Vietnam seeks greater foothold in thriving Web3 gaming space

[HO CHI MINH CITY] Vietnam’s young population and its high level of smartphone and Internet penetration have made the country a prime location for gaming studios and developers eager to tap the global Web3 gaming space.

Vietnam is already attractive for many of the world’s major gaming companies as they seek to grow their distribution channels.

Statistics from Vietnam’s information ministry showed that 85 per cent of registered multi-player games released locally are developed by foreign studios in countries such as Japan, South Korea, China and the US.

But Vietnam’s domestic gaming players are dominating the publishing market overseas.

Five out of the top 10 game publishers, ranked by the number of game downloads, in the Seanza (South-east Asia, New Zealand and Australia) region come from Vietnam, according to figures from mobile data and analytics platform data.ai released in 2020.

Lately, the emergence of Vietnam’s blockchain game unicorn Sky Mavis and its non-fungible token (NFT)-based game Axie Infinity has opened the door for Vietnam to gain a foothold in Web3.

Web3 gaming involves decentralised projects where players own their in-game assets, such as a rare item or a particular skin for their game character. In traditional gaming, these in-game digital assets and the rights are owned by the game developer on centralised servers.

Axie Infinity has largely been credited with sparking the global NFT craze back in 2021, with the popular play-to-earn game reaching its peak of 2.3 million players daily in Jan 2022.

In the past couple of years, more Vietnamese developers are jumping on the bandwagon and creating more blockchain-based games as they seek to leverage on Axie Infinity’s popularity.

In 2021 and 2022, there were at least 1,000 blockchain-based game projects developed in Vietnam, with around 10 of them reaching a market capitalisation of more than US$100 million, according to blockchain gaming community Yield Guide Games.

Chainalysis also ranked Vietnam first in grassroots cryptocurrency adoption in the world for the past two years, with play-to-earn gaming and remittances being the key reasons.

“If you see what happened in Finland and some other markets, it really just takes one player, like Sky Mavis, to breed off other spinouts that will come and start new companies,” said Hawkins Pham, director of growth and operations at Vietnam’s first gaming unicorn VNG, at a recent seminar.

“I think we (Vietnam) are at the ground floor of what will promise to be a really exciting gaming ecosystem,” he added. 

Sky Mavis, which was once valued at US$3 billion after a fundraising round in 2021, has also been on a hiring spree of local talent of late as it seeks to expand its global headcount of around 150 staff.

“There is more Web3 gaming talent in Ho Chi Minh City than anywhere else in the world,” said Sky Mavis’ vice-president of growth Quinn Campbell. “We haven’t hired developers from outside of Vietnam. We’ve been able to find enough incredible talent right here.”

New strategies

Sky Mavis co-founder Jeffrey Zirlin credited the initial success of Axie’s in-game economy structure to the advent of “Ronin”, an Ethereum-linked sidechain to support cheaper and easier in-game transactions.

Although the company claimed to have processed around US$4.2 billion in NFT transaction volume so far, Ronin also suffered from a major security breach in March 2022 when hackers stole more than US$600 million worth of crypto assets. 

Compounding matters is the fact that the play-to-earn hype has generally seen a downward trend. As such, Sky Mavis says it is seeking new strategies to secure its position in the market, with one move being to shift the focus from in-game economics to improving gameplay.

Sky Mavis also wants to develop a stronger infrastructure for gaming in Web3, as the company is betting big that this new generation of the Internet, decentralised and powered by blockchain technology, will create more player-owned economies.

Sky Mavis is enabling worldwide studios to build and launch their Web3 games on its blockchain Ronin network, as well as distribute these games via a platform called Mavis Hub.

Sky Mavis said it had upgraded the Ronin blockchain recently to enable third-party developers to scale their games more securely and efficiently on the network.

In March this year, Sky Mavis announced the first five game studios that will develop and launch their games on Ronin.

These five partners, picked from a pool of more than 250 studios worldwide, can leverage the gaming ecosystem built on Ronin that shares Sky Mavis’ user base, community-owned protocols, applications and asset liquidity to support their Web3 game creation.

Meanwhile, the plan is for Mavis Hub to become the “Steam of the Web3 world”, Sky Mavis media producer Duc Truong told The Business Times. 

Steam, regarded as the world’s largest traditional PC game distribution platform, distributed more than 50,000 PC games as at the end of 2022. It has also been the main revenue generator for gaming giant Valve Corporation – the creator of blockbuster titles such as Half-Life and Dota 2 – for more than a decade. 

“While Ronin network serves as the underpinning infrastructure, Mavis Hub (can) provide Sky Mavis’ expertise and technological support for other studios to shift, operate and maximise benefits of developing game content in Web3,” said Duc Truong.