Tokyo, Japan - March 29, 2022 - KLab Inc. (Head office: Minato-ku, Tokyo, President & CEO: Hidekatsu Morita, hereinafter referred to as "KLab"), announced that it will establish a subsidiary that oversees Web3 related business and enter the blockchain business.

The establishment of "BLOCKSMITH&Co." (hereinafter "BLOCKSMITH") was resolved at the board of directors meeting held in March 2022. Tetsuya Sanada, Chairman and Founder of KLab, will be appointed as President and Representative Director of BLOCKSMITH.

Looking back, innovations in the industry have occurred every ten years: PCs in the 1980s, the Internet in the 1990s, social media and cloud computing in the 2010s, and new industries continue to innovate today.

In the 2020s, services and concepts such as DeFi and NFTs utilizing blockchain technology, Web3 and the Metaverse have appeared. We believe that blockchain is the latest trend since the Internet Revolution.

The game industry in the 2010s saw the free-to-play business model open up to new users and markets through mobile devices and further expanded the scale of the industry.
However, now a new game model called GameFi has resurfaced that we believe will open up new users and game markets.
GameFi is a new category of games that realizes "Game + Finance" through blockchains and token economy, or simply, games where users can earn while playing.

KLab was one of the first companies to enter "free-to-play" mobile games in the early days of 2009 and experienced rapid growth through trial and error. We have been preparing for blockchain and GameFi for over a year. Judging that the timing is just right, we have resolved to announce the establishment of our subsidiary and the entry into the blockchain and GameFi business.

Services and social activities that utilize blockchains and tokens (cryptocurrencies) are collectively called Web3 and it is projected that the market size will continue to expand. We believe that the entry to Web3 is through games and those who grasp GameFi will also control Web3. Based on this ideology, BLOCKSMITH will expand its business from GameFi to Web3 in the future.

• Development, provision and operation of GameFi

(GameFi is a new category of games that realizes "Game + Finance" through blockchains and token economy, or simply, games where users can earn while playing.)

• Issuance and sales of NFTs

Development and provision of Metaverse and GameFi platforms including advertisement distribution, EC, etc.

• Web3 related business

Unique Business Model
Many play-to-earn games face the following challenges. BLOCKSMITH will endeavor to create a new and unique GameFi model that solves these problems.

Challenges

• Blockchain literacy is required for users to participate which makes it difficult for beginners to join.
• NFTs and token economics are designed on the premise of rising prices which makes it difficult to maintain when the number of users and demand decline.
• The balance deviates between games that are "play-to-earn" versus the original "play-for-fun" model.

Utilization of Popular IPs
There are still yet too few NFT games that utilize popular IPs. KLab will leverage its long standing IP acquisition capabilities to implement popular IPs into NFT games.

Global Service Development
From the start, we will provide global services centered on Europe, the United States and Asia.

Schemes Conforming to Existing Legal and Accounting Systems
New services and businesses utilizing blockchain technology are being created one after another which existing legal and accounting systems were not prepared for. This includes GameFi and current games experiencing numerous problems with the existing systems in Japan and other countries. Therefore, this inability to carry out standard advertising activities also hinders full-scale expansion.
BLOCKSMITH has devised completely new and unique schemes, mechanisms, systems, and more that will be compatible with the accounting and legal systems of Japan and the United States. We have also applied for business model patents for a portion of these.

KLab has two internal projects that have been underway since last year.
With the establishment of BLOCKSMITH, these two projects will be taken over from KLab. We aim to start providing some of the services by the end of 2022.
Prior to the services becoming available, we plan to hold NFT pre-sales.

This wholly owned subsidiary will enter the blockchain-related business and be used for hiring highly specialized human resources, flexibly responding to the current legislation, bold and quick decision-making, and highly flexible financing.

• About the Company Name

A blacksmith is a skilled person who crafts with iron, a whitesmith crafts with silver and tin, and a weaponsmith is a weapon craftsperson. Therefore, we are BLOCKSMITH. The name is coined from these English words and inspired by the image of blockchain craftspeople.

• Recruitment

Here at BLOCKSMITH we are searching for new partners to develop new GameFi with us.

Chairman of the Board of KLab Inc. Tetsuya Sanada founded four companies across a variety of fields while still a college student at Kansai Gakuin University. In 1997 Tetsuya Sanada joined the company ACCESS, where he contributed to i-mode's initial design and browser development. In 1998, he created CYBIRD, a company focused on various mobile media, of which he was the Vice President and CTO. In 2000, Tetsuya Sanada set up yet another company, this time to serve as a mobile software R&D branch for CYBIRD, known as KLab (called "K Laboratory" at the time). Tetsuya Sanada maintained the position of Representative Director, President and CEO until he was promoted Director and Chairman in March 2019 and will be involved in the establishment, management, and training of startup companies for KLab's non-game businesses.

Company Name: BLOCKSMITH&Co.
President and CEO: Tetsuya Sanada
Establishment: April 1, 2022
Capital: 10 million JPY
Head office: Roppongi Hills Mori Tower, 6-10-1 Roppongi, Minato-ku, Tokyo, 106-6122
Business: Development and distribution of Game&SocialFi services such as blockchain technology, crypto assets utilising NFTs

• Linkedin:https://www.linkedin.com/company/blocksmithandco-en/
• Twitter:https://twitter.com/BLOCKSMITH_EN

【Contact】
BLOCKSMITH&Co. Digital Marketing
https://www.blocksmithand.co.jp/contact/