Why Crypto Games Will Never Be A Thing
Emerging technologies: VR/XR, Artificial Intelligence, Metaverse, Blockchain…
Each holds promise in its own way to transform the world, and each has a distinctly game-y feel. When hardware companies wanted people to bring bulky, expensive personal computers int their homes, they hired game developers to build video games that could be played on their hardware. The rest is history.
Tech is cool, but without something to do with it, it’s useless.
Insights From The Next Generation Of Gamers
I teach game design at Northeastern University. I’ve been here for almost a decade, and have seen many technologies bloom in that time, but few of them have matured into the actual gaming market. Game development students at a top-tier university should be the best informed, most excited, and most innovative of consumers, right? When it comes to their designs, they certainly are.
Yet, I get mixed reactions when I talk about these technologies. Occasionally, I present design challenges around emerging tech. The school has spent a large amount of funds (undisclosed to me) on VR resources (head sets, dev kits, lab space, etc.). Some students develop in it, but the vast majority of it goes untouched. Still, there is institutional buy-in and sales of headsets are growing.
In the gaming industry, that institutional buy-in does not exist around Blockchain. In fact, we see the opposite.
During the peak of the crypto bubble, I asked my students who was interested in blockchain gaming. None were. None understood how blockchain worked. I explained how at the time a solidity developer could charge hundreds of thousands of dollars for their work. They didn’t seem to care. If they knew anything about crypto, they thought if it as an investment vehicle at best or at worst a scam.
When I asked them how they might build a game on blockchain, a few shrugged and said, “A card game?” Obviously they saw that an NFT looks like a card and therefore it could be played with, but they did not see why you would do this, adding extra layers of complexity, instead of just repeating the success of already established games like Hearthstone played on traditional tech.
No one else seems to either.
Counting (AI Generated) Hands
One last anecdote before I move on to the thrust of my argument.
Last year, Open AI launched Chat GPT. That month, I asked my students who had used it so far. About a quarter of hands went up. We talked about LLMs and how to responsibly use them.
This year, in the same class, I asked the same question. Every hand went up. Everyone had used it for school work, brainstorming, and speeding up game development. The utility was obvious, the tech is accessible, and most of all it is fun to use. One year later, they understand it and also understand that they will need to master it to be successful in their careers.
Blockchain, a decades old technology, has yet to penetrate their experience.
Why Not Blockchain?
On its surface, Blockchain seems to be a good match with games. It’s a more secure and transparent way to track ownership of an asset. It allows communities to create and manage systems in a decentralized system. It gives players freedom to trade and gift items in a frictionless way that doesn’t depend on a third party to arbitrate it. And it allows them to actually earn money through the appreciation of assets or speculation on them. This theoretically should also encourage game devs to make the best games possible since drawing attention to these assets with a very fun game will skyrocket their value (to the moon!). 🚀🚀🚀
The problem is, none of these value adds solve a problem that gamers actually have. Tracking ownership of assets is a solved problem, handled easily by databases. Players typically trust the game devs making their games to be fair, and would rather have somebody else ensuring the security and transparency of their transactions instead of worrying about such things themselves. They do not want the community to make design and development decisions about the game; they want professional game designers to do this. They don’t want to track the history of virtual goods, or use World Of Warcraft items in Call Of Duty.
And they don’t want to speculate on tokens.
Perverse Incentives
Whenever you add financial gain into a system, you instantly pervert the incentives of that system, tipping them toward the material. It seems like a no brainer that a gamer would like the awesome gun or skin they purchased to become insanely valuable, too. This way, they can play a fun game and instead of paying for the privilege, get paid. The lure of money would draw in more players to enhance the community, and everyone profits. It’s a win-win-win.
But the in practice, the opposite is true. Players want to play games to escape from real life and experience moments of delight and joy, not to make money. If they really wanted to earn money, they would work or invest, activities that can also be rewarding in their own right. And as appealing as the opportunity to make money is, speculating in a token is also a risk that not everyone wants to take.
To make this a little more concrete, imagine that Microsoft developed a new online shooter that featured an item shop… except the items in the shop have an added benefit: Each one comes with a certain amount stock in Microsoft. And if you sell the game asset, the stocks transfer with it.
This is essentially what adding crypto-speculation into a video game would be. It turns ever asset into a security, an investment vehicle.
Granted, some items in games have already come with massive price tags. But these items become valuable because of their utility. They have no value outside the game. NFTs are unique and immutable, and tradable on exchanges, making them a security in their own right. A share of stock is fungible, but the principle is the same.
If the Super Suit comes with 10 shares of Microsoft stock, it becomes not a game item, but an investment vehicle. And buying it is no longer a game decision, it is a financial decision.
And therefore, Microsoft is no longer developing a game at all, but an investment platform.
And therefore, any design decisions they make must necessarily serve its power to spur investment and speculation, not create a healthy, fun game system. Or if they do make a fun game, it’s a coincidence.
Gamers are extremely sensitive to this. They already have experience watching their game items turn into commodities. Developers frequently use dark patterns to boost revenue and increase in-game transactions. This is almost universally considered a negative to the games’ aesthetics. My students always say this, and when they design they are adamant about not using these mechanisms.
It’s not that they begrudge companies their money. It’s just that gamers are cognizant, whether they articulate it this way or not, that mechanisms that increase spending, revenue, and value are usually not aligned with the best game experience for players, and this is the perspective they approach gaming from.
What Is The Future Of Blockchain Gaming?
I believe that Blockchain as a technology does have utility. Its benefits (security, immutable ledgers, transparency, speculation) could have great benefits for fundraising, e-commerce, and lifting people out of poverty. They can be used to protect the environment through conservation-minded Dapps that sell NFTs that correspond to nature reserves, or they can create a fair transparent carbon credit economy. Users can track donations to charitable organizations to make sure their money is helping people. Tokens can be used to incentivize people to perform pro-social actions.
People are working on these utilities, but they’ve yet to mature. The technology may one day come into its own, or it may sputter out. Probably Bitcoin and other crypto currencies will long remain viable investment vehicles.
But the future of blockchain gaming is a dead end. It’s clear that this technology does not offer utility to gamers, the ultimate customer of game developers. People will continue to build games on blockchain, but they will remain a sideshow, or an investment platform masquerading as a game.
Sam Liberty is a game design and gamification consultant and has created gamified conference tools for the World Bank, World Wildlife Fund, International Red Cross, and others. He teaches game design at Northeastern University.
