#4 - Sustainability and Shortcomings
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In the last edition of 0xPlay, we explored about emerging tech & the role they play in the industry.
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If you’ve been following web3 games & developer activities the past few months. You’d have noticed a frenzy of high-profile funding & euphoria. It’s a bit confounding to me that some projects have been able to grab such massive amounts in funding, especially when they don’t have a clear product in mind.
When it comes to games utilising blockchain technology, we’re still VERY early. I say this as someone who has been tracking web3 games for nearly two years. I’ve seen a lot of projects emerge & quickly fade, the bravado of “sustainability", generating value & being in for the “long-term” quickly dissipates when reality strikes.
The euphoric gold rush for web3 games meant that for most developers, players & investors, being involved in this space meant looking out for pure return on investment while thoroughly discounting the need for creating a real game that delivered fun & an immersive experience to its players.
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The Problems:
#1 Stability: The market forces in general, act as an impediment for creating a sustainable engine for growth. A major driver for creating revenue and “value” for players is the ability to trade assets, tokens & other entities.
When the trading volume drops, newcomers become hesitant to join the ecosystem which again impacts the volume, growth & overall activity for most games.
Even if you aim for these fallacies & do the work in ensuring a sustainable framework, an economy with plenty of ways to introduce sinks & spurts. Sustainability will continue to be a problem due to how the ecosystem is shaped.
The questions you have to ask yourself while designing the systems revolve around -
How do you avoid panic when the market is red & players want to abandon the ecosystem in drove? How do you keep players interested if the value of in-game assets is dropping?
How do you continously improve & evolve the game without network effects in place? How do you avoid centralisation in an ecosystem that strives for decentralisation?
There have been projects that have been tackling these questions, and to an extent they’ve done well, but none of the big web3 games have been able to disconnect themselves from value-driven activities.
If you can’t attract whales, endemic investors and players in drove. You won’t be able to achieve growth in numbers, volume & life-span.
#2 Value: Web3 ecosystem is powered by value-driven growth. This isn’t something new, if we take a look at majority of the “successful” web3 games, you get the picture that as long as your ecosystem is profitable. You’ll on-board players & as long as players are making money, you’ll keep the circus going. However, what happens when you aim to create a sustainable approach?
The death spiral, Sky Mavis’s Axie Infinity is by far the best example. They had a sprawling ecosystem, their tokens were reaching ATH & volume thresholds that could rival other L1 tokens.
It wasn’t surprising when the entire structure came tumbling down, after all the premise for growth was based on continously on-boarding more players to drive prices up & generate “value” for older investors/players.
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The moment the devs started to introduce features that would create a sustainable framework for long-term. The bubble popped & players left the ecosystem en-masse. Now, I’m not of the view that Sky Mavis cannot turn the ship around. Honestly, their recent moves do tend to showcase a step in the right direction & fair-game to them for being bold.
But the problem remains, players are searching for profitability & most developers falter and aim to provide these short-term fixes despite the long-term problems.
#3 Perception: By far the biggest obstacle that plagues web3 is the perception. This isn’t a problem for just web3 games but web3 in general. Most users are wary of being involved due to the incessant scams, security risks, smart-contracts that sign-away ownership & developers being dubious in their approach.
There has to be a concentrated effort to explore & create a better way to on-board players, provide trust & generate goodwill. We cannot let bad actors bog-down the industry & de-rail efforts.
The intersection of blockchain technology & games as a medium has far-reaching implications. I believe we’re going to see some fantastic projects that will effortlessly on-board users to the next iteration of the internet. But untill then, this problem will plague the industry.
The Approach:
Web3 games have a long way to go before they become a major part of the industry. It’s been five years, but most studios are just dipping their toes & exploring this subset of the industry. There are studios that are actively researching the tech & ways to integrate their IPs.
While there are some successful projects out there & a lot of promising projects yet to release. The industry is still in an experimental state. However, I’m a firm believer in the Play And Own model. I think it represents the best chance to create an engaging, long-lasting ecosystem for developers.
P2E is dead. It surprises me that it was even alive to begin with, but that’s a digression for another day. For people who are unfamiliar with the concept of Play And Own here’s a quick primer.
The idea for this model is to step away from the expectation of profit (digress from value driven activities, inflationary economic framework & creating a necessity to on-board users to generate value for goods), however this doesn’t mean that there’s no expectation of value & growth.
The model focusses on incentivizing ownership and trading activities through economic & social structures. This in-turn fosters engagement for players which further drives retention and growth for the game ecosystem. This isn’t a new model, there have been plenty of games that have adopted this approach in the “web2” era. (EverQuest, Eve Online etc)
In my opinion, play and own model offers a great framework for both players & developers. With the adage of depth, players get an engaging experience that further elongates the games life-cycle.
Player ownership model that creates real sense of belonging to the ecosystem rather than being just a value-driven entity. The accessible entry also means more players get associated with the ecosystem & get a chance to experience the game. This is great for both players & devs as it creates further visibility and growth.
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What most of the gamers are really chasing is “fun”. Players love an honest & engaging experience more than anything. There’s an inherent fallacy if we believe that all “web2” gamers are seeking ownership, decentralisation & governance.
Sure, there definitely ARE users who want that, but not EVERYONE. And that’s something that goes unsaid these days in this era of echochambers where many convince themselves that web3 games will envelop the entire industry.
Players deserve ownership, they deserve respect & they deserve to be heard across the board. We need to remember that it’s a marathon, not a sprint.
Blockchain gaming has a bright future ahead, it’s going to have expontential growth (across revenue & user acquisition), it will aid in the adoption for web3 & create giants in the process.
As developers, we cannot afford to be profit-driven & shortsighted.
We need to stick to the fundamentals and make games that are ultimately rewarding & engaging for players. After all, that’s what makes this medium stand out from others.