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This is a semi-follow-up to an older P1 post titled “Designing Better Game Economies”, which you can read here:
It’s been almost two years since that post went live which was also around the “pico-bottom” for the industry. Having come from the insanity of the Bullrun and a slew of failed “web3 games” which frankly butchered up their entire product simply because of bad tokenomics or in-game economy, that piece was meant to help developers and designers not run into that problem by understanding the basics.
(Quick note from Future Editor Boffin. This was initially typed out in early March but I’ve decided to keep it in to show how much can change in just 2 months)
Now, however, things are different. The markets are roaring upward and a stone's throw away from breaking ATHs, the sentiment all around can be described as hopeful and there are eyes on the various different budding sectors throughout this crazy niche of ours. This of course includes the Crypto Gaming sector.
As I sit here typing this out while taking too many “regular breaks” between getting this piece done and trying to grind my levels in the latest game I’m playing (Limbus Company), I keep coming back to one main point. Normal economies for the most part are really *fucking* boring. I don’t want an “accurate” representation of that in the video game I’m playing (crypto, web3 or even normal games). I want to play games that I find fun and currently, chances are 9/10 that’s an indie game.
AAA Gaming has been getting “less fun” for quite some time too. Every other game is a live-service game promised to be supported for years to come with new content but as you’ll know most have failed miserably because live-service is a substitute for a “chockfull of microtransactions”. Even the standalone games are hit-and-miss. For every successful standalone game we have like Hogwarts Legacy, you have equal (if not more) failures like “Suicide Squad: Kill the Justice League. Hell, we’ve recently seen the entire controversy of “Sweet Baby Inc” (or GamerGate 2.0 as some are calling it) and the negative effects of forced diversity for the sake of “looking good”. It’s a whole thing which you can see for yourself.
Funnily enough, this issue is closely related to this post which is doing rounds on CT about crypto not being “diverse enough”. I believe this to be a moot point simply because crypto is as meritocratic as it gets. You’re not judged for the things you can’t change (sex, age, gender, geography, education) but for the output and value you give to others. PageOne is the culmination of this “authenticity moat” and is a good example to use.
Between me, Tervo and Tolks, P1 consists of posts about the industry as active on-the-ground participants. You don’t know who we are, what we do IRL, how old we are, where in the world we’re based, what our religious beliefs are or anything of the sort. We’re a bunch of online anons who met in a Discord server and banded together to talk about the industry in a no-bullshit “web3 manner” (which has caused much more harm than good).
Despite not knowing anything about us except for the work we’ve put out, we’ve grown this newsletter throughout the bear market into one of the most reputable independent crypto newsletters out there. I can ramble about this topic to no end (and may even be a future article) but this distinction between “Crypto” and Web3” needs to be emphasized.
While I’m still a big proponent of the gaming intersection and am looking forward to the different projects that we’re going to see launch with their own "unique spin” on whatever genre they have decided to tackle, I’ve frankly had a change of heart on the overall segment of “Web3 Gaming”.
Crypto gaming enhances the scope & breadth of a game which can run without any NFTs or Tokens.
Web3 gaming repackages proven and very profitable (predatory) monetisation opportunities and makes it run *with* blockchain assets.
How do we measure or quantify this “fun” though? If we choose to define each game as its separate economy, where does the fun come into it? I believe we need to take a sandbox approach for this. Despite what most people will tell you, economies within a game are meant to be fun and engaging. This can be achieved by incentivizing certain behaviours behind different “currencies” (which I’ve discussed before). Often, these economies are either too generous or too stingy, leading to unbalanced gameplay. That’s the consensus anyway.
But hold on to your horses. What’s wrong with an imbalance? Does it make for a worse experience? That depends on which side of these imbalances you view. If the imbalance is coming from the side of the game developer being too stingy, then yeah, it’s a system which is pretty BS. If you’re under-levelled and you need to grind out some XP for an hour or two before the game gets “fun again” while you could make the argument that it’s allowing players to savour the game and not do everything in one go, it’s a weak argument. Survival games are the worst offenders of this where most of the time is spent grinding for resources, yet it’s the least liked or memorable part of the game. If you recall your top 5 gaming moments in any gaming genre, would grinding for resources or “setting yourself up” be in them? I’d wager no.
In economics, there is a term called “Homo Economicus” (or Economic Man) which is the portrayal of humans as agents who are consistently rational and narrowly self-interested with their end goal to achieve the optimal outcome. It’s on Homo Economicus that most of economic theory is based. You would be forgiven for thinking this is a decent foundation but then you need to ask yourself why there is such a big divide between academia, the “markets” and the everyday participants? It’s because the core theory of economics, the economic man, is based on a faulty hypothesis. Humans by nature aren’t rational nor do they always chase the optimal outcome.
If you’ve talked to any normal person, you’ll realise very quickly that most people do not opt for a “utility maximisation” mindset in anything they do as they’re more like to be “utility satisficers”. In simpler terms, “this is good enough” is more likely than “this is the most efficient way to get the most value”. This is without even getting into the topic of what value even means to most people. For some, it means getting the $1 McDonald's menu while for others it’s getting a rare watch for the same price as a house deposit. If everyone were indeed as rational as economics believes people are, sales & marketing tactics that target emotional receptors would be considered an extortionate waste of money.
Imbalance in games isn’t a bad thing, and I’d go further and say that fundamentally all game economies are imbalanced, especially the fun ones; they’re the most imbalanced. It’s all to service the “power fantasy” trope which undermines most of the games we play. Wanting to be stronger, faster, richer, smarter or whatever verb you want to be. It can be an escape from the usual and a big part of the drive as to why people play games.
Looking at it from that lens, why would you want to base your entire game on reality? A case can be made to base the starting economy in reality but then allow players to break the limits of said established economy to service the players. This is a good approach (and pretty much the entire premise of series like Solo Leveling) but if these “blockades” can only be breached by the ability to defeat the pay-wall, you’re setting up a foundation for a Play-to-Win Game (which is even more egregious if the game is that of a PvP nature). They’re very effective, don’t get me wrong. The ability to destroy your enemies because you spent a mere $0.7 on your mobile wallet is enticing, but there is no stopping or an “upper limit” to this behaviour. It’s a money sink to the truest definition of the word.
This is how I view the majority of Web3 gaming. To take a lot of the predatory practices of monetisation within games and dial them up through the use of blockchain assets like tokens and NFTs. Sure, you could sell these expensive items when you don’t play the game or quit it, but if the game never takes off, establishes a dedicated audience that is slowly growing or worse, never releases. All of the “freedom” you were promised suddenly doesn’t matter because there is no market for it.
The worst offenders of this are Gala Games, which I’ll straight go ahead and say how this company is still functioning is beyond my comprehension. When the co-founders aren’t suing each other, the company is too busy “buying game studios” to integrate web3 & blockchain assets and then just not doing anything with them.
Introducing “Grit”, the premier blockchain web3 battle royale where the “town ain’t big enough for the both of us” is the slogan. They’re partially right there, as the game servers haven’t been live since March 2024, though there have been 0 players since July 2023. The last time any team member spoke in their discord server was in March 2024 as well. This is one of the final messages that was sent by a team member, which is, very telling.
If you delve a bit deeper and look at the official blog posts they’ve made, the last one was published in May 2023, and it outlines how the “NFTs” in the game will be used.
You can buy the consumables. Now, you may be wondering what kind of consumables they are. Are they purely cosmetic? You should know better by now, but no. You can buy health packs that will heal you “for a lot of health” for $5 (not $GALA tokens) and you can only use this 5 times. Meaning, that each heal comes down to $1.
If you look at the chain stats, you’ll see exactly why this attempt at a cash grab didn’t play out. In the entire time this “game” has been live, the total volume generated is less than $3k with less than 20 “participants” if you can even call it that.
This unfortunately isn’t a one-and-done case. On the official Gala Games website, there are 18 separate games listed, ranging from “Live” to “In development” for both brand new and already established IPs like “The Walking Dead” and “Battlestar Galactica”.
Mind you, Grit is listed as a live game, so take from that what you want.
Coming back to the idea of power fantasy, the thing a lot of the “web3 game studios” seem to miss is to make the players feel good or more importantly powerful in a game that doesn't have to do with anything blockbuster or the “moment to moment” gameplay, as much as it does with giving the players agency within a world with a set of “contextual rules”. The issue with web3 games is that if players were given this agency, it wouldn’t be good for the actual $token ecosystem which they’re trying to make work.
I’ve had a change of heart with most of the implementations I’ve seen of blockchain with games. I don’t think most games are enriched or the experiences are made better simply because of the presence of such assets, in fact, I never thought that was going to be the thing that truly sends us forward. I’d hoped to see actual game studios, making actual good games and then utilising this new tech in a manner that would make sense but I’ve yet to anyone present this case.
We have games like Parallel that do the “most right” so far (though I admit I’m biased), but we can’t only have one or two games that are good examples when there have been *hundreds* announced with some having secured funding into 8 figures and have nothing to show for it. When you decide to make a game with “Blockchain assets”, you need to be on par with the games that exist *without* these blockchain assets and then you have to prove that this new system of backend tech is a net positive for the games space. We’ve yet to see that, especially at scale. You can’t compare yourself as “doing good” against other web3 games that are working as barely a website and declare yourself a pioneer.
Maybe we need existing game studios to take risks from the “core games” they make and show all the native builders how it’s done, which would just extend their monopoly further. That is exactly what CCP game is doing with Project Awakening, an eve-online-like experience but with the backend being run via the blockchain.
The quick run-down is that Eve-Online is a futuristic sci-fi MMORPG that takes place in a player-driven, persistent world with a space travel setting called New Eden. The game is open-ended gameplay. There is no focus on predetermined grinding, levelling up or a storyline identical to everyone else. There are no levels and little vertical progression to it. It’s a sandbox to the max and is enhanced by a player-driven economy which at least for the past decade has been releasing detailed monthly economic reports as well. You build or do what you want to, and while this makes Eve-Online have a higher barrier to entry and a steep learning curve, it also allows for some of the most unique stories ever told in gaming due to this open-ended nature.
CCP is the *only* game studio in the world that is equipped to build something like this, having been the custodian of Tranquility (the name of the main server instance) for over 2 decades at this point and a player-run economy for just as long. This style of games while it doesn’t attract a large number of people, still has a dedicated audience and the type of games that the studio knows how to make.
With Crypto and blockchain being as experimental as they are, I had hoped to see a budding and vibrant scene of “indie/experimental games” blowing up and constantly innovating. While we have some in terms of 100% on-chain games like SkyStrife, there is still a criminal lack of experimentation as we see in the actual gaming indie scene (which is where all the biggest innovations in recent gaming have come from). The other approach is to be like OhBabyGames and not include any blockchain assets at all. That’s going swimmingly well as they’ve already had partnerships with SpongeBob, Invader Zim and Fillan (one the Biggest names in Vtubing)
People are fed up and tired of modern Triple-A gaming and Mobile gaming monetisation practises, yet that is the exact thing I see a lot of “game studios” here seem to be going for. While it could act as a path towards profitability faster than other methods, the goodwill and connection to the core audience are severed. In the worst-case scenario, you could end up as Grit with less than 3k in volume yet an aftertaste of “never trust anyone from this company again”.
Thanks to Tolks & Tervo for their help with editing and cleaning up this article.
If you’ve made it this far, thank you for reading and I hope this has been a useful read. You can follow me on Twitter (and now Farcaster) to let me know what you think about this post & don’t forget to subscribe to Page One for your essential crypto readings!
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