Vietnam’s traditional game publishers evolve into blockchain players

Photo: Daan Geurts/ Unsplash

As play-to-earn (P2E), or GameFi, becomes the new rage, several game publishers in Vietnam are accelerating their transition into the blockchain-based gaming market — launching features that can enhance the gaming experience and also helping players earn some revenue.

GameFi — a combination of the terms ‘gaming’ and ‘finance’ — allows players who take up blockchain-based games to earn digital assets, like non-fungible tokens that can be stored in secure wallets.

VNG Corporation, Vietnam’s first tech unicorn, is evaluating options to incorporate NFT into its gaming business in a sustainable way, it said.

“The gaming industry continues to evolve and the introduction of NFTs as part of this change is interesting. As game producers, we are interested in new ways to bring value and engagement to our players. At this stage, we have some initial concepts and plans that we are still researching, but nothing that we can discuss yet,” said a spokesperson for VNG’s gaming division.

While Vietnam’s gaming industry is currently dominated by the homegrown VNG Corporation and Garena, a unit of Singapore-headquartered Sea Group, several venture-backed startups — Funtap, Appota, and Thudo Multimedia, to name a few — are developing a stack of blockchain-based games.

“Funtap is beefing up its foray into GameFi, leveraging the strengths of our ecosystem that includes gaming and fintech businesses,” said the company’s founder and CEO Minh Bui. “Blockchain technologies are changing the nature of gaming and influencing how games are being built.”

Funtap had secured a seven-digit Series A investment led by Makers Fund in 2020. Last year, it picked up an over 30% stake in the local digital payments firm 9PAY. It also operates the wealth tech platform Tikop.

Founded in 2015, Funtap is among the top mobile game publishers in Vietnam with offerings across massively multiplayer online role-playing game (MMORPG), simulation, and card battle genres. It claims to have more than 42 million customers in markets including Thailand, Malaysia, and Singapore, besides home country Vietnam.

Game publisher Appota, backed by Korea Investment Partners, is another player engaged in developing NFT games. In October last year, Appota made a strategic investment in blockchain game publishing platform ChainVerse.

“P2E [Play to earn] games/GameFi will become mainstream leading the whole gaming industry for at least the next 5-10 years. What you are seeing right now is just the initial steps. We will see pioneering products reshaping the market,” said Tuan Minh Nguyen, CEO Chainverse, Appota.

Tri Pham, the founder and CEO of the Vietnamese blockchain-based game hub Whydah, told local media that games are the gateway that allows a wide range of users to access blockchain technology.

In December, Whydah raised $25 million in a funding round aimed at helping game studios apply blockchain technology. Participating investors included Morningstar Ventures, Hashkey, Eternity Ventures, Bitscale, Youbi, and others.

It has partnered with seven game studios in Vietnam — Topebox, Wolffun Game, IMBA Game, Hiker Games, Divmob, 1B Game Studio and KEIG Studio — to develop a product called Iron Sail, which brings together players in the blockchain space.

Thudo Multimedia is another startup in the Vietnamese gaming space. Its P2E game Bemil aims to build a decentralised society.

Bemil, released in July 2021, is the result of a creative collaboration between a Vietnamese development team and a Serbian game publisher. Its CEO Han Nguyen is the former founder of the Vietnamese crossborder e-commerce platform Fado.vn, while chief production consultant Lam Son has many years of experience as a project leader at American Game Studio.

Investors, too, seem to have spotted promise in the fast-growing market.

In October last year, Sky Mavis, the company behind the NFT game Axie Infinity, raised $152 million in a Series B funding round led by Andreessen Horowitz (a16z).

Also in October, the Vietnamese blockchain game project Sipher successfully raised $6.8 million from investment funds based in the US and Korea, and before that, Faraland raised $2.4 million, whereas HeroVerse raised $1.7 million.

Gaming boom in Vietnam

According to App Annie, Vietnam ranked second in Southeast Asia in 2020 in terms of game downloads — next only to Indonesia.

Game downloads in Vietnam increased 10% year-on-year in 2020. Consumer spending on games also rose 50% in the same period, driven by a strong mobile-first consumer base. Vietnam has a large number of smartphone game players with 57% of its 68 million smartphone users spending an average of 3.9 hours a day gaming, according to App Annie.

Meanwhile, the global gaming market was worth $178 billion in 2021 and is expected to surpass $295 billion over the next five years, according to the blockchain gaming website PlayToEarn Pte Ltd.

Innovations in blockchain-powered P2E gaming have been a significant catalyst in this projected growth. Through P2E, the game studios will gain access to new capital and a new customer base.

The global gaming market is set to grow by $125.65 billion between 2020 and 2025 at a compound annual growth rate (CAGR) of 12% as per the latest report by Technavio Reports. Around 56% of the growth will originate from APAC for the gaming market.

The report also showed that blockchain market size is projected to grow from $4.9 billion in 2021 to $67.4 billion by 2026 — a CAGR of 68.4%.

Traditional players hit

The growth of blockchain-based gaming also brings with it challenges for traditional game publishers.

“GameFi attracts players because they want to earn money, so balancing the interests of game publishers and players is an issue,” said Nguyen of Appota.

The high amount of capital going into GameFi makes it difficult for traditional players to compete. A spokesperson for VNG said the biggest challenge faced by traditional players is finding talent.

He added that it takes time to filter out what is long-term and what is short-term because this segment is in the very early stages of development.

The number of P2E games released lately exceeds user demand. There are even many “click-to-earn” projects with no gameplay but they call themselves P2E games.

“I believe there is long-term value in NFT’s being introduced to gaming. Conceptually gamers play games for entertainment value, they invest time and money. If NFT can help retain the value of the money spent or allow them to transition, this would improve the overall gaming experience and create ‘value’ from a player’s perspective,” added the VNG spokesperson.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.