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Setting Up Blockchain Gaming for Adoption: A 3-Pronged Approach

Lowering the barriers-of-entry for the masses is crucial for crypto mainstream adoption, and in this case, blockchain gaming could take over where DeFi has failed: be the on-ramp to onboard the next two billion users into crypto.

Unfortunately, most blockchain games currently on the market do not have the best interests of their potential players at heart — arguably, they are even worse than DeFi in terms of lowering the barriers-of-entry for mass crypto adoption: in fact, most are blatant pyramid schemes cleverly marketed under the guise of play-to-earn “games”.

While the current status quo isn’t ideal by any means, blockchain gaming still remains our best bet to propel crypto towards mass acceptance — we just need to do it the “right” way.

This article will outline a 3-pronged approach for the cause: designing a “proper” blockchain game with the potential to be crypto’s first killer app.

#1: Cultivate Game-Centric Communities

Blockchain game adoption: game-centric community (scenes at ESL One Cologne 2020)
[DHL In Motion] scenes at ESL One Cologne 2019: the pinnacle of game communities

Think of the community as the lifeblood of a game — just like the fanbase of a football club, or the volunteer force of a non-profit organization. You could even say that the community forms the identity of the game itself!

Despite its importance, there still exist a handful of blockchain game projects with fundraising priorities largely leaning towards “who can offer the most money”, as well as marketing agendas mainly targeting financially-motivated parties over the people that will actually play the game — an endeavour that will only result in a weak and divided community for the blockchain game.

Blockchain game adoption: not a game centric community (play-to-earn YouTuber)
[Crypto King/YouTube] does this depict a game-centric community for you?

As such, it is a no-brainer that in order to cultivate game-centric communities, a blockchain game’s fundraising and marketing efforts must be primarily catered towards their most engaged community members.

In the case of fundraising, instead of conducting ICOs on launchpads (which skews allocation to whales that know nothing about the game, let alone having the intention to play it), blockchain games could opt for a “community sale”, in which only active community members on the game’s Discord server are allowed to whitelist themselves for ICO. Another example would be making it mandatory for players to complete certain in-game PvE quests or missions in order to be eligible for ICO whitelist. The point is to prioritize allocation towards the people who actually cares about the game, instead of towards “mercenary capital” only there for the yields.

On the marketing front, instead of making it all about tokens, NFTs, and financial rewards, blockchain games could place more emphasis on showing in-game footage or gameplay sneak peeks. Heck, you could even argue that there is no need to advertise the blockchain component of the game: if a game is sufficiently “playable” by itself, then it will succeed — blockchain or not.

Blockchain game adoption: game-centric community (Discord server of a game)
[Imperium42/Medium] nurture game communities — they are the identity of the game itself

Token and NFT incentives are a double-edged sword: 1) if done right, a strong community that will take a traditional game, say, one year to grow, could be nurtured by a blockchain game in half the time; 2) inversely, a toxic community that could bring down a traditional game, say, over one year, could wind down a blockchain game in a matter of months.

Blockchain games that encourage the formation of game-centric communities from day one will have a strong foundation to lean on during its toughest times. The most influential football clubs of the world are not those with the most honours to its name, but those that have the largest and most passionate fanbase spread across the globe. Similarly, the strongest games of the future, blockchain or not, will not be those with the most fancy gameplay mechanics or graphics, but those with a cult-like game-centric community under its belt.

#2: Embrace “Free-to-Play, Play-to-Win” Principles

Blockchain game adoption: free-to-play (PUBG Battlegrounds, top 1 game by all-time player count)
[Dewa.gg] PUBG Battlegrounds: top 1 game ranked by all-time player count

At the time of this writing, out of the top 20 most played video games by player count of all time, not a single one is a paid game — in other words, each and every game is free-to-play. And out of the top 50, only 7 games are not free-to-play — top of the list being GTA V, with a current price tag of $10.

In short, the free-to-play model works — it eliminates the single-most pain point for players: paying up money to play a game. GamesBrief sums up best the merits of free-to-play: “paid-for games start with customers who already feel that they are paying for their content, whereas free games have a better ‘karmic’ position of giving so much value — for free — to their customers; players feel less nickeled-and-dimed in a free-to-play version.”

Ironically, most blockchain games right now require players to purchase NFTs before they are able to play their “game” (think Axie Infinity or Crabada) — a far cry from free-to-play. Coupled with steep prices and extreme volatility, it is just common sense that these “games” will only bring in profit-minded speculators into its ecosystem, not actual players — which certainly doesn’t help blockchain gaming’s case in the public eye.

Blockchain gaming adoption: merits of free-to-play over pay-to-play (I don’t wanna play with you anymore meme)

Embracing “free-to-play, play-to-win” principles is of paramount importance: blockchain games need to have an onboarding process as open and inclusive as possible. Understanding crypto is already hard enough — additional entry barriers like upfront commitments are a sure-fire way to drive away potential players from your blockchain game for good.

In this spirit, we can envision how the gameplay loop of a potential free-to-play blockchain game could work:

  1. Instead of requiring a player to buy a certain number of tokens or NFTs just to play the game, we can equalize the playing field by mandating everyone to start from a free default character;
  2. The only way to buy more powerful characters or weapons is to play using this default character, complete missions or win PvPs to earn in-game tokens (which won’t be pre-mined and can only be obtained by playing the game), and then use it to buy the more powerful NFTs (which can only be bought using in-game tokens);
  3. If a whale wants to own a powerful NFT, they must wait until someone manages to earn enough in-game tokens to buy the NFT, then sell it on the secondary market to the whale (at a higher price), effectively accruing value back to the player (and the game itself through secondary sale royalties);
  4. The game could also impose player account level restrictions for the in-game usage of powerful NFTs (e.g: only level 50 player accounts can use the “Great Sword NFT”). Placing greater emphasis on the NFT’s in-game utility would help limit purchases that are speculative in nature.
Blockchain gaming adoption: ruined user experience (EA meme)
[Memedroid] 1) this is EA; 2) EA likes to ruin user experience aka pay-to-win; 3) don’t be like EA.

Blockchain gaming could do away with ponzi-like mechanics, and instead focus more on playability and enjoyment. To this end, for blockchain games to have any chance of catching the eye of the mainstream, it is imperative for them to embrace the principles of “free-to-play, play-to-win”, irrespective of the nature of the game itself and how its exact gameplay loop is designed.

#3: Operate Under Well-Managed Virtual Economies

Blockchain game adoption: operate under a well-managed virtual economy (Fortnite’s in-game item shop)
[mobilefreetoplay] Fortnite operates under a closed virtual economy — the “easiest” to manage out of the bunch

In the real world, the economy of a country is orchestrated via fiscal and monetary policies. To put it in very simple terms, fiscal policies are the means by which a government adjusts its spending levels (treasury outflow) and tax rates (treasury inflow) to influence its economy, while monetary policies are the means for a government to control its money supply.

To illustrate, building public infrastructures such as bridges or street lights, or increasing tax rates are examples of fiscal policies. Lowering reserve requirements (aka “printing money”), or selling government bonds (takes money out of circulation) are examples of monetary policies.

Blockchain game adoption: operate under a well-managed virtual economy (World of Warcraft in-game auction)
[Vox] World of Warcraft operates under a semi-open virtual economy — introduces additional complexities into the mix, but not to the tune of fully open virtual economies

Similarly, just like how messing up fiscal and monetary policies can wreak havoc on a country, messing up fiscal and monetary policies can also wreak havoc on a blockchain game — a game with superb playability will quickly find itself becoming “unplayable” under a poorly-managed virtual economy.

To put things into perspective, let’s assume a scenario in which a dungeon-style blockchain game: 1) increases the rate of its “portal fee” to fight PvE quests; 2) reduces the overall rewards obtained from completion of those quests. Assuming all things equal, the circulating token supply will shrink over time, since the aggregate tokens removed from circulation by virtue of “portal fee” on every quest attempt will outpace the aggregate tokens issued as rewards from the completion of attempted quests.

As a consequence, this leads to a vicious death-spiral: 1) more players attempt quests by paying the “portal fee”; 2) the aggregate tokens issued to players successfully completing the quests are less than the aggregate tokens taken out of circulation by the “portal fee”; 3) players in aggregate gradually become ‘poorer’, in-game items become less affordable; 4) quests become harder to beat since players are unable to purchase sufficient gear; 5) even more tokens are removed from circulation, inflating the price of in-game items even further; 6) quests become so hard that most players just decide to quit the game altogether.

While this is an extreme hypothetical example, the point still stands: a well-managed virtual economy is very important towards the going-concern of its underlying blockchain game.

Blockchain game adoption: operate under a well-managed virtual economy (Elemon marketplace)
[@ElemonGame/Twitter] Elemon marketplace: all blockchain games will operate under an open virtual economy — a potentially challenging but highly rewarding endeavour

Consider fiscal policy as the means to trigger inflows and outflows from the blockchain game’s treasury. For instance, to boost its user base, a game can spend a portion of its treasury funds to invite a prominent artist to host a virtual concert within the game. To earn back the money spent on hosting the virtual concert, the game can temporarily increase the royalty percentage taken from secondary sales of its in-game NFTs, or impose a tax on the sale of its in-game tokens.

On the other hand, consider monetary policy as how you design your in-game “faucets” and “sinks”. Faucets are events that trigger token issuance to players, while sinks are events that remove tokens out of circulation, either burned or retained in treasury. For instance, faucets may include quest completion rewards, while sinks can be something like a “space portal fee” to allow fast travel between galaxies on a space exploration blockchain game, or a “casino entry fee” to enter a public virtual casino on a social virtual world.

Blockchain gaming’s virtual economy: balanced faucets and sinks (thanos perfectly balanced meme)

Just like whole countries, a well-managed virtual economy is integral towards the long-term sustainability of a blockchain game. Just like how governments make use of fiscal and monetary policies to keep their respective economies in-check, blockchain games will have to make use of fiscal and monetary policies to maintain the balance of their respective virtual economies.

The 3-Pronged Blockchain Game

Blockchain game adoption: screenshot of game development in progress
[InnovEd] time for less speculation, less unfounded hype, more in-game content updates (yes, please!)

Make no mistake, current blockchain games still leave a lot to be desired. With that said, the fact remains: blockchain gaming holds tremendous potential to be the main on-ramp for the masses to dip their toes on the crypto wild-west.

Until then, the search for crypto’s elusive killer app — a “free-to-play, play-to-win” blockchain game with a well-managed virtual economy and a cult-like game-centric community — continues.


Disclaimer: The author @0x_delken is a Reitio core team member. The views and opinions expressed throughout are those of the author as an individual, and do not necessarily reflect the official policy or position of Reitio as a project.

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