Dark Star

Posted on May 20, 2021Read on Mirror.xyz

Balancing the Meta: The Role of Games in a Crypto World

*a flynn x glick x tal x dicker joint *

In the morning, you’re picking crops on the farm. By afternoon, you enter the arena to do battle. This isn’t a remake of the movie Gladiator. It’s one Anon’s day in the world of crypto games. As DeFi, NFTs and other blockchain-based technologies compete for mindshare, the entire crypto world is not only borrowing heavily from game mechanics but increasingly becoming a single massive integrated game itself. This is the inevitable result of user sovereignty. Interoperable protocols provide the freedom to move between thousands of dapps and blockchains, so developers are leaning into gamification in order to put a leash on existing users and keep them coming back for more.

Game designers are, of course, experts in terms of keeping people engaged for long periods of time, even more than social media companies. Where social media companies have a recurring strategy to get someone to engage and then keep them engaged (ie. monetizing their attention through ads), games are different. Games look to draw you in at an initial (often free) engagement, but then encourage you to build status and identity within the experience itself. Mapping all this to crypto is easy. The users make purchases (see: NFTs) that make your social involvement (see: social tokens) unique. The experience blends intrinsic and extrinsic incentives to keep you invested (financially & socially) in the experience itself.

Despite this focus on gamification however, crypto games continue to struggle with designing exciting game mechanics that both drive long term engagement and live up to the decentralized and democratic ideals of the blockchain. Even the most popular games such as CryptoKitties and Top Shots have fairly similar bell-shaped curves in terms of transaction volumes and DAUs. We see significant concentration with limited adoption by broader groups participating at a fairly skewed playtime.

Why is this? Well, for the most part, cryptogames are borrowing pay-to-win and other non-meritocratic game mechanics instead of building the accomplishment loops that drive user/player delight, long-term engagement and mass adoption. They reward power users and big spenders, leading to a cycle of ‘rich getting richer.’ All this is based on non-skill-based mechanics that reward wallet size above all else. For example, users who buy rich assets are granted future potential benefits (more inflation, more exclusive opportunities to purchase in early sales) leading to them getting richer and putting themself further ahead. That’s not to say there aren’t success stories -- nor opportunities for skill, hard work and grinding to be rewarded -- but until the ecosystem learns to adapt the best of games, by rewarding all kinds of human capabilities, it cannot reach its full potential.

Cities & Culture

In Economic Flows & Cultural Products, we discussed how the path of protocol and creator (ie. DAOs) adopting will mirror the growth of culture in our first cities. That is to say, culture and creation via patronage and communal backing. Ironically, games were one of the first major applications and products built by crypto enthusiasts looking to drive greater adoption and mass participation in their new decentralized economy. In 2018, many of the biggest NFT marketplaces (OpenSea and Bitski) went all-in on crypto games as many proclaimed they were the future of crypto adoption and that crypto was the future of gaming.

This made sense. Gaming was already one of the most popular activities in the digital world, with significant overlap between the crypto and gamer audiences. And looking at the example of both Facebook and mobile, it was evident how important the rise of platform-specialized games had been to the popularity of those platforms. On top of that, gaming seemed like a particularly perfect fit for decentralized technology. Players have long been used to purchasing digital goods and participating in digital economies, with a natural belief that games ought to allow players more freedom and control over their virtual possessions. Vitalik Buterin has credited Blizzard’s arbitrary destruction of his World of Warcraft Siphon Life Spell as impetus to create Ethereum.

Three years later, despite all these efforts and focus, crypto games still haven’t seen anything like the viral adoption we saw within Facebook and mobile. Most remain much more like speculative investment vehicles than entertainment hits. And with high gas fees and challenges in scalability and infrastructure, the player ranks remain small and concentrated.

There are several reasons why crypto games haven’t scaled to mass adoption--

  • Platform: platform issues remain rampant. Today there are high transaction costs and problems with scalability, problems that would be even worse if user bases and demand were bigger. Plus there are big ugly unavoidable questions regarding the benefits of decentralization to the high-twitch vivid environments many serious gamers demand.

  • Revenue”: business models remain challenged and misaligned. Today the opportunity for game-makers to earn a SHIT-TON of money from sale of land and items leads them to maximize these types of products -- this can make the core of the game suffer from ‘asset inequality,’ an experience too expensive for entry-level players, and a sort of preening Yuppie-ness that isn’t that cool.

  • Immersion: there is insufficient immersion - the crypto-ness of the games (many are thinly veiled yield farming) and interoperability of assets across games into marketplaces reduces the game’s intensity and believability and its sense of place and escape.

More importantly though, crypto games are competing with DeFi itself and, in that, often losing. If the game is just thinly veiled speculation and/or yield farming, why not just do that with the thousands of fun tokens minus the game pretext? It may actually be simpler to play the purer version, and, with the addition of social media group behaviors, even more fun.

DeFi is a more accessible game than crypto games and the rules can’t be changed by any single entity.

It’s possible that, because the use of the blockchain for the trading of digital assets as NFTs is so obvious (and lucrative) that crypto game designers have missed the larger possibilities of decentralization. Rather than centering their communities on competitions of cooperation and creativity, we get shallow status contests and themed casinos. And incentives can be seriously mis-aligned. With crypto games, the original creator can mint more NFTs at any point which causes inflation.

There’s no question that videogames have a God-dictator that determines the story, controls the economy, and tries to create the best possible experience. This helps make the games more fun and playable by altering the “meta” and ensuring playability and balance. This authority may be camouflaged in games, but it's always there. And it is essential to how successful games work. DeFi, in comparison, is competing 'games' (blockchains and dapps) within a metagame (the game of token vs token), with nobody in charge, or perhaps lots of people in charge. In the world of crypto, everything and nothing is a game at the same time.

In many ways, the problems facing crypto games reflect the inherent tension between those aspects of a game that ‘want’ to be decentralized and those better or more easily accomplished by a centralized solution. The development and management of innovative gameplay experiences, complex storyworlds and game economies are simply easier in a centralized setting. New crypto users, with their need for fiat and customer service, make this problem even more acute. Perhaps the two most popular gateways to crypto, Coinbase and Dapper’s TopShots, accepted the need for a compromise, but it is often an uncomfortable synthesis. The disruptive capabilities and ambitions of crypto sit restlessly within a bounded environment, like a caged wild animal looking for its opportunity to escape and wreak havoc. How to bridge this gap? Everyone agrees, to use the most common example, that it would be awesome if Fortnite enabled you to buy and sell and use Fortnite stuff outside of Fortnite. But that stuff is only valuable because Fortnite is awesome, and that awesomeness is the product of a highly managed environment. That's not to say we will never build decentralized systems and governance for a thing like Fortnite. We can and will eventually have Creator DAOs that build and run worlds. But we're not yet very close to being able to do that. And until then, we will mainly have crypto games that are more DeFi than delightful, more on-ramp to the blockchain than an engrossing destination.