Tobold's Blog
Tuesday, May 10, 2022
Blockchain gaming

Blockchain games up to now have been a complete failure. The most successful one, Axie Infinity, is basically a pyramid scheme preying on people in less developed countries. Ubisoft's venture into this area has been a PR disaster. And Square Enix has been widely ridiculed for selling of valuable intellectual property to invest in blockchain gaming. I always find it astonishing how quickly people forget about rather recent history, and are unable to learn lessons from it. Because what I learned from years of MMO gaming is that yes, blockchain games *could* be a massive hit, if certain conditions were met.

If you go through the now nearly 20 years of archives on this blog, you will find numerous blog posts about people spending real money on virtual items in MMORPGs. For years this was a kind of a war, where developers would try to prevent players from trading virtual goods, and players would try to do it anyway. The prevention of trade is the reason why your raid epics are "bound" to the character that picked them up. There is strong historical evidence that if players care very much for a game, and there are items in that game that make your character stronger, these players will be willing to pay real money for those items.

With blockchain technology, each item in the game can be a non-fungible token NFT that can be freely and safely traded between players using the crypto currency used on that blockchain. With the devs now in on it, the game can be designed to be real-money trade friendly.

So what about the examples of the failed NFT games? Well, any such game need to answer the question where all that money is coming from. If *everybody* in the game is just in it for the money, because the game itself just sucks, this can't work. You need some players who want to sell virtual goods, because they like money, and some players who want to buy virtual goods, because they want those goods for their characters. And that is where the Ubisoft Digits went wrong: They were just cosmetic items in a game with just a 58 Metacritic rating.

But if you apply the technology to a more popular game, and you make all items in the game NFT, not only the cosmetic ones, there will be demand, and there will be trade. There was demand, and trade, in games that tried to restrict RMT, so if you remove those restrictions, the trade will flourish. Of course, strictly speaking, if you buy the Sword of Uberness from another player instead of getting it from a lootbox, this is still Pay2Win. But I have a sneaking suspicion that the hardcore gamers will be surprisingly quiet about that, because they will be earning good money from that.

Have blockchain games up to now been horribly bad? Yes! Is that an inherent feature? No! As soon as somebody makes an actually good game that allows players to trade virtual items via the blockchain, that could become quite popular and profitable. Maybe Square Enix is onto something. Or it will be somebody else who makes the first actually good blockchain game. But the idea isn't unworkable: There is a lot more intrinsic demand for powerful items in virtual worlds than there is intrinsic demand for pictures of bored apes. Analysts found that only a very small number of people actually trades NFTs, and most of those trades are "wash trades", faked to make an NFT appear more profitable. Virtual items in games will certainly not be worth millions, but there could be actual demand from a much broader base for them.

I think you're right. The PUG scene in WoW classic is dominated by GDKPs now, where people bid gold that they often bought to get the epix. The hard-core carry them and get gold which they can also use to get gear. Win win except if you are a new player with no gold to get into them in the first place.

I can easily see NFTs applying here, the virtual goods already have no tangible value.
Do you want to explain why any game company needs to use Blockchain or NFTs to do what you're describing? Because so far no-one else has been able to. If they wanted to do it, they could do it with the tech they already have. What does Blockchain or NFT add that isn't there already?
NFTs are a solution in search of a problem. Nothing that you described needs an NFT to work. Players have been trading items to each other over steam for years now. Blizzard already dabbled with a real money auction house and the WoW token has been in place for years as well.

The only reason devs are interested in NFTs are because of the potential to explode in value. NFTs bring nothing else to the table that devs can't do on their own.

Crypto in general is the exact same issue and that's why it only has value as a speculative investment gamble. Everyone wants in on the next Bitcoin and the FOMO drives the "value" off all it's derivatives.
In the context of items in virtual games, the advantage I see for blockchain technology is the fact that items can't be duped anymore. Bugs or hacks that duplicated items have been very problematic for game economies in the past. But I would agree that there is no absolute "need" for a blockchain to enable trading. It would be more of a marketing tool. Spending money for virtual items has always been risky and a bit silly, blockchain technology at least makes it appear safer and more akin to an "investment", even if that is mostly a lie.
What you describe had been possible for years without Blockchain. It is my understanding that the thing Blockchain and NFTs bring to the table is the promise of giving digital items an existence outside of the game so that they can be used in other games and applications. It is not at all clear to me that that is useful. It has been suggested that players could use items such as avatars that they "own" in multiple games. That would require a substantial investment in technology by the game developers however and why would they do that? I suppose if it became popular enough then standards could be developed that would allow digital assets to be ported between games. However I don't see any sign of this happening and even if it did I would be worried that it might strangle creativity if every game had to conform to certain standards of look and feel. Furthermore if you include non cosmetic digital assets in this portability you create s balancing nightmare. A smart targeting gun from a space shooter is not going to fit well into a WW1 game.
Duping may be an issue in games controlled by one company, but scams are hardly unknown in the NFT business! So long as items exist in a single company's game, I see no benefit from NFTs other than hype. Blizzard controlled the real money auction house in Diablo 3 - NFTs would have done nothing. Poker sites often hold many thousands of dollars belonging to individual players. Some of them take crypto - one or two take nothing else - but none of them use NFTs for anything.

Only if games become very decentralised can I see any potential use for them - and even then, companies could join together to form an organisation to oversee transferrable items. As mbp points out, there still needs to be some organising involved to determine what items may be transferred and how.

So right now it looks like hype, and a solution in search of a problem. At least crypto has some use when governments want to get up in your business.
I was going to say that blockchain technology and NFTs are wholly unnecessary in video games, but I guess there is no need to add my voice to that choir. Solution in search of and so on.

That leaves the question of why NFTs are being shoved into so many things right now. Sure, it's the current hot buzzword, so it might just be a marketing ploy. But there is widespread and obvious hostility against the concept, and this is well-known, so it would be a very bad marketing ploy, unless it is primarily targeted at investors and investors are even more clueless than I thought.
Now, if I were a cynical person, I might suggest that these attempts at forcing crypto and NFTs down the throats of the gaming public could be motivated by people in the industry who are heavily invested in crypto and looking for a way to inject enough liquidity into the market to be able to cash out their holdings. Which (purely coincidentally, I am sure) is one of those problems bigger fool scams tend to have. And, since I am a cynical person, well, I guess I am suggesting that.

So, no, I don't think a "good NFT game" is in the near or middling future, because people who want to make good games and people who want to put NFTs into games are two distinct populations with very different incentive sets. Maybe, just maybe, after all these markets along with their associated cryptobro culture have collapsed, somebody might be able approach the concept of the blockchain with fresh eyes and find an actual use there, and there is a sliver of possibility that this use falls within gaming. But probably not, and definitely not anytime soon.
Post a Comment

<< Home
Newer›  ‹Older

  Powered by Blogger   Free Page Rank Tool