Blockchain Games or Crypto in Games

We have seen a significant rise in Blockchain or Crypto Games over the past several years. While both concepts are often used interchangeably, blockchain and crypto serve very different purposes. I want to approach the technology—blockchain and crypto—as a financial tool within the gaming industry and the mistakes some people are making.

Blockchain began with the rise of Bitcoin and was introduced as a decentralised and secure digital ledger. Bitcoin served as an introduction to the world of cryptocurrencies for most people, bringing a new form of financial asset to the table. In the relationship between Bitcoin and blockchain, the former is a financial tool, and the latter is the underlying technology that allows Bitcoin to be transacted securely. However, Blockchain is a highly versatile piece of technology with applications well beyond the world of crypto and finance. Although Bitcoin and blockchain will forever be intertwined and associated, they have unique, distinct applications.

The case I'm making here is that games are implementing features not of the technology—blockchain—but of the Financial side, Crypto, and that has a direct affect on the quality of the games, the experience for players, and, ultimately, their business model. Lets explore some of these issues!

Motivations  of Crypto Users vs Gamers

Cryptocurrencies are financial assets, so it makes sense that financial incentives and goals primarily drive crypto users. When you invest in something like crypto, the overall aim is to make a return on your investment. If crypto users have to navigate some less user-friendly paths to achieve these financial goals, then so be it. The road less travelled can be rewarding, after all. On the other hand, gamers are usually motivated by experience, entertainment, challenges, a sense of community, and rewards. For the most part, gamers invest money to receive entertaining experiences in return. Crypto users invest time and effort to receive financial rewards – almost the complete inverse.

When we look at gaming over the years, we have seen a massive change to simplify usability (see how mobile has played a major role in this), but Crypto implementation in games has done the opposite and made these games less user-friendly.

The Misalignment of Terms - Crypto in Gaming

We can clearly see certain terminology in the large majority of what’s called Web3Gaming, including Tokens, NFTs, staking and DAOs. These terms are far more relevant within the financial world than the gaming space, yet they seem to be cropping up more and more. However, as discussed previously, I believe that this is not aligned with gamers. NFTs are digital assets, tokens are in-game currency, and DAOs are related to guilds or alliances.

The goal should always be to enhance the gaming experience for the players rather than confuse them by forcing crypto-terms into their games. Using gamer-centric terminology keeps the focus on the game itself and makes it accessible to a larger audience – The gamers, which is the gamers a project should be focusing on.

The Problem with Current Game Development Focus

There is mounting pressure on game studios to change their successful methodology in order to integrate crypto. Funding from NFT sales, tokens, and crypto investors are increasingly emphasising this change. I’ve spoken with hundreds of projects that have introduced many of these due to external pressure and rarely to the benefit of the gamers. Unfortunately, this forced mindset can lead to focus on the token utility more than to the game experience and value added to the player.

This is simply less relevant or entertaining for all types of games. Traditional games that rely on in-app purchases or ad revenue have proved extremely successful without adding more complicated financial models to the mix. As soon as you prioritize financial models over the gameplay, you risk the success and entertainment of the game itself, which in turn sees a huge drop in any return on investment.

Without strong and consistent player interest, there is no medium or long-term return because you won't retain your player base.

What about NFTs?

NFTs have the potential to completely revolutionize the gaming landscape, offering players the chance use in-game assets in new ways that may not be possible or simple in the traditional games. However, the current state of NFTs within gaming is far from that reality. Most of the time, they are mere JSON files that don’t actually provide any ownership or value to the holder. There is also a very real obstacle to overcome when implementing NFTs into games – people are more sceptical than ever about the true benefits of NFTs. The simple fact is that NFT implementation is not worth doing in the gaming industry unless it can genuinely enhance the gameplay and experience, while providing true value to players.

We have seen the rise and fall of the NFT market, mostly in my view down to FOMO than to the real value. And I believe that this rise negatively impacted gamers' perception of NFTs. (similar to the bad implementation in the past of Micro-transactions in some games that forced a big push back from gamers).

Interoperability: A Promising but Unrealized Concept

One of the most exciting concepts about blockchain games is the potential for interoperable features. Simply put, players can use assets across multiple games, whether that be a skin, a weapon, an emote, or something else. The main challenge in pursuing this interoperability is the vastly different styles, animation, and mechanics from game to game. It would require many different developers to cooperate, making it a little impractical. At this stage, it remains more of a theoretical concept than anything else. Perhaps more technological development is required before we can see true interoperability in the gaming world.

Lessons from past game mechanics

It is important to remember that people were sceptical about the switch from premium games to free-to-play models ten years ago too – the same scepticism being levelled at blockchain gaming right now. Microtransactions were doubted and criticized but are now a staple of the gaming landscape. The moral of the story is that new mechanics and financial models can be a success in gaming, but only if they add to the player experience and are very carefully implemented. There is a fine line that needs to be walked to avoid alienating and exploiting the player base.

Conclusion: The Path Forward

The conclusion is simple: there is still a long way to go. Blockchain gaming is not ready today and won’t be ready tomorrow, but it should be seen as a natural evolution. As long as blockchain technology is implemented in a way that enhances user experience and expands what is possible in the world of gaming, then it should be a success. The future of blockchain gaming lies in innovation and adaption. Developers need to listen to what gamers actually want, and then find a way to use blockchain in order to make those dreams become a reality. The technology is too good to waste, but also should not be rushed.

The whole reason I work in this space is the find the right mechanics to make this happen, ensuring that blockchain technology finds a home in the gaming sphere while adding real value to video games.

My Personal Insight

I have always been immensely passionate about the world of blockchain technology and its potential for video game application. I sincerely believe it has a lot to offer to the future of gaming. However, I am aware of the responsibility we have to enrich and not exploit, which is why we need more time to develop blockchain mechanics that work for gamers before we fully implement it into the gaming sphere. It is so important that we keep experimenting, learning and adapting as an industry in order to find the best ways to integrate blockchain. The commitment to finding player-friendly blockchain applications highlights the need for thoughtful, experience-driven integration. The future of blockchain in gaming lies in evolving alongside player needs and industry best practices.