platforms, we know how to build marketplaces.
The second axis is, is it free-to-play or is it pay-to-play? Right. And it sounds trivial, but I want to bring us back to the history of games. All of you remember how games or even just movies started. right, it was always paywall at the start.
You want to watch a movie, right? Are you want to watch Matrix say, ok go rent it off black blockbuster, right? Or if you want to play a game, they'll say go buy the CDs, right? I remember when I was young you wanted to play a game called Starcraft, which was the hottest game. They'd be like, no, nobody can play unless you go pay 40 bucks to buy the CD's, right? And then games discovered this very simple yet powerful tool. They said, what if games were free?
But eventually, if they like what they see, if they're having fun, you you give them in-game purchases, right? You tell your loyal supporters that if they like what they're playing, if they want to support the developers, if they want to solve, get you know, cute skins and digital goods, go pay inside the game. But we will not block you having your first experience at the get go.
So this transition from pay-to-play to free-to-play was what really unlocked the gaming market to the size it is today. There's like two and a half billion gamers today and it's because most people actually don't want to pay upfront fees. They just go; let me experience what you're talking about, let me have fun, then let's talk about the money. And people do like that concept, right.
The problem with the current generation of GameFi is that they are trying to do what games in a Web 2.0 have learned one skill, which is they try to make you spend before you play. So if you think about titles like Star Atlas or Axie Infinity or Pegasi, what is the first prerequisite.
Angie Lau: You have to buy, you have to pay-to pay, play-to-earn.
Wui Ngiap Foo: Exactly, correct. You have to buy something. Exactly, and of course, they would say – oh, this is because the economics have to make sense, right. That if you want to earn, you got to pay money first.
Angie Lau: Apparently, that has been the criticism of projects like Axie Infinity, you know, this kind of allegation of a Ponzi scheme structure where you have to pay-in before you know, the other players who have been there originally get the earn out. That structure is changing, obviously, it has to. But that's the criticism.
Wui Ngiap Foo: Of it is it is also you create this walled garden where you don't attract the masses, right. So if you took every single GameFi out there and you summed up its users, it is about 40 million people, right? Not a small amount, but not great. But if you think about how many gamers are there in the the Web 2.0 world, the real world, it's two and a half billion. So it's always something that, you know, I'd like to talk to my team, to our strategists about, which is I call this the mystery of the missing gamers. Where is the other 2.4 billion people?
Angie Lau: The migration is not happening.
Wui Ngiap Foo: Correct.
Angie Lau: But one of the big things that we're also observing is that – it's almost like the OGs and the Web 2.0 space, they want to preserve their status there. They don't want to get into the NFTs, in fact, that they have pushed back against a lot of these gaming companies that have said, let's do an NFT, let's launch this, let's launch that, and the backlash from their own gamers were phenomenal.
Wui Ngiap Foo: Indeed..indeed. And I would say this, at the end of the day consumer companies follow what their consumers want. right. At some point, if enough people who play World of Warcraft tell Blizzard they want an NFT version, Blizzard will give them an NFT version. The reason why there is so much backlash is because the consumers don't want to play Axie, right? The problem is if you took the money away from GameFi today, would people still play it? And I think that is the uncomfortable elephant in the room question. The answer is no people. If there was no money to be earned, people will not play the current breed of games on GameFi and and it's no criticism to them. I think a lot them are my peers, are good friends. I actually deeply respect what they've built.
Angie Lau: So what you're saying is the value proposition is the money, not necessarily the funding.
Wui Ngiap Foo: It is not the fun. They have not cracked the fun. And in my mind, fun is 4 things right. Fun is achieving. You're able to achieve complex puzzles, get badges. It is socializing that people have fun, engaging and building communities. It is killing, PvP, feeling that you're better than than somebody else and that I think a lot of the Web 3.0 do quite well. And the last bit is exploring. And most of the case games in the game space have not cracked this code.
Games in the Web 2.0 space have. Think about Legends of Zelda: Breath of the Wild, right. It's an immersive open space. You can talk to people, you can trade, there's an intricate economy. People go there because they are having fun, not because they are paid to to play. Right. And so I think that earning as a concept for gamers, for the digital economy is a good one. It's a powerful one, but it cannot be the be all and end all.
You know, I know a guy who is on level 28,000 on Candy Crush. I don't know how many years he spent on it, but let's just say no one.
Angie Lau: I didn’t even know there was a level 28,000.
Wui Ngiap Foo: There was… there was. And let's just say that the reason he's spending all that time is not because Candy Crush is paying him $0.20 a day. I think that we have to go back to basics for games, games have to be primarily fun, then you earn. When you flip that, then what? What are attracting is you're attracting speculators and they are not gamers by nature.
Angie Lau: What do you want to call it Atlas? And why did you call it Ethlas actually?
Wui Ngiap Foo: Great question. My co-founder, who is also my brother, named it actually. So Ethlas is actually a merge of 2 words. Ethereum, because we are built on the Ethereum protocol, actually a derivative of the Ethereum protocol, but still EVM compatible and Ethlas meetings of to a space, a world and we merged that we just wanted to build a world of worlds, right? So, that's kind of where the name derived.
Angie Lau: From a world of worlds. And what does your mother think that both of you are neither doctors or lawyers and both of you are in gaming? I mean, I’m teasing you a little bit but you know, it's the asian parents, you know.
Wui Ngiap Foo: It is my mom did call my sister up when she heard that I was quitting my job. And she's like, I don't know what he's doing, but are you sure.
Angie Lau: She didn't call you?
Wui Ngiap Foo: She did call it because she's always thought full of my heart. You know, funny story, when I was in college, there was this point where I almost quit college. I was quite obsessed with this game called DOTA 2. It's very big in the region and me and my crew, it's a 5v5 right. And me and my crew were actually really good at it, right, and we we always of go, what if we went pro? Right. The world's our oyster.
And so we actually talked ourselves into almost quitting school. We were like, you know what? We're going to join this like Singapore qualification for the global tournaments. We're going to kill it and we're just going to quit school because like, who wants to go to school, right? You know, the future is in gaming. And and let's just say that I went to that tournament and we got our ass handed to us right multiple times, in fact, they were just people with just better instincts, better reaction times, younger, more dedicated, and we came back very dejected. We were just like — oh, man. And so we continue our studies and here I am in a technology world. But, you know, all things considered probably would have been it was a better outcome for me than the alternative.
So that's kind of a little story about myself, but I've always sort of gone built something and do great things, right? And for me, what drives me is creating an impact, creating a lasting legacy. The same reason I enjoy Google, the same reason I joined Grab. And so when when I thought about what I wanted to do next, it was two things, right? Number one, I spent, you know, I spent seven years at grab. It was a great run, a great chapter. The company IPO'd and I felt like I needed to go back to my roots and some of my roots was even this pre-grab. I always told myself I'm going to build a startup one day, right? Wasn't sure what, but I'm going to do something right. The second is a little bit a little bit more personal, a good friend of mine who worked with me for many years, he passed away from cancer. And it really sort of hit me from a sort of a the the how just how mortal we all are. Right. And I just go, I'm not getting any younger. It's been a good run. If you're going to do anything, you should do it now or you should do it soon. Right. And incidentally, GameFi at that time really blew up and and we didn't actually go in wanting to do games.
Yeah, here's the funny story. Initially, Ethlas was actually supposed to be a DeFi platform. We were actually going to do loans like loans for like the underprivileged students. And we had we had a pool set up. We had all the yield farming mechanics set up. And we realized that it wasn't – number one, sustainable unit economics and number two – we weren't really feeling it right. And so what happened was, you know, in our free time while we were jamming about how could we make that idea better, my brother actually self created a little game on a website and it was just for us to sort of just take a break every time we were working hard on something and suddenly we realized that people were playing that game, that we didn't know who they were.
It was just a public website that people found it, right. And one day the game crashed because it was never our bread and butter and people pinged us and they were like – hey, look, it's a game coming back up, right? And these were like hyper casual games. In fact, if you go to Ethlas, that game still exists is a game called 2048. It's a little game where you just get the blocks to merge together. And at that point, like, my brother was just like, wait a minute. Like if yeah, exactly. If there are people pinging you about product that is pre-launch and there's demand for it, maybe there's something right.
And as we dug into it, we realized that there was this whole GameFi scene going on, not exactly what we were trying to build because we took a very big bet on things like platform. On things like hyper casual games, on things like the next billion users, but like it was also in the same stuff. If you squint loosely in the same category of going, take games, take blockchain and mash it up. Right. And so for us, what Ethlas became was it became we were convinced that there were there was this one single and simple mission statement we wanted to achieve, which is we wanted to use games to onboard the next billion users into crypto. Right. And that's because we just felt that there was just so few legitimate gamers on crypto and there were just so few people. Full stop. Right. Just to quote a stat, all of blockchain combined has 340 million people. Right? And and that's less than 1% of the global human population. And as somebody who has scaled apps to hundreds of millions and billions of people, I understood why it's important for disruptive technologies to have mass-market adoption because technology ring-fence or silo to only a small amount of people, it's not disruptive, right? Disruption. Think about the Internet, think about electricity, think about railroads. They only became valuable when the mass market could consume them in bite-sized ways.
Angie Lau: So what's interesting is the transfer of knowledge that you have in the southeast market, you know, what people actually want when they want to experience something that they want to get on their phone or their, you know, or online. How do you transfer the knowledge that you've had? Is former head of technology at grab to what you're doing today?
Wui Ngiap Foo: Great question, great question. So there are some key lessons or key big bets we're taking in how we are structuring Ethlas that is very deviant from how GameFi think about things today, right. So for example, you know, our main population on ethnicity is Brazil, followed by India, followed by the Philippines. And they all share this sort of mass market, emerging economy and huge potential kind of demographics. And so the first thing we did for us is we say we're not going to launch an app which, you know, would shock many people. We are 100% browser-based true technology. And you know, just familiarity with the chromium stack. We said if you're going to get a billion people, they don't want to download something, right? They kind of want to be able to play, they want to immerse. And maybe eventually they want an app, but not in their first entry point. Right. So that's the first thing. The second thing we did was we said. Every good thing that has happened to humanity has to have some free element, right? If you want mass market, you have to render a service our value add, but not charge for it.
And so we set ourselves up to be free-to-play. And this was back in December, right where every game was going – I will sell you NFT before you can enter my ecosystem. Right. And the third thing that we learned from just experiences in Grab, is how do you think about things that you and I may not care about but the average mass market consumer may. Right. So for example, not everyone has an iPhone, right? You know, if you are in Brazil and you're catering to the mass market, Android phones are the dominant phone. Right. Performance is a thing, storage space is a thing. Right. And so how we optimize our app, how we think about latencies, even, what kind of games, right?
Instead of building a triple A title where you make someone sit in front of a desktop and grind for 4 hours. We said, we are going to augment your human experience. We're going to fill up the moments in between. So imagine if you are a delivery driver waiting for an order at Ding Tai Fung, it's a two hour queue. You would maybe be browsing TicTok, now you can just play Ethlas and maybe earn a dollar or two, right? Let's say you're a student waiting for your bus, right, fill up the moments in between, let's say you are a housewife. Just going, look, I could be playing Candy Crush or I could be playing a version of Candy Crush where it's fun, it's social, but it exposes me to crypto and tokens. And I learned a little bit about that and that's kind of like our value prop, right? We deeply understand the fact that people don't want to change their lives 180 before they embrace a piece of technology. They want a technology to blend into their lives. They see the value of it. Then they say, okay, you know, give me more of that. What more do I need to do? Do I need to create a wallet? Do I need to figure out how to go to an exchange to change the tokens? But don't front load that right. And so a lot of like the thesis and the mental models that we put into Ethlas is fundamentally driven by this idea that we understand what a billion people would like.
Angie Lau: Right. So for those who are watching right now, we're in Singapore. What is so different from Southeast Asia and the and understanding the market that is going to potentially set this region apart, especially for startups who understand this space versus maybe a Europe or a US.
Wui Ngiap Foo: I think it's the fact that we're just close to a lot of high potential markets. Right. If you look at a stat I like to quote a lot. If you look at the top ten countries with metamask adoption, southeast Asia is four of the top ten, and it's mind blowing. Because it's just like you would think like it would be America and Canada and France. But it's not right, it's like Vietnam and Philippines and Indonesia. And I think it's just because when societies are growing and they are sort of forming. Forming their path to what it means to be a prosperous community. They just more receptive towards adopting new technologies. And so a lot of what we do in the region is just in inherently scalable outside.
Give you an example, we targeted the Filipino community because we knew the Filipino community. They are also very big in the GameFi scene. And we say let's build communities for them, let's build games that they like and all - and this was three months back. And all of a sudden we realized that people in Brazil were playing our games, even though they don't speak English and they were just going, it's not that I can understand exactly what is happening, but the lowest common denominator that you've built into the games, right? Ease of use, just intuition. The kind of games that appeal to Filipino communities that is just transferable to like the mass market in Brazil. And so we built up a huge part of this community, even though I have no idea how to speak Portuguese. But we are super proud of our Brazilian community. But it was that organic, right? And so we were just like when you build great products, you don't even have to speak the language, everybody is speaking the same language of ease of use, of crypto.
Angie Lau: It's the Tower of Babel moment for GameFi.
Wui Ngiap Foo: It is a little bit of that. It is a.
Angie Lau: Little bit of that first language that transcends language. Institutional are coming into this space. There are some big-time investors who believe in Ethlas, but they're also making a bet on this region and here in Asia. Why do you think that is?
Wui Ngiap Foo: I think it's a couple of reasons, right. Number one is the tech scene. The technology scene in Southeast Asia, I feel, is really frothy. There's far more talent in the region than there was when I started grab seven years ago. There are far more startups that's starting, and more importantly, people are recognizing that. In the past, if you had a very brilliant Singaporean data scientist, are a very brilliant Vietnamese engineer. They would just go to the valley, but now they're going, Hey, you know what? I like my region. My family's here, and maybe I want to do a start up here or join a startup here. Right. And I think all of that coalesce into this perfect moment of going. This is going to be like the Silicon Valley of the eighties, but for Southeast Asia and Asia. Right. And I think Beijing got that moment with with with the rise of the BATs. Right. And obviously, the Valley has just been well known for startups. But I think innovation is hitting and capital is hitting and talent is hitting. Right. And that's that's what's happening.
Angie Lau: What are you hearing from your investors and sequoias in who else are who are circling this space that you've been tapped with capital and what are they exploring?
Wui Ngiap Foo: So our lead investors involve include Sequoia, include Dragonfly Capital, include Makers Fund. They are very trusted partners. We are very blessed to have them on our table. On top of that, there are actually quite a lot of players who are interested in the space, right? We are speaking to everything from sovereign funds to Web 3.0 VCs to gaming funds to even in our conversations with a certain I cannot disclose, but like certain government, government-linked companies who go – hey, look we like how you guys take an active role in promoting Singapore as a HQ, right? We like you, take an active role of saying you don't have to go to the valley to build a respectable startup. What can we do to help? Right? Is it capital? Is it strategic collapse? Is it a partnership? And so I actually think that Web 3.0 for the first time is not Valley-centric, right? Not like there were many waves of technology disruption where it was always like, you know, come to where the action is. Right. But if you look at Web 3, where is action? It's in Lisbon, Portugal it's in Dubai, it's in Singapore and some of it's in India and China. And I think that the decentralization nature of web3 actually really spill over into the real world. Right? People are just going, we can build companies anywhere and they do. Right? And I think that's pretty cool.
Angie Lau: Not only is it pretty cool, it really represents the next phase of growth. There is, as you said, this brilliant moment that coalesces so many things. You have emerging markets, you have emerging developing nations that are seeing technology as a leapfrog moment. And then on the other end of it, you have a lot of capital looking for growth. And if you're going to achieve a billion people and find those missing gamers from two and a half billion to 40 million, there's a lot of upsides here.
Wui Ngiap Foo: There is.
Angie Lau: There is. It's this moment. And we thank you so much for sharing your story. I think your mother can be proud of you both. Even if you're not a doctor or a lawyer.
Wui Ngiap Foo: Thank you. Thank you. She has a lot of concentration risk in the family right now. But, you know, as the DNC, we are all going to make it.
Angie Lau: We're all going to make it. And thanks for making it. And thank you, everyone, for making it to this latest episode of Word on the Block. I’m Angeie Lau, Editor-in-Chief of Forkast. Until the next time.