SWITCH Magazine Interview: Web3 services opened up the future of the digital world

This article originally appeared in Switch Magazine in Japanese on 22.02.2023. The article has been translated and edited for ease of reading.

Cocone has produced many popular app services, such as Pokecolo and Livly Island. And in 2022, Cocone turned its attention to Web3 and announced four new services and a supporting blockchain network called MOOI Network. We listened to what they had to say about the “Cocone-like digital world” the team envisions.

The Future of the Digital World Opened Up by Web3 Services

With Shintaro Takaya, Cho Hoon Jae, Yosuke Tomita and Takafumi Arai.

In 2022, Cocone announced four web3 services: Meta Livly, PKCL Twins, JANKEN, and ClawKiss. For Cocone, the avatar and digital fashion genre leader, expanding into Web3 services could carry over the appeal of its existing services while opening the door to a new world. However, it’s also a significant challenge. We asked Shintaro Takaya, a representative of Cocone, and some of Cocone’s leaders, about the future of the digital world Cocone is pioneering.

Making the Digital World More Attractive

First of all, please introduce yourself and give us an overview of the project you are in charge of.

Takaya: My name is Takaya, and I’m COO of Cocone. Since last year, the entire Cocone Group has focused on developing Web3 services containing elements of the avatar apps we’re good at creating. I would like to take this opportunity to share about these efforts.

Tomita: I’m the producer of our Web3 app, ClawKiss. We have four projects, but underpinning all are our thoughts and hypotheses about Web3.

What, specifically, is the hypothesis?

Tomita: We aren’t involved with Web3 because it’s popular now. Instead, we believe that Web3 is the technology that can make the digital world we have experienced for more than ten years now more powerful and accessible.

We don’t consider our work a mere avatar service operation. We believe we’re creating another world—a digital world where everyone can be themselves and have a wonderful time. Our users not only carefully decorate their avatars and virtual rooms, but also recognise their attachment to digital items and the value of brands just like they do in the real world. We have witnessed how objects in the digital world can also clearly acquire value, just like sneakers in the real world can acquire a premium value.

We hypothesise that Web3 will bring more power to the digital world. It will strengthen the value of digital items, create a new economy, and increase the number of happier people. Even though the direction of each service is different, this idea flows through the entirety of Cocone’s work in Web3.

What kind of app is ClawKiss?

Tomita: It's an avatar-creating and styling app where you live as a vampire. It’s an attempt to create a digital world with a worldview. You can dress up the partner who provides blood to your vampire and enjoy communicating with other users. You can also sell the clothes used inside the app as NFTs.

Why did you choose a vampire as the protagonist?

Tomita: We predict that there will continue to be a growing need for the digital world and the importance of avatars. To meet those needs, we want to prepare diverse worlds and lifestyles. This work proposes a different way of life, a place to belong, called the world of vampires. Vampires could be considered fantastical minorities in the sense that they look like humans but have different habits than others. We hope to create a comfortable digital world for those who experience difficulties living in a society that demands ‘normality’.

“We want to carefully create a path that allows users who have been playing with our services until now to experience the Web3.” - Shintaro Takaya.

Taking on the challenge of a new genre

How about Mr Arai, who is in charge of JANKEN?

Arai: I joined Cocone two years ago and am currently in charge of a Web3 app called JANKEN. After hearing that Cocone was making a full-scale entry into the digital world, I felt a strong draw and decided to change jobs. When I first joined the company, I was a senior executive manager in charge of an existing app. But as of last year, I’ve been in charge of JANKEN. As this was also the first time Cocone took on the challenge of Web3 services, I began investigating what Web3 services are, what’s popular worldwide, and what kind of trends are beginning.

What kind of service is JANKEN?

Arai: JANKEN is based on the Play & Earn gaming experience that has become a significant trend in Web3. It’s an app with solid entertainment elements and economic efficiency in which users can earn tokens we call JGT by playing and winning at the classic game Rock-Paper-Scissors. The Play & Earn genre is impossible to leave out when discussing the challenges of working in Web3, and it was a challenging project for both myself and the company.

Why did you choose the simple hand game Rock-Paper-Scissors as the main theme?

Arai: To convey the value of Play & Earn and earning subsequent cryptocurrency in the shortest time possible, it was essential to make the gameplay simple and easy to understand. However, despite appearing simple at first glance, JANKEN also contains much of the essence Cocone cherishes.

In the digital world, self-expression and communication with others are the essences of Cocone’s cherished outlook. And JANKEN also allows players to customise everything from the cards decorated with the images of rock, paper, or scissors to the field and music in the background. In each match, the music, design and cards change. So, by creating a space where players can feel each other’s preferences and atmosphere, the battle becomes a form of communication.

###Developing a ‘Cocone-like’ system

I’ve heard that the MOOI Network, blockchain technology developed by POST VOYAGER, supports both of your projects.

Cho: That’s right. The MOOI Network is a service developed by POST VOYAGER, a subsidiary of Cocone, established in Singapore in 2019. I remember that the concept of Web3 did not exist back then. At a time when the laws in various countries were not yet in place, some company employees believed the era of cryptocurrency and blockchain technology was coming and decided to start the company. Then, Cocone’s services consisted of selling digital items. The problem was that there was little sense of ownership since the items only existed within the app.

Last year, while researching ways to engage users with digital items, we considered applying blockchain technology. We also had the option of using existing blockchain technology provided by other companies. Still, we wanted to create a ‘Cocone-like’ system, so we launched the MOOI Network.

“Our ultimate goal is to create a service that you can use without feeling like you’re using an electronic wallet.” - Cho Hoon Jae.

What exactly is a ‘Cocone-like system’?

Cho: Blockchain is evolving daily, with many complex concepts and regulations. Many systems require more work to use. The term ‘Cocone-like’ expresses our desire to develop a service or app everyone can use and understand.

Takaya: We are expanding into Web3 because we want to further progress our avatar creation and styling services that began with Pokecolo, which Cocone has carefully operated since its establishment.

We thought that a future where users could trade their items as NFTs flowed naturally from what we had been doing. With that in mind, we started developing the title PKCL Twins based on Pokecolo Twin from the Pokecolo series. It adds a new interpretation to our existing apps and is structured to allow digital items to be traded as NFTs.

Are you saying that one of Cocone’s future tasks is to develop apps that add a new interpretation of Web3 based on the experience gained from the avatar apps that all started with Pokecolo?

Takaya: Yes, that’s right. We would be thrilled if our avatar apps could serve as a gateway for people worldwide to become familiar with Web3 services.

Tomita: A user-friendly Web3 is one of the futures we should actualise. We want to take Web3 applications that are often avoided due to their complicated technologies and terminology and make them accessible. There aren't many teams in the world that are working from that perspective, so we should take the initiative and start working on it.

So, that's why you're building a network like MOOI Network from scratch instead of outsourcing blockchain technology?

Tomita: It isn’t something a single service can solve; we need to tackle it from all directions and on all layers. For example, even the wallet, which serves as the entrance to Web3, requires a lot of improvements before it can be popular among the broader public.

From now on, Web3 will become a vital infrastructure following the internet we know today. To realise that future significant investment is required. Cocone Group also has over 100 people working on our Web3 projects. And there aren’t many companies in the world that are allocating this number of personnel to such things. However, Cocone believes in the future and potential of the digital world, so we think taking on this challenge is appropriate for us.

Unexpected user base seen in overseas market expansion

There are various issues, such as legal barriers in Japan, and I think it is still an unexplored field. What are your thoughts on this point?

Tomita: For Japan, it is a geopolitical opportunity. In Europe and America, blockchain-based services (such as the linkage between NFTs and games) are moving backwards. In China, the government policy entirely bans all cryptocurrencies. In that regard, Japan is ahead of the rest of the world in developing Web3-related laws and guidelines. While other countries cannot take on the challenge due to political reasons or regulations, Japan is in a good place at a good time.

“Cocone believes in the future and potential of the digital world, so we think taking on this challenge is appropriate for us.” - Yosuke Tomita.

In a talk at the Tokyo Game Show, where Mr Cho was on stage last year, he stated, “MOOI Network aims to be in the top 30 among cryptocurrency wallets”.

Cho: Yes. The cryptocurrency wallet Meta Mask currently boasts a significant market share because it was made to ensure the reliability of blockchain. Ease of use is not one of its priorities. MOOI Network values the linkage with various applications and prioritises functionality while pursuing a visually appealing design to which users can become attached. And if possible, our ultimate goal is to create a service that can be used without feeling like you’re using an electronic wallet.

Changing the subject, the JANKEN app is a highly competitive game that deviates a little from the elements of avatar apps. I also found the game’s economic efficiency interesting in that you can earn an amount of cryptocurrency equivalent to the number of victories. There are still barriers in Japan, but Mr Arai, do you have an idealised image for JANKEN’s success?

Arai: First of all, I believe that the success of the MOOI Network is indispensable for Cocone to succeed in Web3. JANKEN is the main application of MOOI; it’s a different type of app created by thinking about how to get the user to use MOOI and spread it to the rest of the world. The user base of JANKEN is slightly different from that of other avatar apps. Still, I hope that users can move between services via the MOOI cryptocurrency in the future.

“In the future, I hope that Cocone's users can move seamlessly between services via MOOI Network.” - Takashi Arai.

What has the response been so far?

Arai: Honestly, it hasn't reached the level I envisioned.

Takaya: JANKEN isn’t being actively delivered to the whole world yet because there are still many challenges for us to overcome. However, users are starting to emerge in countries that, until now, we thought were inaccessible. These are countries such as India, Pakistan, Bangladesh, Nigeria, Somalia, and Kenya in Africa. I am very excited about this situation where the future is gradually becoming visible, and we can take on the challenge of global expansion.

The idea of turning an opportunity into a chance

So it led to an unexpected response and a new user base opening. What specific prospects is the Cocone Group envisioning?

Takaya: NFTs, blockchain games, and the like have been popular among users looking to speculate on the market. Various events have occurred in the past year, and the market has cooled down, but we consider this an opportunity. While the number of users interested in speculation has decreased, the proportion of users who seek our services purely for enjoyment has increased. So, contrary to expectations, we think prospects will become more stable.

We also believe that we have laid the groundwork for solid business development by providing high-quality apps and web services in an easy-to-understand manner. Pokecolo is a so-called Web2 service that has been running for more than ten years, but we have started a system that allows items in the app to be traded as NFTs as an experimental attempt. We are proud that this is a very unique initiative that only Cocone can pursue. As it isn’t Web2 or Web3, internally, we call it Web2.5. However, we would like to carefully create a path allowing users who’ve been playing until now to experience Web3.

Cho: I think of this trend as a return to the basics. After releasing and exploring several Web3 services last year, we arrived at the idea of returning to our roots and overlapping the services we have carefully cultivated with Web3. You said, “Contrary to expectation, we think that the cooling down of the market is an opportunity.” I feel like you can use this keyphrase precisely because the company has gathered total momentum in creating cutting-edge services.

Takaya: I think it’s a very good time to try new things, as, in a positive sense, users are becoming more specific with what they want.

Cho: NFTs started to gain popularity around October of 2021, and recently I was surprised to see an NFT creator appear as an expert on a morning news program. Even though the word NFT has become part of the everyday vocabulary, the market is cooling down. We believe that a temporary NFT bubble caused this, and we strongly feel that to connect to the future, we need to create a service with solid permanence to connect to the future. When we thought about what is necessary to develop that permanence, we realised that what is required is the prioritisation of our users’ happiness. The avatar creation and styling apps Cocone has carefully developed so far have many creators and a management team who understand this importance. I believe that by returning to Cocone's roots, we can give the new Web3 apps and movement solid permanence.

Do you mean that while you return to your roots, you also turn your eyes to the world as a new opportunity?

Cho: Correct! We have a track record of providing such apps and web services in Japan, but many unknowns exist about expanding overseas. Currently, the trading volume of Bitcoin is dominated by the Dollar, Yen, Korean Won, and Euro. In other words, we can only expand our business by conquering the economic bloc of these four currencies.

To that end, it is crucial to learn about the differences in cultural characteristics, personalities, and living environments of overseas users and to devise various ways to help them understand the fun of the apps Cocone offers. We feel that we need a little more time to get a sense of this area.

Towards the arrival of a world where “partners” are rewarded

What is the assumed timeline until Cocone’s vision of Web3 and the digital world is realised?

Tomita: Pokecolo, Cocone’s representative work, continues to grow every year, and on its 10th anniversary, it achieved its highest sales record. The digital world’s importance to our users is increasing year by year. We are constantly hands-on, creating and improving valuable products to live up to that importance. The digital world is an ever-evolving, ever-growing challenge, after all.

Cocone values its creators, doesn’t it? There are many long-serving employees as well. Would you say that their presence is also a big factor?

Tomita: The digital world is invisible; only what we picture is implemented. Creativity is more important than anything else. The ways we reward our cherished creators also change. We may see better systems than those in modern corporations, such as stock options, like issuing tokens (cryptocurrency) on a project-by-project basis.

Takaya: Moving forward, I think that not only our creators but also those who have created accounts for Meta Livly, PKCL Twins, JANKEN, ClawKiss, and even MOOI Wallet will be more than users or important partners. Owning an NFT or holding the tokens called MOOI is instinctively similar to being a shareholder. Of course, they are users at their core, but when it comes to Web3 services, I feel we should ban the word ‘customer’. We should approach them as partners, not customers or just users.

Tomita: Web3 is the base concept evolving the digital world Cocone aims for. We want to take out time and work on projects to bring the world closer to what it should be.

Takaya: I think we're in a transition period - in the middle of a big experiment. Now that we have started taking on the challenge of going global, we want to appreciate our experiences and continue to propose international services that users worldwide will gladly receive.

What is MOOI Network?

A blockchain network created independently by POST VOYAGER, a Cocone group company. The network issues a token, MOOI, that can be exchanged for tokens acquired in Cocone’s Web3 apps and web services. In addition, it’s also possible to convert to other cryptocurrencies as MOOI is also linked with Klaytn and Polygon blockchain networks. Via MOOI, NFTs can be exhibited and sold in Cocone’s marketplace Jellyme.

More about our interviewees:

Shintaro Takaya has experience producing content at Sega Retro. After that, he served as a representative for several companies before joining Cocone in 2021 as COO. In July 2022, he assumed the position of President and CEO of the company.

Cho Hoon Jae joined Cocone in 2016 after working as an engineer for several major IT companies. In 2020, he was appointed COO of CARROT Co., Ltd. Cho Hoon Jae now serves as CEO of VOYAGER Japan Co., Ltd.

Yosuke Tomita joined Cocone in 2014 after working as a producer and launching domestic and overseas businesses at a major game company. He has held positions such as Head of the Management Planning Office of the corporate planning office and President. Currently, he’s working as the project leader of ClawKiss.

Takafumi Arai has been involved in app development operations and game production. Since April 2022, he has served as General Manager of Cocone. Currently, he is the project leader of JANKEN and the Section Chief of the Global Business Promotion Office.