On 20 October 2020, YPO marks its 70th year as the global leadership community of extraordinary chief executives. From an original group of 44 members in one city, YPO has grown to more than 29,000 members in 142 countries. Robbie Ferguson is currently the youngest member of YPO.
What happens when the gaming industry meets blockchain technology? For YPO’s current youngest member, Robbie Ferguson, President and Co-founder of Immutable, the game will become a lot more engaging — with players taking control and able to generate revenue from their digital assets, or earnings and purchases.
The global gaming market was valued at USD152 billion in 2019 and is expected to reach a value of USD257 billion by 2025. During COVID-19 lockdowns, interest in gaming and communities within games has increased, and in 2020 gamers will spend approximately USD32 billion dollars on in-game items.
An early fascination with blockchain
For 23-year-old Ferguson and his older brother James, both gamers growing up in Sydney, Australia, the desire to launch a startup came naturally and at an early age. “Since high school, we had started different companies together, none of them were particularly successful,” says Ferguson. “But we were both interested in blockchain technology and found Bitcoin and decentralized applications and programming harnessing Ethereum’s blockchain technology magical and revolutionary.” (Ethereum is the second-largest cryptocurrency platform after Bitcoin.)
Gods Unchained: Pioneering blockchain-powered video games
The brothers went on to raise a seed round from U.S. investors, allowing them to create the Gods Unchained trading card game, which became one of the most popular first-generation blockchain games. In 2019, they we were able to secure a USD15 million Series A round led by Naspers Ventures and Galaxy Digital EOS VC Fund.
Gods Unchained is a free-to-play card game where players own their cards. Players are also able to exit the game at any point and either take back or get a return on their purchases by selling their in-game items — interchanging real money with virtual money earned in the games and therefore blurring the lines between the physical and virtual worlds.
“Over the last year, we have continued to work on Gods Unchained as well as building up our flagship product, which is the Immutable Exchange,” says Ferguson. “This is essentially a first-of-its-kind exchange with digital assets that is built on Ethereum. That means that users can own their own items and can trade them with zero gas fees while still retaining full self-custody.” On the Ethereum blockchain, gas refers to the cost necessary to perform a transaction on the network. Currently the gas fee for a single item transfer is roughly USD50.
While the ultimate aim is to provide this exchange for every kind of digital asset from digital title representation of real estate to financial assets in insurance, Ferguson says the focus for the next year will be on building up this exchange for video game items.
He adds, “Players want to own their items. There is no reason why digital ownership should have any different consumer rights than real, physical ownership. Before now, it was technologically impossible, and the cultural norm didn’t exist. How much would someone pay for a house if they could never resell the house? We want to take that analogy and apply it to what we think are real items, which are digital in game video items.”
Nascent technology and other challenges
While finding success at an early age, Ferguson is quick to point out the ongoing technological challenges. “The technology we are using is still in the Wild West stage of development and documentation is very poor. I remember, after hours of research, finding on Github (a web-based version-control and collaboration platform for software developers) a comment that was key to a critical piece of code. So, we were building that infrastructure at a time when infrastructure is still being built,” he says.
As adoption continues to increase, Ferguson highlights that, for his products, the goal is to make that technology invisible. “Players should not have to know they are interacting with blockchain. They should just know the rights they are entitled to when they purchase an asset that is powered by Immutable.”
A second challenge he adds was more personal and related to scaling from being an individual contributor to managing a fast-growing business. “In just over two years, we went from a team of 15 to 70 people. There was growing pain, including learning to operate differently and building processes. We realized that we can’t just come up with ideas. We have to build systems that work.”
Learnings from early success
While still at the beginning of his career, Ferguson recognizes the importance of building a strong corporate culture, particularly as more work moves online.
“Making your culture even stronger in a remote setting I think is more important than ever. It is difficult to have day-to-day ideation and encourage spontaneous interaction in a digital context,” he says, adding that written communication and accountability will be key. “Also, from a leadership perspective, the ability to clarify what the mission is and why you are here is important. Because you don’t have organic (naturally occurring) interpersonal relationship building, you need to ensure people still feel part of a mission, part of a family. That’s so essential for people to do well at work and enjoy their work.”
We realized that we can’t just come up with ideas. We have to build systems that work. ”
— Robbie Ferguson, President & Co-founder of Immutable share
To aspiring entrepreneurs, he has one key message. “I like a sense of urgency. This is the one piece of advice I pass on. Don’t worry about being perfect. Just ship something and see if it gets traction, and if it fails, ship something else and eventually something will stick … As Jeff Bezos says, it’s always day one. I think it is really important to constantly keep that urgency in everything, especially if you are still finding product market fit.”
Mentorship and self-learning have also been a key part of his success. “My biggest mentor has been my brother, but most of my mentors come from books. I read a lot of business and startup books growing up,” says Ferguson. “I have also gained critical learnings from YPO peers, who have drastically more experience than me in the in realm of business.”
The future of computer-generated realities
The number of people playing video games has grown exponentially since COVID-19 hit, and Ferguson sees this as a turning point in the industry. “I think it has accelerated digital transformation trends by a decade or half a decade, and that is really interesting to me because I strongly suspect in three of four decades, young people will spend the majority of their time in some form of virtual augmented reality. In that reality, there will be digital items that need to be just as economically meaningful as the physical items we have today.”
He is, therefore, more committed than ever to protect players from being at the mercy of technology companies that will own licenses, charge big fees and retain all the control.
“We are working on something pretty cool, transforming an industry this large,” he explains. “I think it is necessary for it to happen and it is kind of radical to turn game licenses in video game items into true digital ownership where players time is economically meaningful.”
Ferguson adds, “I think no matter what, this trend (digitalization) will happen, and either we have an economy where people’s economic rights are protected, or we have an economy owned by one or two major players who can exploit people. We’re building foundational products and technology to make true ownership of digital objects a new norm.”
As virtual realities become more ubiquitous, the success of these products and technology promises to impact video gaming as well as blockchain communities across different industries.