Mysten Labs is a bit late to the blockchain gaming party, but the company has raised $300 million and it’s serious about launching high-end games on its Sui Layer 1 blockchain.

The Sui Mainnet launched yesterday and it goes live with 11 gaming partners — including one company making a game based on The Walking Dead — starting as early as May 15, said Evan Cheng, CEO of Palo Alto, California-based Mysten Labs, in an interview with GamesBeat.

Players will be able to gain immediate access to the games developed by Mysten’s developers, publishers, and ecosystems. The whole Sui project is built around the idea that not all blockchains are the same.

Sui is a next-gen platform that empowers experienced game developers to enable deeper levels of player engagement and agency with a seamless user experience thanks to its scalable, fast, and secure infrastructure.

Over the last year, Mysten has been working closely with some of the world’s leading game developers, publishers, and ecosystems to build unique, immersive, and fun games that leverage Sui’s advanced technology. During last week’s Consensus 2023 Conference, Mysten Labs’ cofounder and chief product officer Adeniyi Abiodun showcased a trailer of the new games.

“Our team has been working tirelessly with some of the most distinguished, recognizable, and innovative gaming brands and creators in the world to build games that offer users brand new experiences on the Sui Layer 1 blockchain. We are excited to start on the summer of Sui,” said Cheng. “We and our partners have truly enjoyed building games on Sui’s secure, scalable, and easy-to-use infrastructure, and we look forward to continuing to release cutting-edge on-chain games.”

The games

Starting on May 15, these partners will unveil games and experiences weekly that users can play. From May 15 to 21, the games that debut will include Orange Comet: Final Stardust, Arrivant: Project Eluune, and Talofa: Run Legends.

From May 22 to May 28, the games launching will include Worlds Beyond, Lucky Kat: Cosmocadia, and Aether Games: Cards of Ethernity. From May 29 to June 4, the games launching will be Seascape: Mini Miners, Orange Comet: Degens & Dragons, Ghost Ivy: Haven’s Compass and BlueJay: Arcade Champion.

From June 5 to June 11, the games launching will include Onenet: Bushi, Lucky Kat: Panzerdogs and Orange Comet: The Walking Dead.

The company is closing it out with The Walking Dead title from Orange Comet because that is the biggest entertainment brand supporting Sui so far.

More than 30 game companies have signed deals so far.

“At Worlds Beyond, we’re committed to providing creators with the resources and innovations with the help of Sui to help bring their visions to life. That’s why we offer a comprehensive suite of tools, including our world-building tools, user-generated content digital asset library, and game builder portal – everything creators need to create fully-realized gaming and non-gaming experiences,” said Clive Bennett, cofounder of Worlds Beyond, in a statement. “The future is looking very Sui-eet indeed for blockchain gaming.”

Cheng said a lot of the game partners are independent studios that were formed by veteran creators. They know how to build games and want to incorporate some blockchain elements. One of the partners is Netmarble, a South Korean game company that is one of the world’s biggest game makers. Netmarble partnered with Mysten Labs to bring Grand Cross: Metaworld to Sui.

“Sui chain is the future of gaming, and strategy games in particular. It’s fast, secure, and provides endless possibilities for in-game assets and experiences. Seascape Network is proud to be one of the launching titles,” said Seascape in a statement.

Rather than poach developers for a lot of money, Mysten concentrated on game developers that either hadn’t chosen a chain yet or were coming to Mysten because they want to explore a newer chain with better scalability. Mysten has made a couple of investments, but not many and instead it introduces the developers to VC funds. Mysten also plans to help devs a lot with marketing, said Jennifer Kye, marketing lead at Mysten Labs, in an interview with GamesBeat.

Courting game companies

From the outset, Mysten Labs took the time to court the right game developers working on high-quality games, Cheng said.

“Fundamentally, you need to have a game that attracts people,” Cheng said. “Quality is very important to us.”

Putting it in words I could understand, Anthony Palma, head of gaming and partnerships at Mysten Labs (and my Warzone buddy), said in an interview that you can imagine live service games like Warzone (not a customer) could have a future version where you could buy skins in a marketplace and sell or trade or transfer those skins, enabling players more things to do.

Players could make some money and sometimes come upon a rare skin. But it would be hard for other blockchains to keep up with the scale of a game like Warzone. And if you can abstract away complexities of Web3 onboarding for new players, that allows developers to concentrate on building a great game.

“You can onboard them into the experience without ever having to see the words “crypto, blockchain or gas,” he said.

In seeking out partners, Palma said the company went after partners that were making great game experiences. Developers will be able to address opportunities like user-generated content in a more meaningful way. And companies can re-target players who have churned to come back via rewards. Players can play without Web3, or upgrade to it when they’re ready after playing the game for a while.

“It’s really been difficult to be able to build the game that you want to build at scale with a good user experience up to this point with kind of the ecosystem up to today,” said Palma. “What Sui is looking to do is fix that user experience both for gamers and for game developers by providing infrastructure that can scale to meet the demands of the network. But that also allows you as a game developer to build the game that you want, as opposed to having to work around the constraints of a chain, to try to fit it in.”

Palma said the company was able to find a lot of the developers because he had previously encountered them while being a venture capitalist at Griffin Gaming Partners, the biggest game fund.

“We are a lot easier to integrate. There’s a lot of functionality that’s baked in natively,” Palma said.

The blockchain also has abstraction layers that make it easier to go after a broader gaming audience, Palma said.

“Our tagline is onboarding the next billion users into Web3,” Palma said. “We’re just the backend technology that supports great games and better player engagement and agency.”

Origins

The Mysten Labs team has a lot of technical experience. Cheng himself spent 10 years at Apple and six years at Facebook. He won a prestigious ACM Systems Award, and he admits he was a pain in the ass sometimes.

Anything his bosses found hard, they gave to Cheng. He got into blockchain in part by working on Facebook’s Libra technology, a cryptocurrency project that was killed in 2020. Cheng had left with four other members of the Meta team — Sam Blackshear, Adeniyi Abiodun, and George Danezis — and started Mysten Labs in September 2021.

In September 2022, Mysten Labs raised $300 million at a $2 billion valuation in a funding round led by FTX Ventures (OK, we know what happened to them) with other investors including Binance Labs, Coinbase Ventures, Circle Ventures, Lightspeed Venture Partners and the crypto wing of Andreessen Horowitz (a16z). NCSoft also came in as an investor in a later $15 million round in November 2022.

To remove the cloud from FTX, which collapsed last fall in a huge cryptocurrency scandal, Mysten Labs bought back FTX’s stake for $96 million this spring.

Cheng said the company focused on gaming because game companies tend to be at the technological forefront. They’re willing to adopt new technologies and try out different models.

“It comes down to the desire for the Internet to be fairer, to eliminate a lot of middlemen that use distribution power to profit,” Cheng said.

There are other problems, like the short shelf life for games, the inability to keep fans engaged, and the difficulty of acquiring new users ever since Apple prioritized user privacy over targeted ads, Cheng said. Game developers have been dependent on publishers to fund their projects. Game companies are experimenting with user-generated content, empowered communities, and other challenges. And the costs of finding these solutions cannot be passed on to consumers, Cheng said.

“The game companies are ready to engage with us on solutions, and we understand their pain points,” he said.

One of those pain points is using a blockchain that can easily update a digital asset, like a sword, when its value changes in some way.

“Our five founders believe that basically, the infrastructure of Web3 has to be upended,” said Kye. “It has to be started from scratch. And the Sui blockchain itself came to be because our programming language allows for a more expressive way to build apps.”

One thing that is different about Sui is the consensus mechanism allows for objects to transfer at a much faster rate.

“Previous chains just could not, because of how their engine was structured, could not allow for mass transactions and high speeds at low cost. And that is what Sui is allowing,” Kye said.

The technical background

Sui is a first-of-its-kind Layer 1 blockchain and smart contract platform designed from the bottom up to make digital asset ownership fast, private, secure, and accessible to everyone. Mysten Labs is the original contributor to Sui and the ecosystem has thousands of community members.

The Sui Foundation is dedicated to an independent organization dedicated to the adoption of Sui.

The Mysten team very much believes that the future of gaming will not be divided by Web2 vs. Web3 gaming. The Sui network seeks to enable a great gaming experience – not a “great blockchain gaming experience.” The underlying technology – whether it be Sui or a console – should really be a tool to enable experiences for players, Cheng said.

Sui is a decentralized, proof-of-stake blockchain of which Mysten Labs is a core contributor. The technology behind Sui was developed by former executives of Meta’s Novi Research and lead architects of the Diem blockchain and Move programming language.

Sui builds on innovations in consensus algorithms and leverages novel data structures that result in a high-performance Layer 1, that has expandable capacity while delivering a development environment for rich, dynamic, composable assets that will usher in a new generation of decentralized applications. These innovations enable Sui to scale throughput and storage horizontally to meet application demand while maintaining extremely low operating costs per transaction.

Sui is a permissionless Layer 1 blockchain designed from the ground up to enable creators and developers to create experiences for the next “billion users in Web3.” It is horizontally scalable to support a wide range of application development with speed at a low cost and low latency. Sui can take advantage of more machines per validator to increase its performance. Sui can process something like 100,000 transactions in a second, far more than some other blockchains.

And Sui takes a significant leap in scalability by enabling parallel agreement on causally independent transactions and making most transactions processable in parallel. This better utilizes processing resources and offers the option to increase throughput by adding more resources.

The blockchain forgoes consensus to instead use simpler and lower-latency primitives for simple use cases, such as payment transactions and asset transfers. This enables a number of new latency-sensitive distributed applications ranging from gaming to retail payment at physical points of sale.

“Gaming is a leading sector that has taken a significant interest in the new technology that we’ve been developing and the potential that it holds for gaming overall,” Kye said.

Rivals among blockchains

Rivals are touting zk-EVM technology based on the Ethereum Virtual Machine and they say game companies should converge around the blockchains like Polygon and ImmutableX. But Cheng said that’s based on false ideas and he said such chains don’t have the right data model for complex assets. Those assets are static, not changeable. And he thinks those solutions have not tackled the scalability problem. At the moment, that isn’t showing because very few people are playing games on Ethereum, Cheng said.

“We don’t want to be backward compatible with the wrong way of doing things,” he said.

Cheng acknowledged that bringing blockchain products to market can be complicated and they require a complete solution, from bespoke marketing to accessible technologies and good developer tools. While Mysten is throwing a lot of money at partners, Cheng said he believes the company is positioned for long-term success.

As for game assets, Sui is designed to be adaptable, not rigid. You can update assets on the blockchain when they use Sui. You can change them and combine them. Older blockchains, by contrast, have the wrong fundamental building block, Cheng said.

The blockchain gaming market outlook

Of course, there’s a good chance that the metaverse and blockchain sectors are going to get overshadowed by the excitement around generative AI. In fact, blockchain games slipped to about 20% of venture capital raised by game companies in the first quarter, according to Drake Star Partners. That compares to 50% of all investments in 2022. But Kye doesn’t see that trend hurting stronger companies.

Still, a lot of traditional gamers and game developers have expressed opposition to blockchain games.

As for the crypto and NFT slowdown, Palma said that the scam-like deals are dying off and the real companies are still operating. If you can show a proof of concept that works, then that kind of project is still likely to get funding and traction with hiring. It’s time for the builders to take over, Kye said.

The company has good success in Asia Pacific, landing partners among big Korean companies. In Asia, game companies aren’t as worried about resistance from gamers to blockchain games.

And while Mysten Labs might be late compared to other blockchains, the company believes that we’re in the early stages of blockchain gaming and nobody has a huge advantage at this point, partly due to gamer resistance. The company believes the pie is still growing, and that we’re in the first inning, Palma said.

“This is not the end. This is just the starting line as we ramp up our gaming adventure,” Palma said.