Opinion: Blockchain games are still an experiment until commercial success

Author: Kenny Kim

Source: Medium

Translation: First Class (First.vip)

The author of this article elaborates on the reasons why blockchain games attract a lot of attention and what obstacles blockchain games need to overcome in order to achieve commercial success.


Two characteristics of blockchain games: permanent and extensible

Blockchain games have not yet formed a separate category, so one "blockchain game" may be very different in architecture from another. But if we only focus on blockchain games, we can guess what functions are essential for the game. The two most prominent features of blockchain games and traditional games are permanent and available. Scalability.

Both Bitcoin and Facebook's Libra use blockchain as a financial asset infrastructure. The reason why blockchain is suitable for handling financial assets is mainly because of its durability. If my bank database could be deleted or modified, or if the company I hold issues shares to anyone they like, I might not invest funds in such agents or infrastructure. The same goes for games. If game items that people win or buy can be manipulated, deleted, or copied at will, they will hesitate to invest time or money in the game.

You might wonder who is willing to invest a lot of time and money in the game. But in the gaming industry, it is a recognized fact that a few high-consumption users contribute the most to game revenue. Users who spend tens of thousands or hundreds of thousands of dollars on games often worry that if their game assets are not guaranteed, they may lose these assets forever. Many users lost all their game assets when the game was closed, and the online community has confirmed this. Just as blockchain in finance uses its permanently neutral distributed information database to protect financial assets, blockchain games promise to protect players' gaming assets. In theory, if a blockchain game runs only on a blockchain protocol, it is impossible to close the game. Even if the developer shuts down their services, the game assets will remain and can be used for other purposes. Permanence is currently one of the most touted features of blockchain games.

If Cypher doesn't believe in the permanence of the Matrix (virtual world), he won't decide to return there.

The second most important blockchain feature in the game is scalability. The irreplaceable token characteristics of the blockchain records the source of all game assets. That said, it is possible to accurately track what a project has experienced since its release. This could change the way assets are valued, depending on what the owner is doing, expanding the meaning of the game and its assets. For example, one item may be more valuable than another with the same functionality if the former is used by international esports star Faker. This is best explained by the difference between signature baseball and ordinary baseball. Although the same effect can be achieved by existing game servers, it is not easy to achieve without the above-mentioned permanence.

Smart contracts are another indispensable feature of the blockchain, which can further expand the possibilities of the game. For example, in 2017, third-party developers developed Kitty hats, competitions, and battle games based on crypto cat games.

Although crypto cats only allow the collection and breeding of tokenized cats, Axie Infinity brings breeding, fighting, and virtual reality to its games. Interestingly, this game is expanded by partnering with other blockchains. Recently, Axie Infinity has established a partnership with MakerDao, the most influential cryptocurrency lending and stabilization project on the Ethereum network. This partnership provides a unique Axie for those who put ETH in MakerDao.

For existing non-blockchain companies to join this partnership, they must figure out how to build the API correctly. It is also important to standardize the communication between a single API and various other services. But on the open database of the blockchain, the interaction between such services is relatively easy. If the smart contract is well constructed, it is easy to see how each service is constructed and what kind of data it has accumulated. If they are on the same blockchain, a smart contract can reference another smart contract to implement functions or access information. In addition, although cross-chain technology is still in its early stages, it may allow different blockchains to communicate on the basis of lack of trust.

Blockchain games: speculative, poorly designed gambling?

Although I have only listed its benefits, there are indeed many people who have reservations about blockchain games. We need to review these reservations in more detail.

More than half of the dapps in the top 20 on Dapp.com are actually gambling

Currently, the most popular dapp category on the public blockchain is gaming. Gaming dapps are very popular on EOS and Tron and rank first on statistical websites such as Dapp.com. This has led to the emergence of some highly speculative games. In addition, blockchain games often allow the exchange of items to fully own assets. The problem is that this exchange is made through cryptocurrencies, and although most countries do not recognize cryptocurrencies as currency, they can be easily converted into fiat currencies through cryptocurrency exchanges. If a randomly drawn game can produce items converted into liquid assets, how is it different from lottery or gambling? We cannot deny this, as it will lead to an increase in gambling in the game.

From a strictly liberal perspective, one might argue that gambling and speculation are fundamentally not wrong, and individuals should be free to do what they want to do. But if blockchain games are mainly for economic benefits rather than entertainment through storytelling, problem solving, and achieving goals, then external rewards may destroy the game's intrinsic motivation. No one will pay to buy a game without inherent entertainment. If no one is willing to pay, the rewards players get will be unsustainable.

In addition to criticism of the basic principles and architecture of blockchain games, many people also complain that the blockchain games currently on the market are too lacking in usability. Blockchain infrastructure is currently full of elements that can be troublesome for users, including creating accounts, installing wallets, managing private keys, backing up keys, and paying for gas.

For example, Ethereum has a complex 42-digit hexadecimal address format. It also requires users to pay a gas fee for each transaction, and users must pay in advance. Gas determines how long the transaction takes, at least 15 seconds, and may take up to several minutes to guarantee that the transaction result will not be cancelled. If the traffic increases a little, the network will delay because it cannot process more than 15 transactions per second. To explain this from a game perspective, you have to pay each time you take an action, and those who pay more may be adopted more quickly.

EOS was originally a platform to solve the Ethereum problem, but the user experience it provided was not as good as expected. On EOS, another user must create an account for you, and you must pay that user a certain amount of EOS. In addition, although there is no transaction gas fee, you have the right to trade according to the proportion of EOS amount in your account. If you don't store the correct amount of EOS in CPU, NET, and RAM, your transactions may not be processed. In the context of the game, the game may require that you pay the fees from the time you create an account, and deposit money into your account before you can play the game. Finally, you must allocate the money to several accounts in accordance with a complex set of rules Otherwise, the game may be suspended.

In this case, if blockchain games want to attract users, they must provide more value than regular server-based games. But in reality, the situation is exactly the opposite. Many games simply have a cryptocurrency payment function without actually understanding the blockchain. Many games creatively add blockchain functions to the game, but actually do not provide an interesting gaming experience. After the success of crypto cats and various other gambling dapps, many game developers have joined blockchain game development, but even the most popular of these games currently has only 2,000 daily users.

Until commercial success, blockchain games are still an experiment

Despite criticism, I still believe that the permanence and scalability of blockchain games can bring a different experience to traditional games. Existing server-based games can be described as a short-lived, virtual reality with limited scalability. However, new blockchain games may become a real alternative reality.

As mentioned above, blockchain games are long and arduous, and it will take a long time to see commercial results. After a long experiment, we may come to the conclusion that blockchain games are just a concept without commercial value. But it has been less than two years since the advent of crypto cats and blockchain games, and I think it's too early to judge their potential. Entrepreneurs participating in this experiment must think about why they need to create games on the blockchain instead of focusing on short-term profits, and make creating a truly fun game a top priority. They must also find a way to take advantage of the advantages of the blockchain and overcome its shortcomings.

For gamers, it may be difficult or inconvenient to compensate or hide blockchain functions. For example, Ethereum introduced Meta Transactions to allow new users to trade without owning ETH. EOS has recently adopted a system that allows dapp developers to pay for resources instead of users using EOSIO 1.8 updates. As you can see, many infrastructure and dapp developers in the blockchain ecosystem are working to improve the network and have successfully increased the availability of the network. If in these positive attempts and efforts, the blockchain game industry can grow, we may see the birth of companies like Unity 3D or Supercell.


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