Mainstream Gaming On The Blockchain

Mainstream Gaming On The Blockchain

Mainstream gaming on the blockchain is coming, and there’s no stopping it.

No doubt you’ve been hearing and reading a lot about blockchain and gaming these past few weeks; especially due to the media knee-jerk reaction to the news that Valve had banned (no, not quite) all blockchain gaming from Steam. Then, as if on cue, Epic Games chimed in; except, in their case, Tim Sweeney basically said the quiet part out loud — no obfuscation.

This single line entry in the Steam guidelines is what caused all the furor.

Applications built on blockchain technology that issue or allow exchange of cryptocurrencies or NFTs

In contrast, this is what Tim Sweeney had to say:

…provided they follow the relevant laws, disclose their terms, and are age-rated by the appropriate group

See the difference between the two? Most people seemingly ignored the second part (which I bolded for emphasis) of the Valve statement.

I have spent quite some time since then explaining to friends, colleagues and business partners alike that the furor surrounding the Valve statement is much ado about nothing. I believe that you can build and distribute a blockchain game on Steam — as long as you don’t “issue or allow exchange of cryptocurrencies or NFTs” within the game. In short, there should be no real-world value attached. If you think about it, that’s no different from having a live game with in-game currency but which have no real-world value outside of the game.

To be clear, Valve doesn’t exactly have a robust gatekeeping system on Steam. So unless you’re literally publishing a scam or porn, your game is likely to get published after you pay the $100 fee. But if it’s a blockchain based game, then yeah, it’s totally going to get extra scrutiny. Like adult games would. And in all that, your blockchain game on Steam would also be subject to precisely what Tim said.

What about Apple? As I said on a recent GamesBeat session, I believe that Apple is just going to flat-out ban anything that remotely looks or smells like it’s sitting on the blockchain. Why? Because it’s Apple, and they take things like privacy, security — and control very seriously.

While there is already some pushback against blockchain gaming from some industry areas — and of course some gamers (did you read about the recent Discord user rebellion over crypto?), I believe that most of it is out of pure ignorance, and it will subside in the short-term. Not to mention the [social] stigma associated with anything related to crypto due to it being associated with bad actors going back many years.

Some people tend to rebel against, and/or avoid things they don’t [fully] understand. So when they hear things like crypto, blockchain, NFT (!), DAO, smart contracts, proof of stake etc. the usual response from most of those people who don’t actually understand it, is based on opinions derived from either a lack of understanding or I daresay, apprehension.

When it comes to gaming, there’s always a sea change that garners a lot of attention, vitriol, angst — and contention. Why? Well, gaming is mostly about dramatization of various elements (story, design, content etc.). So of course where there are gamers, there’s bound to be all sorts of drama. It’s in our DNA.

Core gamers tend to get excited about the simple things that they understand — fully. For example, a core PC or console gamer could spend hours talking or writing about and marveling at beads of sweat on a character’s face regardless of the fact that they have no idea what shaders are or how they do what they do. All Jack & Jill Gamer care about is that they have the machine — complete with all the needed hardware and software components — to play the game.

Hardcore gamers tend to go out and dig up info about their machines, the individual components, their games etc. — and if they’re bored enough, they’d even follow the careers of the people who make and/or publish the games they like and play. The latter doesn’t play such a big role now like it did back in the day because, well, the average gamer today doesn’t particularly care who you are or what you’ve done before because the industry has ballooned, people have moved around, consolidation tends to erode history etc. So those gamers only care about what you’re doing now, what you’re doing next — and if it’s cool. Gamers are finicky like that.

Historically, games have a high degree of failure, regardless of who makes them. In that mix, a great many game studios are no more than one game away from a financial catastrophe. So there’s always a need to keep coming up with new and interesting ways to keep gamers engaged. And where low margins and huge marketing (some even eclipse the cost to make the game!) costs are concerned, recurring business is the Holy Grail of [engagement] longevity because even the all-elusive longtail is but a footnote without engagement iteration.

And that’s how we got F2P out of the glut of games and the desire to get gamers into a game and hope that they stick around and actually pay for something — anything. Remember back when the whole F2P gaming model was mocked and laughed at by the “hardcore” gamers who immediately associated “free” with bad quality? How about that whole in-game currency thing? No? OK — how about loot boxes? Several years later, and in every game publishing medium, F2P games are a staple. And some very popular paid games even come with loot boxes, in-game currency etc.

The same thing happened with mobile gaming whereby quite a few vocal gamers were completely aghast that anyone would consider mobile games to be competitive enough with PC or even console games. Look at the mobile gaming landscape today.

What I’m trying to say is that the whole furor over blockchain gaming will blow over. Yes, it will take quite some time, but it will one day become standard fare if it ends up being another revenue stream for games — and gamers alike.

You’re probably wondering what I meant by blockchain games being a revenue stream for gamers. If you haven’t heard the latest buzzword, then let me introduce to the inbound juggernaut, play-to-earn or P2E. Don’t confuse that with games (e.g. bingo, poker, casino games etc) in which you can play to win money. They’re not the same.

This is how CoinMarketCap defines P2E:

The play-to-earn business model supports the notion of an open economy and gives financial rewards to players who bring value to its metaverse…Play2Earn (play-to-earn) games refer to the concept of gaming in which a platform provides its players with a chance to earn any form of in-game assets that can be transferred to the real world as a valuable resource.

And there’s already a burgeoning market of P2E games out there.

While I don’t believe that P2E will supplant F2P as the alternative to buy-to-play (B2P) games, I do believe that when (note that I didn’t say if) blockchain gaming hits the mainstream in the long-term, it will be bring along a lot of drama, lawsuits, Congressional oversight, govt ire — and all the big hammers the EU has been stashing away for the time when they will need to engage in the fight for the souls of the damned that are lost in the blockchain. Yes, that was drama. I’m a gamer.

As I look back now, for years I had been saying and writing that digital distribution was going to be a big deal and the future for games of all kinds. And that was long before Steam (which only came along in 2003) was even a thing. Then Steam came along, some subsequently freaked out because they couldn’t possibly imagine not owning physical goods for a game they bought. I don’t even want to go into the big box retailer reactions. I mean, there were even publisher boycotts, tomes of articles, flat-out rebellions and everything in between. I wrote an article for Gamasutra back in 2009 about leading publishers threatening a boycott of Steam. Twelve years later, I was right — and Steam is still the dominant digital distribution system because they 1) get gamers and game devs 2) they listened 3) they were fair — not evil.

So when I see all this noise around Valve’s stance on blockchain games, I just shrug because often times when something is new it’s a bit difficult for most people to see the big picture, let alone the long-term prospects. Especially if the underlying basis is about something (in this case crypto, NFTs etc) that’s either misunderstood or which already has a reputation lingering on the dark side.

I feel the same way about mainstream gaming coming to the blockchain because it opens a world of possibilities that most can’t even begin to comprehend in the short-term. At some point anyone serious about making money on this brave new frontier, is going to have to get on board.

Don’t get me wrong, it’s not going to be easy — at all; and the glut of sub-par “games” is going to be an issue. Remember back when Flash games were a thing? Yeah. I mean, for every Axie Infinity, Genopets, or Cryptoblades, there’s this lot.

The choice of blockchain platform is also going to be a huge factor. And there are quite a few of them, including Hedera, Solana, Forte, Polkadot, Polygon, to name a few top tier ones. Each of these have their pros and cons ranging from transaction rates and fees, to energy costs and latency. And many more platforms are coming because the legacy blockchains are already inadequate in terms of being cost effective for most applications — especially games.

Getting a game on the blockchain is one thing, what you do on it, and how you do it, are completely different matters. As you may have noticed, most of the current crop of blockchain games revolve around owning and/or selling things via the use of NFTs. There’s not much “game” there, if you know what I mean. If you don’t know what an NFT is, then I invite you to skip Google, and just go straight to Jon Radoff article in which he explains it all in layman terms.

At the time of this writing, the vast majority of blockchain games are all basically P2E. See where this is going, right?

On the cost side, it’s going to take several years for developers and publishers to build mainstream (AAA, AA) games on the blockchain. It’s why EA, Take Two et al are making cautiously optimistic statements about their prospects. The fees alone are a barrier of entry, and it’s precisely why P2E is thus far the dominant business model. For example, if you were to create an NFT on OpenSea, one of the most popular marketplaces, it would cost you fees in either Ethereum, currently trading at around $4,668 per ETH or Polygon (free since July 2021). As you can see, right off the bat, there’s already a [financial] barrier of entry. Tom Clement wrote an article a few days ago about this specific issue.

The flip-side is that with game assets (characters, items, weapons, potions, pets etc.) as NFTs, gamers can carry and/or trade items between [collaborating] games. I’m not talking about what you see in Fortnite with branded skins etc. Nor am I talking about something along the lines of PUBG and Riot doing a deal that will see the former creating characters and assets based on the League Of Legends universe. No, it’s bigger than that. Imagine buying, making, or finding a rare weapon in an FPS game, then being able to use that same weapon — which you own — in another FPS game that allows/supports it. The blockchain lets you do that.

If you’re thinking “Oh great, EA and Activision are going to come up with new and creative ways to milk us ala loot boxes, aren’t they?”, then why yes, yes of course. I mean, why not? Someone has to pay for those fees. Except this time around, unlike F2P whereby 1 person pays for the 100K who don’t, everyone gets to pay their share. To be honest, it’s no different from publishers paying fees for the game servers you play on for free. It just costs more — and you get to pay for it.

The other thing is that, for the short-term, blockchain games and their genres are still very much a niche. I mean, have you see what it takes to on-board on Axie Infinity just to play? Clearly, going by the costs of the pets there, a large number of gamers are perfectly OK with that. And there are entire careers and livelihoods around that one particular game. And while that may not be the type of game for most avid gamers, as the things progress, and larger studios and publishers start to get involved, we will begin to see the more eclectic collection of game types and genres that we’re used to.

So yes, mainstream gaming on the blockchain is coming, and now is the perfect time to start thinking about getting on board.