Derek Lau, VP of Immutable Game Studio, on The Future of Web3 Gaming

In an exclusive interview with cryptonews.com, Derek Lau, VP of Immutable Games Studio, talks about staking rewards for Guild of Guardians, how Immutable Games Studio will define the next native audience of blockchain games, and the future of web3 gaming.

About Derek Lau

Derek Lau is the VP of Immutable Games Studio and brings a unique blend of experience in start-ups and strategy into the world of web3 and blockchain gaming. Derek had successfully led GoG from the ground up into a community of 400k gamers, $20m in revenue through NFT sales, and a token valued at $300m+. He is an ex-management consultant from Oliver Wyman, where he was responsible for developing and implementing strategy projects for the C-suite of Australia’s biggest companies. He was also the founder of Parkways, a peer-to-peer parking start-up where he developed a strong entrepreneurial spirit and hustle. When he isn’t working, he’s gaming or refreshing Crypto Twitter.

Derek Lau gave a wide-ranging exclusive interview which you can see below, and we are happy for you to use it for publication provided there is a credit to www.cryptonews.com. 

Highlights Of The Interview

• An overview of Guild Of Guardians
• The recent implementation of staking rewards for Guild of Guardians
• Derek’s thoughts on the future of Web3 gaming
• How Immutable Gaming Studios will help to define the next native audience of blockchain games
• Inking the biggest esports collab so far in 2023, signing up 8 eSports teams

Full Transcript Of The Interview

Matt Zahab 
Ladies and gentlemen, welcome back to the Cryptonews Podcast. We are buzzing as always and, today my guest is coming in hot sixteen hours ahead of me. I am recording at 5pm. He is buzzing at 9am in beautiful Sydney, Australia. Today we have Derek Lau, the VP of Immutable Game Studio. Derek brings a unique blend of experience in startups and strategy into the world of Web3 and Blockchain gaming. He has successfully led GOG from the ground up to a community of 400,000 Gamers absolute craziness and 20 million revenue through NFT sales and a token valued at 300,000,000 X management consultant from Oliver Wyman, where he was responsible for developing and implementing strategy projects for the C-suite of Australia’s biggest companies. He was also the founder of Parkways, a peer-to-peer parking startup where he developed strong entrepreneurial spirit and hustle. And when he’s not working, he’s like the rest of us gaming or refreshing Crypto Twitter. Derek pumped to have you on man, how you doing? 

Derek Lau 
Yes. Thank you for the intro. Excited to be here, Matt. 

Matt Zahab 
Pumped to have you on man. Read that intro. So curious about your parking startup. That’s so cool. I want to hear more about it. Tell me about it. 

Derek Lau 
Yeah, so kind of problem we’re trying to solve was that, there are certain places in the city where it’s super hard to find parking, it’s super crowded. But at the same time, there were all these houses and apartments with empty driveways, and empty parking spots. And so we thought, Hey, how can we connect the two together. So we kind of various scrappily just build a startup to connect the two. And there was a lot of fun loads a lot, you know, made some money, but ultimately the market is very small, you can imagine the population of Australia is not very big. And in some ways the parking mocking the trade is also dominated by two main companies. So it’s quite hard to kind of break that and do a lot of partnerships there. Which is actually the way that these kinds of startups get successful in other countries through partnerships. So it was a good experience and definitely learnt a lot there about just building stuff and getting scrappy. 

Matt Zahab 
That is totally a worldwide use case, though. Like I even think of one friend in particular, shout out my buddy Max, who lived in the beaches, lives in the beaches in Toronto, and every year, twice a year, there’s a firework show, and people would come down five hours before and all street parking would be filled, he’d stand outside his house with a sign being like 50 bucks to park. And when someone’s desperate, they’re just going to do that the park has, like it’s just it’s such a no brainer for every big event. 

Derek Lau 
Exactly. Yeah, if only there was an app for that. 

Matt Zahab 
Exactly. I love that. Crazy. Now a couple big things. First and foremost, GOG Guild of Guardians, you guys just won the best Web3 mobile game of the year award and I want to see the first ever Web3 award show congrats on that huge shout out to you in the team. 

Derek Lau 
Thank you. Yeah, very glad to have kind of been recognized as one of the big mobile games in the space. And they’re very happy to kind of receive people’s support in that process. 

Matt Zahab 
We will definitely get into GOG. But before we do, some more big news that came out was the Immutable Passport. Immutable is absolutely dominating the Web3 space at the moment, you guys are building just a myriad of tech that is applicable to almost every area and really simplifying things, making use cases, infinitely easier for consumers both crypto natives and non-crypto natives to come in. And, you know dance and romance in this space. And some huge news came out about Immutable Passport. And I’d love to know more about this and what exactly it is all about. 

Derek Lau 
I mean so yeah, Immutable Passports super exciting. It’s the team’s been working very hard on it for a while. And what it is, it’s designed to be kind of a one stop shop for making it very easy for people to use crypto. Right now, the crypto is confusing. It’s very confusing for someone who doesn’t know anything to figure out what a wallet is, in credit seed phrase store it accesses signed transactions. And for people who don’t want to go through that they still want to own stuff. That’s what passwords for so it’s designed to be something that different developers can use, you know whether it’s a Guild of Guardians or another game and, to really provide a good experience for users while still being secure. And while still allowing people to have digital ownership. 

Matt Zahab 
So it really is like a passport like exactly how it sounds and says that just gives you access to everything in the most simplistic way. 

Derek Lau 
Exactly. It’s a noncustodial wallet. 

Matt Zahab 
Right. Noncustodial wallet. So it’s anyone can just come in jump in and have access to the whole sort of suite of Web3 games and other applications within the ecosystem. 

Derek Lau
Yeah. 

Matt Zahab 
That’s huge. And this must have taken tons of work boots on the ground. Long hours for this to pop off. 

Derek Lau 
Yeah, I know. The teams are working super hard on that. And they were very happy to get the news out. 

Matt Zahab 
I love that. Web3 gaming, you had an incredible thread. Now we are recording early Feb. This episode will also air early Feb. but you had an absolutely incredible thread that sort of blew up on Twitter. And it was really just a summarization of what happened in Web3 gaming in 2022. I can pull it up and read some stuff off if you’d like. But if you could summarize that’d be great. Because it was just absolutely world class. 

Derek Lau 
Oh man, a it was a long one. So feel free to dive into anything particular. But yeah, I think the thread was really summarizing what we saw in last year, right? And the some of the key things that we saw last year was kind of the funding and marketing conditions and how that impacted the space. There was we saw a lot of people enter into this space, particularly in the first half of the year, not just participants, but also developers and builders. And a lot of companies have started up and raised money and are now working very hard to build. We also saw a trends in terms of what people think a successful work program will look like. The narrative very much shifted from the idea of earning and financial access through games, to fun, right. And you could argue that it’s overcorrected. And there’s less of a focus on innovation. Yeah. And then the threat also kind of goes into some predictions for next year know what one of the predictions, I think is that there’s going to be a big increasing shift away from tokenomics in economy. So should we’ve seen so far towards communities and growth? And I think this is a gap in the market, which we’ll start seeing filled by different individuals and companies, and so on. And we could go on and talk about different topics are there as well? 

Matt Zahab 
Oh, yeah 100%. There’s too much old near tonight, one of the points I loved was the policy and regulation, part of the thread where you talked about how we will most likely see more in-app, peer-to-peer trading on Apple. And Apple obviously dominates the obstacles. They own the App Store, but they dominate apps, mobile applications, and they have the killer 30% fee. So you believer that crypto companies and Web3 games will just have to soak that 30%. And that will just sort of be at attacks, that will have to be baked into the balance sheet and baked into the tokenomics in the ecosystem just to in order to get more people to download the app. 

Derek Lau 
Yeah, effectively. I believe that right now, based off the apple guidelines, as they’ve defined it, they’re happy with NFTs, they just want to get their cut. And so there’s no reason why we can’t start introducing NFTs directly in the app, including trading, except Apple will obviously take the 30% cut. I believe some users who don’t know any better may prefer the convenience, right. But there’s always the option once people get on board and learn about kind of NFTs and digital assets, that they’ll also be able to not trade in the app and then choose to trade on the desktop or trade on the website as well and avoid the 30%. So I believe though, both options, right for people, and that’s kind of the path that Apple’s got wants to go down right now as well. Whether that’s ideal is a different question. But I think that’s the path that they seem to be going down. 

Matt Zahab 
It’s such a crazy tax and like not a lot of people know about that, like all your apps that we love and use every single day with the exception of a few like every time you make an in-app purchase your you know with your nice little double click the thumb I guess right thumb double click at the right thumb. These 30 ticks gone like it’s pretty bananas, still gotten away with this. And it’s how many years later like I know Epic Games has had a huge battle with them a bunch of massive companies. Amazon for one has the workaround for they bring you back to like Safari, so you make the purchase on Safari. But do you think this is ever gonna go or is the 30 Tic Tacs just here to stay? 

Derek Lau 
There’s a lot of pressure by everyone is not Apple, right to make it go away. And I think they will continue to say that. It’s difficult to say kind of when or at what point in their monopoly needs to raise for this to be a real issue and for regulators to step in. Even this lot of conversations. And so I think long term, it’s going to change in the short term. You know, I’m no expert, but I think it’s gonna, we should expect it to be the same for now. We shouldn’t pray that it’s going to change drastically and we shouldn’t plan for that. 

Matt Zahab 
Right? Totally makes sense. Another great point you brought up was the language right now NFTs as a acronym word, whatever you want to call it. So much Fudd so much bad blood, a lot of people lost infinitely more money than they did making money. I totally got it. Heck, even on the inside the word NFT is a little wishy washy. And on the outside, it’s a completely different story. You’re a believer that this language will change. And it will be a lot more digital collectible base, perhaps that’s the best word. Any other good words in the mix? Do you really think digital collectible can stay around like do you think we need something you know, buzzy to get this to go mainstream? 

Derek Lau 
Yeah, I don’t know for sure what word we will land on. But it’s interesting. Different surveys have been done just to see how people respond to these words, whether it’s digital asset, Digital Collectible, NFT, Blockchain token or whatever. And NFT has, by far the worst reception, even though they’re all the same thing. And so I definitely feel like for now, digital collectible seems to be on the rise and, you can see examples of this and practice such as Reddit introducing their avatars, were they had a very non NFT branding to it and, it was well received. And I’m assuming many people don’t realize that it isn’t NFT, right? Otherwise, they may be against it the term. So I think it will build stream more and more into the idea of it’s just another digital thing, right? And that becomes normalized. 

Matt Zahab 
100%. And another great point you brought up there was the interoperability aspect and, heck even in 2021 that was such a very well could have been the word of the year and 2021. Everyone was talking about interoperability and, how for the metaverse and NFTs and crypto to be fully functional. And to sort of go mainstream, you’re going to need to be able to take game character x into Metaverse y and while using token z, so on and so forth. Obviously, that’s very complex, especially when tons of different, you know, use cases and game assets are being built on different chains in different protocols. Are we anywhere close? Or is it still just really sort of can only do that if it’s in the same game studio. 

Derek Lau 
I think we’re quite far away. I think that idea comes up quite a lot just because it’s one of the first benefits that people think about when you think about NFTs. And so people think oh, you know interoperability, that’s one of the key benefits. And that’s what they work on, or that’s what they believe will take off. The main problem is around the incentives, there needs to be a lot of collaboration between different projects, different layers of the technology, in order for interoperability to actually work. And every business is different and, so the aligning doesn’t tend to use is very difficult. I think Blockchain as a tool will, can potentially be really good at aligning incentives. But for now, there’s it’s not I think happening quickly enough to for us to see interoperability concert. I think well, we’ll see there is you know, a single entity, who has their own incentives aligned, can explore size scoring interoperability, they can start adding other game characters to their own world, they can have their own ecosystem of games, which share a token or share NFTs and you can transfer characters around, I think that’s what we’ll see as the first flavor of the about interoperability within the gaming space. 

Matt Zahab 
And realistically, it’s between Immutable and Animoca, most likely, sort of to the two that could make it happen. 

Derek Lau 
It could be but there could be other studios who could be very focused on it as well, I think in a way, we’re very excited by durability, but it’s also not necessarily our top priority at the same time, right. And so there could be other studios where they make it the top priority and they just laser focus on it. I think that does happen to some extent. And we could see them kind of come out with some interesting experiments and things like that. 

Matt Zahab 
You kept bringing up incentives and you and I are definitely in the same yacht here the financial incentives was in word the thing that got people into NFTs as a whole, everyone was like all you know play-to-earn, I can play game and make money we saw with Axie it was truly transformative, I think play-to-earn is I think the term play to earn in gone, I think play to have fun and perhaps earn is here to stay. That would honestly be an absolute treat. And I think a lot of people would jump on that train and that bandwagon. But what are their incentives? Can we you know, bring to the arena besides the cliche, fun, which is the reason why you play a game right to have fun to shoot the shit with your friends to feel a part of a community to pass time, which pretty much is all under the bucket of fun and happiness. And then you have the you know, the wealth factor health, wealth and happiness you have the wealth factor, which would be making money, health, I don’t really know how you can throw health in there unless it’s something like stepping right where it’s moved to earn. But what other incentives can game developers and studios bake into their games to help more people join the parade? 

Derek Lau 
The way I think of about is to think about all the different apters in the game’s ecosystem. So you have players who play the game. And within that group you have different types of players that are motivated by different things. So I’m going for the murder of I gameplay, I really want to show off some someone other things, right. But then you also have all these groups outside of the game as well. So the developer is one group, you have third party creators, you have content creators, streamers, you know, you have these Esport organizations, for example, we have other games. And so the question, I think, is, how do you kind of align incentives by giving people these digital assets that have value or could have value and they might not, but they could, in a way so that the more value these different apters add to the game or the ecosystem, the more value they’re getting return? 

Matt Zahab 
Well said. 

Derek Lau 
And they kind of build this flywheel right and so I think there’s a lot of things you could do on the growth side with aligning incentives with different people in the community to procreate as etc. And there’s also a you know, big question of how do you properly give back to your players, especially those who aren’t actually necessary motivated just buy money for those who just engage a lot and, adding value to the game and are talking a lot in discord, etc. So I think this incentive alignment is going to be a continual challenge and balance to get right but it’s definitely very powerful when you do. 

Matt Zahab
That is like, that’s the first domino like, I feel like once the incentives are aligned, just the train will leave the station. It’s like anything else in life. Derek were gonna take quick break, give a huge shout out to our sponsor to the show PrimeXBT and when we get back, we are going to buzz on the one and only Guild of Guardians. Before then huge shout out to PrimeXBT. They’ve been friends of Cryptonews for a hot minute. We’d love them incredible people a great team, and great and amazing products. They have a robust trading system for both beginners and professional traders. It doesn’t matter if you’re a rookie or a vet, you can easily design and customize your layouts and widgets to best fit your trading style PrimeXBT also running an exclusive promotion for listeners of the pod, you get 50% of your deposit credited to your trading account. The promo code is CRYPTONEWS50. That’s CRYPTONEWS50 all one word, CRYPTONEWS50 all one word to receive 50% of your deposit credited to your trading account. And I’m back to the show with Derek. Derek Guild of Guardians you put blood sweat, tears, and some more blood sweat and tears into that game, you and the team built an incredible, Ubisoft supported by the way, mobile squad based action RPG game published by the one and only Immutable Games Studio. It’s absolutely blown up just like I said it won mobile game of the year. And you have also inked some crazy Esports collabs, which I feel like is a huge, another domino that needs to the fall in order for Web3 gaming to really hit mass adoption. I’d like to begin with the conception and started Guild of Guardians. Like how difficult is it to build a mobile game, and to build a one that is you know, profitable and where people play it, like how much goes into it behind the scenes. 

Derek Lau
So we are currently still building Guild of Guardians and, there’s a lot of work that goes into it. Everything we need to do to make a great mobile game is what we’re doing to Guild of Guardians plus more, because they’re also trying to figure out how to add Blockchain and Web3 to make the game even better for players. And so it is a very cross functional effort. I think it’s a craft art half of science. And so it takes a lot of iteration, a lot of coordination to get right. You know, it’s I mean that we see improve over time, which is very good to see as well. 

Matt Zahab 
And walk me through but you know, a couple of the numbers like you guys have hit some pretty impressive numbers. It’s not easy doing that. And also walk me through a couple of hoops that you had to jump through like battling the App Store battling Google Play. Like if someone wanted to build a game, a Web3 based mobile game like what are some of the roadblocks that you’d be like hey, just a friendly heads up this is the battle you’re gonna have to go through. 

Derek Lau 
So we currently have over a million players now who are pre-registered for the game on our mailing list and excited to play the game when the game comes out. That’s a pretty big milestone for us because we our goal is to reach millions of players. We’re not here to just build a niche game that’s played by a few people who like Web3 and Blockchain. We’re here to try to push the industry forward and do something that no one else has done before. So that’s a pretty big milestone for us and, you know one of the big challenges that we faced is trying to build a community before the game has come out, right? This is something that is more unique to Web3 as well, where you try to involve the community more and you’re more open earlier on, rather than just going live about hey, here’s a game you can all play. And so this is a challenge for us that we’ve certainly learned a lot and iterated on it over time. We’ve also done a bunch of NFT sales as well, right. And this has been super useful to help supplement the funds that we have internally in order to make sure that we can make the game as good as possible. So I think around $20 million of NFTs have been sold. We’ve also launched a token, where the price will fluctuate depend on the market conditions. And obviously the market isn’t great right now. But we’re really excited by this because it allows us to try to align incentives with different people in the ecosystem. It’s a really powerful tool to help bootstrap the network, so that the game is as successful as possible. And then some of the kind of more invisible progress and status just in terms of how we’ve built out the team internally, you know with some really good and experienced people in games development and Web3 and, indifference you know specializations in order to try to holistically deliver on these pretty lofty goals. 

Matt Zahab 
100%. You also you also mentioned the token now, staking is such a big part of incentivizing players to stay in the game economy, right? And I know that you guys recently implemented staking rewards, walk me through that process. What’s it been like? And, you know I guess really just why is it? Why is it such a need? Why is it such a pain point for the gamers themselves? 

Derek Lau 
Staking is a hot topic, because it is. 

Matt Zahab 
So spicy. 

Derek Lau 
It helps people in the short term, but at the cost of giving out tokens. Which means in the long term, you have less tokens to give out to other people, right? And, so there’s always this trade off imbalance that we’re trying to find with staking. The reason we have it is because we do want to give back to people to hold the token and support in us and believe in the project. No, we believe that is valuable. Particularly kind of before the game comes out. As I mentioned, we do to try to find that balance there. And some of the challenges, in addition to finding the balance is also the legal and reg side, we want to be very safe when it comes to regulations. And so we have a very high bar here, that unfortunately makes us go a bit slower. But in the long run hopefully it makes us a lot safer as well. And when it comes to regulators taking a look at what all of the different game projects are doing in the Web3. 

Matt Zahab 
And Derek, we can’t you know, keep going on this pod without mentioning the Esports partnerships absolutely huge. That I feel like that’s just such a no brainer. Now I know there’s some there’s still obviously Fudd. And there’s some bad blood when it comes to Web3 gaming and Esports. But I feel like this is just so paramount to success. So paramount to mainstream. Web3, gaming being a thing, right? These Web2 Esports teams are looked at by a lot of kids and men and women for that matter. And girls, as literal gods, like are there you know what I mean? Like 25 30 years ago, you ask a kid and, they actually have this study every single year in school. It’s like what do you want to be when you grow up? And it’s, I want to be an astronaut. I want to be a doctor, I want to be a firefighter, a lawyer or a banker or a professional athlete, dancer, whatever. Now it’s I want to be a YouTuber, I want to be an influencer. I want to be a gamer. You know what I mean? So it’s like these people have so much clout they are idolize, they’re legitimate gods, to have a partnership with one of the most popular Esports organizations is massive. How did you guys get them on board? What’s cooking up in the future? Tell me more about that. 

Derek Lau
Yeah, I love that court. You know our goal is we want to reach millions of players, we want to really push the industry forward. And that’s really what’s behind this partnership, which we believe isn’t only significant in Web3, but really is significant, even if we ignore Blockchain or together. It’s actually very rare for these Esport organizations to work so closely with any game, right? Let alone a Web3 game. And the reason we were excited by this and more trying to get out of this partnership is to really align incentives with these Esport teams like how can we create a win scenario where, you know, they’re helping us reach the audience, helping us improve the game, they’re helping engage, make the game better and really drive a lot of attention, right? Which is very much needed in the space in order to convert the minds around what Web3 gaming is and isn’t. And, you know how can we make sure that the more success that they bring us also, the more success we give back to them and our fans are on in terms of engagement in terms of real ownership in terms of other things. So that’s really at the heart of this partnership which is how can we have kind of a long term aligned partnership and now we’re excited to have the trust of these teams as well through very often are very sensitive to their brand and giving away their brand who you know, their brand is everything so it’s quite a process in order to get A teams on board have the same partnership to all give their brand and embed into the world of Guild of Guardians and, so that’s very exciting. 

Matt Zahab 
It’s crazy how much money like that the pros make like these guys literally make cake. Imagine making cake to play games. 

Derek Lau 
Yeah. And like you mentioned earlier, the kids grow up on this, right? And it’s only going to increase I don’t see how it decreases for me it’s only going to increase. And with the advent of Web3 and NFTs potentially much more people could make a living out of it right, it may be potentially doesn’t just become reserved for the top 0.01% that it opens it up to more people. 

Matt Zahab 
Almost turn it into a gig economy kind of thing like a like an Uber or an Airbnb or like you know, anyone who wants maybe not Airbnb, but anyone who wants to realistically could make $1 here with Uber, I guess literally anyone now because you can just get a bicycle and do UberEATS right. So it’s like exactly that. 

Derek Lau 
Exactly. 

Matt Zahab 
That’d be pretty cool. Derek What a treat man. I’ve had a blast chatting with you. I know we’re getting a little tight for time we have a segment on the show called the hot take factory where we jump in. We put on our shit kickin boots, and we let a couple of hot takes fly doesn’t have to be Web3 related it can be anything in life, health, wealth, happiness, sports, politics, gaming, you name it, give me a couple of Derek hot takes were only you believe in it and, most of the people do not. 

Derek Lau 
Oh, okay. So one that jumps to mind is just around why we need NFTs in games. My take is that I think trading is not enough, right? I think just purely earning something is not enough of a difference to make people want to adopt Web3. So it’s not enough to just have it play a fun game and earn some stuff, I think we need to do something more innovative. That actually adds more value to the player experience in order to really get people over. 

Matt Zahab 
So literal, not just digital collectibles, but like in-game assets that are going to be treated all the time. 

Derek Lau 
Yeah, it needs to be designed in such a way that it’s not just a you know, 20% improvement, but it’s a 10x improvement. And I think that’s what we want to achieve in the industry. 

Matt Zahab 
I love that. Derek thanks a lot man had an absolute blast chatting with you can’t wait to have you on for round two. You and the team at Immutable are literally tearing up the space in the best of ways possible. And, quite frankly we need more teams and people like you, but we need more Immutables in Web3, pack the space. You know, our industry would be a hell of a lot better if we did. So thanks for coming on. Before we let you go can you please let our listeners know where they can find you, Immutable and GOG online and on socials. 

Derek Lau
You can find me on Twitter, which is @xdereklau and similarly Guild of Guardians and Immutable also on Twitter or you can go to guildofguardians.com or immutable.com. 

Matt Zahab 
And as always, I will include everything in the show notes. Derek, thanks so much for coming on man wishing you all the best and we will keep in touch and we’ll have you on again soon. 

Derek Lau 
Thanks. Great to chat Matt. Thanks for having me. 

Matt Zahab 
Folks what an episode with Derek Lau, he and the team at Immutable are building, they are moving and grooving in the Web3 gaming space and of course I will include all the show notes about Immutable Passports and Guild of Guardians, we have so much to learn from the team at Immutable super pumped about Derek on really hope you guys enjoyed this episode. To the team love you guys. Thank you so much for everything Justas you’re the best. Thank you for everything you do. And to the listeners love you guys more than you know keep on growing those bags and keep on staying healthy, wealthy and happy. Bye for now, and we’ll talk soon.