The blockchain game market of TON ecosystem is like a colorful fireworks show. Since Notcoin became popular, the "Tap to Earn" projects in TON ecosystem have received a lot of attention. For example, the recently popular Hamster Kombat and Catizen allow players to easily earn income through simple click operations. Data shows that Hamster Kombat's X account has 10.6 million followers and its Telegram channel has more than 46 million followers; Catizen's X account has 1.733 million followers and its Telegram channel has more than 4.5 million followers.
*Image source: TON APP screenshot
However, behind this hot phenomenon, it is inevitable to raise questions: this type of Tap to Earn blockchain games seems to be essentially the same, just with a different storyline. In addition, Mankiw observed that with the expansion of the blockchain game market, this type of rapid replication development model has become more and more common, and blockchain game developers frequently use existing game frameworks for modification and packaging. Mankiw gave this model a nickname, called "skin-changing blockchain games."
What is “chain game with a new skin”?
Attorney Mankiw believes that blockchain games that can be developed through rapid copying may be called "skin-changing" blockchain games. This has many advantages, such as low development costs and fast speed, which enables GameFi developers to respond quickly to market changes and quickly enter and occupy the market.
Specifically, according to the different links of replication, these blockchain games can be divided into two categories:
The first category is new Web3 games that are released based on existing popular blockchain game mechanisms or concepts by changing game UI, storyline and other elements.
The second type is to create a Web3 economic system by putting Web2 games on the chain, copying the original game content and mechanism, and only changing the token model in the game. For example, "Travel frog" in the TON ecosystem is the blockchain version of "Travel frog".
It basically transplanted the Web2 version of "Travel Frog" to Web3, including game art, music, content, and mechanism. The difference is that the clovers earned by players in the game can be exchanged for TON later. This type of transplanted chain game can attract players from the original Web2 game community on the one hand, and on the other hand, with a larger fan base, it increases the in-game economic realization, and of course more people will be willing to "pay the bill."
However, this type of blockchain game reminds Mankiw of the fact that after the WeChat mini-program game "Sheep, Sheep" became popular, a "chain game version of Sheep, Sheep" was born, claiming to be "developed by the original programmer of Sheep, Sheep developer". It retained the essence of the original gameplay and added cryptocurrency concepts such as "token economy" and "NFT".
At first, the enthusiasm of players was unprecedentedly high, and the value of YLFY tokens soared by 80% within a few days. However, when the developer of the game "Yang Le Ge Yang" Beijing Jianyou Technology Co., Ltd. issued an announcement denying any connection with the blockchain version of "Yang Le Ge Yang", the blockchain version of "Yang Le Ge Yang" could no longer be opened. The project owner "ran away overnight", and the YLGY token plummeted to nearly "zero" within a week, going through a "roller coaster"-like market in a short period of time.
It is true that such a popular gameplay can indeed attract more players. However, at present, this gameplay is obviously a "scam" of the project party. Judging from the price curve of the tokens issued by the project party, ICO is the real way for them to make profits. On social media, many people expressed their expectation to participate in the pre-sale of the project first, and then sell it immediately after the project goes online to earn the difference. But except for the project party and the first person to take action, the subsequent users who purchased the token can only become "takers".
Common legal risks in blockchain games
As we can see, the above cases expose the mixed bag of the current "GameFi" field, with many people using the name of "blockchain games" to make money. So although these re-skinned blockchain games can attract a lot of attention and traffic in a short period of time, blockchain game entrepreneurs should also be wary of the drawbacks behind the prosperity.
From a market perspective, although this type of blockchain game can be launched quickly, it is often difficult to maintain long-term user stickiness due to the lack of innovation, and the life cycle is not long. Players will soon get tired of games that are highly repetitive and lack novelty, resulting in user loss. Moreover, after a large number of similar reskinned blockchain games entered the market, competition has become more intense.
At the same time, no matter in which country or region such blockchain game projects are developed and operated, the following legal and compliance issues must also be considered.
From a civil perspective, if the character design, scene interface, plot dialogue, music and sound effects in the game are too similar to those of other games, copyright may be infringed; similarly, unauthorized use of similar names, logos or service marks of other games may constitute trademark infringement. If the original game has relevant invention patents, such as game mechanisms, algorithms, etc., the newly developed chain game may constitute patent infringement if it uses these technologies without authorization. These scenarios are actually the same as the intellectual property infringement of Web2 games. For example, the court ordered compensation for "Crossfire" for plagiarizing the game map of "Crossfire". To take a step back, even if the newly developed chain game does not constitute copyright or trademark infringement in law, if its behavior violates the principle of fair competition, such as misleading consumers by imitating the promotional materials or gameplay of the original game, it may also constitute unfair competition.
Of course, the criminal aspect deserves more attention from blockchain game developers. Since most blockchain games are developed by overseas teams, Mankiw sorted out the common criminal issues of blockchain games:
If such games use false propaganda or misleading advertisements to attract players to invest or purchase in-game items for illegal purposes, they may be involved in fraud;
If a game is used as a cover to attract players to invest by promising high returns, but there is no legal business operation or reasonable return mechanism behind it, it may constitute the crime of illegal fundraising. According to relevant laws and regulations, the organizers and leaders of illegal fundraising may face heavier criminal liability;
If the game allows players to place bets with real money or cryptocurrency, and the game results are uncertain, or in-game items can be exchanged for real-world currency or items, it may involve gambling. Previously, Attorney Mankiw wrote an article titled "How GameFi Can Avoid Gambling", which elaborated on the determination of blockchain games involving gambling.
In addition, gaming platforms may also be used as a tool to conceal or transfer illegal proceeds. According to the Anti-Money Laundering Law, if in-game transactions are used to hide the source and flow of illegal funds, the persons involved may be held criminally liable for money laundering.
Mankiw's Compliance Advice
How to avoid such compliance issues is what blockchain game developers should focus on. Attorney Mankiw made the following suggestions:
Original development. Encourage the development of original content and avoid excessive imitation or copying of core elements of existing games, including but not limited to game code, art resources, music, storylines, etc. If you need to use third-party intellectual property rights, you should obtain authorization through legal channels. Consider establishing an internal intellectual property database to track and manage all assets used and related licensing information. At the same time, keep detailed development documentation records, including design decisions, source materials, and licensing information, for future legal review or infringement claims.
Transparent publicity. Provide authentic and accurate game publicity materials to avoid false publicity and misleading advertising. Clearly inform players of the game's rules, gameplay, charging model and user agreement. Standardized advertising and marketing templates can be developed to ensure that all publicity materials comply with the requirements of the Advertising Law and the Consumer Protection Law, and avoid the use of expressions that may cause misunderstanding. Regular legal and compliance training is needed for marketing teams to strengthen awareness of false publicity and misleading advertising.
Fulfill appropriate regulatory obligations. Mark gambling prohibitions and other reminders on prominent pages of the game, add entertaining descriptions, and supervise the comments and dynamics of the community. It is recommended to establish a user-accessible compliance reporting system that allows players to report suspicious activities and inappropriate behaviors, which can not only demonstrate decentralization but also strengthen community self-management.
Avoid token financing. Avoid financing through token issuance (ICO). You can explore various financing channels, such as venture capital, angel investors or government grants, to reduce dependence on ICO and reduce legal risks. Before considering any form of financing, a detailed legal and financial review of the project is required to ensure that all fund-raising activities comply with current financial regulatory laws and regulations.
Reduce risks through multi-angle design. Design compliant in-game economic systems and operational activities to avoid illegal activities such as illegal fundraising, fraud or gambling. Establish a comprehensive risk assessment mechanism to regularly assess potential legal risks in game design and operation. At the same time, design emergency plans, including quick response plans for legal dispute handling and sudden public relations events.
Legal advice. Consult a professional lawyer before launching a project to ensure that all operations comply with the laws and regulations of the project location and the local users. It is recommended to establish a long-term cooperative relationship with a professional legal team to ensure that professional advice on emerging legal issues and policy changes can be obtained at any time.
In addition, game content should also be considered for compliance. Developers need to ensure that game content complies with national laws and regulations, comply with AML and KYC regulations, and at the same time, ensure the security of players' personal information, comply with relevant data protection and privacy regulations, and implement effective data security measures to prevent data leakage or abuse.
Conclusion
In general, the existence of skin-changing games reflects the need of GameFi and even the Web3 industry for rapid development and market response. Although the entire industry is still in its infancy, Mankiw still hopes that blockchain game developers can consider compliance with relevant local laws and regulations while using this strategy to ensure the upward and compliant development of the entire industry. Based on this, blockchain game developers can protect themselves, provide players with a fairer and safer gaming environment, and survive and succeed in the competitive market for a long time.
