What to save you, a misguided encryption game?

Published on 1 Months ago   92 views   0 Comments  

The following is compiled by the way of defi

In the past year, I have been immersed in the world of encryption games. This is where I am most interested in this field and where I feel most qualified to express my opinions.

Fortunately, I can see encryption games from more angles than most people. I am a loyal player of Runescape, world of Warcraft, Diablo 3 and dota 2, which show the early experiments of what we now call encryption games. These experiments include the gray market of game currency in world of Warcraft, the "NFT" of rare items in Runescape and dota 2, and the short-term attempt at real money auction houses in Diablo 3.

I have made quite a wide range of attempts at past, present and upcoming encryption games, spending at least $100000 on imaginary land, sneakers, characters and tokens. In the past few months, I have started to write more analysis content related to encrypted games on this website.

I also helped build a crypto game economy. I am a consultant to crypto Raiders and I provide assistance in game economics and token economics. By personally building the crypto game economy and seeing it run online, I've tested some different theories. In the past few months, I have been more exposed to these ideas in practice through economic cooperation with other games.

Encryption games are brand new, and few people have more than one or two years of experience in this field. Therefore, although I am still very unfamiliar with all this, I still feel qualified to raise some of the problems I see in this field and some ways we can improve them.

I'm very optimistic about encryption games. This is what I've wanted for more than a decade, although I didn't know its name until recently. I believe that games will eventually develop into a trillion dollar industry in cryptocurrency. Therefore, although this article is currently critical of this field, don't think it means that I don't believe in this industry. On the contrary, I deeply believe in its potential and hope to help it become the best.

Therefore, this article is not a clear provision for all games. It's more like a list of problems and possible solutions or experiments. I share my views on encryption games as much as possible in the limited content. I hope more encryption game teams can really practice some ideas of this article, iterate them, and make this field stronger.

Without much to say, let's analyze it in depth. If you have any ideas after reading this article, I hope toTwitterI heard your feedback on the Internet.


Problems in the current encryption game


At present, there are some common problems in encryption games. I will analyze them in unspecified order:

  1. NFT sets a bad precedent for games
  2. Defi set a bad precedent for the game
  3. The benefits in most crypto games are unsustainable
  4. The cost of playing games is too high for the life cycle of the game
  5. Much of it is nonsense
  6. People with money (capital) have too much power than people with leisure (time)
  7. "Play and earn (p2e)" sets the wrong expectations for players

NFT sets a bad precedent for games

The NFT wave kicked off in early 2021. It began with art, then moved to profile pictures, and began to gradually penetrate into the field of games.

What I need to emphasize here is that the popularity of NFT began with works of art and collections with rarity and fixed supply. The strategy for investing in these collections is simply to buy and hold them. If you choose the right one, the price of NFT in your hand will rise. Once you sell them to the next buyer, you can make money from them.

This standard of NFT investment sets a bad precedent for the game. Creating NFT characters for players to speculate in the game will make the game develop in the same direction, that is, waiting for the price of NFT to rise. At the same time, the idea that you can buy a game's basic account, hold it and expect it to become more valuable is absurd.

Nevertheless, in NFT games, people pay great attention to the "floor price", that is, the cheapest purchase price of NFT. A game with falling floor prices is seen as dying, even if it means that the threshold for new players is getting lower and lower.

When encryption games start with 10000 NFTs worth thousands of dollars, it is very difficult to build an economically reasonable game and a happy community. You need to greatly reduce the price of NFT so that more players can enter the game. If the game starts with high-value assets, it will attract more speculators rather than players, which is in line with the large number of people the game side hopes to appear in the early game community.

Defi set a bad precedent for the game

The first wave of encryption games is essentially a combination of NFT and defi. These games use the Ponzi scheme in defi (buy the tokens in the game, use it to exchange more tokens, sell the tokens you earn, and hope you can get a return on your investment before everything collapses!), Only additional steps are added. The breeding cycle that exists in many NFT games is essentially the same as that of defi mining, except that the way in the game is to attach colorful characters to it.

In addition, the defi yield and pledge set the player's expectations of what the token should do. People expect that they can buy a game token and get passive benefits from it without playing the game. The introduction of passive benefits into the game will eventually destroy the economy.

Encryption games need to get rid of expectations for NFT and defi. Copying these paradigms helps start a new game, but these ways are now clearly hurting it.

The benefits in most crypto games are unsustainable

If all the new resources in a game increase the income of game participants, the game economy must eventually collapse. You can't always increase everyone's income potential without massive inflation of the reward currency, which will eventually lead to the collapse of the value of the reward currency.

A simple way to test this question is to ask what the main tokens are and how they affect the economy when used. If all the major new resources increase people's income ability, then the game is unsustainable. If the main new resources do not increase income, the game may have a sustainable economy. It is necessary, but not sufficient.

This is my main criticism of stepn. Although this game is very interesting and better than the economic design of most games now, most of the new resources in the game will increase the income of players, so unless they can alleviate this problem, it will eventually collapse in some way.

Game costs are too high for the game life cycle

How long can a good game last? two years? Five years? Few games last more than 10 years. Therefore, when we evaluate the value of game assets, we must consider the short life of most games.

At present, there are basically three methods to judge the value of goods:

  • Intrinsic non monetary value (status, happiness, etc.)
  • Cash flow (it makes money for you)
  • Appreciation (guess you can sell it at a higher price)

The boring ape Yacht Club (bayc) has 100000 pieces of land on the other side of the universe. The current floor price of these lands is $6000, which will become more and more expensive in the future.

Assuming that the average price of all 100000 pieces of land in the future is $10000 per piece of land, the market value of otherside is about $1 billion. If we are very optimistic to assume that the bayc metauniverse will be popular for 10 years, and if you are not willing to spend $10000 just to play without the promise of return, you must ask whether you can make ends meet on your land at least during this period of time.

The only way you can get a return is that you can sell your land to others at a higher price, or you can generate good cash flow from the land. However, selling it to others for more benefits is the traditional Ponzi economics we are used to and want to get rid of.

Maybe you can see the problem here soon. Assuming that you want your bayc land to generate at least 10% of the cash flow every year, the whole ecosystem needs to pay $100 million to the landowner every year. Assuming that bayc can match the popularity of Fortress night, which generates about $5 billion a year. The question is whether bayc can distribute 2% of its income to landowners?

Although this is not impossible, we must weigh whether bayc can build a game as popular as fortress night and maintain this popularity for ten years.

Is it possible? Yes, but that's not the direction I'm willing to bet. I think we have to admit that most of the value of these assets is that people expect it to appreciate. People expect the value of this asset to rise when they hold it, and they will be very sad when their fantasy is defeated. Yes, it will end eventually. No game can last forever.

Many "play and earn" jobs are nonsense

In an ideal play and earn version, you will be able to realize some of the value you have accumulated from playing an interesting game. Or you can get paid by making some meaningful financial contributions to the game, such as designing a popular skin that other players can buy.

Now most encryption Games "earn" is not like this. Most of the revenue from encryption games comes from doing some form of meaningless work, usually a series of button clicks. To be fair, this is very common in games, especially in online games: digging copper in Runescape is really a little boring. But if your income comes from logging in to the game every few hours and clicking a few buttons, instead of experiencing the playability of the game, but just doing some basic operations, you just create a strange job.

Some farm style recycling and land management games are common examples of this. To put it bluntly, I'm not saying that this must be a bad thing, but if most of the game revenue comes from logging in and clicking on something every few hours, you don't really build an interesting game that people make money from. Unless you can make land management complex to the level of a simulated city, or compete in some way. I really think it would be interesting to create a Web3 simulation city game where you can create trade agreements and share resources between different cities.

People with capital have immediate power

Now, P & amp; Most of the power in the e game is immediately available to those who have a lot of capital. They can buy a lot of resources, run the economic cycle faster, and quickly gain significant control over the market.

This is a blow to real players because they may have more time rather than capital. The highest revenue potential should be attributed to those who invest the most time and energy in the game, and the extent to which some players can approach this goal by deploying a large amount of capital should be limited.

Assuming that those who have a lot of money invested in the game are to extract revenue, not to play it, they will plan the game accordingly. If you can mine in the game, these people will dig all the value to the greatest extent, and the losers will be those who are really playing the game.

"Play and earn" sets the wrong expectations

If a game wants to develop continuously, players can't immediately start to get a good return on investment in the game. The easier the mathematical calculation of how to realize the return on investment, the easier the game will be used by people with a lot of money.

This is where the term "play and earn" is quite pleasant. The gameplay of most encryption games should not be the meaningless work of camouflage, it should have the actual gameplay. And the benefits of the game should be difficult to calculate, especially for new players.

Finally, the income of the game should be irregular, and there should be large bonuses in the game rather than stable income. The more difficult it is for players to predict the stable income of the game, the more you can build the game around the actual gameplay of the game rather than the defi cycle.

Well, these are most of the problems I think exist in encryption games. Now let's see how we can solve these problems.


How can we fix the problem of the current encryption game?


As I said in my introduction, the article I wrote is not a comprehensive analysis, but a list of ideas and things I think encryption games should try. This field is still at a very early stage, and we are all trying and exploring.

  1. Significantly reduce entry costs
  2. Restrictions on the power of new capital
  3. Give priority to reward games rather than clicks
  4. Cancellation of pledge
  5. First, build an interesting game
  6. Separate external and internal economies as much as possible
  7. Cover up ROI
  8. Readjust P & amp; E's expectations
  9. Unlimited games

Significantly reduce entry costs

It's foolish to spend ten thousand dollars to play a game. Now almost everyone knows that you can't touch encryption games without some spare money. The only reason people now recognize the feeling of encryption games is that we are excited by the popularity of NFT and copy these modes.

However, the idea of creating a $10000 game startup account is absurd. It rejects a lot of players who may want to try your game but can't afford to invest in a decent used car.

This also puts a lot of pressure on the economy in the game, because the revenue of the game must prove that this huge start-up cost is reasonable. If you want to try to get your money back within three months, you need to earn $3333 a month from your startup account. So either someone else needs to invest $3333 a month in the ecosystem so you can make money from it, or you have to benefit from Ponzi, which is almost certainly the latter.

People joining an encrypted game should be free or equivalent to the cost of an ordinary game (less than $60). I prefer free game mode, and some teams are doing interesting experiments in this direction (such as genopets and sunflower land).

This will greatly reduce the income people can get from the game at the beginning, but this is a good thing. The pressure to keep the token price high will be reduced, so that people can get crazy income from the game. And that means expectations are much lower. They won't invest $10000. They can really enjoy the game.

If you have launched a game with a high price threshold of $10000, what would you do? We tried to deliberately reduce the price of characters in crypto Raiders, but we didn't get good feedback. People are biased against NFT, mainly because people pay too much attention to the floor price of NFT. Therefore, although we have made progress in reducing the cost of game access, many people are very dissatisfied that they hold an NFT and can't be bought at a high price.

But I support some similar models. What I think is that if you can change a character worth $10000 into 10 characters worth $1000 or even 100 characters worth $100 over time, you will greatly reduce the threshold for people to enter the game without damaging any value of the original buyer. This may be your best choice.

Some people will say that renting and scholarships are a solution here, but I don't like them. The point is to have your own game assets or to borrow them from others.

Runescape and wow's economies work well as people continue to create new tier 1 accounts. Access should be free or very cheap, and income should be earned through enough work.

Limit the power of capital

Someone with a lot of money should not raid and dominate the game or game economy.

One way this happens now is through reproduction. A person or guild with a lot of money can buy many assets, start breeding business and have a great impact on the market without really playing games.

Another area we may see is the game goods market. If someone can come in and buy the rarest items in the game, they can immediately start to win the game or produce the best rewards without a lot of effort.

In terms of breeding and economic cycle, there should be some restrictions on the speed at which someone can deploy capital. Stepn has an interesting obstacle, which is based on the level of sneakers. Because sports shoes must reach level 5 to be cast, and you can only cast a pair of sports shoes at a time, because breeding has a 48 hour cooling time, no matter how much money you have, you can actually cast only once every 36 hours or so. This is very different from breeding in other games. In other games, you can theoretically buy 100 characters and breed 100 from them. In stepn's sports shoes collection, there is no way to achieve this multiple growth.

Another way you can establish control for this is through soul items. The best equipment in the game should be picked up in bundles, so it can't be sold. It can be used to win games and produce low-level marketable equipment, but it cannot be sold itself. This ensures that the highest income and competitive potential are mastered by people who actively play games and cannot be bought by newcomers. Let people buy up to 80-90% of equipment, not the best equipment.

Finally, you can make certain activities that increase the return on investment non transferable, such as investment in time bound land upgrading.

A small criticism of crypto unicorns is that the land can still be transferred through sales after upgrading, and new players can buy it directly. So you can buy a piece of land on opensea, invest some money, and immediately compete financially with those who have been playing games for a month. I don't think this is ideal. Playing games for a while should have some additional benefits.

Reward games first, not click through rate

To make the game fun and have income, the income should come from activities closer to "playing" rather than repeated clicks.

This does not mean that breeding games are bad, but that they should have a decent strategic and tactical level to connect with them. The game should have trade-offs. It should be difficult for players to develop a spreadsheet and calculate the best way to play the game. Buying resources to click "breeding" and selling new NFT should never be the main profit mechanism.

If reproduction is the main profit mechanism, this means that people don't spend money on games, but spend money on the Ponzi scheme of reproduction. When people pay for advanced equipment, or extra running, or cosmetics, a game is successful. These things can let them play the game more, or let them use it flexibly in the social environment of the game.

Limiting the best rewards to PVP, final game content, challenges, leaderboards and other more competitive activities will help ensure this.

A metaphor I often mention is that a person who has registered a new RuneScape account cannot expect to have an immediate impact on a large exchange. A person who buys an NFT character or signs up for your game should not get an immediate financial return.

Cancellation of pledge

Pledge is often implemented in one of two ways, which are meaningless.

First, you use governance tokens as a pledge to get more governance tokens. This is stupid, because you are now rewarding the wealthy defi miners, not the real players. And besides slowing down the sale of tokens, it's good, but it doesn't improve the game.

Or, you can use the governance token as a pledge to obtain the revenue share in the game. It's also a little stupid, because now you have to make the economy in the game more lossy, so that most players can't really earn anything in the game, because you pay rewards to speculators rather than real players. You can take part of the cost from the market in the game, but in this way, you affect your ability to generate income.

I think it is more meaningful to take the governance token as the most valuable limited resource in the game and use it for the most influential upgrade of roles or accounts. This allows the role to accumulate value over time, as these upgrades must be limited and give the token a reason to exist and be held. Instead of letting people lock it in the pledge contract, let people lock it in the game.

First, build an interesting game

This seems to be a revolutionary idea, but I think for crypto games to work, it first needs to be a really interesting game.

If no one wants to play your game, when players don't make money from it, they will get out of the car and sell everything as soon as there is a problem in the market. If the internal economy of the game cannot operate without the influence of external token activities, the game is in an unstable state at the beginning, and it is difficult to establish it later.

It seems foolish, but few people do it. It may be because the introduction of tokens is an incredible way to raise money, and the production cost of the game is very high. So you do have some challenges here. How do you wait to incorporate your tokens into your game until you build an interesting game, and how do you build an interesting game without using tokens as a fund-raising mechanism?

Well, of course you can raise money in the normal way. But I also think community members can be more patient than we assumed. Illuvium is doing a good job in this area now. They have a token that has been launched for some time. They are now introducing people into the testing phase of their game, but there is no way to make money in the game. That's the future. They focus on building a really interesting game first, and then introducing the element of making money when it becomes more mature.

Distinguish between internal and external economies

Trying to balance the costs in the game around the external value of tokens is tempting, but it will become a distraction and lead to a frustrating game experience for players.

These two economies should operate independently. Whether a gold coin in the game is worth $0.001 or $1, the function of the game should be the same. There will be a period of surge in interest in games, people will pour into games and push up the price of tokens, and there will be a low tide of decline in the price of tokens. During these times, the player's experience of playing the game should be consistent. Otherwise, you will constantly change the economy of the game to chase the token price, which will make the whole thing quite chaotic.

At least in my opinion, an example of not doing this well is stepn's recent decision to base its coinage cost on the relative price of its tokens.

This makes one of the core cycles of the game extremely difficult to predict on a daily basis, and makes coinage an annoying mathematical operation. Maybe that's the point. It makes players less fun of coining and more of a transactional experience. The main advantage of this approach is that it helps to increase the price of their governance tokens, and may make the game more affordable in the short term by lowering the price of GST.

In any case, people should not check coingecko in order to decide or know what to do in your game.

Cover up ROI

Once again, we assume that any easy economic cycle will be used. We should make it difficult to calculate the return on investment of a game.

Measuring ROI is important for many games today because of their high startup costs. If you're not sure how to earn the money back, you won't want to spend $10000 on a character or a piece of land. However, if the start-up cost of the game is very low (I think they should be), then this problem becomes less important.

However, it is still worth thinking about how you can blur the cost-benefit analysis of activities in the game. One way is through rewards with high variability.

Perhaps the expected value of running a land in the game is $0.20. But 90% of the time, you only earn $0.1, and 10% of the time, you earn $1.1. This is a very simplified version, but you should be able to understand what I mean. You can know that a player should have some rough return on investment in the game for a few months or years, and they can't easily calculate it in the game due to the difference of results.

This is a common design standard in games with booty boxes, rare items and other mechanisms, but it's strange that we haven't seen so much in "play and earn", perhaps because a lot of earn is based on "work" rather than "game".

Around P & amp; E rebuild expectations

This will be the most difficult, but also the most important. As an industry, we need to change expectations from P & amp; E game is something that you can quickly tap profits and move to really interesting games. You happen to be able to cash in some of your work.

At present, "dota2" is a good model. You don't think it's a P & amp; E game, because it does not involve cryptocurrency, and there is no activity like "work" that allows you to earn any value. But the assets in the game are really valuable in the game market, so if you get something you don't want from the booty box, you can sell it to others.

In a game, most players end up spending more money than they earn. In fact, I'm not sure anyone will make a net profit in this market unless you have some very early, very rare items. But this is a good example of a game that can have a market without destroying fun.

If a game takes a long time before making money, and once it can make money, it is difficult for people to calculate the return on investment, and this does not affect the playability of the game, then you may have a more sustainable game economy.

Unlimited games

I hope our last change is to create a P & amp that doesn't need to limit players' ability to enjoy the game; E game.

Energy, charging and other time-based restrictions are good ways to limit inflation in the game. But they do limit how much people can enjoy your game. If you build a good game, you will eventually disappoint those who want to play it.

On the contrary, our goal should be to let many contents in the game play freely without restrictions, and only the activities generated by capital are limited. In the past, other economically developed games had very small restrictions on economic activities in the game. In Runescape or wow, you can basically dig all the copper mines you want, and their results are also good. However, we can still limit those valuable activities, such as ending the land of the game or harvesting the rarest resources, which may also be related to the concept of establishing an interesting game first. If the game provides players with a wide range of fun and then adds money making content, players will have a lot of things to do that are not linked to money making, which may eventually solve some problems.


Write at the end


This article is a bit of a brain teaser, but I hope it will help any team trying to build a "play earn" game.

We all have an incredible opportunity to be the first to solve this problem. Build this generation of world of Warcraft or Runescape scale games, but have a real-world economy.

I am very optimistic about this field. This is the field of cryptocurrency that I am most interested in. So if you want to share what you're doing or other ideas on similar topics, be sure to contact me on twitter.


Generic placeholder image
Promote your coin to 10k unique users daily
contact us PM Twitter
45 views   0 Comments   3 Days ago
37 views   0 Comments   4 Days ago