Blockchain games

A Balanced perspective on web3 gaming!

Scrolling through the latest articles I came across this article discussing gaming and how blockchain is revolutionizing the industry. I concur with the perspective that blockchain (or DLT) can indeed provide many advantages to the gaming sector. Industry leaders such as Ubisoft and Blizzard have already taken the initial steps and are actively developing new games that make use of blockchain technology. This demonstrates that blockchain adoption is coming to gaming too, which is inevitable given the ongoing shift towards blockchain integration in many industries worldwide. It makes sense that the gaming industry will not stay behind.

Blockchain is indeed a game changer and this can be very true for the gaming industry as well. However, there are numerous misconceptions surrounding Web3 gaming, and, in my opinion, the mentioned article is contributing to them. The advantages of incorporating blockchain technology are at times somewhat exaggerated and are not presented in an entirely objective manner, thus giving the reader a false impression.

Building a Web3 game myself, I experienced first hand what it means to work with Web3, and I now know that oftentimes things are presented in a somewhat misleading way. Leaving out important info. This is true for both sides, by the way. When seen from a Web2 gamer’s perspective, articles are often overly negative. But when seen from a Web3 perspective, articles are often overly positive. So let’s examine certain points raised in the article and consider a more balanced perspective. 

In-Game Earnings Finally Rewarding Gamers
Luckily, this article did not overstate it too much, but nevertheless mentioned the following about games like Axis Infinity:

“The Ethereum-based platform has developed a new gaming model that rewards players for the time and effort spent playing the blockchain game instead of just the money they put in…. Overall, GameFi offers gamers a new and exciting way to earn money while playing their favorite games. “

The problem I always have when reading these statements is that they fail to tell people that you first have to buy yourself into the game. In this case, “Axies”. You need to buy some Axies first that might cost you anywhere between 100 and 300 dollars with no guarantee you will earn that money back! How is that rewarding? It’s attracting what I like to call “investing players” and not gamers.

Luckily, some new Web3 games are seeing ways to tackle this problem, but still, we have articles like this giving you the misleading idea that the gaming industry is taking advantage of those “poor” players putting “time and effort” in while not getting anything back for their hard work (read: gaming and having fun) they spend on these games. Saying how Web3 gaming is solving a problem that is actually not a problem.

This article was not all too bad, but I read many that really put a hard emphasis on this being a big win for gamers. It’s almost as if they are saying that the gaming industry is the bad guy and now “finally the tables have turned”. It’s misleading and I can’t help it but seeing how wrong it is to present it like that. 

Gamers never expected anything back but fun, and that is what they are getting. Hours upon hours of fun. It’s like they are telling me that when I go to see a movie and pay for it, “I am the victim!” As I should get rewarded for seeing that movie that I paid for and spending my precious time for it. Repeating over and over again how gamers should really be rewarded for their in-game spent time, is making up a problem that never actually felt like a problem in the first place. On top of that, the Web3 space first needs to start building games that gamers really like to play. Yes, earnings in gaming can be a great feature, but it should come along with great gameplay and not as a selling point on a poor game(play). And there is the problem. Web3 games often look awful and are no fun to play. Blockchain is an amazing add-on to gaming but until the Web3 space ramps up their gameplay, gamers will not onboard, as they never asked for play-to-earn games in the first place.

True Ownership
This brings us to the next topic that is often so overhyped in this space: “True ownership”. In this article, they are, again, luckily somewhat careful in how they bring it. In fact, the things they say are not completely wrong. It states:

“Blockchain gaming allows actual ownership of in-game assets that make a contest more exciting than other competitive games available in the market… Such ownership gives players more control over their gaming experience”

I fail to see how it gives players more control over their gaming experience, as it’s still a digital on-screen item, and you still have to play according to the rules of the game. And as you can’t lose your items in the game, there is also no more excitement than in Web2. But I might read that wrong. 

But let’s first start on the positive side of things as here Web3 does take a clear win over Web2 in my opinion. There are games like Diablo 3 or Counter-Strike that have in-game assets that you can sell on certain online marketplaces. But oftentimes the selling process is hard, and it’s easy to get scammed out of your items, ending up with no money. And for many other Web2 games, you can sell your items but there is no way you can have the profits go to your bank account. But with game assets on Web3, it’s an easy process, and if you sell them on an established marketplace, it’s almost impossible to get scammed. Another big win for Web3 is that you can always verify how many of the same game items are available and at what maximum amount. Web3 is very transparent so if a supply is fixed you know there will never be more of those special items you so much desire and you can make a better estimate of it’s value.

So what’s my problem here then?

Well, I agree that true ownership is great. Imagine owning an apartment on an Overwatch map and being able to really cash in on its value in a safe way. Impossible to hack your wallet and thus your in-game item, and I bet they would sell for a lot of money. By having it as an NFT, you even tap into the crypto market and thus are not only addressing gamers. This is great. But… if the next best thing in Web3 looks like Decentraland, I think many gamers will pass. 

I have been in many X spaces (formerly Twitter) where they shout it from the roofs and tell you how amazing it is that you finally REALLY own the in-game assets. They neglect to say that if the game fails, that your ownership is worth snot, nada, nothing. There goes your fancy ownership staring at you in your wallet. And this is my problem! Trying to sell your game because you use true ownership, does not make your game a winner.

They often make it sound as if you have nothing to lose, and many investors jump on the hype without realizing they are investing in something that can fail big time. There are not a lot of really good Web3 games out there that can compete with the triple-A industry. True ownership is used as a selling point for even the worst Web3 projects. Ownership is only a true selling point if the project has potential or already proven to be of value. Investors need to take this into consideration every time they hear someone use “in-game asset ownership” as a selling point!

Don’t get me wrong! I am a big fan of true ownership, but I am less of a fan of how it is being presented. Web3 games need to ramp up first before we can “sell” Web3 ownership as a great feature. And we are not there just yet.

Higher Security?
The article states more benefits of implementing blockchain technology into gaming. They mention the following:

“Secure and transparent transactions: Blockchain provides high transparency and security to the gaming industry. Transactions on the blockchain are transparent, efficient and immutable, making it difficult for fraudsters to cheat the system.”

On the blockchain side of it, YES, 100% true. (If building on the right chain!) Like mentioned before, selling your NFT can be much safer and even easier on Web3 than on Web2. But oftentimes it’s presented in the wrong way again. For someone new to the space, it often reads like “Crypto gaming is safer and can’t be hacked”. I admit that this is not what they exactly say, in this article at least. But anyone new to the space will read it as such. They do not say that “NFT transactions” is one thing, but the “game programming” is another thing. The two are separate things but working together.

And here lies the problem, the gaming process can still be hacked. This is something that Web3 games struggle with a lot but won’t tell you about it. Web3 games are often rewarding gamers with real dollar value, they need to make sure that their games are “uncheatable,” and this is hard! Blockchain only secures your assets, and yes there are companies working hard on implementing blockchain safety into gaming to make it safer, but we are not fully there yet.

When a hacker finds a way to cheat in your game, they can make a lot of gaming tokens and sell them on the marketplace for real money. It’s a big issue often not discussed. More frustrating, is that a lot of blockchain-based games do not have the best security in place. Saying how blockchain improves the safety of gaming without mentioning that it is only true for your owned items, is again misleading. Blockchain games need to be more careful with their security than any Web2 game, as blockchain games deal with real value in-game assets.

Three things to potentially look at when investing in a blockchain game are:

– Do they have insurance in case of a hack?
– Did they use a platform to find potential security holes?
– And/or is there a bug bounty?

One needs to address these things seriously, especially when you are near the completion date of your game.

So now that we have addressed some of the positive things that the article mentioned, let’s also look at the downsides they mentioned.

The “Downsides” of Blockchain Integration: Difficult to Implement.

One thing it mentioned is: 

“Implementing blockchain technology in games requires technical expertise and may be challenging for developers unfamiliar with the technology”

Yes, this is true if you pick the wrong chain. Some are horrendous and almost impossible to build on. But it took us only two hours to see that Hedera is an amazing chain, and it took our lead programmer only a couple of days to get familiar with the coding and work with it. The industry has grown a lot, and you don’t need to be a rocket scientist anymore to use blockchain technology. Yes, you need to be a programmer and spend time getting familiar with the technology, but that’s it. Oftentimes the community will help out with the growth and development process. Integrating DLT from Hedera is not hard at all for a good programmer. And I know there are other chains that offer similar experiences too. So using this as a downside is, in my opinion, not true anymore, at least not for many newer chains.

Scalability
The article goes on to point out how scalability is a problem. Well, I can say we are past that stage already. I could not find a date on the article, but Hedera is the fastest network around, and scalability is not a problem. Think I’m wrong? As it shows 10,000 tps “only”? Well, it’s throttled. They are holding back, but wait until they unleash the network’s real potential. It’s the fastest chain out there. But there are many other chains that have solved this problem as well.

Regulations
Regulatory uncertainty is then mentioned. I can see how this is something that scares people off, and although I can never guarantee anything on this matter, I don’t think they will ban crypto from gaming. It’s important to look out for companies that have their paperwork in order, as regulations might come hard. Make sure (ask them) that they have done things by the book! Launching a token for instance without consulting a law firm and having the right paperwork is a clear no-go from the start. Better have a company taking more time to launch then rushing it without the right paperwork done first.

Conclusion
I am a big fan of blockchain and DLT, and I see how the whole world is getting ready to use it in all aspects of life. Not using it means falling behind. Blockchain offers many advantages, and this is very true for the gaming industry as well. But I also see how the industry is oftentimes overhyped and (sometimes maybe unintentional) misleading people. “Selling” their product as the next big thing, only because it makes use of this new technology. This is why emerging projects rake in millions in the industry, selling it for more than what it actually is worth.

Bottom line is that it all starts with a good product and with that good product blockchain does indeed have a lot of advantages. The web3 space is no different than web2. You need a good product to be sustainable first and then blockchain can add value to that. But it starts with a good product so in my next article I’ll explain what to look out for when investing in any metaverse or gaming project.

Patrick de Grijs
Earthlings.land