Written by Donovan Choy, Independent Researcher
Players of traditional games hate NFTs.
Last November, gaming giant Ubisoft announced plans to introduce NFTs as in-game wearable props in its classic Tom Clancy game series . At that time, the related video promotional video released by the company on Youtube was displeased by a large number of gamers. In order to save the company’s embarrassment, the company quickly removed the video. According to data from the NFT trading market Rarible, as of February 2022, Ubisoft’s NFT collectibles sold only 35 , which further confirms that its player base is not very interested in NFT collectibles .
Still, kudos to Ubisoft . While other game studios, such as Sega (Japan’s Sega company) and GSC Game World (Ukrainian game company), quickly abandoned and shelved their NFT plans amid backlash from fans.
Fans believe that NFTs are just another way for game studios to make quick money . A 2022 Game Developers Conference report surveyed more than 2,700 game developers and found that “the majority of gaming industry professionals say their companies are not at all interested in cryptocurrencies (72%) or NFTs (70%)”. As shown below:
01. Why do players of traditional games hate NFTs?
The main objection seems to stem from the monetization issue , which revolves around the ” Play-to-Earn” model that Axie Infinity is promoting in mid- 2021.
Unlike traditional games where in- game currency and items are controlled by developers , blockchain games allow players to freely create, fully own and exchange assets in their own way between the crypto world and the fiat world . This shift from “you can only trade what we say you can trade” to a game economy where “everything can be traded freely” offers players an opportunity to profit from the time and effort they put in – so It ‘s called “play and earn” .
From this perspective, we can understand why players are skeptical of NFTs. Gaming is an enjoyable way to escape the monotony and stress of life. The market forces of blockchain gaming disrupt this elaborate simulation, blurring the lines between players and their fantasy worlds.
Only work and no play, smart kids become stupid, smart kids need play time.
Perhaps there is also an unspoken sense of fairness in traditional games , and blockchain games will make traditional gamers feel that this fairness feels violated: traditional games allow players to choose themselves from a variety of role-playing possibilities Destiny – provided we all start from an equal starting point ; but in the blockchain economy, players can use fiat to buy resources (such as Axie Infinity players buy SLP tokens to breed new Axie pets) , which may This will .
This emotional premise of progressing in games based on player ability is what has led many veteran players to make ” Pay -to-Win ” microtransaction- type purchases ( such as those prevalent in casual “free” mobile games ) “loot boxes”) scoffed . They’ll tolerate this purchase if it brings an aesthetic upgrade , but will be more dissatisfied if the player can buy the actual gameplay and take advantage of it .
In a nutshell, blockchain gaming delivers the proverbial red pill of The Matrix. But hardcore gamers are so happy in their traditional sims that they don’t want to see how deep the rabbit hole goes.
Above: Blockchain game “Red Pill” vs. traditional game “Green Pill”
02. Is the blockchain ruining the game?
Whenever the media reports on a large group of angry people, our brains tend to reduce them to a homogeneous group, believing that they express a unified set of preferences. However, if you walk through this cacophony, a more complex reality almost always emerges.
Gamers protest that blockchain adds in-game monetization to games that will make gaming artforms worse: but worse for whom?
The strongest hostility towards blockchain games tends to come from “hardcore” non-casual gamers on the Steam marketplace and Reddit , such as when Valve Corporation (the developer behind the Steam Game Marketplace) announced a ban on all blockchain/NFT games, Many players cheered on Reddit.
However, it’s unclear whether this fan base represents the broader global gaming market of 2.8 billion players with diverse spending preferences .
According to Newzoo , casual mobile gamers (55.19%) outnumber PC gamers (28.7%) and console gamers (16.11%) combined . As shown below:
Revenue data from the global game market also illustrates the same situation: mobile games account for 52% of the industry , PC games account for 20%, and console games account for 28%. As shown below:
Of course, microtransactions (where players spend small amounts of money to buy virtual items in-game) are popular in both casual and non-casual games. Different reports have found that the share of revenue generated by microtransactions alone ranges from $34.5 billion in 2021 to $92.6 billion in 2020 .
The market has shown that casual mobile games dominate . If in-game commercialization is a bad thing, a fair number of gamers will embrace it .
Yes, I know it’s shocking. This game market is mainly composed of mortals who are ignorant of culture and art. Most people have little understanding of the art of video games and dare to indulge in the ” Pay-to-Win” micro-game of “Clash of Clans” ( Clash of Clans ) Trading, we are now very interested that they will turn their funds into NFT games.
Taken together, this data tells us that even though some players think in-game monetization is bad, the majority of the gaming market disagrees.
Non-casual players complain that blockchain gaming introduces unnecessary financialization, a subjective preference that reflects a small segment of the gaming market . Of course, they have every right to make their own choices. The beauty of the free market is that it allows multiple values to coexist at the same time. But what I’m saying is that they don’t represent the billions of casual gamers who are willing to spend money on games and who are likely to accept “play and earn” to make money from games.
Is this speculation? On-chain data from the 2021 DappRadar report found that between 1.4 million and 2.7 million unique active wallets are connected to blockchain gaming on a daily basis . In the third quarter of 2021 alone, sales of gaming NFTs accounted for 22% ($2.32 billion) of all NFT sales. Another estimate puts the blockchain gaming market at $1.5 billion in sales in 2021 (about three-quarters from Axie Infinity) .
The “play and earn” model is just getting started, but it has already passed the test of the market.
03. “Earning while playing” is economic freedom
Hardcore gamers see the gaming industry as a business-free elitist principle that the “best” players stand out in the game, but that’s a fallacy. All games have a “play and earn” element, we just don’t think about them in monetary terms.
The best players spend the scarcest resource, time , honing their skills and honing their best gear (anyone playing Diablo?) . In the crypto space, we think of “whales” as those with deep pockets. And in gaming, the “whales” are those players who have the most time. And those of us with less time invested will not be at the top of the leaderboards, invited to raids, or admired by the community.
Web3 extends Web2’s role in gaming. Web2 allows (some) players to monetize the time they spend in-game via Twitch streams and earn money from tournaments and product sponsorships via social media . Web3 takes this egalitarian logic a step further, enabling everyone to do it . Anyone remember video games before Web2 ? To brag about my hard-earned Runescape leaderboard score on some unknown site is all my “gain”.
Even veteran gamers who worry that “play and earn” will ruin their virtual worlds will agree that our favorite Web2 games can contain too much tedious labor and farming . We wanted to get to a higher level, so we were invited to dragon slaying raids, but can we avoid repeating the process like Eric Cartman in South Park (the most recognizable character in the game) and his friends Kill a million wild boars? (This is a kind of tedious “swiping task” process)
“Earn while you play” may not revolutionize the “scraping” process, but it could at least redesign the game so that players can earn rewards from it. These rewards are not trivial . A 2008 research report estimated that EverQuest 2 players “lost” an opportunity cost of $24,852 per year, based on their average game time (25-29 hours per week) and the amount of time they live The earning power that society brings to them.
NFTization of third-party skins, maps, and tiles also opens doors for thousands of Skyrim , Half-Life , and Minecraft ( Minecraft ) game makers and creators of user-generated content Profitable gate , they can distribute their work for free while getting paid by “true fans”.
Blockchain gaming promises to unlock all of these earning potentials and more. Critics of the “play and earn” model worry that the monetization model could take away the “fun” of the game, but they are dead wrong. Compared with the existing options, “Earning while playing” allows players to obtain more benefits. It’s better than doing nothing.
04. “Play and Earn” is not a Ponzi scheme
Since blockchain games like Axie Infinity require players to invest $100-300 in advance (Editor’s Note: Axie Infinity players must first buy or rent at least three Axie NFT Crypto pets to start playing the game), critics have rushed came to the conclusion of “Ponzi Economics”.
First, not all games have high barriers to entry . Popular ” free ” blockchain games like Splinterlands and Gods Unchained already exist. The same is true for upcoming big-budget AAA games. Aurory , an upcoming role-playing game on the Solana chain, allows players to play for free, earning NFTs and the in-game currency AURY in the process. Another much-hyped AAA game on Ethereum , Illuvium , plans to release its games in a ” Free -to-Play” model, where players can choose to pay and access the game as they do in many free games today. limited content. So, don’t worry that little William will be logging into a “virtual casino” over the summer.
Second, in terms of paid entry barriers, GameFi DAOs such as Yield Guild Games (YGG) or Merit Circle have emerged, bringing millions of players into profit sharing models . Some critics see it as exploitative, but not when professional esports teams similarly hire and train the best gamers.
Finally , as more and more blockchain games enter the fray over time, economic theory tells us that higher supply will cause Axie’s “play and earn” model to fall out of favor. Blockchain games that are uncompetitive due to their inability to offer players attractive returns in a “play and earn” model will begin to attract players through other traditional gameplay elements such as immersion and creativity . Achieving this hybrid balance between leisure and “earning while playing” will be the balance of blockchain gaming.
05. Blockchain further realizes spontaneous game world
The biggest reason for the excitement of blockchain games is that business culture and market mechanisms will inject various emergent effects into the game . Unintended effects refer to the spontaneous order and consequences that develop from discrete human actions, in the words of the Scottish philosopher Adam Ferguso : “The consequences of human actions, but not of the execution of any human intention.”
The path pictured above is a common example of spontaneous order.
Many of these spontaneous orders already exist in traditional game economies . The best example is EVE Online, a sandbox MMORPG (massively multiplayer online role-playing game) documented by economic historian Steve Davies, in which the entire geopolitical order, large player factions of over 30,000 members And complex economic systems develop without a central direction .
In MMORPG games such as EverQuest , World of Warcraft, and LOTR Online , the popular legal title system of Dragon Kill Points (DKP) serves as a way for players to fairly distribute team raids. The way of rare loot appeared spontaneously .
Even in relatively simple 2D games like Pac-Man or Super Mario, players can create their own unique experience by creating ways to get high scores to compete with others . Designers of simulation games such as Minecraft who set loose boundaries for the game (i.e. allowing players to build almost anything ) didn’t imagine that the RSF (Reporters Without Borders) organization would be in Minecraft. The World” built its virtual library called “The Uncensored Library”, offering more than 200 censored books, as shown below.
The “Uncensored Library” in Minecraft
If all this spontaneity develops without the immutability of the blockchain, imagine what would happen to the gaming world when players were able to freely create, own and trade in blockchain games based on actual market incentives The change?
Just like social clubs implemented by NFTs (such as BAYC Boring Ape Yacht Club), immutable property ownership in the game can incentivize players to build stronger community relationships in guilds/tribes, thereby improving game player acceptance and retention rate . Third-party game creators and creators of user-generated content can ultimately gain some value from the game economy they help improve , and have more incentive to create better game mods.
Even if in-game items lack direct interoperability between virtual worlds, players who opt out of the game can preserve some capital from the time invested by trading their NFTs for a common cryptocurrency. This is similar to how paper money has historically liberated capital liquidity from the barter trade system. The economic impact will be enormous, to say the least. Like real-world economies, this will interweave disparate game economies in a way that even the best developers can’t predict.
Blockchain will not dry up gaming culture , it has the potential to enrich the world of video games socially and economically, opening up a world of player interaction.
When Blizzard banned gold diggers in World of Warcraft, they did so because economic value was leaking out of their walled gardens, hurting their profit margins. For years, Microsoft has enforced intellectual property laws that allow Minecraft users to modify and create user-generated content, but prohibit them from selling officially licensed code for profit, effectively maintaining a related gray economy.
Gamers have reason to worry about how blockchain will change their precious world. But their passion for gaming, combined with a serious misunderstanding of blockchain, led them to ultimately defend a dictatorship that truly maximizes profits: game publishers . And blockchain provides a way to rationalize every aspect of the game economy. This change comes with risk, but risk is also a prerequisite for progress.