July 31, 2023 - 8 min read
New incentive models are proving more sustainable than the GameFi of old., but it won’t matter unless the games are fun.
In Web3, trust and transparency are essential factors. People are entrusting their hard-earned assets, and will move them rather quickly if they are uncertain about the security of a given protocol. Platforms must prove that their designs are fair, and cannot be manipulated. This also carries over to the games that we play online. If I don’t know my competitors in the game, I need to know that they can’t cheat and win all of my money.
While on the surface this might seem mundane, it is one of the core innovations at the heart of blockchain: to demonstrate and maintain trust in a decentralized network full of strangers. This trustlessness carries over to gaming and GameFi, where transparency and immutability have been core principles long before the blockchain came onto the scene. Ensuring sufficient entropy is critical to maintain unpredictability and excitement for players of any game.
After all, if the game isn’t fair, users will not remain for long. To scale, any game needs a sticky component which keeps players around for months or even years to come. That is to say that the game needs sustainable incentive models which prevents players from becoming bored or worse, frustrated that the game is no longer fair. It’s no longer fun.
Skyrim is testament to how long a game can linger on after its release if fans keep playing the game and building upon the universe, and one can only imagine the longevity of its successor if it is bestowed with the power of digital ownership and the ability to legitimately capitalize on one’s hard work within the game. Impressively, the game was re-released at least seven times officially since launching and has players to this day eagerly awaiting the game’s sequel.
Combining distributed ledger technology with smart contracts, and video games, opens up a world of opportunity which would otherwise not be there. Without even going into how AI could play a role in all of this, let’s first explore some reasons why people enjoy blockchain games compared with traditional gaming.
Before GameFi came along, players didn’t truly have ownership of in-game assets and items. Now, these assets and items are represented as NFTs, stored on blockchains, and are therefore tradable and transferable. They not only have utility within the game and gaming ecosystem, but many will enjoy high valuations as collector’s items alone.
Since blockchain games are built on decentralized networks, they’re much more resistant to censorship, corruption, and outsized influence of oligarchies or centralized authorities. Furthermore, on-chain transparency allows players to verify the authenticity and scarcity of their assets, thereby validating their worth in comparison to previous in-game items.
That is, in-game items could be conjured up with cheat codes or other means which would impair the scarcity of things like in-game assets or items. This builds trust and naturally looks inviting for individuals to opt in voluntarily as these values become more obvious, and new projects optimize and innovate further.
Lastly, digital assets acquired in one game exist in the same ecosystem as other compatible games, meaning they can be sold to others for tokens which can be used for other purposes, whether in the game or not. Players become stakeholders in the game since the time they invest can be extracted later, with the chance for outsized gains as well if they’re lucky.
Early models of GameFi have come forth while the process of opening a wallet and acquiring digital assets has been challenging, and overwhelming to make the barrier to entry high. Knowing the nuances of using a Web3 wallet like Metamask is not as self-intuitive as you might imagine to all users.
For instance, swapping between Devnet and Testnet or choosing which MATIC token to acquire before playing a game, as there are both Ethereum and Polygon versions available. Without a decent understanding of the tech or and a willingness to take some measured risks, only the brave have given blockchain gaming a try, relatively speaking. That is to say that the addressable market is still mostly untapped.
Making things worse, transactions on some blockchains cost enough gas to make them prohibitive to interact with in many cases. These costs have contributed to the proliferation of L2 solutions, among other reasons.
Nevertheless, it has been a troublesome point which has undoubtedly limited overall adoption of blockchain games. This problem can be exacerbated sometimes with poorly designed tokenomics or otherwise unsustainable gaming mechanics.
For instance, when projects can’t earn enough revenue to self-sustain a domestic in-game economy, it will either stagnate or turn towards unsustainable inflationary NFT or token distributions to generate activity. Once new players stop being onboarded and liquidity in the game’s economy dries up, trouble begins. Instead, the game needs to be not only excellent, but sustainable across time.
While GameFi and the accompanying ownership and transfer of digital assets present obvious revenue and fundraising opportunities for developers, it can also degrade fun as the player base expands and returns to subsequent adopters begins to diminish.
If airdropped assets have significant effects on outcomes in the game, then the game will be more fun for early adopters as they dominate the leaderboards, while newcomers get wrecked by those who can invest more to play (or were allocated cheap/free tokens).
The most enjoyable games keep things competitive with constraints which conduct matchmaking in transparent ways. At least in this way a contest will be facilitated with a relatively unknowable outcome. That is to say that the game will be provably fair, if robust VRFs are used.
Models which give higher-paying players a major advantage that cannot be reconciled with matchmaking parameters and which reduces the uncertainty of gaming outcomes will always be doomed to collapse sooner rather than later by its inequitable distribution of fun. Perhaps any game which uses this mechanic will limit the number of users who consider it to be fun, what an ironic twist. Nevertheless, there are a few blockchain games looking to do things differently as they prepare to take front and center stage.
One example of this is Metalcore, which may or may not be everyone’s cup of tea. However, solid artwork and a true gaming experience sticks out in a world of narratives and roadmaps. The story goes that humans have been able to colonize the stars as a result of a newly developed technology called The Fabricator. When a large mission goes poorly, stranded humans find themselves ravaged by internal conflict and factional infighting.
Pre-alpha gameplay footage shows both first-person and third-person combat. Players control mechanical war machines and a variety of human-like evolutionary offshoots in futuristic, off-world settings. The game can be found in the Epic Games Store. Interacting with the game, like purchasing NFTs, can be done via MetaMask wallet.
Early reports have indicated that the PvP gameplay seems to work just fine so long as one’s PC meets the hardware requirements, but that re-spawn times could be improved. After all, if one spends too much time looking at waiting screens than actually playing the game is no fun, digital assets or not. While this would be a bummer to play, it’s difficult to be overly critical during this development stage.
Pre-alpha means that it is in the earliest testing phases, so we will need to cut them a lot of slack. It’s natural that fans want gameplay sooner rather than later, and they would like to get their hands on tokens and NFTs to represent their enthusiasm for their games of choice. The author of this piece has been waiting on a certain title to be released for more than a decade; the pain is real.
It’s also natural that developers want to market their game and get feedback from their power users, so that they might strike just the right balance between delivering what the audience wants, what the tech can handle, and what will be a sustainable long-term economic model for their ecosystems.
According to some, the “GameFi era” is transitioning into more sustainable economic and incentive models. The idea is to tilt the benefits in favor of newly onboarded users and the general population of players rather than benefiting early investors or speculators.
The landscape of blockchain gaming is continually evolving, and attitudes and preferences may change as the technology matures. As with any emerging technology, there are both enthusiastic supporters and cautious skeptics within the gaming community. Nonetheless, it is doubtful that adoption will occur unless the games are cool or dare I say, epic.
Maybe we need to forget about “play to earn” for a while and just make fun games again. The digital assets contained within the game should be a feature, not the main point. Games have traditionally been so compelling that we would play them for free and spend countless hours without the expectation of getting anything. Tapping a screen thousands of times just to earn some money sounds more like a job to me than a game.
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