Square Enix becomes a validator for blockchain gaming firm Oasys

Oasys announced that Japanese game publisher Square Enix, the maker of the Final Fantasy games, has become a validator on the Oasys blockchain gaming platform.

That means that Square Enix will help provide the security and computing power for Oasys’ proof-of-stake blockchain network, enabling it to do transactions for its gamers. Oasys says its blockchain is environmentally friendly, and Square Enix is one of 21 initial node validators on its platform.

Oasys is based in Singapore and Japan. As part of this initiative, Square Enix and Oasys will explore the feasibility of harnessing user contributions in the development of new games on the Oasys blockchain.

“To partner with a respected and ambitious gaming company such as Square Enix, helps us to accelerate our collective mission to bring blockchain gaming to the masses,” said Daiki Moriyama, director of Oasys, in a statement. “With our partnership, we will be able to truly bring new experiences and
empower gaming fans from all backgrounds while helping to establish the next stage of growth
for blockchain entertainment.”

Square Enix is one of the most established integrated entertainment companies in the world and
is the publisher behind many iconic videogame franchises. It sold off its Western studios as part of a strategic move to invest in the development of decentralized games with tokenized economies built on the blockchain. Square Enix launched its own Blockchain Entertainment Business division in April 2022.

“We are excited to join the Oasys team and others in the gaming community on this project,” said Yosuke Saito, director of the Square Enix Blockchain Entertainment Division, in a statement. “Our shared enthusiasm for Web3 gaming makes this an exciting partnership for us and we look forward to gaining insights that can advance the creation of all-new gameplay experiences for gamers across the globe.”

Square Enix is the latest and last major gaming publisher to join Oasys’ blockchain, which already enjoys strong institutional backing from other initial validators including the likes of Bandai Namco Research, SEGA, Ubisoft, Netmarble, WeMade, Com2uS and Yield Guild Games. Square Enix has sold more than 173 million copies of its Final Fantasy series worldwide.

With the support of both traditional and crypto-native gaming partners in the industry, Oasys will continue to focus on building better experiences and shaping the future of blockchain gaming, the company said.

Oasys is creating an ecosystem for gamers and developers to distribute and develop blockchain-based games. It solves the problems game developers face when building games on the blockchain. Its strategy is to build the fastest network powered by the gaming community, a scalable network powered by triple-A game developers, and a blockchain offering the best user experience with fast transactions and free gas fees for users, readies participants to enter the Oasys and play.

Oasys is a multilayered Ethereum virtual machine-compatible, proof-of-stake public blockchain project that is scheduled for full launch in 2022.

The name Oasys is actually inspired from the OASIS (Ontologically Anthropocentric Sensory Immersive Simulation) virtual reality world in Ready Player One, and the project was designed from the very beginning to return value to players. The vision is a world where players can have fun and earn rewards through their gameplay, with their time and passion becoming assets of irreplaceable value to them.

While Oasys intends to eventually shift as much of the management of its project to the community as possible (some call it changing into a DAO – decentralized autonomous organization), for now it is currently registered as an exempt private company, limited by shares based in Singapore.

This is similar in nature to the organizational structure of other foundations and companies behind other public blockchains such as Solana Labs, Ethereum Foundation, Terraform Labs, etc.

The company is registered in Singapore primarily because Japan (and Korea to some extent) has many regulatory issues regarding the treatment and taxation of crypto assets. Singapore, on the other hand, has a good balance between being a global crypto hub and regulatory framework for a blockchain gaming business hub to succeed in Asia Pacific.

The core Oasys team comes from Japan, and is an expert group of developers behind Doublejump.tokyo, one of the most successful Web3 game developers in the world with over five years of experience developing various blockchain games. The two most popular game titles – My Crypto Heroes and Brave Frontier Heroes, were the top blockchain games sales since their release in 2018 through to early 2020 (world’s leading blockchain game for trading volume, number of transactions, and number of users on Ethereum).

Oasys was conceived with the idea of 21 initial validators to provide stability, security and structure to the project and these include major Korean gaming companies — Netmarble, Com2us, Wemade, NHN, and Neowiz.

Oasys also recently partnered with ConsenSys to produce an industry-first, gaming-optimized wallet for players, as well as announced a collaboration with Mythical Games, a leading crypto-native games developer to serve as an initial validator.

Oasys addressed the concerns of gamers and developers who see blockchain gaming as a bunch of scams. It said it is clear that for blockchain gaming to succeed, it cannot do so alone. Rather it must acknowledge its limitations and embrace the value and expertise that traditional gaming brands can offer. It is encouraged that we are seeing more buy-in from traditional game developers and gaming companies. However, very few companies have the credibility and legitimacy to attract institutional interest from these triple-A game developers.

“Big gaming companies see the value of engaging users beyond just traditional gamers and gaming also represents one of the best use cases for the blockchain and NFTs,” Moriyama said in an email to GamesBeat. “What it really offers game developers is a chance to pivot away from product and leverage on the technology to create a community. Bandai Namco and Square Enix both highlighted this as a long-term vision for their businesses in recent company updates.”

Moriyama also said that, as things currently stand, games on the blockchain are generally not fun. This is mostly down to the limitations of current blockchain architecture. If you think about how games are judged to be “fun” or “good” in the blockchain — nobody wants to pay high gas fees to execute actions
within a gaming metaverse or wait 15 seconds to 5 minutes for a transaction to be confirmed.

Current consensus mechanisms are geared so much towards decentralization, security and privacy that it can come at the expense of speed, performance and cost. For blockchain powered gaming solutions to be attractive to game developers and succeed in winning the hearts and minds of players, they need to be highly scalable with high transaction speeds and low/zero gas fees for users, the company said. They must have a well-designed user interface, be fully optimized for performance and be interoperable between various multiverses. That’s what Oasys is trying to do.

“The Oasys team recently attended Korea Blockchain Week in Seoul to meet with their validator partners as well as run a Game Pitch Day event for some of the best and brightest Korean game developers and see what new and innovative Web3 games are out there,” Moriyama said. “Alongside Bandai Namco, Arriba Studio and Doublejump.tokyo, over a million OAS tokens and potential investment equivalent to $200,000 in U.S. dollars was made available for Korean Web3 game developers who are looking for support to publish their games globally.

Play-to-earn games are currently banned in South Korea, so the country doesn’t actually have a large user base or market size for blockchain games. However, this is actually a good reason for why Korean game developers have assumed global expansion from day one, Moriyama said.

Blockchain games are designed to be borderless and regionless, so in addition to the benefits for the Korean market being able to develop high quality games globally, this also reduces friction for projects like Oasys to collaborate with Korean game developers in expanding into other markets.

Korea has a lot of potential, as it has a global reputation as one of the spiritual homes for gaming with a large market of both game developers and players, Moriyama said. The company has about 20 people.

Moriyama said current consensus mechanisms are geared so much towards decentralization, security and privacy that it can come at the expense of speed, performance and cost. For blockchain powered gaming solutions to be attractive to game developers and succeed in winning the hearts and minds of players, they need to be highly scalable with high transaction speeds and low/zero gas fees for users. They must have a well-designed user interface, be fully optimised for performance and be interoperable between various multiverses.

We also see resistance from players about earning models in the blockchain, which for many projects is simply not scalable. Focusing on monetary rewards without prioritising gameplay does not motivate users to continue playing the game. The attempt to financialise gaming without regard for the spirit of why we play games simply turns a fun, recreational activity into a job.

This is the most significant reason why we still see so much apprehension from conventional gamers and gaming platforms, who view blockchain gaming as a cash grab.

Fundamentally, play-and-earn is the natural evolution from play-to-earn and pay-to-play models which transfers the value of playing from centralised worlds into the players’ hands. Beyond earning tangential income, it really changes how we approach a leisure activity/hobby such as gaming and transform it into something that can provide tremendous value to both game developers and players.

The most complex South Korea’s Game Rating and Administration Committee does not allow any blockchain-based games to be released domestically. This means that for now, the focus for any blockchain-based gaming projects has to be on foreign markets.

South Korean game developers started turning to blockchain as early as 2017. However, regulations against cryptocurrencies and blockchain technology, including a ban on ICOs that would have helped smaller developers, has held back the industry somewhat.

Japan also has some regulatory issues around the taxation of crypto assets. Japanese firms operating in the Web3 sector need to pay taxes on unrealised gains if they issue a token and that goes up in value. Japan currently levies up to a 55% tax on gains made in crypto by investors, while token issuers reportedly are levied at a tax rate of around 35%.

These restrictions make it a little more challenging to operate, but not insurmountable. Projects like Oasys will just need to take a hybrid operational approach and operate out of more crypto-friendly jurisdictions, respecting the laws and regulations of all target markets, Moriyama said.

To become a validator, an entity must have at least 10 million OAS tokens staked through a validator contract. This is not too dissimilar from how validators run on other blockchains. The staking reward from Oasys is determined over time based on how long the validator has been operating.

Oasys intends to launch its public sale and be fully on the mainnet by the year’s end. The company recently raised $20 million through a private token sale in July alongside Republic Capital, with participation from Jump Crypto, Crypto.com, Huobi, Kucoin, Gate.io, bitbank and Mirana Ventures.