Gumi has all the time been a fan of new expertise. Founded in 2007, the Japanese sport writer had one of many huge hits of the smartphone period with Brave Frontier in 2012. The firm went public in 2014, and now it has 865 staff.

The firm has moved into new markets by means of its affiliate corporations. Yomuneco lately launched Swords of Gargantua, a swordfighting digital actuality sport. It additionally created My Crypto Heroes, one of many high blockchain video games on the planet. And it has created the $30 million Gumi Cryptos fund to spend money on blockchain video games. These strikes are according to the corporate’s perception that new expertise paves the way in which for brand new types of leisure.

I caught up with Gumi CEO Hironao Kunimitsu at Oculus Connect 6 occasion in San Jose, California, and I additionally met along with his executives Masaru Ohnogi, head of Gumi America, and Kiyoshi Shin, chief technique officer of Yomuneco. We talked about this philosophy, concerning the state of the VR market, Japan’s digital YouTubers (digital entertainers who don’t exist in the true world) and blockchain expertise.

Here’s an edited transcript of our interview.

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Left to proper: Kiyoshi Shin, Hironao Kunimitsu, and Masaru Ohnogi.

Image Credit: Dean Takahashi

Masaru Ohnogi: We’re into the sixth 12 months of Oculus Connect. This 12 months, if you watch the Oculus workforce and all the event groups, everybody seems to be very glad, proper? Two years in the past, not a lot. Last 12 months was OK, however two years in the past, three years in the past, all people appeared like they have been asleep. [Laughs] With the Quest worth at $399, that’s the killer worth level. It’s promoting very effectively.

GamesBeat: I believe by subsequent 12 months, possibly they will get it a lot near $200 or $300. That could be great.

Ohnogi: Yeah. It’s a query of what number of Oculus Quest items they will promote.

GamesBeat: They’re not promoting within the tens of millions. Very low tens of millions is feasible. But I don’t assume 10 million is wherever close to attainable, not till it’s round $200.

Ohnogi: The high-end headsets have been as much as 5 million final 12 months. Maybe by the top of this 12 months we’ll have the ability to stand up to 15 million altogether. I hope that subsequent 12 months we are able to get to 30 million to 35 million. That’s the scale of the Nintendo Switch. If you may get to that form of scale, we’ll have extra million-selling titles.

GamesBeat: I ponder how effectively enterprise is doing. Maybe within the meantime lots of people are shopping for these VR headsets for enterprise use.

Ohnogi: In the Japanese market, the B-to-B market is increasing. Many software program makers have began utilizing them.

Gumi’s imaginative and prescient

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Gumi’s brand

Image Credit: Gumi

GamesBeat: Tell us extra about Gumi itself.

Hironao Kunimitsu: We established the corporate in 2007, and we went public in 2014. We at present have 865 staff. We’re nonetheless very closely into cellular gaming. Our important focuses for the enterprise are cellular video games, AR/VR, and we began trying into blockchain in 2017.

Our firm’s imaginative and prescient is round new expertise opening up new sorts of leisure. In 2007, when the smartphones have been coming, many new alternatives got here up. Many gaming corporations tried to port present console or PC or futurephone video games to smartphones. That turned out to work. Games wanted to be made particularly for smartphones. Smartphone video was related. People tried to deliver present video content material to smartphones, however once more, it wanted to be particular to the smartphone. VR and AR and blockchain are the identical. We have to search out out what works particularly for VR. That’s our technique.

If a brand new leisure firm doesn’t have already got robust IP, they need to problem new applied sciences. In the start of a brand new market, new IP has an opportunity to win. That’s why we’re all the time difficult new applied sciences.

Gumi’s investments

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Gumi is considered one of Japan’s most energetic buyers.

Image Credit: Gumi

GamesBeat: Where are you investing?

Ohnogi: We’re additionally actively investing in lots of corporations within the cellular enterprise. We’re cellular video, smartphone-first video, streaming companies, social media companies.

Kunimitsu: The technique is all the time related. When new expertise comes alongside, new sorts of leisure can include it, whether or not it’s smartphone-first or AR-first or VR-first. We have been capable of IPO due to smartphone-first video games. Next, we closely invested in smartphone video. These corporations solely targeted on smartphone-first video content material.

Ohnogi: We initially began an integration program with startups in Tokyo, Seoul, and Helsinki. After six months of incubation, we spend money on 5 to seven corporations with every batch. We present places of work and amenities and mentors. After six months we manage a demo day and the businesses ship a pitch to the buyers in search of funding. We even have fund companions right here.

Gumi itself additionally straight invests in corporations. One instance is Yomuneco, which you will know. We have plenty of mentors working with them.

Japan’s digital YouTubers

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Gumi’s international footprint

Image Credit: Gumi

Kunimitsu: In 2015, once we determined to leap into the VR market, there have been virtually no startups in Japan. That was why we determined to begin our incubation program. Japan’s monitor document is sort of good in video games. We have already got 21 corporations concerned, and each considered one of them has succeeded in securing funding. We’ve had eight corporations attain Series A, and 4 attain Series B. In Japan, solely 15 corporations total have reached Series A, so half of these have come from our incubation program. There are solely 5 at Series B altogether, so 4 out of 5 got here from our incubator.

These corporations are our main investments. Are you accustomed to the concept of digital YouTubers? These got here from our incubator. Internally we mentioned what sorts of content material would succeed by going VR-first. We’re completely assured that video games are considered one of them, however we needed to look for different kinds. One of them is digital YouTubers.

Right now Kizuna Ai already has greater than four million subscribers, however many different customers see her on YouTube. When you’re watching on YouTube, it’s identical to the cinema. When you employ the VR glasses, she’s actually there. You can speak and shake fingers. If it’s one thing like a live performance, everybody can sit within the entrance row, from wherever on the planet. We assume that is going to be killer content material for VR.

Some of those corporations are additionally B-to-B. The B-to-B marketplace for VR is admittedly rising in Japan, like all over the place else. This firm is in well being care VR. This one is for video coaching.

GamesBeat: I went to the Virtual Beings summit in San Francisco. That was excellent. It was about 200 folks, however that they had loads of audio system going for simply 5 minutes every. They had some actually attention-grabbing initiatives that they’re doing now to create synthetic folks, synthetic pets. I didn’t know there was a lot exercise there. They’ll do one other one in Los Angeles in November. That’s a extremely thrilling space. They introduced up the digital Japanese characters doing live shows.

Kunimitsu: Right, proper. In Japan this 12 months we’ve had so many digital YouTuber live shows. Each ticket is round $80 to $200, however customers nonetheless pay. The idea is booming.

Why VR will develop

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Yomuneco’s Swords of Gargantua

Image Credit: Yomuneco/Gumi

GamesBeat: I’ll be very attention-grabbing to see how far that goes. Tell us extra about VR.

Kunimitsu: We have some video games which might be doing very effectively. Beat Saber has already handed 1 million gross sales, round 1.four million items. Super Hot has additionally reached 1 million. If you may break 1,000,000 copies, even in comparison with cellular video games, it’s a good dimension. Against Gravity, the makers of Rec Room, they only finalized how a lot in funding, despite the fact that they don’t have any income?

I really feel just like the urge for food for VR is lastly coming again. The previous two or three years have been a really chilly winter. But some corporations are breaking tens of millions of gross sales and bringing in $20 million, $30 million in funding. In Japan Gumi is the one firm that’s nonetheless investing. A whole lot of different corporations, like Gree, have left the VR scene. Stockholders have been asking me for the previous three years when VR will lastly get right here. [laughs] I believe it’ll be this 12 months.

What makes us assured, Beat Saber offered greater than 1 million. Many folks have been saying that early adopters had purchased HMDs, however nobody was actually utilizing them. That was the rumor. But now gross sales of video games like Beat Saber and different high titles are coming again. We have extra confidence that if we make a superb sport, the customers will come to it.

We speak so much with the Oculus folks. The huge distinction they see with the Quest is the energetic person charge. It’s a lot greater than the opposite {hardware}, whether or not it’s HTC or Rift. It’s extra handy. We assume that’s why the exercise charge is so excessive.

We’re trying towards content material that’s particular to VR. What is VR-first? What we’ve discovered is that immersiveness has two components. One is bodily and one is psychological. The bodily element is 6DOF (six levels of freedom hand controller). It’s a giant distinction from one thing like a 3D TV. You can dive into VR and transfer round. It’s bodily immersive. Only the 6DOF content material is making a giant distinction.

When it involves psychological immersiveness, we see that within the attraction of issues like digital YouTubers. With digital YouTubers, you may turn out to be any person who’s not the true you. You’ve tried VR chat, proper? In Japan VR chat is much more standard than it’s right here. Inside VR chat, customers can deliver their very own avatars. On Japanese servers, many of the avatars are lovely ladies, even when 80 or 90 p.c of the customers are older males. [laughs]

In a digital world, folks need to turn out to be one thing completely different. When you will have that form of avatar, different folks deal with you such as you have been lovely. You attempt to turn out to be like that character. When we’re born, in a way, we tackle this avatar. It’s the avatar we use with our household, in school, in society. Your mates or your loved ones count on you to be a sure form of individual, and so that you act the way in which they count on. But possibly you will have completely different traits inside. Maybe you need to be an attractive lovely girl, proper? But in the true world, that’s too dangerous. In VR we might be anyone.

We have many traits, however in the true world, we’ve got just one avatar. The neighborhood you’re part of expects you to be a sure form of character. But in VR we are able to select any form of avatar. We can select from many various societies and communities. You can turn out to be any person who’s, in a means, the “real me.” That’s one other uniqueness in VR that we’ve discovered.

We’ve seen in our expertise with smartphone video games that not each style has been profitable on smartphones. Smartphone-first video games have had loads of success with sure genres, although. Choosing the style is essential. Two genres have gotten super-popular for VR-first content material. One is MMORPGs, and the opposite is open world survival, Fortnite sorts of video games. That leads us to Sword of Gargantua.

GamesBeat: Is your multiplayer VR up and working but? Has it been standard?

Kunimitsu: Yes, it has. Our objective has been to make a quick, actual MMORPG kind of sport. But full MMOs are too enormous, so we’re specializing in two issues. One is battles, and the opposite is neighborhood. For the battle system, we’ve chosen a really close-distance model. Many VR video games have been about capturing, however for this type of RPG we needed to have swords, so we’re working in that route.

As far as multiplayer, PvP is just a little troublesome, so we selected to give attention to four-player co-op. That was our first goal. We’re the one sport on the Quest providing this type of multiplayer sword combating in VR areas.

Another factor we’ve discovered about VR video games is that the issue of scale could be very completely different. The sport methods might be way more sophisticated. This Gargantua you’re combating is 10 meters excessive. Fighting in opposition to an enemy like that’s virtually not possible in 2D, if you consider how the battles are imagined to work. But if we make our enemies too small, that’s additionally not attainable. The downside of scale is essential to VR. It’s completely completely different from present video games. That’s one thing else distinctive about Gargantua.

We have a VR-first UI. We’ve added many various capabilities to cope with issues like VR illness. Also, organizing 4 gamers at very shut distances might be troublesome, however we’ve additionally solved that downside. We even have loads of alternatives for expansions. Many corporations in VR have launched a sport and completed with the challenge. But like cellular video games, we plan to maintain updating and doing reside ops.

Obstacles for VR

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Swords of Gargantua

Image Credit: Gumi/Yomuneco

GamesBeat: How many individuals labored on Sword of Gargantua?

Ohnogi: Almost 30.

GamesBeat: The Medal of Honor folks at Respawn instructed me that they had about 180 folks engaged on their sport for 2 and a half years. How lengthy did it take you to make Sword?

Kunimitsu: About two years. The first 12 months was R&D. 180 is just too huge. [laughs] Most of the profitable titles thus far have been very small groups, proper? Beat Saber was initially three folks. Blade and Soul was two or three? Pavlov was additionally small. For VR-first, core gameplay is extra necessary.

GamesBeat: If you go on to make extra VR video games now, do you assume that’s about the correct dimension of workforce, 30 folks? Or do you assume you’ll have to make use of extra folks?

Kunimitsu: No, I believe that’s about the correct dimension. Our greatest goal is round 1 million gross sales. We need to attain at the very least 200,000 to 300,000. That’s affordable. 1 million is form of the dream at this level. But 200,000 to 300,000, 30 folks is an affordable workforce dimension for that.

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Swords of Gargantua

Image Credit: Yomuneco

GamesBeat: I’d like to see the Quest have the ability to broadcast to a TV, so everybody else can watch on the identical time.

Kunimitsu: That’s one other necessary issue, yeah. Later we’ll be revealing PvP as effectively.

Ohnogi: After we launched we began introducing squad competitions. Every week we do a small replace, and we’ve got new movies on Twitch and YouTube. This is considered one of our high gamers taking part in. He’s loopy. Way too fast. He is aware of the place the enemies are coming from. We’re going to maintain including new weapons as effectively, as a result of customers have been very smitten by gathering them.

Kunimitsu: We’re making ready not solely new swords, however different kinds of weapons as effectively.

GamesBeat: Have you tried Vader Immortal? I felt like that was a bit too easy.

Ohnogi: Yes, we’ve tried different sword combating video games in VR and we’re very assured in what we’ve got, particularly as we replace. The subsequent huge replace will in all probability be across the finish of November. We’re creating an journey mode. The present challenges are extra arena-based, and we’ve seen that our customers need one thing the place they will progress by means of a narrative. We additionally need to enhance the multiplayer foyer, so we’ll have a common foyer the place everybody can chat.

Kunimitsu: Right now a giant downside for VR video games is that the concurrent person numbers are too low. You’re very tense if you play a VR sport, proper? It’s not one thing you need to play all day. Once we put within the new foyer, you’re not essentially combating on a regular basis. You can go inside Gargantua and simply speak and hang around. Then you may get collectively a gaggle and go battle if you need to. That ought to deliver in additional concurrent customers.

We’re planning loads of different new options. We’re going so as to add new enemies, and we need to add extra character jobs. Currently everyone seems to be a warrior, however because it’s an MMORPG, we’d like different character courses — archers, healers. At the Tokyo Game Show we’ll present a brand new playable demo with the PvP mode.

Making the Oasis from Ready Player One

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Gumi’s Project Oasis

Image Credit: Gumi

GamesBeat: Do you name that by one other title?

Kunimitsu: Yes, DOG stands for Duels of Gargantua. That’s the participant versus participant mode. This video is a few of what we’ll be displaying on the Tokyo Game Show, though you see it in third individual right here. You can see how the AI switches the digital camera. We’re hoping to develop this into an actual esport. We need to have help for screens so different customers can watch.

Adventure mode right here, this can be a roguelike model of sport. Here you may see the foyer, and the brand new participant skins. Those sorts of options are on the way in which. Next 12 months we’ve got two huge plans. One is avatars. Everyone needs to have the ability to change up and customise their very own avatar. The different is new jobs like magic-users and tanks.

Right now what we’ve tried to make is an immersive, real looking battle system, and we predict we’ve succeeded. But one factor we’ve found is that people who find themselves robust in the true world may also be stronger in this type of VR sport. When we’ve got extra characters like archers or thieves or magic-users, extra folks will have the ability to take pleasure in it. That’s a part of our plan for subsequent 12 months.

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Gumi’s grand plan

Image Credit: Gumi

We’ve all seen Ready Player One. What we need to create with an MMORPG is that form of world. We’re beginning with Sword of Gargantua and Duels of Gargantua. But sooner or later we need to construct extra round VR chat, VR live shows, music, sports activities, procuring, all this stuff collectively. We can have an actual digital world. We began in 2017, and now we’re right here. Between now and 2022 we need to create that Oasis form of world. We’re going so as to add the power to vary your avatars. We’re constructing an open world mode. We need to have issues like music occasions and survival gameplay.

These are the sorts of issues that solely first events and second events are doing. By 2022, we’ve got two third events, different corporations, working collectively. We’re additionally invested in working round blockchain. One of the distinctive qualities of blockchain is {that a} piece of digital knowledge generally is a distinctive asset. We’re already began to hook up with that, however sooner or later we need to be absolutely related to blockchain capabilities. That brings us nearer to this concept of the Oasis. By 2022, I actually assume it’s attainable.

GamesBeat: You have loads of attention-grabbing exercise happening. I ponder who else is attempting to do the Oasis too.

Kunimitsu: Maybe they’re not speaking about it but. [laughs] There’s Project Horizon.

GamesBeat: That appeared a bit extra like Minecraft, which continues to be a fairly good concept.

Kunimitsu: In the longer term, the massive profit for VR–as I say, on this world we’re caught with one avatar and one society, one neighborhood. We have one set of traits. A whole lot of us aren’t tremendous glad about that. But in a VR world we are able to select from many various avatars, no matter we wish. We can choose our personal neighborhood. We can categorical completely different traits. That makes us extra free. That’s what I need to create.

In this world, the way you look on the skin–many individuals will say it’s not that necessary, proper? But actually, it’s necessary. A ravishing girl goes to have a bonus. A good-looking man has a bonus. We can’t change that. In our communities, whether or not it’s our faculties or our corporations or our households, the place we find yourself in these communities comes from how we glance. Not solely that, however that’s part of it. And that determines the traits we categorical. It’s a giant a part of why folks aren’t glad, why they really feel a lack of freedom.

In the VR world you may select who you need to be. You can select a neighborhood. You can select your traits. If we are able to make folks extra glad and extra free, that’s what we need to create. That’s one thing distinctive to VR.

The blockchain future

Gumi CEO believes VR and blockchain are key to connected worlds

Above: My Crypto Heroes

Image Credit: Gumi

GamesBeat: What is your curiosity in blockchain?

This is at present the world primary blockchain sport, My Crypto Heroes. It seems to be like a collectible card battle kind of sport. It’s accessible worldwide. You can see the put in base, DAU, subscribed customers, and complete gross sales. Currently that’s about $three million.

What I’ve discovered concerning the uniqueness of blockchain video games, there are two components. One half is, due to the blockchain, knowledge can’t be copied. That’s why you may have asset worth. Each of the character on the blockchain can’t be copied. It can solely be traded. If you think about in a world just like the Oasis, or a Minecraft kind of sport, if every asset is exclusive, possibly somebody can be excellent at making issues like homes or furnishings, and somebody will need to purchase that.

With blockchain, you may management provide. Usually worth is decided by provide and demand. In the web age, knowledge is copyable, so the provision is sort of infinite. Data itself is tough to promote. That’s why each firm on the web has turn out to be a service firm. Gaming corporations have gone this route, and firms like Spotify. But on the blockchain, every bit of knowledge is exclusive, so you may management provide. Data itself can have worth.

The different distinctive perk is that the information doesn’t belong to us. It belongs to the customers. Users personal it as an asset. The huge distinction between cellular video games and blockchain video games is that the customers are very supportive and pleasant. They assist us with promotion. They’re making websites concerning the sport themselves. That’s as a result of they personal an asset, part of the sport. Once the sport turns into extremely popular, more than likely the worth of their property will go up. That’s why they need to lend their help to the sport.

It’s just a little like becoming a member of a startup. You go to work for a startup partly since you get inventory choices. Everybody works actually laborious as a result of when you make it to an IPO or acquisition, all of them profit. Blockchain video games are giving customers one thing like a inventory possibility. When the sport turns into very profitable, these gamers all profit. It’s a really robust mechanic, a very new form of incentive for engagement.

Gumi CEO believes VR and blockchain are key to connected worlds

Above: Gumi’s bold Project Oasis

Image Credit: Gumi

GamesBeat: What is the connection between VR and blockchain?

In the longer term, within the VR world, blockchain implies that each digital asset–we are able to management provide, so you will have asset worth. It’s an necessary change for the web. As I say, every part on the web is copyable, which is why knowledge can’t have worth. If I promote you this iPhone to you, I don’t have an iPhone anymore, in order that has worth. But if I simply ship you one thing like a doc on-line, that’s not price something.

It’s why, in 20 years of the web, we’ve solely seen two profitable enterprise fashions. One is promoting and the opposite is e-commerce. The digital world itself can’t have worth until it’s associated to the true world, which is true of each promoting and e-commerce. But as soon as we’ve got blockchain related to the web, and related to the VR world, every bit of digital knowledge can have asset worth.

If you look again on Second Life, lots of people tried to generate income shopping for and promoting land in Second Life, however that land isn’t distinctive. It was completely centralized, too. If Linden Labs needed to increase the world, they may do it. With blockchain, that’s not the case. The firm can’t have that full management. It’s decentralized. Your land or your own home or your digital objects can have actual worth. With blockchain, if any person likes a sport and needs so as to add issues like enemies, monsters, or weapons, they will do this, they usually can promote it to any person who has cash in the true world.

GamesBeat: I suppose the query that arises is, in the event you put blockchain in your MMO, does that imply the customers management the sport as a substitute of you?

Kunimitsu: That’s attainable sooner or later, in a decentralized world. Of course, blockchain expertise isn’t fairly there but. We’re too early for that form of connection these days, to the web and to VR worlds. But my guess is that in two to 3 years, we’ll see extra scalability and extra safety. Then we are able to join blockchain expertise to the VR world. People will have the ability to have a number of avatars, a number of communities, a number of characters, and several other financial methods. I believe that is the longer term.