The Future of Gaming
Chances are, you're a gamer, and this affects you...
When people think of a gamer, they think of an introverted teenage boy wearing a bulky headset hunched over a computer drinking Redbull. This couldn’t be further from the truth.
There are over 3 billion gamers worldwide, with ~50% playing on a mobile device. Contrary to popular belief, women account for over 40% of gamers in the US. Gaming is not a niche market, in fact, it’s bigger than the global film industry and the North American sports industry combined.
Building a Fun Game
Multiplayer games widely outperform single-player games. Look no further than EA Games canceling the anticipated release of their Star Wars Game in 2019 over concern about the appetite for single-player games. People want to interact with one another, whether it be through competitive first-person shooters or through chill free realm games.
People play games because they’re fun, they derive some form of fulfillment from them, or they want to socialize. In the same way, people grab dinner with friends to catch up, people often party up with online friends to socialize and relax. When people wear expensive clothes they’re signaling social status, in the same way, people wear unique avatars or skins in a game to represent coveted ranks, wealth, or achievements.
Making Money from Games
As games become more popular, it makes sense that more people are interested in making money from them.
Chances are you’re not a game developer, professional e-sports player, or a successful streamer. To give you some perspective, being a professional e-sports player is harder than making it in the NBA, and unless you’re part of the top 0.01% of streamers, you’re not making much money from streaming.
The introduction of play-to-earn (P2E) games has shifted the paradigm by allowing people to profit off their spoils in-game, which come in the form of tokens (both fungible and non-fungible). Millions of people are playing these games and earning tokens on a daily basis.
While this sounds amazing, there are still several issues with P2E games:
They boast absurd returns, but in reality use capital inflows to pay current users, similar to how a ponzi-scheme works
The player base is made up of the cryptocurious and those looking for financial gain, not real gamers
Steep initial costs create high barriers to entry
They’re not fun and they’re confusing to set up
The need to have a web3 wallet and an understanding of exchanging and swapping tokens is foreign to many
Bombcrypto is an example of a boring P2E game
The Future of P2E Games
Seamless Onboarding — Learning how to set up a wallet and understanding token swaps creates an incredible amount of onboarding friction, which is why only people genuinely interested in crypto or people who make a living off games have overcome this hurdle. When you fire up a next-generation game, you shouldn’t be able to tell the difference between a game built on the blockchain and one that isn’t.
Game Designers making the Games — The Blockchain and web3 space is in its infancy. The people currently developing many of the games are crypto-first people learning how to build games. Making a fun game is one of the hardest things to do, and so we need to have traditional game designers making the game and cryptonative people serving as advisers.
Better Tokenomics — The fall of popular P2E games like Axie Infinity and STEPN are a result of poor game economies. In both cases, there was a lack of deflationary sinks which led to an oversupply of the respective utility token. Effective sinks are challenging to create when people solely play for financial gain. Games need to be more fun so people will spend on sinks that don’t create a net increase in the tokens.
No Financial Barrier to Entry — Many games require you to purchase an NFT worth hundreds of dollars to start. The free-to-play model outperforms competing ones and counters the ponzi-scheme elements associated with P2E games. This model allows anyone to play the game and we’ll see more of it.
Balancing Entertainment & Money
The best P2E games are going to sit at the nexus of entertainment and digital ownership. Entertainment is the reason people play games, they want to have fun and enjoy themselves. Digital ownership unlocks the capabilities for people to reap the benefits of their effort.
Current P2E game designers are obsessed with creating games with absurd financial returns to entice players to the game when in reality this creates an unstable ecosystem and one that inevitably mirrors that of a ponzi and attracts the wrong audience.
With the help of experienced game developers, P2E games will be fun and enjoyable and people will have reasons beyond money to play. These games will have real deflationary sinks that will enable a successful game economy as people spend on social and in-game elements, which could come in the form of resource-intensive content, cosmetics, or the action of creating in-game guilds to name a few examples.
Given the earning abilities for P2E games, it’s unlikely that it’ll be the primary source of income for people, instead, it’ll be a supplement. The increase in automation driven by technology will push many into the gig economy (which has been accelerating for years already), meaning people will be looking for additional forms of income, income that can be achieved via P2E games.
P2E games with proper deflationary sinks achieved through fun and enjoyable gameplay represent the future of gaming. Game developers will be leading this movement, creating brilliant worlds that attract fire and foremost, gamers. Games like Cryptokitties, Axie, and STEPN have laid incredible foundations for us to learn from — what type of people play P2E games, do games need to be fun if people only care about money, and how can we create stable game economies? Soon, gamers won’t be able to tell the difference between the games they grew up on and P2E games, but thanks to the hard work of many, they’ll be able to benefit from digital ownership of their efforts.
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