Author：0xoct, ResearchDAO

Special thanks to our editor Joys and AmberSun, and thanks to BriefKandle and origugua for their assistance.

1. Introduction：

Although GameFi has been defined in the market as the blockchainization of games, this logic, in fact, is ambiguous. If the popular NFTFi and SocialFi are regarded as the combination of simple elements, i.e. NFT+DeFi and Social+DeFi, then GameFi should also be rightly regarded as the combination of Game and DeFi.

GameFi is not the blockchainization of traditional games, but its essence is quite different from games. The traditional game is to put the game experience as the first priority in the development of the game as well as the profitability of the development team. GameFi's first priority is to encourage Play to Earn behavior, and to let users get substantial benefits in return. The difference in core appeals makes GameFi and traditional games have more obvious differences, despite the overlap in development ideas and operation logic.

In traditional games, there are different classifications of game genres: MMORPG, SLG, RTS, etc., all of which have different successful works presented. But the same game genre, in GameFi, is likely to appear unexpectedly new due to the change of environment and purpose.

2. Traditional games and GameFi

In the gaming world, there is a special term: Game Feel, which is used to describe the first sensation a game brings to the player's experience. Regardless of the type of game design and the target audience. If the "game feel" is poor, then players will not continue to experience it.

Some people may think that complex or esoteric games have a good "game feel", but they do not. Not all types of games need to have complex mechanics.

Different game genres have different design models and different user groups.

• At present, the traditional game field, the main games are divided into the following broad categories:

  • ○RPG (Role-playing games): Role-playing games usually have a complete storyline in which players can leave their identities behind and take on certain roles in the game to gain some sort of vicarious satisfaction. This requires the construction of a logically sophisticated and perfectly self-consistent game world, as well as a game environment full of freedom. RPGs can be subdivided into strategic role-playing games (SRPG - Simulation Role Personate Game) and action role-playing games (ARPG - Action Role Playing Game) according to the way the combat is conducted. Action Role Playing Game). ○MMORPG： Role-playing category is the most popular, and heavy games are still the main force to absorb money; however, the threshold of game development and operation is high, and most mainstream products come from large factories.
  • ○MOBA: The genre has risen due to its fast pace, but only a small number of products currently occupy a high position in the gaming market due to high-intensity interactions and longer game lengths (20 minutes to 40 minutes).
  • ○FPS (First Person Shooting): FPS games are game genres that emerge based on 3D technology, the most important feature is the change in the player's perspective, the screen as a medium for the player to interact with the game world so that the player is immersive and brings a strong visual impact.
  • ○SIM (simulation): SIM games are divided into RTS (Real-Time Strategy) real-time strategy games and SLG (Simulation Game) strategy and wargames. For the former, typical representatives include "StarCraft", "Age of Empires" and so on, while for the latter, there are representative works such as "Total War" and "Civilization" series.
  • ○Card-based SLG is gradually becoming more popular: as card-based SLG is widely received by users and has lower development costs, it has also become a priority choice for many studios and project teams to try their hands. At present, card-based SLG is also a category that grows in both quantity and revenue in the U.S. handheld game market (card-based games account for about 5.3% of the Top 100 head games in 2019 and about 6% in 2020) and maintains a market share of more than 20% in the Japanese handheld game market for the past two years.

• The above types can be said to have more comprehensive coverage of the traditional game types currently on the market.

  Strictly speaking, as GameFi, which also has game attributes, should also develop comprehensively in each game field, and one or two phenomenal games should appear for each type of game, but what we have seen so far is that in GameFi, it is more based on nurturing, sandbox, cards, and management strategy, and there are attempts about action shooting, sports racing and other types of games, but their DAU (number of daily activities) is not satisfactory.

3. Different types of games GameFized with different difficulties

The reason for this is that there are differences in the underlying logic between traditional games and GameFi.

Traditional games look at retention, i.e. game publishers pay more attention to users' game experience and have been working to maintain more user retention and cultivate users' paying habits by improving user experience.

In fact, for GameFi's game development team: the core logic is to provide early money-making effect (time monetization), then bind a larger community of interest, a larger narrative, and redistribute the benefits of the traditional game industry chain, and on this basis, maintain the stability of the ecological value within the system.

Unlike traditional games, GameFi games have three major requirements:

• An economic model that cannot be avoided
• Intrinsic financial core
• Users with profit as the priority goal

Regarding GameFi, it can be divided into the following four types:

• Native GameFi game: Decentralized finance with NFT assets through DeFi's debit to achieve the effect of "mining" like income. Most of these games are card games, the secondary market is relatively prosperous, and the head GameFi game has a perfect ecosystem and a huge user base.
• Realistic financial mapping GameFi: This kind of GameFi game maps the realistic financial system into the blockchain industry, GameFi plays a part of the role of centralized banking, in this kind of chain game players can experience all the financial methods in traditional finance such as stock market, fund, futures, etc. in a complete way.
• GameFi that focuses on game experience: This kind of chain game focuses on immersion and aggravates the attributes of the game, while taking into account the ecology of in-game digital assets, making the game fun and producing game digital assets similar to mainstream digital assets.
• Virtual mapping of realistic behavior: such as Stpen, Letmespeak, etc. This type of game gives realistic behavior to gold farming by combining it with realistic behavior.

The three main characteristics of GameFi have led to deviations from traditional games in terms of the development of GameFi games:

• GameFi's gold-farming characteristics have led to a natural preference for low-complexity interactions and a natural rejection of high-complexity transactional game types such as action shooters and contests, as well as dimensional outcome theory games such as MOBAs.
• On the other hand: Axie's success has made many teams start to imitate it based on their existing experience, and have low interest in new models with high trial and error costs.
• In fact, in the process of evolution, after the user habit (User Behavior) was educated by Axie, the entry threshold of card games playing gold is lower.
• Other types of games we can't say are not suitable for games, it's just that there is no game yet that can do both gold playing and playability.

GameFi represents a decades-long shift in the value paradigm from game officials to players. Starting with pay-to-play (P2P), users will pay to play games created by game studios. At the root of this value shift lies the structure of the economic model inherent in GameFi.

4. The problem of traditional games transforming into GameFi

Although from chess to 4X strategy, traditional RPG tabletop games to AAA open-world, games have never been mere entertainment, but a platform for players to compete for limited resources. Therefore, game coins with circulating value and usage value play a crucial role in the user retention and business cycle of games.

But there was never one like GameFi, which quantifies and binds the power and benefits of users with Tokens. In fact, since Axie became popular, almost all traditional game companies have gone to study Axie, but none of them dare to do it. On the one hand, this involves issuing coins, the game majors are naturally averse to it, because it is still in a gray area globally.

On the other hand: the transition from traditional games to GameFi is not just simple economic model implantation, but more of a switch of Value. GameFi essentially uses coin issuance to solve all the previous game middlemen. The more you play the game, the more you are a shareholder of the game. The game player is no longer a player, but an investor. From the game team to the middle of the user, the increase of intermediate elements such as Guild, but also let the game developers for the lose of control of the game, worry. AC Capital once proposed a vocabulary called: Guild overflow, referring to a game, early welcome Guild (bring liquidity), late go Guild (large digging McTee collapse the stability of the ecological economy within the game).

A GameFi game will parasitize many Guilds, this effect will not be vicious in the early stage of the game to show, and even to a certain extent conducive to the development of the game ecology, but when the game enters the end of the ecology, it will produce the phenomenon of excess guild exodus, so that the game ecology and the number of guilds to maintain a balanced state.

Can traditional game teams step over this psychological threshold? This is something to think about.

5. Conclusion: Traditional games and GameFi may meet in the meta-universe

Currently, there is a lot of debate in the market about whether a game should be P2F (Play to Fun) or P2E (Play to Earn), and this is one of the biggest points of GameFi.

In fact, the most important issue for a GameFi is the sustainability of its economic cycle, not to strengthen one of its attributes of Fun or Earn. Different attributes of GameFi can be reflected by different game types, and by issuing different games to improve playability step by step, but the underlying economic model of the same token remains common. As long as a GameFi token economic model can run effectively, then its Fun properties and Earn properties can be realized through 4 to 5 games together. This is what the Axie team is currently doing.

How to ensure the sustainability of the economic model?

• On one hand, it's pulling in new players, which means GameFi needs to further lower the barrier to entry.
  • Currently, new players know more about GameFi based on white papers and materials, and often need to pay a fee if they want to play. The free single-player trial model is becoming a trend.
• On the other hand, embrace the meta-universe.
  • As a subset of the meta-universe ecology, games are also an important way to generate and transfer ownership of meta-universe assets, and will also take on important responsibilities for the operation of the underlying meta-universe ecology.

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