Welcome back to Chain Reaction, where we unpack and explain the latest in crypto news, drama and trends, breaking things down block by block for the crypto curious.
For our Tuesday episode this week, we talked to James Zhang, a 24-year veteran of the video game industry -- first as an artist, then as a founder and investor. Zhang, founder and CEO of NFT art consultancy Concept Art House, started his career as a concept artist at LucasArts, the studio behind the Star Wars video games.
Concept Art House launched 14 years ago with a mandate to provide art to video game companies, and in that time the company has helped ship over 1,000 games, Zhang said. But in 2021, the company honed its focus to exclusively serve customers building web3 video games as Zhang kept identifying opportunities at that very intersection.
"Over the last two years, we have had a total pivot into web3, and there's kind of no looking back," Zhang said.
Concept Art House has worked with both creative brands looking to build a presence through web3 video gaming and crypto-native companies that lack experience in gaming and art creation, according to Zhang. The company has worked on projects with NFT giant Dapper Labs, the company behind NBA Top Shot, and comic book creator Frank Miller, best known for writing and illustrating "The Dark Knight Returns." Last October, it raised $25 million from investors, including Animoca Brands, and from angels such as Axie Infinity creator Jeff 'Jiho' Zirlin.
But despite Concept's initial wins in web3, the crypto bear market has hit NFTs particularly hard in the past few months, making its work much more difficult. Zhang said crypto winter has had three main effects on his business -- first, that low token prices have caused people to be more careful about what NFTs they buy; second, that venture funding has to last longer; and third, that new token launches are no longer a major catalyst for growth in the NFT space.
One of Zhang's main areas of focus these days is on helping artists monetize their skills within web3.
"We want to create a really powerful artists' network that can credential and identify who an artist is and what they've worked on in web2 and web3. So instead of creating one [piece of] IP, we want to create a platform that's really friendly for artists in web3," Zhang said.
Compensation for the artists behind NFTs has been a controversial topic, with artists such as Seneca, who illustrated the images in the Bored Ape Yacht Club project, speaking up about not being compensated in a lucrative way.
Zhang sees both sides of the issue, saying artists in general are both "underpaid, and they're paid what they're currently worth" based on market value. He thinks artists have some agency to improve how they're compensated and sees web3 as a tool that can help them in that process.
"The artists who are more financially savvy, who understand community, have more power. They need less agents, less middlemen. That's kind of the promise of blockchain," Zhang said.
"I think in the future, you will see this fork for most professional artists -- do you want to try to understand finances more, your role in it, your role in the community, your role in technology and contribute as a highly skilled artist? Or do you want to just paint and draw really well?"
You can listen to the full episode to hear more of Zhang's thoughts on how artists can position their skill sets in web3, as well as how he thinks about intellectual property and ownership issues in the NFT world.