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For most, the idea of spending tens of thousands of dollars on a parcel of digital “land” is unfathomable. But in the world of Illuvium, one of the world’s most anticipated blockchain games, demand from buyers has been hot.
The game was created by Kieran Warwick and his brothers – who each boast net worths in the hundreds of millions – based on a Pokemon-like premise where players can capture and battle with critters known as Illuvials, each one of which is minted as a non-fungible token (NFT).
The NFT and crypto market has fallen drastically this year, and blockchain games have received a frosty reception from gamers. But this doesn’t faze Illuvium founder Kieran Warwick.
Warwick has recently discussed the meteoric rise Illuvium has seen over the past 18 months, however, the NFT and crypto market has fallen drastically this year, and blockchain games have received a frosty reception from gamers. But this doesn’t faze Warwick, who says he’s focused on building something that will succeed regardless of its blockchain functionality.
The Age and The Sydney Morning Herald spoke to Warwick for our weekly series You, Me and Web3, which aims to examine, challenge and demystify the ideas behind the emerging industry by speaking to the people who live and breathe it.
How did you go from a burger rating app to running an NFT gaming studio?
Back in 2016, I was introduced to ethereum. At that time, I was convinced I had missed the boat on bitcoin, so when ethereum came along, I went all in. Instead of putting a deposit down on a house, I took all that money and put it into ethereum, and I ended up getting absolutely wrecked. So I was like, ‘screw crypto, I’m not dealing with that ever again’.
Around that time, I also got added to a burger review Facebook group, and it quickly grew to 200,000 members. So we had this idea to build an app and monetise it, add delivery, all that stuff. And just as we were getting traction, COVID hit, which pretty much stopped us in our tracks.
My brother [Kain Warwick], who started the Synthetix protocol, then said to me ‘I know you got burned in crypto, but what about if I give you $100,000, and you just trade’? So I started doing that, right before the bull run, and made a stupid amount of money. And I’m really competitive, I wanted to catch my brother, to make more money than him, so I had all these ideas of starting a VC firm.
But then I stumbled onto NFT gaming, and immediately saw the opportunity. And it just so happens that our other two brothers, one’s a game designer, and the other one is a professional CGI modeller. So off we went.
What’s the idea behind Illuvium? Give me the elevator pitch.
It’s basically the first triple-A interoperable blockchain game. We’ve got three games: one is a city builder game very similar to SimCity or Clash of Clans. That is where you extract resources and fuel. You then take that fuel and you go into the overworld, which is connected to it, which is very similar to Pokémon.
“There is not a single fun game that I play in Web3 right now where I can say to my friends, ‘hey, put down Call of Duty or GTA and come and play this’.”
And then you’ve got our third genre of gaming which is our Illuvium arena, where you take the deck that you’ve built up of characters, and you start battling them. And all three games are seamlessly connected, and they all use the same assets across the whole ecosystem.
We have nearly 1.8 million people who have registered so far. And we’ve only let in about 30,000 into the private beta. It’s very early days, and we don’t want to go mainstream yet, but it’s still pretty decent numbers for a pre-launch game.
We’ve had a big downturn in crypto and NFT prices this year, how does that affect a game like yours?
For me, it’s all just noise. I was one of those people that was very sceptical of almost 99 per cent of NFT projects out there. Same thing with 99 per cent of the games out there. It takes a really, really long time to build an immersive game, one that’s addictive, competitive and has the type of mainstream substance that real gamers have come to love.
So when you have people coming out saying, with 10 people in their team, they’re going to build a triple-A game, you can see why people think this is a scam, and it’s never going to happen. We’ve been in this area for so long now, it’s just BS, to be honest.
Is the full launch of Illuvium tied to the health of the NFT market? Are you going to wait until things are looking better before you go live?
There are two funnels that you can go through for Illuvium: there’s the crypto funnel, with about 3 million active gamers, and they’re all about the NFT jargon about yields and all of that. But there are 3.5 billion people in the world who like gaming that has nothing to do with NFTs – they just like playing fun games.
An Illuvium Lynx avatar.Credit:
So we’ve got a free-to-play version – you’re literally just playing the game, and we will store your assets for you without you even realising that you have a wallet. This is how we’re going to get mainstream adoption. And at any stage, a user can migrate, and we will create their own wallet for them and then all of a sudden, you’re a crypto user. So it just breaks down the barrier.
Earlier this year you did a $US74 million ($118 million) virtual land sale where people paid upwards of $80,000 for a virtual block of land. What do people get when they spend that much?
Illuvium Zero is the game that uses that land. There’s only a finite number of resources, and 5 per cent of all the revenue generated from the entire ecosystem goes back to those people who hold a land plot. All of these plots are literally powering our entire in-game economy.
How are you selling these before the game has even launched? If only 30,000 players can actually access the beta, what benefit do they have by owning any of these land plots?
Nothing yet.
So it’s quite speculative then?
Yeah. It’s frustrating in the sense that we had the game ready. We’re big believers in not selling NFTs unless there’s a use case. We could do an Illuvial sale right now and go and sell $300 million worth of Illuvials, but it would ruin the game. We want everyone to start on a level playing field when the game opens up.
That’s what we wanted to do for Illuvium Zero, but my brother decided at the last minute our graphics weren’t ready yet so that heavily delayed the launch. So we were never meant to sell NFTs without having a game, but it kind of just ended up like that. You could say it ended up quite speculative, but they’ve held their ETH price really well so far.
It does seem crazy, the concept of people buying virtual land for as much, or more, than you can put a deposit down for a real house.
It only makes sense when you have a use case right? If you look at Bored Apes for example. They said, ‘give us all of this money for land, and then we’re going to take that money, and we will build a studio around it and we will build a game, I promise’.
That’s why it’s so frustrating for me to not have Illuvium Zero out. We have that game ready, it’s just the overhaul of the graphics to go from a really basic game to a triple-A game, it takes another five or six months.
There is a fair amount of resistance from the broader gaming community against NFTs in games. How do you reconcile that with wanting to be a triple-A game studio? Is it a hurdle to overcome?
If you go look at my Twitter, I’m known as this troll to all these other projects because I’m not going to buy into, and I don’t want other people to buy into, the narrative of people building out these games on a promise. We raised money at the start and said we would build a studio from that, and now we have 170 people, which is barely scraping the surface or being able to call ourselves triple-A.
So when people say to me, what do you think about this negative connotation that NFTs have? I’m like, how would we not? There is not a single fun game that I play in Web3 right now where I can say to my friends, ‘hey, put down Call of Duty or GTA and come and play this’ because it doesn’t exist.
We just don’t have it yet. But once we do, people will forget about all thinking NFTs are bad because all their favourite games will be NFTs.
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