Blockchain game players and developers must work together to create more sustainable economies, new game settings, and user acquisition methods.
By Joanna Kurkowska
Compiled by: aididiaojp.eth, Foresight News
Game mechanics, concepts, genres, and game economic models have been hyped for decades. Games like Destiny, Persona 5, and Dead Space have been praised for their gameplay elements in addition to their excellent game design. With the rise of cryptocurrencies, the Play to Earn (P2E) model has taken center stage in the mainstream gaming media at the time of writing.
The current narrative around P2E models is objectively negative and one-sided. There is a lack of understanding as to why different models exist and why they appeal to players. There are many gaming realities that are difficult to cover in one article, so we will start with traditional games, including how they fit into the P2E model in the context of player characters and in-game economies.
First, we need to discuss why this is something we need to try in gaming and fundamentally understand what has happened over the past few decades and what is happening now in terms of digital currencies and player behavior.
Currency, experimentation, and player behavior would influence not only game design, but also the genre we know today.
For example, let's consider the medium of exchange in the Mario series, the Mushroom Coins. Strictly speaking, these coins are not currency, as they are automatically redeemed for extra lives or points; the RPG-themed Mario games are an exception, where the coins can be used to purchase items. The game and its economic design emphasize the mythical "fun" and "exploration" factors, as any platform should, rather than making financial gain the primary motivation for playing the game.
However, when we explore other types of games, such as massively multiplayer online games (MMOs), the picture is completely different. While exploration is still important, MMOs also involve elements of companionship, activity participation, and real-world money. In the past decade, the main motivation for playing games has been income and profit, and World of Warcraft's "gold farming" has risen sharply, and the problem has been widely reported in the media and on forums.
The fun of gaming has turned into daily work, with the need to earn more coins as an incentive, which is evident in P2E and proves that contrary to popular belief: it is almost always possible to make money from gaming. EVE Online, Entropia, and Ultima Online all gave real value to their assets and built economic models, laying the foundation for blockchain gaming.
Now let’s dive into some of the game states, what are they, how do they relate and what is their future?
Various game standards
We will not classify traditional games into free-to-play, freemium, paid competitive, etc. based on business-centricity. The goal here is to understand how it can coexist with blockchain games, even though the latter is facing criticism and questioning.
Traditional Games
Traditional games include games that do not use blockchain technology and instead use fiat currency to acquire game use and digital goods, which is the main distinction we will use when describing the different types of traditional games.
Examples include:
Single-player adventures: The Witcher 3, Returnal, Another World
Two-Player Co-op: Overcooked 2, It Takes Two, Monster Hunter: World
Multiplayer games: Fortnite, World of Tanks, Apex Legends
Hybrid games: Minecraft, which can be both a single-player and multiplayer experience
Someone who plays Royal Match might be drawn to it for its challenge and fun nature, but fans of Uncharted might enjoy it for its thrills and cinematic experience.
P2E
The term covers games based on blockchain and token economics, with a focus on playing games to earn crypto tokens, usually involving NFTs. In theory, P2E enables players to freely move assets in the in-game economy and earn crypto tokens from these actions, which is the opposite of traditional games. With encouragement from game creators, users can also use cryptocurrencies for community and guild building.
The model has been widely discussed as a possible sole source of income, especially in developing countries. However, it has proven to be unsustainable in the long run, as Naavik concluded after studying Axie Infinity: the token is prone to inflation and the economy needs to be constantly adjusted. In addition, the cost of entering the game is high, and the guild model is also trying to lower the barrier to entry.
Potential monetary gain is the main motivation for players to participate in P2E games, adding a ninth role "The Earner" to Game Refinery's list of player archetypes. The token factor (conversion from fiat currency to tokens) and NFT assets in games have caused many concerns and criticisms from the traditional gaming community. While some of these arguments come from the simple fact that gamers do not understand the true meaning of NFTs or have limited understanding of blockchain technology, gaming companies can do more to change the status quo.
NFTs are often associated with high costs and environmental issues caused by high on-chain gas consumption. This has caused gamers' focus to shift from entertainment factors to economic factors, which has been further exacerbated by the Covid-19 pandemic and rising inflation. For many people, P2E is no longer a fun game, it has become a necessity. Considering the intersection of the Covid-19 pandemic and the rise in popularity of Axie in the Philippines, many Filipino players can earn an average of $15 per day, which is even higher than the local average daily wage.
P2E is inspired by traditional games in terms of genre and model (from Minecraft to Zelda). The creation of in-game economies and the emergence of ways players (or in-game developers/creators) can easily cash out from the game is an interesting twist compared to traditional games. In the traditional model, publishers often discourage players and in-game developers from extracting funds from the ecosystem, such as:
Roblox: In-game developers are limited to making withdrawals no more than once a month, and the company requires careful review of their account activity when making withdrawals.
World of Warcraft: Using fiat currency to sell or buy any type of assets is strictly prohibited. All transactions must be conducted in WoW's native currency. This illegal business thrives on forums, auction services, and digital asset exchanges.
The ease of exiting from P2E can be compared to banks issuing mortgages before the 2008 crisis. There are many risks in P2E, such as flawed token economics leading to inflation, lack of effective user acquisition methods, large market fluctuations, players losing interest and exiting the game, which in turn has a chain reaction on asset prices.
Through the evolution of the P2E model, we can observe possible changes in P2E game design methods:
Moving to a Play And Earn model where in-game revenue is a bonus to the game, not the core.
Adopt the freemium model that has proven to be very successful in games like Candy Crush Saga, Fortnite or DOTA 2. This can already be used in Axie Infinity Origin (where NFTs are not required to play) or in games that are in development (e.g. Legends Of Elysium).
Play And Earn
In the Play And Earn (P&E) model, income is not the main priority for players to participate in the game, but rather serves as a subsidy for the time they spend in the virtual space. In this way, P&E is more similar to traditional game models and freemium models. Although it may occasionally encounter similar problems to Play To Earn, the pressure of the Earn factor is much lower, so the expectations of the Play And Earn type of players are different from Play To Earn. To Earn is mainly for monetary rewards, while And Earn will have a richer experience, such as being able to interact with big guys, they can be king of the hill, thrill seekers or network players, etc., they are happy to get monetary compensation for the time spent playing games.
Economic design or technical work should not be the focus of a Play And Earn game, but more attention should be paid to the mythical fun factor and engaging game mechanics:
Examples include:
Legends Of Elysium: A card game where players use a free basic deck.
Blankos Block Party: An open world multiplayer game with digital toys.
Angrymals: A free mobile game, but purchasing NFTs gives players access to Play And Earn.
Play To Experiment
Play To Experiment is a model that involves various types of experiments, from graphics all from the developer side to economic systems to exploits from the player side. Players can participate in potentially mainstream games, but experiment in their own way, finding glitches or pushing game mechanics to the limit. The key thing to note here is that experiments also involve extensive testing of token economics.
Examples of experimental games include:
Dark Forest: A real-time strategy game based on Ethereum that can be played in many different ways
Vib Ribbon: A rhythm video game in which players use other people's music CDs. It is also known for its unique art style consisting of simple vector graphics.
AIFA Football: A game that’s taking a new turn with the use of AI. Creator Altered State Machine has released an AI-infused NFT that lets you put your brain, along with everything it’s learned, into another NFT, robot, or other digital entity.
Moonsama: Originally a generational collection on Kusama and Moonriver, it eventually became a blue chip project for the Polkadot ecosystem and became popular in the Minecraft environment. While it is not technically a standalone game yet, the creators are exploring the boundaries of the metaverse, blockchain games, and NFTs.
Play To Own
Play To Own is a game that is primarily based on user behavior and in-game assets. To be classified as Play to Own, an asset must meet two key conditions:
These assets are NFTs and the standards may vary, including Kusama’s RMRK, Ethereum’s ERC-721, ERC-1155, and others.
These assets can be moved not only between games in the same series, but also between games from different franchises or companies.
Moving in-game assets to other games has been around since the early 80s. Games like Wizardry III: Legacy of Llylgamyn allowed players to import profiles from either of the first two entries in the series, Metal Gear Solid could leverage save features from other Konami games (developer of MGS), and Vib Ribbon leveraged music CDs to generate levels. But these are all examples of games that exist within the same ecosystem or hardware. Wizardry is the same game series, with the original MGS using save games from Konami development, and Vib Ribbon using a CD format unrelated to the game. Of course there are always exceptions, with Bard's Tale being able to import Ultima III and Wizardry characters, but the result was rather disappointing as it was only intended to attract players who play other games rather than providing any clear benefits, such as no in-game Easter eggs and no impact on the story. In this context, there is a lot that NFTs and blockchains can do in terms of ownership and interoperability.
Play To Own emphasizes not only the true ownership of assets, but also their interoperability between various games that are not connected by developers, publishers or any gaming ecosystem. That is why, at least in theory, Play To Own should be strictly related to Play To Earn, Play And Earn and Play to Experiment models, and not exist in traditional games. The relationship between Play to Experiment and Play To Own can become one of the most interesting branches in gaming, pushing developers towards higher goals in terms of game mechanics, quest creation assets and level design.
Examples may include:
Swords obtained in Kingdom Hearts can be used in World of Warcraft
Splinterlands cards can be used in Gods Unchained
NFT medals or achievements for completing CD Project RED’s The Witcher 3 can benefit from Amazon’s New World.
This vision of interoperability is highly utopian and almost impossible to achieve from a developer's perspective, requiring not only the involvement of multidisciplinary teams, but also the production costs. For this reason, even projects built on top of other projects simply stay in similar ecosystems, with Ectogames, Loot Project being a prominent example.
However, the interoperability factor is crucial for Play To Own because:
Owning an NFT item that can only be owned within one ecosystem is no different than owning a Fortnite skin, CS:GO assets, or Team Fortress 2, all of which are designed to be non-transferable.
When the NFT-based ecosystem shuts down, the assets will be worthless unless interoperability is introduced earlier or another entity decides to build on top of them.
Even if we look at discussions of NFT ownership and interoperability on Google Trends, the most discussed topic is ownership:
This may be a result of the Web3 narrative’s focus on ownership, and on the other hand, the collector’s psyche that is deeply rooted in treasure hunting, including gaming and digital asset collecting, where gamers can own and upgrade their collections of valuable items. If we refer to a research paper by Jack Cleghorn and Mark D. Griffiths from the Department of Psychology at Nottingham Trent University in the UK, other motivations for buying virtual assets include the exclusivity of the items, their functionality, and the “cool factor”.
Examples of such games haven’t emerged yet, but projects like Fragnova are working on enabling not only a unique ownership factor, but also creating “absolute interoperability of game data and logic, modifiable games, and innovative creator incentive models.”
Play To Participate
This type of game emphasizes the pure participation in the game and the collective experience. It involves single-player games such as Elden Ring and Final Fantasy series and multiplayer competitive games such as Street Fighter series, League of Legends, and Axie Infinity.
Owning assets and Play To Experiment through playing games or purchasing them is also a form of participation. It can be tied to a collective experience or fandom.
Play And Experience
Play And Experience includes all models of game states. As Kurt Kalata wrote in A Guide to Japanese Role-Playing Games, one person participates in certain game settings and enjoys the sprawling world adventure and fantasy plot. Other players want to immerse themselves in the virtual world and disconnect from reality.
For a wider audience, monetary gain is key to having the best experience, whether as an esports player, a seller of in-game items, or a recipient of Play and Earn. Multiplayer collective adventures are also an important influencer in games.
Each game state does not threaten the existence of other games, even when it comes to changes in business models. Instead, each model evolves over time, gradually solving previous problems or flaws and experimenting with solid foundations, including game mechanics, graphic design, and economics.
summary
Over the past few decades, games like WiBArM, Megami Tensei, Utopia, and Space Panic have influenced the development of game mechanics, UI, and even the entire genre itself.
Mainstream games put some experimental elements into commercially successful products, such as Air Combat, Pokemon Red, Starcraft, World Of Warcraft, and Donkey Kong. As the mechanism and form are improved, the various stages of in-game economy and monetization models have had a wide impact on traditional games and blockchain games. With the rise of online games, we can also observe that people's views on in-game currency assets are changing, such as from a simple digital score indicator to a virtual economic pillar that can be exchanged for real currency.
Instead of focusing on spreading FUD on NFT assets and blockchain games, fans of traditional games may want to shift their attention to exploring new possibilities and helping game developers with constructive feedback. Blockchain game players and developers must work together to create more sustainable economic systems, new game settings, and user acquisition methods. Both parties are free to play to experiment or play and experience, mutually benefit each other and continue to provide creative and stimulating experiences.
