Adding NFT trading does not make a game successful
One common misconception I see is the belief that taking a good web2 game, adding blockchain to it and making things tradable, will lead to success. The idea that good gameplay and ‘fun’ experiences is the only thing missing between today and mass adoption.
I believe this take is flawed on several levels, and that games need to be designed from the ground up to truly take fit with the blockchain and succeed, even if they look and feel similar to great web2 games.
Why is there a tendency to start with web2 games and add trading?
The idea that adding ownership to a good web2 game will enable it to suddenly succeed is a misconception that is perpetuated by several trends in the market:
Traditional game studios are trying their hand at web3, and the easiest way to experiment (or get approval) is to slap trading onto an existing web2 game
New web3 gaming studios are filled with gaming industry veterans, with deeply entrenched views on what a ‘good’ game is, and insufficient blue ocean thinking on why blockchain improves gameplay beyond ownership
Current web3 games in the market have yet to penetrate a mainstream audience, leading to the commentary that “we just need good games” and that web2 gameplay by itself will lead to succeed
Why web2 gameplay + trading doesn’t lead to wins
Trading only provides a marginal improvement for gamers
As Peter Thiel proposes in his book Zero to One, creating an innovative product that dominates existing competitors requires a ‘10x improvement’. Something needs to be 10x better than its closest competitor in order to truly be differentiated and win. For example, Google gave 10x better search results when it first game out, and Uber made it 10x easier to hail a taxi to get around.
I believe the same thing applies to Web3 gaming. Adding trading to a great web2 game will not actually lead to disruption, because it doesn’t represent a 10x improvement. Players won’t switch from Fortnite to an equally good (but unknown) ‘Web3 Fortnite’ clone just because skins in the clone were tradable. The switching costs are too high and the network effects of web2 giants will be very challenging to compete with.
Core web2 systems are at conflict with open economies
Web3 games by definition have an open economy, whilst web2 games by definition have a closed economy. This means the the way in which they are designed are actually very different. For example, the resources and currencies that players earn in free-to-play games are not tradable, which makes it much easier for game designers to balance their experience. Opening these up to be tradable could break the entire game system as well as the publisher’s monetisation model.
On the other hand, the many benefits or game systems that are available in open economies aren’t obvious in the industry today. Finding and implementing these requires studios to go beyond adding trading to an existing web2 game.
Poor genre or player motivation fit
Not every game genre or audience type is compatible with Web3. This comes back to the player motivations - if the core gameplay and interests of players aren’t tied into participating in an economy, it’s likely that there won’t be a great fit for NFTs.
A common genre that I see adapted for web3 which I believe is fundamentally a poor fit are FPS games. FPS games generally compete on being highly competitive, where things like latency and ‘feel’ are extremely important. For developers, building exceptional netcode is key to winning, rather than any type of meta design or fancy trading economy. You can see the amount of investment that Valorant made to be successful. Whether you can trade your gun skin is secondary (or even tertiary) compared to the moment-to-moment experience. In addition, FPS games are high action, which skews towards a much younger audience (as proven by me getting schooled by 13 year olds). Younger audiences typically are not spenders, are mostly not able to purchase crypto in the first place, and are unlikely to be passionate about the trading part of the game.
Conclusion
Adding trading to a web2 game will not lead to overnight success. Building web3 games are much more nuanced, and requires game systems to be designed from the ground up, not just copy and pasted.
As developers it’s our duty to innovate and find the ‘web3’ part of web3 games. Instead of copying what has worked before, we need to use the underlying technology of blockchain to create fundamentally better gaming experiences and business models.
This is like the early days of the internet. Will we upload a photo of the phonebook to the internet or build the next Google?
Disclaimer: These are only my own opinions and ideas.
About me: Lifelong gamer and crypto native degen. Background in startups and consulting. Founding and leading Guild of Guardians - a mobile, squad based RPG by Immutable with >800k players on the waitlist. I’m passionate about pushing the entire web3 gaming industry forward by sharing strategic yet practical perspectives. Find me on Twitter.
a. I agree that making the game successful is not about skins itself. But the idea of a Skin becoming a User Generated Content that finds itself to a Social media Platform disconnected from the game, has so much social equity that it can lead to economic equity as well. And perhaps it may drive the community to feel more engaged with the game as well. I personally feel that this model has never been tried. Feel free to correct.
b. When I speak to gamers in LATAM & SEA, you will be surprised that many average-spending gamers think that if by spending 10-30 USD in games can enable them to possibly extract 30-70 USD, then they would gladly make that expense. And that is where 80% median spends are.
c. One of the things that I have learnt is - It is just harder to implement a model that enables everyone to execute commerce & track it as well. This is how google pay and apple work with games. If Unity had a playbook for P2P, then almost all games would support P2P model today and nor would google/apple complain.
d. While I am building for Mobile Games powered by blockchain, I often struggle to understand the role of decentralisation and where is it necessary. for instance - Minecraft has a Creator verification problem; there are so many duplicate skins. If they implemented private blockchain that proves who has created what skin when, I think that it is a form of decentralisation as well.
Thx for reading, appreciate it
Derek.
a. Why do you think CS-GO market & the game still exists despite a clampdown in 2015 for AML reasons. The skins market was implemented three years after the launch of the game.
b. Roblox Metaverse Fashion report clearly calls out how are youngsters spending inside the Game, and their audience may be the same 13 year olds.
c. Why do games need an open currency powered by Crypto, why can't trading itself be sufficient - Fifa/Albion online auction houses on mobile still exist.