Core Loop raises $12M to develop sandbox MMO with blockchain

New game studio Core Loop has raised $12 million to develop a sandbox massively multiplayer online game using blockchain technology.

The company was started last year by mobile game veterans Vincenzo Alagna and Dan Chao. They fired up Core Loop and raised $2.4 million, but they didn’t talk about the blockchain part at the time. Since then, that part of the industry has exploded. Their MMO will have a player-driven economy, a dynamic changing world, and some blockchain components as well.

And that focus on blockchain is one reason the company has been able to raise money from Andreessen Horowitz (a16z), which led the round, and additional investors Galaxy Digital, Initial Capital, Dune ventures, 1up Ventures, and Sisu Game Ventures.

“Vincenzo kept asking me if we wanted to add blockchain to it, and we decided to do it,” said Chao in an interview with GamesBeat. “Blockchain is becoming more and more popular, and once we sat down and started to do the design of how it actually fits into the game, we convinced ourselves this looks pretty exciting. We think it can work and it does feel like adds a lot to the game. It doesn’t take away from the game.”

Times are good for game startups created by veterans. In the first nine months of 2021, the money pouring into games surpassed $71 billion for investments, acquisitions, and public offerings, according to Drake Star Partners. So much activity has come from gaming’s pandemic boom that I suspect we’ll start seeing shortages of game developers. On the other hand, a lot of talented people didn’t get a chance to get funding in the past, and they’re now benefiting.

Core Loop has been able to build up to 15 people. Chao thinks the team may add another 10 people over the next six months.

Veterans

Alagna, who is CEO, had roots in Machine Zone and Gree, and he has worked for more than 20 years in technical roles. Alagna was president and chief technology officer and oversaw multibillion-dollar franchises such as Game of War: Fire Age, Mobile Strike, and Final Fantasy XV: A New Empire.

Chao, president, has also been in games for more than 20 years as an engineer, game designer, and producer for PC, mobile, and console. He was the lead game designer at Funzio, which was later acquired by Gree for $210 million. Chao led the design on multi-million dollar titles such as Crime City, Modern War, and War of Nations.

Their remote team is spread out across the U.S., Canada, Australia, Europe, Japan, and New Zealand. All of these ingredients made it easier for Andreessen Horowitz to invest.

“We believe the next generation of MMOs will combine the best of social and systems design from traditional MMOs with a Web 3 powered virtual economy built on true ownership and the ability for players to earn a living in the game,” said Jonathan Lai, a partner at Andreessen Horowitz, in a statement. “Core Loop is leading the way and we couldn’t be more excited to work together.”

Community led

Above: Vincenzo Alagna is CEO of Core Loop.

Image Credit: Core Loop

Their focus is on community leadership, and that’s one of the things that was appealing about blockchain. They thought more about how they were system designers and that the gamers themselves could be more like game designers. They decided to mix their deep expertise with game design and the new technologies and models such as Web 3 (the decentralized web that takes advantage of the transparency and security of the digital ledger of blockchain) and play-to-earn, where players can own the items they buy in a game and then resell them.

“We think the player should be more in control of the game. We analyzed how to solve that issue in multiple ways,” Alagna said. “There has been this convergence of Web 3, blockchains, governance coming together. We want to shift some of the control to the players, and we have this trust layer. We looked into the different options. We saw others validating the technology. It turned out the climate was right for us to use it.”

In many role-playing games, roles such as merchants or crafting are often relegated to AI non-player characters. But Core Loop wants to see how much it can push those systems into the hands of players while still providing rules that help regulate those dynamics.

Players will also have agency in other ways. Players will be able to choose not just their hero class but their role in a sandbox world.  The lore of the land should take form through player actions and their history in the virtual world, as players could become story writers, warriors, merchants, or leaders.

The company is making its game for mobile and PC. While that is some extra work, it has a good reason for doing that.

“If you had an MMO that you play easily during the day, whether you’re at school or in the office and just kind of have that on your phone,” Chao said. “You could be grinding and earning resources that way, killing some small monsters, but then you still go home on your PC and do more complicated things like raids and that sort of stuff. That’s the goal there.”

He thinks players would gladly farm resources and kill easier monsters all day while they’re in school or the office. The game stresses preparation like what hero should be equipped, what gear to wear, and what other items should be farmed before a raid.

The blockchain role

Above: Dan Chao is president of Core Loop.

Image Credit: Core Loop

Play-to-earn games such as Axie Infinity use nonfungible tokens (NFTs), which use the blockchain to uniquely authenticate one-of-a-kind digital items. Since digital ownership is easy to establish, NFT-based game items can be bought and resold easily. And that provides new roles for the community and opportunities for self-governance in games.

In the game, players will be able to go on adventures and kill monsters without ever experiencing any blockchain. The most important thing for Core Loop is to focus on making a great game first. The game will be free-to-play so you will not need to purchase anything before playing. They said that adding blockchain doesn’t mean that every resource in-game will be a token or every item will be an NFT. That would be unnecessary. It should be interesting for users whether they decide to interact with the blockchain or not.

“As a free-to-play game, you don’t have to buy you know anything to start playing our game,” Chao said. “I think that’s really important for us. “In the game economy, not everything will be a blockchain token. So you can still play, harvest gold, pick some berries from a bush, all that sort of good stuff. That’s still just normal MMO activity. There will be some like blockchain currencies that people can earn.”

But certain roles, like a land baron or a blacksmith, will require that you participate in the player-driven economy and the blockchain tech. But killing monsters, going around adventuring, and raiding will be normal free-to-play activities.

The developer can set up these roles that will be performed by humans rather than AI characters, Alagna said.

“We shift this control back to the players, and we regulate a bit more of the metagame this way,” Alagna said. “That’s what we got excited about.”

Some crypto experience

Above: The Core Loop logo

Image Credit: Core Loop

Chao tried a blockchain game dubbed Crypto Assault a few years ago, just when CryptoKitties was coming out. He learned that requiring players to make a pre-purchase to play a game is a difficult onramp for players. If you have to set up a Metamask wallet and learn how to do blockchain transactions before you start playing a game, that’s a big turnoff. It’s also not much different from the premium games model.

“You can have a game be free-to-play but still have different places in the game where you earn a blockchain currency,” Chao said.

Fun first

On top of that, Chao said it was good to remember to focus on making a fun game first, rather than paying attention to other matters related to the blockchain.

Alagna said more tech has come out in the meantime, like Layer 2 sidechains, which can simplify a lot of the problem of onboarding people to blockchain games. The company is evaluating a lot of these right now, and they should help.  With modern games, developers have access to cloud servers, ready-to-use engines, community and chat tools, and now trust layers.

While they like what NFTS can do for games, they’re not fans of games with weak gameplay.

“We are making a fun game first,” Chao reiterated.

Chao thinks that the intersection of blockchain and the MMO genre is perfect. Players can drive the world forward by working together. Imagine a giant walking across the world that requires a large group of players to kill it, they said. When it is killed, it falls over a mountain to reveal a dungeon that links to a new zone. It’s also important the world is seen as resources, fortresses, and territory that guilds will want to capture and control.

Chao isn’t quite ready to have a whole game designed purely by the community. But he thinks the gamers should have more say in a game’s design than they have had so far.

“I’m not ready to go all the way like the whole game should be designed by the community,” Chao said. “It’s up to us to make a great game. Certain things in the game can be sold by the developer. Some revenue can go to a player. It depends on what you want to make tradable on a decentralized exchange. And it doesn’t have to be a pyramid scheme, which has been done in the past. You can think of something of value like a large ship in Eve Online.”