Interview

"Web3 is a solution in search of a problem." FunCraft’s CEO steps back from blockchain

After considering web3 and blockchain, FunCraft's Michael Martinez decided that the future lies elsewhere

"Web3 is a solution in search of a problem." FunCraft’s CEO steps back from blockchain

FunCraft’s Michael Martinez has seen enough hype cycles to know how to approach new technology calmly. Today he reveals his thoughts on not getting into blockchain and web3 development.

With a background at Zynga and EA, he’s been in the games industry for over 14 years. Now, he is the co-founder and CEO of San Francisco-based FunCraft, which has been publishing mobile games since 2019, including popular titles Wordgrams and Merge Kingdoms.

And despite investigating it, he hasn’t got into web3, as he explained in an honest and open LinkedIn post this month.

“I met several founders who drank the web3 Kool-Aid. Some entered the space because they believed in the hype of unlimited upside. Some entered because they felt pressure — often by VCs — to make the switch after failing at mobile free-to-play games,” he posted on the social media site. “At the beginning of last year, I almost began to believe web3 might be more than hype. But it turns out it’s another solution in search of a problem. I’m so glad that my co-founder, Jason McGuirk, and I didn’t go all in on Web3.”

The post compared blockchain gaming hype to the buzz around VR or mobile free-to-play but spoke about how it hasn’t yet materialised in a way he would want to embrace. Since he writes with years of experience, we asked Martinez for further comment, and he agreed to speak with BlockchainGamer.biz about his motivations and observations.


BlockchainGamer.biz: Firstly, can you just tell us a little bit about FunCraft’s strategy?

Michael Martinez: We started FunCraft three years ago. We really saw an opportunity to bring more social and live ops, and deeper meta games, to really classic gameplay.

We’ve had success with word games. Specifically, Wordgrams - it’s a turn-based crossword game. And as we’ve grown that game, we’ve loved the audience. We love the type of game. And we think there’s so much to explore in there. We’re totally committed to daily ritual word games.

There are some massive companies there already (Words With Friends; there’s PeopleFun with Wordscapes; PlaySimple had a massive exit to MTG a few years ago), so we think there’s a huge opportunity there.

People have been comparing the shift to web3 as having the same kind of divisiveness that free-to-play had back in the day. Do you think that’s a fair comparison?

It’s so interesting. I gave a talk almost a year ago at a blockchain conference about the rise of web3 gaming and what’s possible there. That was really the thrust of the piece.

I started at Zynga as a product manager back in 2009, so I’ve seen Farmville and Zynga Poker and all these games. There was such a visceral reaction from traditional gamers. At GDC, it was really shunned. “What is this scamminess?” All of that.

And in my talk, I was remarking that there have been multiples of these in the past. There’s been a push towards VR, there’s been a push towards AR. And I think that those were really kind of similar to what we have now: solutions in search of a problem.

I think as the tide has gone out, we’re seeing that a lot of those numbers are not as real as we once imagined…
Michael Martinez

There are these really cool techs that sound promising, but clearly consumers haven’t been clamouring for it. And there haven’t been any breakthrough companies in either of those, except for, of course, Pokémon GO.

I thought for a moment that web3 – and this was last year – had broken through. “Wow! Players do want this!” The eye-popping numbers we were hearing from it. “This seems to be something! Not only are players clamouring for it, but people are building really big businesses on top of it as well.” So it seemed like both of those coming together. There was a period when we were thinking, “Is this something? Is this real?”

And I think as the tide has gone out, we’re seeing that a lot of those numbers are not as real as we once imagined. A lot of the user counts are very, very small. The number of people actually purchasing the NFTs is very small.

I think things need to last quite a bit longer, not just two years. Or a year and a half. I don’t even know how long it lasted.

Are any web3 gaming companies doing it right?

It’s hard. I’ve tried to stay abreast of this as much as possible, and I went through a period when I was trying out games and trying to stay educated. And I never got hooked on a game or hooked on any of these in the same way that other games have grabbed me, in terms of understanding it both as a user and a player or even as a business.

I do suppose there are some that have been effective, and I think they’re a little smaller in scale than the big headline-grabbers that are out there.

You mentioned Pokémon GO, perhaps one of the few games that made a success of that AR hype. It almost feels like blockchain gaming hasn’t had its Pokémon GO moment – that attachment of a big IP or some idea that captures gamers’ imagination. Do you think that’s what every new tech needs?

Absolutely it does. I would say that, actually, web3 has had it with Axie Infinity and even with STEPN. And those were the things that grabbed everyone’s attention.

And then, of course, people can say, “Oh, the barriers to entry are too high. It’s too complicated, the wallet. This will never be mainstream.” But I actually think a lot of those components are what is essential to its success.

Gabe Leydon, formerly of Machine Zone, on one of his podcasts, gave this point that so many game developers approached 4X – which is what Machine Zone’s Game Of War was, and Mobile Strike – and said, “Hey, we’re going to remake this game, but it’s going to have good UI and good UX, and it’s going to be easy to understand. And it won’t have such high paywalls.” His whole point was: “You’re missing the point of the game. That is the essence of the game! The whole essence of the game is that it offers this path for players.”

I think if a game-maker doesn’t understand the motivation of the players in terms of doing it, then they’re really in trouble.

One of the conversations around web3 gaming has been that onboarding is hard. The interface and the UI are impenetrable – having to set up a wallet and so on. But I’ve seen the point made that it’s the least of their problems. The game itself has to be appealing. Do you think that accessibility is the least of web3’s problems?

I think it is, but I also think that that’s is what those games currently are. I mean, for me, my experience playing these games, and trying the speculation, is the core of the game. I’ve seen so many game developers talk about how as long as you have speculators involved, they are going to ruin the game experience or ruin the game economy. But I don’t know how you separate that because that is what the game is. That is the core of the game. So that tension is really fundamental to it.

There are so many fun games out there already. The promise of owning your investment in a game, that makes a lot of sense intellectually. If it was a 4X game or an RPG game – all of your loot, and all of that, you could own everything – that certainly makes sense. But that already exists within certain games, whether it’s CS:GO or other games. That concept is there, and I don’t think the idea of blockchain solves it materially.

You spoke about hype cycles, and you mentioned VR and then web3. Now we go to conferences, and everyone seems to be talking about AI. Are you observing the same thing, and is AI the next hype circle you see?

I certainly am. And I think the other one that was in there as well that you can insert into that group was the metaverse, which is so closely related to blockchain and web3. And that was like, “What?” [laughs] That was a very bizarre moment as well.

Everyone was talking about blockchain games, and I did feel like a bit of a dinosaur, like, ‘Oh my gosh, we’re missing out. How dumb am I?’
Michael Martinez

I think the common complaint is: “Oh, well, the metaverse has existed within games for many decades now. And that’s the best version of it.” Or there will continue to be versions of it, whether it’s Fortnite or Roblox, as the clearest examples of metaverses.

Yeah, I’ve certainly heard that and seen that with AI. And I’ve seen great posts where it’s like Scooby Doo, where a company claims they’re an AI company… and they reveal underneath the mask, and the villain is actually just calling ChatGPT, and there’s nothing more underlying it.

It is amazing. It’s really interesting to play around with. It’s hard to come up with use cases! I was trying to explain it to my wife yesterday, and she said, “I don’t really get it.” I was like, “Yeah, I don’t either.” It’s really hard to come up with great prompts for it. It’s certainly a fun tool to mess around with.

And then I think there’s huge, huge concerns and questions about who is powering these, or what data is powering them, and whether they’ll profit off of everyone’s work – other artists’ work. It’ll be interesting to see who makes something useful out of it.

So what is next for FunCraft? What excites you?

It’s been pretty wild because, like I said, at that conference last October, all everyone was talking about was web3 and blockchain games, and I did feel like a bit of a dinosaur, and like, “Oh my gosh, we’re missing out. How dumb am I?”

I think the point of my LinkedIn post, and really the point of our work, is there are no shortcuts. You have to do the hard work of building an audience and building a team that is capable of serving your audience. We’re really focused on that. And I think you have to keep putting more out there – more for your players – to find what’s successful for them, what they gravitate towards, and what resonates with them.

So we are continuing to build. We’ve got more coming in Wordgrams, and we have some other great word titles as well that we think are all playing on our hard-won knowledge and taking it even further.

Originally published on Blockchaingamer.biz


COO, Steel Media Ltd

Dave is a writer, editor and manager who today is Steel Media's Chief Operations Officer. He gets involved in all areas of the business, from front-page editorial to behind-the-scenes event strategy. He began his career in games and entertainment journalism back in the 1990s when Doom came on floppy disks. You can contact him with any general queries about Pocket Gamer, Beyond Games or Steel Media's other websites, conferences and initiatives.