Building a More Sustainable Model of Blockchain Gaming

Blockchain gaming has a unique value proposition to gamers around the world, never has a niche in the gaming industry offered such unrestricted in-game asset ownership to players, giving them the chance to monetise their countless hours spent in game. Despite this, there is fundamental issues with the products currently on the market, as well as many of the projects currently in development. The crux of the industry’s problems lies in the prioritisation of in-game economies over the Gameplay itself. Ask yourself (if you are a gamer) what makes you play games, and what value do you extract from this hobby, I am confident in saying that 99% of gamers asked would respond simply and obviously, that they play games for entertainment. This is hardly a revelation, but it has clearly been overlooked by most of the blockchain games currently on the market. They fail to realise that the value of all games lies within the gameplay, by prioritising the profit incentive, rather than the value derived from the gameplay itself, the very in-game economies they choose to prioritise become de facto Ponzi schemes.

Play to Earn is a term popularised by Axie Infinity, while their innovation cannot be called into question, the model they popularised is inherently flawed. Referring to my previous point about why gamers game, they do it for fun, if a game markets itself on being profitable to play, they attract purely profit seekers. The problem this creates is simple yet unsurmountable. If the entire player base of a game is playing in pursuit of profit, there is an absence of injections into the economy which is entirely unsustainable. One method being used to try and counter this is creating barriers to entry for players to access games, such as the need to purchase a team of Axies to play Axie infinity. This is unworkable in the long run, a team of Axies was comfortably above $1000 in Axies peak, nobody was paying that to play Axie Infinity, obviously they were pursuing profit and saw it as an investment. Going forward, blockchain games must grow organically based on the value of their gameplay, as games have been doing for decades, rather than trying to grow on an unsustainable dream of universal profit. For players to consistently withdraw from an in-game economy, there must be other players injecting into it regularly, otherwise it’s simply not feasible. Whether it be through in-game currencies, cosmetics, or any other method of monetising, blockchain games must find a way to create a DAU base that is injecting into the in-game economy. This is an impossible task if your DAUs are only playing in pursuit of profit, without a fundamentally strong game, injections will always be insufficient. Looking at gaming classics over the last 30 years, the best in-game economies have been primarily made up of in-game assets, and the demand for rarer items among the player base.

This is a model proved time and time again, CS:GO skins, Fortnite skins and many more are splendid examples of in-game economies based upon in-game item rarity systems. People enjoy playing these games and spend lots of time on them, thus they are willing to spend money on in-game items and would probably spend far more if they truly owned these items and were able to easily trade them P2P without risk of being banned. This is the model blockchain gaming must implement, rather than trying to move heaven and earth to make a tokenomics model that allows consistent profit for all actors in the game’s ecosystem, which isn’t possible. This article from “Seeking Alpha” estimates that the market capitalization of CS:GO skins is in excess of $1 billion and does an excellent job explaining the market to those unfamiliar.

In terms of in-game currencies, these should act as a deflationary value of exchange for the in-game items in said game. Blockchain technology serves as the perfect method for gamers to trade their assets freely and fairly, the broader NFT art community has demonstrated how much value can be added to an industry by allowing people to participate easily in an industry that previously had high barriers to entry. This is our focus here at Gamearound, to make great games in the traditional way, and allow gamers to truly own and trade their in-game assets, so they are rewarded fairly for the pivotal value they provide to the games they play.

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