YouTube Gaming Head Talks to Delphi Digital: Blockchain Games, Web3, and Creator Economy

Author: gm/Rhythm Research Institute

Recently, Ryan Wyatt, the head of YouTube Gaming, appeared on the latest episode of Metaverse Musings, a show under Delphi Digital, where he discussed the future of blockchain gaming, Web3, and the creator economy with Delphi Digital co-founder Yan Liberman and partner Piers Kicks.

Ryan Wyatt served as a commentator for Major League Gaming for seven or eight years before moving to YouTube, focusing on the Machinima channel, which has years of experience in the gaming industry.

He explained to the audience the role of Big Tech, such as blockchain technology, in Web3, the transition from Web2 gaming to blockchain gaming, and how crypto can unlock the creator economy, among other topics.

Next, Rhythm BlockBeats has organized and translated the interview as follows:

Piers: Hello everyone, welcome back to the latest episode of Metaverse Musings. Since the last episode, we’ve had a brief hiatus, but we are incredibly excited to kick off the new year with our first episode featuring Ryan Wyatt.

Ryan Wyatt, as the head of YouTube Gaming, joins us for this discussion. Ryan, thank you for being here! Also joining us is our co-founder Yan Liberman.

Ryan: Thank you for the invitation, I’m glad to be here to talk about everything gaming.

Piers: Yes, that’s great. If possible, I’d like to start with some introductions for those new friends to get to know your background.

Ryan: Sure, gaming has been a part of my life for a long time. I started by participating in some competitions and then worked as a commentator for Major League Gaming for seven or eight years. In the early days, I primarily ran some programming and tournament infrastructure for games, and later transitioned to Machinima, which is a multi-channel network focused on global gaming.

Additionally, the early gaming channel on YouTube, MTV, was very interesting. I collaborated with many different content creators and tried to figure out how to monetize gaming videos. It has truly been an interesting journey, and about eight years ago, I eventually came to Google. As the gaming video market grew larger, I entered the gaming vertical there.

Now it is one of the largest verticals on YouTube, with hundreds of millions watching every day. It has been quite a long journey, but it has been enjoyable for me.

As a gamer, commentator, Justin TV and Twitch streamer, and someone working in gaming business from nine to five, I’ve seen many people from different industry perspectives do the same. I feel like I’ve done it all, and it gives me the confidence to be here today for this conversation.

Piers: That’s awesome! Can you tell us what initially attracted you to YouTube and what the whole process was like?

Ryan: Yes, that’s a great question. We received investment from Google Ventures early on at Machinima. YouTube grew so quickly, but at first, they didn’t really staff the program properly until Amazon acquired Twitch, and Susan (who started Google from her garage) was appointed as the CEO of YouTube.

At that point, YouTube began to realize it needed to launch a gaming vertical and take it more seriously, even though none of us had the relevant vertical expertise at the time.

Yan: You’ve been at Machinima from the beginning, and for a long time. I’m curious about what the most interesting project you worked on there was?

Ryan: There were many, but I prefer to talk about the one that failed because I learned the most from it. In the beginning, we were behind our competitors and needed to innovate a lot for game publishers, creators, and audiences.

So we launched a standalone YouTube gaming app that users could download as a mobile app. Basically, it allowed users to shoot relevant gaming videos and build as quickly as possible in a more user-friendly environment since everyone had autonomy over it.

On the surface, it all sounded great. When we launched it, I personally loved the app, but it didn’t achieve the success we expected. It didn’t get much traffic, and it was clear that YouTube was directing users to its main website or app every day.

So we found ourselves needing to compete not only with Twitch but also with YouTube itself, and for those heavy mobile users, if you’re not a top-five app, you won’t get much traffic. Later, we ported it back to YouTube and made some trade-offs, and now there are 350 million logged-in users watching gaming videos on that channel every day.

Piers: That’s all really cool, but I’d like to hear some of your thoughts on Web3. Currently, some major tech giants are on the opposite side of this movement, and I’m curious about your perspective on the role these big platforms will play in the Web3 era?

Ryan: That’s a great question, and at YouTube, we’ve spent a lot of time thinking about it. The simplest answer is that, like what YouTube is doing in Web3, we are the largest learning and content repository in the crypto and Web3 space.

This also highlights the Web3 content that YouTube provides in the Web2 world. YouTube will be responsible for bringing hundreds of millions into this space and helping them learn from it. Additionally, we are looking for other ways to engage in this space.

Recently, we’ve tried some interesting things. Every year, we prepare gifts for our top creators, and this year we collaborated with three different artists to send NFTs to creators, which they loved. So for YouTube, figuring out what we can do in the creator economy and continuously bridging the gaps is key.

Now, some large tech companies have built strong moats in Web2 and are gradually observing what’s happening in Web3 and how they can participate. YouTube will also develop products around it, and as audiences and creators have more questions about Web3 products, YouTube will step in and take the time to provide solutions.

At the same time, I think the best part of Web3 is that it won’t be centralized; it will be developed and built by everyone together, which is the most inspiring aspect of this movement.

Piers: Yes, that’s true. I also want to know how all of this is evolving and the role and position of gaming in modern society, as well as what changes we might see in the future digital and entertainment landscape?

Ryan: For me, I’m amazed at the changes happening in the digital entertainment industry, not to mention that everyone is participating in some way, and people are starting to discuss what the metaverse is.

In it, they not only find entertainment and gaming but also discover new social identities and communities they enjoy. Gaming is indeed the number one form of entertainment for Generation Z, and the range of game types being developed has become broader and more inclusive.

Yan: You’ve gradually entered the crypto space; how did you fall down this "rabbit hole"?

Ryan: I’m not very interested in DeFi applications like crypto, and I find it hard to have a real interest in cryptocurrencies; in my mind, it flashes as a form of gambling.

But where I really started to get interested was in NFTs, just like applications in the gaming environment, where people want verifiable digital ownership, which is important to me. Additionally, I think some of the smartest people I know are in this space, which is fascinating in itself.

Piers: What resonates with you the most and excites you about blockchain gaming?

Ryan: As a gamer, I love spending money on games I care about and want to be involved in them as early as possible. Imagine I buy a skin that won’t be resold on the market; as the game evolves, my economy grows with it. That’s what truly fascinates me about this space because you can see people sharing the same vision and working together to achieve it.

When I invest in any game, especially a significant one, I hope to have some liquidity in that investment. If the game has some liquidity and resale value, even if it’s losing money, I might be willing to invest more.

What excites me the most is that, besides Axie Infinity, people have already seen many high-quality blockchain games. You might have heard of a fantastic game called Ember Sword; it’s really engaging and will genuinely open users' perspectives in a more natural way. As a Web3 gaming enthusiast, I will continue to see more examples like this.

Yan: You have a deep understanding of the Web2 gaming space and a grand vision for Web3. What elements of Web3 gaming do you think will resonate most with traditional Web2 gamers?

Ryan: I think it’s still the open market and digital ownership aspects, which is something many people are talking about. Even though it’s technically feasible in Web2, people haven’t done it. Additionally, it’s somewhat like the concept of an open economy; digital ownership has almost become a standard product feature in developers' minds.

Yan: Based on your gaming background and what you’ve seen in Web2, what do you think is still missing in the Web3 gaming and NFT scene that could help accelerate its progress to a new level?

Ryan: I think some Web3 games or NFT projects require users to put in some effort to identify because they might be selling their NFTs just to raise funds, and the game will never launch. For example, a user spends $200 to buy an NFT to enter a game, but two months later, it’s only worth $6, or they can’t even own it. I do think we need better security.

Whether it’s better UI, consumer-facing wallets, or underlying technology, I also think people need to be able to explore and take risks without sufficient judgment, which are also things that need improvement in blockchain gaming.

Yan: Do you think the most successful games in the future will have to avoid crypto components, where people come in to play but don’t realize there are crypto elements?

Ryan: I don’t think every game needs to be a blockchain-based game, just like Minecraft doesn’t need to be. For example, I want my son to be able to play this game easily without worrying about how to learn to deposit Ethereum into his digital wallet; he should just enjoy the game itself and have fun.

Many people play games primarily for entertainment; they don’t need to be introduced to economics too much. They shouldn’t have to spend hours setting up a wallet before they even start playing.

We still have a long way to go, and we are moving in that direction. Ultimately, as the entry barriers lower, these processes will become smoother. I also think that’s where the fun of continuously optimizing lies; as this space opens up to users, in the future, newcomers playing blockchain games will be treated as native crypto residents without any discomfort.

Piers: I’m curious about your stance on DAOs. Will there be positive community governance in large-scale games in the future? Do you think there’s a clear path for game users to make meaningful decisions about the game’s future and its economy?

Ryan: Generally, I’m optimistic about innovation and evolving things. I think in the future, in a community where most people are not game developers, there will be corresponding layers of authority for decision-making. People will be interested in what products we develop and vote on it.

Piers: How does Web3 impact the creator economy on YouTube and beyond?

Ryan: Indeed, Web3 has opened up many opportunities in the creator economy. For example, in the game Axie Infinity, people earn from SLP or what they are doing and continuously introduce them to the community. Now I’m starting to think like an NFT practitioner, wondering if there’s a way for gamers to participate like traditional artists.

For instance, allowing them to create a skin and then place it on the in-game NFT market, just like anyone can create art now and publish it on OpenSea for trading. I hope to see gaming become like that.

Piers: What are your thoughts on regulation in gaming? We have indeed introduced monetary economics into games; how should we address a range of reporting requirements, allocations, compliance, and other issues?

Ryan: As it begins to roll out in various countries, we should look at it from a macro global perspective, which will provide more stability and understanding of the market. Right now, it’s still the Wild West; people don’t know how to touch it or interact with it. When regulation comes, most of the governments need to first understand it.

Only by truly understanding it can they start to formulate corresponding strategies. I think in the U.S., it will continue to evolve and become a thriving ecosystem and economy. Although it will be very unstable at first, I really welcome it and hope to collaborate with more like-minded people.