Welcome back to Chain Reaction, where we unpack and explain the latest crypto news, drama and trends, breaking things down block by block for the crypto curious.
For our Tuesday episode this week, we spoke 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 art consultancy NFT Concept Art House, began 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 more than 1,000 games, Zhang said. But in 2021, the company fine-tuned its focus to exclusively serve customers creating web3 games, as Zhang continued to identify opportunities at that very intersection.
“Over the last two years, we’ve had a complete shift to web3, and there’s no going back,” said Zhang.
Concept Art House has worked with creative brands looking to build a presence through web3 video games and cryptocurrency-native companies that lack gaming and art-making expertise, 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 like Axie Infinity creator Jeff ‘Jiho’ Zirlin.
But despite Concept’s initial wins on web3, the cryptocurrency bear market has hit NFTs especially hard in recent months, making their job that much harder. Zhang said that the crypto winter has had three main effects on his business: first, that low token prices have made people more careful about the NFTs they buy; second, that risk financing 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 helping artists monetize their skills within web3.
“We want to create a really powerful network of artists that can credit and identify who is an artist and what they have worked on in web2 and web3. So instead of creating one [piece of] IP, we want to create a platform that is really friendly for web3 artists,” said Zhang.
Compensation for the artists behind NFTs has been a controversial topic, with artists like Seneca, who illustrated the images in the Bored Ape Yacht Club project, speaking out about not receiving lucrative compensation.
Zhang sees both sides of the issue, saying that artists in general are “underpaid and paid what they are currently worth” based on market value. He thinks that artists have some agency to improve how they are compensated and sees web3 as a tool that can help them in that process.
“Artists who are more financially savvy, who understand the community, have more power. They need fewer agents, fewer middlemen. That is kind of a promise of blockchain,” said Zhang.
“I think in the future you will see this bifurcation for most professional artists: Do you want to try to understand finances more, your role in them, your role in the community, your role in technology and contribute as a highly skilled artist? Or do you just want to paint and draw very well?
You can listen to the full episode to hear more thoughts from Zhang on how artists can position their skill sets in web3, as well as his take on IP and proprietary issues in the world of NFTs.
Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m.