Matthew Wolf interview: Why Zynga is diving into blockchain games

Matthew Wolf started a new job and a new studio at Zynga to make blockchain games back in November. Then Take-Two agreed to buy Zynga for $12.7 billion in January.

Was it a coincidence? Who knows? But Wolf is excited about spinning up the new business to build games that take advantage of blockchain games and nonfungible tokens (NFTs) for Zynga’s customers, who are older players who embrace casual and midcore games on mobile devices. They’re not the typical hardcore console and PC game players who are allergic to any mention of NFTs.

Wolf, a former Coca-Cola game executive and former exec at Electronic Arts, is excited about experimenting and creating games that can take NFTs — which use the transparency and security of the digital ledger of blockchain to authenticate digital items — and give players new ways to play as well as ownership in games.

I talked to Wolf about his plans, and how he hopes to overcome the resistance of hardcore gamers, and why he’s still forging ahead with his plans even as Take-Two prepares to acquire Zynga. Wolf is hiring for key positions, including a lead producer, creative director, and technical art director.

Here’s an edited transcript of our interview.

GamesBeat: Have you had to deal with much resistance? Is there a certain communication style you’ve used to handle things like that? I’ve seen the hardcore folks run into lots of trouble. Ubisoft, Team17, GSC Game World, they all backed down on their NFTs. Troy Baker as well. But then Netmarble announces that 70% of its new games will be NFT games and nobody bats an eye. The mobile game space seems more receptive.

Matt Wolf: Overall I’d say it was positive. We see the chatter that’s happening on the sidelines, people discussing it. It seems net positive. People want to know what we’re doing. There’s some questions. “How is Zynga going to enter this market? What’s Zynga’s strategy? What’s their approach? What are they going to do?” But I didn’t personally see any blowback on what we were doing. It was more about curiosity. “That’s cool, but what are they going to do?” There’s a question mark about what’s next.

GamesBeat: It feels like it’s important to know who your audience is and what they think about this particular subject around NFTs. You have such a broad audience that maybe it might be hard to tell. If there’s resistance, where would it be? Where should you logically target within your very large demographic base? Do you think you’ll have a targeted approach here, or do you think this is something that might be broadly reachable?

Wolf: We’re creating our first product from the ground up with the crypto speculator, crypto whale, hardcore enthusiast in mind. We think that’s who’s populating most of this world now. The reason why we’re probably focusing less on hypercasual fans is because to get to playing one of these games, you have to go through an onboarding which includes moving fiat currency into a crypto universe, into a game universe, through various wallets and so forth. For now we’re focused on the market that’s currently consuming this, and we’re building an experience that we think will appeal to that market, which is different than how we might approach our traditional hypercasual market. There will be a day, we think, where the two will converge, but right now we’re focused on the folks that currently consume this stuff.

GamesBeat: How are you approaching the NFT and crypto expertise part? Are you building that in house as well, or are you turning to someone like Forte to help?

Wolf: We’re building internal capability. It’s important for the company to future proof itself. We believe this is a market that will continue to expand and we want to be ready for it, so we’re building our capability. That includes building an internal studio, which we’re doing. And then also fortifying that with outside expertise. The Forte alliance is one of those. We’ll make more announcements as the year rolls on with other partnerships we’ll be bringing into the fold. That’s our strategy.

In terms of our own internal studio, one thing that I’m pushing right now is to bring in that best of breed talent. We’re looking to bring in a head of community, an expert in econ and tokenomics, an executive producer who has a lot of passion and some prior experience with blockchain and NFT collection, things like that.

GamesBeat: Do you think this will be a mobile game first, or a PC and mobile cross-platform game?

Wolf: It’s going to be a purpose-built product. It’ll be a Web3-based native product. It’ll exist wherever Web3 can exist, on PC and mobile.

GamesBeat: It sounds like you would want to mix together what you might call crypto native and gaming native people to get a quality, crypto-savvy product.

Wolf: This is where we need to run a panel on who the consumer is. Who’s playing this stuff? What’s their mindset when they play? Because it’s a whole discussion. But I would say initially we’re focused on speculators and more hardcore players, I suppose, as it relates to blockchain games, and NFT collectors. That’s our sweet spot. We’re not disillusioning ourselves that casual gamers or players are inhabiting this world at scale yet. We think that’s where it’s going, but right now we’re focused on product that we think will appeal to whales and speculators, folks that are in this world on a daily basis today.

GamesBeat: How did you get interested in this space?

Wolf: We’re all in tech. We’ve all been in games and tech for a long time. Around 2014 when I was still at Coke, I started to invest and play around with crypto. I was just completely enamored with the idea of decentralization and blockchain and all that. I just kept going. Then I started to advise a few companies. One was Epics.gg, the trading card company that’s on the blockchain. I’ve been with them for about four years, since they started. I just saw the potential for this immutability and the ability for people to pull more value out of a game than just entertainment as they play, in the form of yield in some way, shape, or form. Something they could profit from or flip or whatever because it was their property.

I’ve been in games for a long time. I’ve always seen this evolution of–okay, we were once a shrink-wrap business in retail. We asked people to pay $60 for an experience and they did that. Then we went to free-to-play, and everyone thought it was crazy, but then that became a huge business. I feel like we’re at another floor. Now people will potentially get paid to play these games, or be able to generate yield by spending their valuable mindshare playing these games or experiencing these collectible products. I feel like it’s a natural evolution.

GamesBeat: When you think about some of the resistance we’ve seen on the hardcore front, does it sound like that might just be a crowd you’d bypass? Or do you think there’s something valuable to learn from that response? Maybe to emphasize a certain kind of design because of that concern that’s out there?

Wolf: I wouldn’t bypass anybody in the games world, ever. You have to listen. What I’m learning from that is, maybe it might be a good idea today, where the current market is, to purpose-build content that delivers very clear value to these people. A product that’s built for this reason, for a particular market, rather than just bolting something on to something else that they’ve known and loved for years. That feels like a threat to the economy they’ve grown to appreciate. But I listen to everyone very carefully. I would avoid bolting an NFT solution on to an existing ecosystem. That can rub people the wrong way.

GamesBeat: It sounds like they’re suspicious of–these can be turned into very monetization-heavy loot box type things. Or they could be scams in that you could set up pre-payment for things like characters and then maybe never deliver the game.

Wolf: I think they are suspicious, and I think they do–remember, we have to remind ourselves who’s playing these games today. A lot of the voices that we hear may not have ever experienced even putting money into a crypto wallet. They may not have crypto wallets at all. They may not have experienced what it’s like to purchase a digital good and then sell that digital good. They don’t understand inherently what this is about.

That’s the piece where we have to be careful of who we’re selling this idea to, who we’re providing a product for, and how we’re explaining what that product is. If we focus on hardcore gamers, the assumption is, “Well, of course they know the value of NFTs and how this all works.” But many of them may not. We’re selling them something that they never asked for, that they don’t understand. If we’re going to do that, then we have to market and explain the value proposition very carefully and not assume that they know it all, that they have a clear understanding of what it is.

With a loot box situation–this is more of an investment situation. You get something, and as long as the publisher delivers on the road map, the value should sustain. These people can buy and sell their goods and recoup if they want to or profit if they want to.

GamesBeat: That gets to the other objection I hear, which is that this is a pump and dump or a Ponzi scheme. The people who buy in early will get to resell at high prices, but as soon as the economy tanks in some way or the game gets less popular, then everybody starts losing money on what they invested in. That’s what they’re afraid of, that the economies won’t be well-designed.

Wolf: It’s an interesting topic. I can tell you this. We’re taking economy extremely seriously. One of the things we want to crack in all of our experiences is a durable economy, an economy that lasts. We’re studying government economies, sovereign economies. We’re working with some of the brightest minds in the tokenomics space to help us figure this out. We’re building a game design around economies so that we can get to a sustainable economy that is durable.

I guess by saying that, I’m agreeing with what you’re saying. It’s incredibly important to us to figure that out. Our pledge to the community will be that we’ll continue to spend time and effort to figure that out, and when we arrive at the market with our road map, they can be confident that we’ll deliver against your road map.

GamesBeat: There are some interesting things around design choices, too, that determine whether you can do it in this country right now. The state of Washington could be very strict about whether rewards constitute something like a gambling payout. It has to be designed as a skill-based game instead of a chance-based game. It seems like there are things to be careful about on the regulatory front, country by country, state by state. Some of that might stand in the way of designing something that people would go bananas for.

Wolf: We’re a publicly traded United States company in a progressive market. These are things we’re constantly looking at and thinking about and preparing for. What players want, in the end – what the investors, the people that play, really want – is they want an experience where they feel safe. They want an experience that’s fun and enduring. And they want to be able to trust the company that’s bringing it out. If we can deliver against those touch points we’ll be in a good spot, and we’ll continue to build a relationship with our users over time by continuing to deliver against those things.

In terms of play mechanics, in terms of the way yield works and all of that, again, we’re working hard at that. Obviously all of the things that you mentioned are top of mind for us. But we think we can be competitive, and we think we can bring out a product that’s sustainable, fun, and delivers a good value to folks.

GamesBeat: Do you have a way to illustrate for gamers, “Here’s how you’re going to have more fun”? The ways you can do things differently from the way existing games work.

Wolf: For one thing, speaking candidly, I don’t know, if we went in and did something completely differently, if it would actually be celebrated or completely rejected. When you do something completely different for an audience and a cohort that never asked you to do something completely different, you risk complete tissue rejection. You have to be careful about that, at least from our point of view.

Our strategy is to come in and deliver something that’s very high quality, very high value, that people can relate to. Then we want to incrementally begin to innovate against that and create some fun surprise and delight moments that are going to get people that much more engaged, that are going to create that much more dimensionality of engagement and celebration. That’s how we’re going to approach this. Our innovations will feel significant, but they won’t drive the core of the product for that reason.

GamesBeat: There’s a certain kind of objection that I’ve heard that seems hard to answer right now, which is that NFTs are a lot of trouble to get started with. What is the thing that I can do in an NFT game that I can’t do today in some other game? They want you to do something familiar, because then they’ll play it, but they’re also asking–if it’s going to be more hassle on the player’s side, then what is the upside for them?

Wolf: It’s fair. For us, it’s about ownership and the open nature of what these games give players. If we’re true to that promise, then people will be able to truly own their items or their characters. It’ll be a wallet that they control. They’ll be able to do what they want with those items. They’ll be an owner in part of our experience and our game for the first time ever, at Zynga. And the first time ever for a lot of publicly traded game publishers. They get that. They get ownership. They get the ability to make a decision about what they want to do with their game items any time they want. I think that’s pretty powerful. You won’t get that in a traditional video game. You rent traditional video games, often. You don’t own the content.

GamesBeat: You probably aren’t cooperating yet, but do you see yourselves aligned with Take-Two on NFT games?

Wolf: I’m kind of muzzled as far as talking about the acquisition and Take-Two. I will point to public statements from Strauss, and I will just say that Strauss’s point of view and the way he’s looking at the NFT space is just like I am. I see his statements and I think to myself, “That makes a lot of sense to me. That’s logical.” So just based on public statements, I feel like there’s alignment. If you look at statements that Frank Gibeau has made, our CEO, there’s alignment there as well. That’s just public stuff I can point to.

GamesBeat: Backing up a little, was there anything you and Frank talked about that made you decide this was the right company for you to do this at?

Wolf: I have a long history with Frank. I started at Electronic Arts way back in the ‘90s. Frank and I worked together closely back then. We’ve known each other for decades. Bing Gordon is on our board. He was also obviously one of my mentors at EA. I know Bernard Kim really well. I’ve known him for a decade. We’re close. It almost felt like a homecoming to me. They’re galvanized on innovation and pushing and understanding what’s coming in the future. Mark Pincus is a big innovator and visionary, obviously. When you put those ingredients together–they invited me to come in and do this, and it was the fastest job decision I ever made in my life by a mile. It was automatic. It was easy to make the call.

Getting into it and experiencing it, it’s been an amazing ride so far. It’s very early still, but they’re giving me a lot of support, a lot of great guidance, and a ton of room to do what I need to do in order to bring these products to market. It’s awesome.

GamesBeat: When I look out at some of the resistance comments, it’s interesting to me to see a fair amount of them come from game developers. I wonder if you find there’s a certain kind of game developer that really likes this, as opposed to people who’ve spoken out publicly against it.

Wolf: It’s an interesting phenomenon, isn’t it? Just conversationally. We’re in an innovator’s business. We have to constantly be looking around corners and constantly figuring out what consumers want next, how to bring new features to market in non-blockchain gaming experiences. You would think that everybody would want to jump in the blockchain space.

I think some of the resistance that we face, just as an industry, comes from some people in the industry being conservative. Game players, core players, tend to be sometimes conservative. Some of the folks that build these games are conservative too. It takes a breed of person to really want to move to innovate in a way that’s going to push the limits of what they know and where they think the industry can go and do it responsibly. Not everybody can see it that way. Not everybody can see the forest through the trees that way. Maybe that’s where some of the resistance comes from.

GamesBeat: One interesting challenge here is how to communicate well about the issue of gamers’ rights, what they’re entitled to. We have a certain line there where it’s been spelled out around things like loot boxes and pay-to-win designs. Choosing whether to pay or not, that’s almost become a right. You have something that could potentially be really good for gamers’ rights or really bad for them, depending on the design. I guess the job is convincing them that this could take gamers’ rights to a new level, giving them so much more agency over what they want to do. There’s a path to that. But what they see so far, they’re worried about.

Wolf: And I don’t know why, entirely. If I’m going to be dead honest, I don’t know what the apprehension is, completely. There’s the rights issue on the part of the player. That’s one discussion point. There’s also the whole idea around collectibility, the ability to collect something of value and hope that the value rises as time moves forward. Which, by the way, is not unlike any collectibles business, whether it’s sports paraphernalia, whether it’s art or anything else. The idea is, I want to buy this because I love it, or I think it’s going to increase in value, or both. Then time will tell if I made the right decision or not.

It’s like what’s happening in the collectibles space with digital collectibles. It’s just that now, with gaming–the digital collectibles space is purely collectible. Now, with the advent of utility as it relates to metadata in the NFTs, there’s this operational element of how I can use those collectibles. That, on its face, is pretty powerful. It’s a whole new layer of dimensionality as it relates to collection. I like the art. I like the company behind this. I believe that this project is going to go in a positive direction. Oh, I can actually do something with this now because of the metadata? What can I do with it? I can do this, that, and the other thing, and that might actually increase the value of my thing? That’s pretty cool. That’s interesting.

That is a separate conversation. That is a value proposition conversation, at least in my mind, not necessarily a players’ rights issue. The rights issue comes down to copyright and trademark as it relates to permissions on the art itself, which is separate. What does that mean to somebody who’s not an artist themself, to be able to build that IP out? They may not even need that element of it in order to be valuable. Or they may, depending on who they are.

GamesBeat: I guess it comes down to, “Show me the game.”

Wolf: Kind of. I think it’s really, “Show me the trust. Show me the dedication that you have to continue to deliver on the road map that you’ve set out. Show me your obligation to that road map. Show me that you’ll deliver on these milestones. If you show me that, I’m along for the journey, because it’s cool to see this continue to come to life.”

I don’t know why, exactly–the press, particularly, seems to get entangled with this blockchain gaming business. I don’t know why. But I think it will thin out a bit as the industry matures, as bigger players come in that are taking a responsible, safe approach and delivering on fun against this stuff. That’s our objective.

GamesBeat: I think a lot of the press has taken on the role of being the Guardians of the Galaxy right now. Wary of the early days of free-to-play. I’m just anxious to get to the real games.

Wolf: I think we all are, and I also think we need to get out there with different products and show the world that we’re doing this responsibly. We have high quality products. We want to build this relationship with our users. We want to build that relationship on platforms like Discord and Twitter and really learn from them and build this conversation, this platform with them, so we can then move forward and build things almost with them. In that way, everybody is along for the ride. Nobody’s building in a vacuum. I think that will help over time. We take that very seriously. We’re a community-based publisher to begin with. We connect through games anyway. That’s a natural crossover to our direction as we move forward with blockchain games.