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Blockchain games are attracting record amounts of investment. Much of this is built on the momentum of the 2021 crypto bull market and the success of early entrants like Axie Infinity. However, developers have needed to rapidly evolve in the hunt for longer-term sustainability and player numbers. As the industry consolidation curve evolves, some will come out on top.

Through our discussions with games, chains, guilds, and players, there are a few recurring themes. Let’s look that these themes from the perspective of a game developer.

A tale of two studios

Imagine two game companies:

Arrow to the Knee Studios is a traditional game developer. Producers of several previous games, they have strong cashflow and large existing player base. Now jumping into a new game called Banana Warriors, a deep and immersive MMO about fighting bananas. They take all of the upfront risk in the development which will take 3 years. They plan to launch with a free-to-play model, with micro-transactions and in-game NFTs.

Mega Ninja Sheep Gaming has never developed a game, so Martian Bovine Conquest will be their first. They pull together a fantastic video, a slick marketing campaign and a roadmap to die for. They plan to launch the game as a very limited beta with one or two playable features, very scaled down. They create 10,000 sheep NFTs for the game, and release 1,000 NFT land pastures (where the sheep eat grass) for sale. These sheep NFTs can be used for breeding and allows the owner to profit if the game is a hit.

Both studios have their relative merits.

Arrow to the Knee is well capitalized with significant game development experience, they create strong core loops in their games. They have a highly talented and experienced development team and proven track record.

Their existing revenues means they have a secure development timeline. They have stayed somewhat under the radar, meaning expectations from the gaming community are not yet stratospheric. Their primary audience is traditional gamers.

Mega Ninja Sheep are financial and economic gurus. They have no ongoing revenues, but have secured significant early investment. Their roadmap has created a lot of interest and they sold out their NFT sheep and pastures. They have cash in the bank and now need to deliver. They hire a great development team to start working on the promised game and features. Their primary audience is play-to-earn players.

Both studios have the potential to build great games. In summary:

Arrow to the Knee has a game in development, and probably won’t be live for at least 2 years. They plan to focus on traditional gamers with elements of blockchain and a sustainable economy. Can they get the traction needed for success?

Mega Ninja Sheep have secured tons of cash to build the game, but expectations are high and the clock is ticking. Their beta will soon be live and playable but very limited. Does their game have long-term growth potential?

Which game would you choose?

Let’s look at some of the factors that might influence your decision, and the potential success of these games. there are 5 recurring ingredients we have seen from successful developers from the new generation of game makers.

1 – Build for Fun

‍If you don’t build for fun, players will only stick around if they made an early investments in the game, are making money in the game, or are willing to stay in the hope that the game eventually delivers. If the economy starts to fold, economic players will leave for greener pastures.

Aim to create the Magic Circle in your game. This is the walled garden of the game world, shut off from the stark reality of life with homework, commuting, and Mothers-in-law. Within the safety of the Magic Circle, imaginations run wild and your players can truly escape.

This focus builds your game for the long-term and provides a sustainable reason to stick around and for players to invest their time and cash in something that returns inner value. The game needs to balance skill against challenge, to hit the sweet ‘flow zone’ where players feel rewarded and empowered, but not bored or anxious.

Be mindful of monetizing this Magic Circle. When money enters the inner core of the game, and it becomes pay-2-win, it alienates and angers a part of the player base. This is one reason why some players are skeptical of blockchain games, they fear that the core of the game will be overly monetized and it will require significant spend to succeed.

‍2 – Balance your player base

‍In reference to point 1, if you build your game purely for economic players, looking to make money from the game, it is likely to find difficulty in the long-term.

As an example, in pure play-to-earn terms, if your game is going to be a hit, then your reward tokens must be able to scale (almost) infinitely. In reference to existing play-to-earn games, players might need to earn 1,000 tokens per month to make a living.

If you have a successful game with 500,000 active players, this means 6 billion tokens will be created annually.

From an economic perspective, this is a huge amount of sell pressure that would need to be balanced.

Ideally the economic players need to be balanced by traditional gamers who play for non-economic reasons such as exploration, socialising, achievement and competition. These players exert buy pressure, which can balance sell pressure for long-term stability.

Traditional gamers will only stick around in your game if they are fun and rewarding. If a game is built from the ground up around a foundation of economic players, they exert a large amount of influence on the development team to keep moving the game in a direction that rewards them. This is why the game needs to balance the player base from day one, to ensure gameplay is prioritised.

The portion of net value extractors needs to be smaller than those playing for fun and willing to pay to reach their goals.

‍3 – Build Community and decentralize key decisions

‍While the game community as a whole is the worst decision-maker about game balance and direction, your game will succeed if key community members are invested in the decision-making process. Not just taking onboard their views, but giving them actionable power in key decisions through the structure of a game DAO.

Building strong community has multiple other benefits for game developers. It provides a sense of belonging for your players, creates multiple ties between players and game devs. Community advocates are much more likely to stick around in the game, be more tolerant of game issues, provide constructive feedback and spread the word about how good your game is.

decentralized decision-making has become a foundation in many DeFi protocols and the early creation of  DAO in blockchain games is also becoming more normalised. It is a good vehicle for rewarding your most passionate and active community members, and a good way of communicating key decisions and their justification.

Making sure the DAO is not just populated by economically-motivated players is absolutely critical. Most of the DAO members should have the long-term success of the game at heart. The voting items in the DAO should also reflect critical decisions being made in the game, with full context and opportunity for members to express their thoughts.

4 – Don’t be scared to pivot

Let’s look at a game that was first announced in 2011, lost its lead designer in 2012 and was deemed by many players to be vaporware by 2013. Things looked grim.

They finally had a closed alpha in 2014, and after 6 years of development went live as a paid Early Access game. Things were still looking shaky and the grindy free-to-play nature of the game didn’t help, with reviews being a mixed bag of frustration with some glimmers of hope.

Sounds familiar? This game was Fortnite.

Before launching, they pivoted the game to become a Battle Royale-style game, inspired by the success of Player Unknown’s Battlegrounds (PUBG). They rushed out the game mode with one map and no character customisation. The rest is history.

As all good project managers will tell you, always refer back to success criteria and whether you are still likely to hit your goals. If you are spluttering along on a wing and a prayer, hoping for success, it might be worth looking hard at player data and sentiment to see if a pivot either in economy design or game itself, is worthwhile.

It might be that you are designing a heavy play-to-earn game and have doubts about the long-term economy. It might be worth exploring an economic rebalance to attract traditional gamers. This swing towards free-to-own games is beginning to take place, with many games seeing alternative ways to build a blockchain game successfully.

5 – Get creative with asset ownership

‍Following the successes of free-to-play mobile games and the mainstreaming of the ‘whale’ concept (big spending players), blockchain gaming is being viewed sceptically by some gamers.

A huge opportunity now exists to promote the many benefits of blockchain gaming, while alleviating these fears around spending requirement. Focusing on the extensive benefits of blockchain games can put you ahead.

Asset ownership has real, tangible benefits.

‍NFT assets rights – This is your asset, it’s yours to keep. Even if the game rebalances or stops operating, this asset will have permanent collectible value. Assets can accrue value through use, have the potential to be exchanged through other ecosystems or have investment value.

Secondary Market Opportunities – Assets that are owned can be traded and rented. They hold innate value and can offer returns on the initial investment even if the player leaves the game. Think automated asset rental returning reliable yields for a player.

On-chain reputation – Your profile in-game is no longer limited to one ecosystem. Managing your reputation carefully within one game can translate to a whole host of benefits in other games based on how you expose your data.

Pedigree – NFT assets now have publicly verifiable histories. Assets are no longer valued on their in-game utility alone, but also their potentially rich background. Imagine owning a helmet verifiably worn by your favourite Youtuber in that one video. Imagine it being worth thousands of dollars and being able to rent it for a week?

In-game governance – Influencers and game advocates can participate in the decision-making process of the game through asset or token ownership. Players can feel like they are shaping the game, which is the ultimate form of empowerment.

These ‘blockchain benefits’ offer you as a game company the opportunity to engage players and provide many varied paths to monetisation. No longer limited to micro-transactions and ads, a diversity of value chains exist dependant upon the desires of the player to add and remove value from your game.

In addition, blockchain opens up a whole wealth of ways to engage around the game, with esports and other viewership options, targeted sponsorship, prize pools, NFT rewards. So many opportunities exist to create a robust game with appropriate ways for players to feel good about their investment in resources.

In conclusion

‍Most of the best games in the world were born from the motivation to create something fun. These games built a strong, grassroots community and scaled.

This foundation of fun still holds true for blockchain games.

Blockchain can be an empowering technology, boosting the game and opening up numerous ways to play and enjoy. Embracing the expanded economy and balancing the motivations of the player base is critical.

Understanding the power of community to help shape game direction and advocate for the game is a highly undervalued strategy. This can be a key differentiator.

Utilizing the power of blockchain and its many benefits, beyond paid ownership of assets can create a vibrant, long-term ecosystem.

Any investment/financial opinions expressed by Play to Earn Diary are not recommendations. Our content is for educational purposes only. If you plan to invest in any game or cryptocurrency then please do your own research and only spend what you can afford to lose.

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