After the era of PLAY TO EARN ends, blockchain games will bring real changes to the game industry

Research summary

With a large number of venture capital pouring into the blockchain game track and a large number of entrepreneurs devoting themselves to creating blockchain games, we are glad that the industry has received widespread attention, but also see more and more chaos. But the early stage of each industry change must be accompanied by a large number of bubbles, and the founders who can truly grasp the core of the industry change in this bubble have the opportunity to create real value.

What is the core innovation of blockchain games? We believe that there are three core elements that have contributed to the industry revolution brought about by blockchain games. The first is that game assets are on the chain through the blockchain NFT/FT standard, which establishes that the ownership of game assets belongs to the players. The second is that with the development of the game Ownership of assets belongs to players, which actually forces game developers to distribute part of the benefits to players participating in the game, which will also break the monopoly of game developers on revenue rights in traditional games. The third point is blockchain The community autonomy culture brought by the spirit of decentralization will encourage game developers to give game community contributors the right to govern the game in the form of DAO, which will also strengthen the interaction between game developers and players to promote more benign game development.

But it is a pity that in the wave of development of the GameFi era, the current popular chain games emphasize “Play to earn”. Most of the projects are less playable than traditional games, but have a higher entry threshold for payment, using typical Ponzi economy design. We believe that the current chain games have not attracted real players, but attracted a large number of short-term speculators through the unsustainable Ponzi economy. The game assets inside the chain game have no actual gameplay support. Therefore, when the number of new players entering the game decreases, the game economy will lack net inflow funds, and the prices of game assets that are seriously over-issued will drop rapidly, causing players to further Sell ​​game assets, creating a death spiral.

To design a sustainable blockchain game, the game must be a game that players are willing to pay for continuously, so we encourage entrepreneurs to still focus on improving the playability of the game. This is the key question that the blockchain game industry really needs to think about at this stage.

The report will focus on the GameFi track to introduce the development history of chain games at this stage, the advantages and disadvantages of chain games compared with traditional games, the role switching of the gold union under the iteration of game development history, and the improvement and distribution of chain games in the profit model. Difficulties on the way to break through.

1. The development history of chain games

From the perspective of the past development process, the chain game can be roughly divided into 4 stages [1]:

Phase 1: Embedding BTC (2013-2017)

The earliest chain games in the first stage appeared before smart contract technology, and Gamefi was in the exploration stage at this stage. The typical masterpiece at this stage is the Bitcoin Minecraft server. People try to integrate BTC and Minecraft into BitQuest. Players will get Bitcoin for their activity and operations on the server. The profit model of the server is to pay for advertisements through auctions. This type of project can only be used as the initial prototype of Gamefi, which only uses blockchain tokens as game currency in the game, and does not have a complete game ecology and on-chain economic system. In the end, this type of server was closed due to reasons such as making ends meet.

Phase 2: NFTs (2017-2019)

After the emergence of smart contract technology and the ERC-721 standard that led to the birth of NFT, Chain Games has ushered in the second stage of development.

The most representative of them is the Ethereum-based Cryptokitties. The Cryptokitties team has developed and adopted the ERC-721 standard so that each CryptoKitty can become a unique NFT. In CryptoKitties, users can buy and breed. NFT electronic pet cat [3]. The gameplay of the game designed by it is relatively simple. The system will release a first-generation encrypted cat every 15 minutes. Players can choose to buy their own encrypted cats and breed them. The breeding encrypted cats will randomly form characteristics according to the parent cats and have a small probability. form variation. According to the scarcity property of CryptoKitties, players have the opportunity to obtain Ether by buying and selling CryptoKitties. The most expensive CryptoKitties transaction history was sold at $1.34 million/600ETH. The game project party mainly uses the sale of the first generation of NFT and the extraction of 3.75% of the handling fee from each encrypted cat NFT transaction as a profit model. 

Stage 3: Play to earn (2020-2022)

Axie infinity introduced the sub-currency SLP in the first half of 2020 to create a dual-token model for chain games, which strengthened the game’s playability and superimposed the demand of Southeast Asian people to make money at home triggered by the 2020 epidemic, thus officially igniting Gamefi’s “Play to earn” “The Prologue of the Times. Axie is a turn-based game similar to Pokemon. When entering the game, players need to buy 3 Axies to start the game (the cost is about 150-1000 US dollars). The battle mainly includes adventure mode and competitive mode. After the coin is rewarded, you can fight by breeding and breeding new AXIEs, or you can directly sell the obtained tokens or Axies to gain income. It can be seen that Axie’s game model and business model have been greatly improved compared to the previous CryptoKitties. After seeing the success of Axie, a series of design logic with PLAY TO EARN as the core have also appeared in the market. game. However, with the collapse of the prices of well-known Play to earn game assets such as Axie and StepN, most game participants have actually suffered losses and the return of their capital is still a long way off.

Phase 4: Return to Game Playability (2022-future)

The unsustainable Play to earn model not only hurts many users who participate in blockchain games, but also causes blockchain game entrepreneurs to think about blockchain game design. And a small number of elite entrepreneurs also realize that when all players participate in the game for the purpose of making money rather than playing, players will not keep game assets but will continue to choose to sell game assets at the first time, causing extreme Large selling pressure, and the net inflow of the game economy can only be supported by the input of new entrants. This model is a clear Ponzi economy and cannot be sustained in the long term. Therefore, a group of elite entrepreneurs re-emphasized the design of game playability, realizing that only when players are willing to keep paying for games and keep game assets, game products can avoid falling into a death spiral in the short term. There are also 3A-level large-scale blockchain game projects with strong playability represented by illuvium, BigTime, Phantom Galaxyies, etc. in the market.

2. The relative advantages and disadvantages of chain games

The relative advantages of chain games

Compared with traditional games, the key advantages of chain games are mainly reflected in the ownership of assets, the redistribution of game interests and the decentralization of game governance.

Asset ownership

In traditional games, players’ game assets, such as game props and game gold coins, essentially belong to the game developer. Even if players use real money to buy skins or props in the game, they only have the right to use them, not ownership. In the traditional game world, players have no right to sell or lease game assets such as skins. Therefore, once the developer changes the game rules or the game experiences external shocks and has to stop the server, players are likely to suffer the risk of losing digital assets. Chain Games benefits from the non-tampering and traceability characteristics of blockchain technology combined with the establishment of ERC-20 and ERC-721 standards, so that the ownership of assets acquired by players in the game belongs to them, and these assets have In a broader sense of liquidity, players can rent or sell assets. The emergence of Chain Games ensures that the ownership of game assets belongs to the players, which is also the core advantage of Chain Games to surpass traditional Chinese games in the future.

redistribution of game benefits

In traditional games, the sale of game items is mainly monopolized by game developers or operators. Although players spend a lot of money and time to acquire many game items, players still do not have the right to sell their game assets. However, because all game assets in the chain game truly belong to the player, the player also has the right to become a seller. This fundamental change will reshape the distribution of interests in the game industry, and will also reshape the profit model of game developers. Game developers will change from the role of sellers in the marketplace to the role of managers who draw taxes from marketplace transactions. Players will be transformed from mere payers to owners of game assets. And this series of role changes is actually the game party’s distribution of profits to the participating players. And the redistribution of this income will also set off a revolution in the game industry just like every political rotation in history.

Changes in governance rights of game participants

In the traditional gaming world, players and game developers are a buyer-seller relationship. Game developers make money by designing games to provide players with an experience, and players pay time and money to get spiritual pleasure. Developers have the supreme right to change the rules of the game at will, and players can only choose to be forced to accept or abandon the game. Although there are many developers who focus on player experience in traditional games, they will listen more to user feedback, but users still do not have the right to truly participate in the governance of game development. In the chain game industry, the relationship between players and game developers is transformed from a buying and selling relationship to a community of interests. Only when the game is better can game developers and game participants benefit together. In the chain game ecology, game developers no longer unilaterally enjoy the governance rights of the game, but through the DAO governance method, the chain game participants can jointly decide the direction of the game through proposals and voting.

The relative disadvantages of chain games

Compared with traditional games at this stage, the key disadvantage of chain games is mainly reflected in the playability of the game. At present, the chain game industry is still in a very early stage, and many elite game entrepreneurs have not yet joined the chain game industry, so there are not enough interesting games in the chain game industry.

Compared with traditional games, chain games have a disadvantage in that they are more difficult to develop. In addition to paying attention to the playability of the game, game developers also need to pay attention to the design of the game economic system. Because if the game’s economic system design is not rigorous enough to cause a failed supply and demand balance, then game assets will be excessively over-issued or extremely scarce. Among them, excessive over-issue will cause the price of game assets to drop, which will affect the value of players’ game assets and bring about a negative experience, and even cause players to sell game assets and leave permanently. Too expensive.

3. Gold-playing Union – Role Switching under the Iteration of Game History

The gold-playing union has always been a controversial existence in the game. Whether it is traditional games or the chain game industry, such characters will be seen. In the traditional game industry chain, games mainly include R&D parties, publishers, distribution channels and players. Game merchants and gold-playing studios in the traditional game industry often have disputes of interest with the game production team, and they are in a gray area. Existence is also regarded as destroying the ecological balance of the game, and it is the target of the game publishers.

In the current chain game industry, because many popular games are Ponzi economies, players are required to have a lot of investment ($500-1000) to get started, so the gold mining union assumes the initial funding provider and identifies the game gold risk. , is an important part of Gamefi in the PALY TO EARN stage. [7] 

The current stage of chain games is still relatively heavy in terms of financial attributes, so from the starting point of game design, it often attracts short-term speculators who come for gold, not players who are truly willing to pay for the game. In the current chain games, due to the lack of gameplay and information asymmetry, the criteria for game players to screen games are often ambiguous, and there is no way to fully adjust individual game projects, and the risks have always been It is a topic that players often revolve around, and the gold-playing union plays the role of a “compass” in the current development of chain games, which has played a certain reference role for players in the screening of projects. Gold guilds generally maintain a good relationship with the game project side. Compared with the players, the union has a higher chance of approaching the game project side, or the due diligence information is relatively more abundant. The trade union will generally first measure the overall attention of the game, the professional background of the project party’s own team, and the investment strength of the capital institution, etc. After completing the initial project due diligence, it will be handed over to the technical team within the trade union for smart contract data coding. Screening and research on gameplay, and finally formulate a set of gold-making plans and distribute them to community managers and gold-playing players.

In the minds of users of ChainGames, if a chaingame project can be endorsed by the gold mining union, everyone will tacitly believe that the project has a certain monetary effect. Therefore, we can see that at this stage, the entire GameFi is more focused on the development of the P2E industry, and the existence of roles such as the gold trade union has gradually transformed from the gray industry under the original traditional model to an important reference for the development of the industry. The switch is very rare in the history of the development of the game industry.

However, we believe that as the chain game industry shifts to a charging model that focuses on playability and F2P, the status of the gold-playing union will gradually decline.

4. The current profit model of the chain game industry

Many traditional manufacturers are worried that after distributing the original monopoly revenue to players, the company’s revenue will be reduced, so they are reluctant to try to do chain games. However, it is not difficult to see from Axie’s 2021 agreement revenue of US$1.3 billion that when game companies distribute revenue to players, players will have greater motivation to participate and willingness to pay. After the whole plate becomes bigger, even if most of the revenue is distributed to users, the revenue of the game company will be very significant.

More importantly, if we assume that there are two very similar games, one gives 50% of the revenue to the participating players and the other gives 0% to the players. It is not difficult to see which game users will choose to play. We also hope that traditional game developers are more aware of the great changes brought about by blockchain games and participate more.

So how do blockchain games make money? Let’s introduce them one by one. At present, the common profit methods of project parties in the chain game industry are as follows: selling NFT game assets, setting fees in the generation of game NFT assets, and drawing taxes from game asset transactions. 

The logic of selling NFT game assets is similar to the logic of selling game props in traditional games, but developers need to pay attention that developers will no longer be able to sell unlimited props, because the NFT they sell will have market liquidity, once players can When buying the same game item at a lower price through the open market, players will no longer have to buy from the developer. Therefore, at present, chain game developers mostly sell game NFTs by selling blind boxes or limited/limited-time auction game props.Behind this is actually the scarcity of game assets, so that game assets have room for appreciation and players are interested in buying them.

In addition to the direct sales that traditional game manufacturers are familiar with, the more commonly used profit methods for blockchain games include setting fees in the generation of game NFT assets and drawing taxes from game asset transactions. We take the popular AXIE INFINITY as an example to illustrate how chain games set fees in the generation of game NFT assets and draw taxes from the transaction of game assets. According to NANSEN data, AXIE’s protocol revenue in 2021 is 1.3 billion US dollars, of which 85% It comes from the token fee ($15-$500) charged when breeding AXIE, and the remaining 15% comes from AXIE’s transaction tax (4.25%). Axie is designed to pay 0.5-4 AXS (AXIE’s governance token) and a certain amount of SLP (AXIE’s game token) whenever a user needs to breed an AXIE. Because AXIE is a necessary item for users to fight, and the selling price of AXIE in the open market is significantly greater than the cost, users are willing to pay for it. The transaction tax is also common in the traditional trading market. The current mainstream blockchain game market tax rate is generally 2-8%. The project party can also adjust the tax rate up or down according to its own needs.

5. Distribution channels and difficulties of chain games

At present, there are three main distribution channels for Chain Games, namely social media (such as Discord, Twitter, Media), project airdrops, and joint efforts by the gold trade union and investors.

Operation on social media is the most mainstream way of promoting all chain games. On Discord, the community manager of the project party will occasionally give users feedback on the current status of the game, the design progress of character skins, or NFT. The progress of the asset sale. At the same time, interact with players in the form of AMA (live broadcast) on various video channels, and answer players’ questions. In this part, there are many ways of promoting chain games that have created new ways of playing based on the original ones. Taking Hero of Mavia as an example, the Mavia Elite publicity plan will be held within the community [10]. All users can sign up to participate in the group, and the users who participate in the group will have an identification within the community. If the small team announces the game (such as writing in-depth tweets related to the project, uploading wonderful game explanations to Youtube videos, painting beautiful game works, etc.), the small team that wins the award through the community jury will have NFT, Skins or whitelisted rewards. This series of publicity methods are formed by community users, and teams often have competitive attributes in publicity, which also helps the game’s publicity to a certain extent compared to individual user publicity. may be improved.

In addition, in order to attract players’ attention to a certain chain game project, many chain games will try to promote the popularity of the game through airdrops, reward tokens, NFT assets, etc. to attract users to participate in this game. This further promotes the short-term increase of DAU data to attract market attention, which is also one of the more commonly used publicity methods for chain games.

Finally, many chain game projects will be promoted through cooperation with gold mining unions and well-known investment institutions. This part of the method is mainly to attract the attention of user targets through financing news. Some players see news conferences about financing from well-known institutions or cooperating with the head gold trade union that the game has at least been endorsed in terms of safety, which will also attract their attention to a certain extent, and play an indirect role in publicity. effect.

The above are the more conventional publicity channels for ChainGames. It can be seen that ChainGames tends to fall into the “Crypto” thinking circle when promoting and acquiring customers. It is believed that a project is mainly promoted through social media or airdrops, etc. . This article believes that if the follow-up chain game projects still use the above promotional channels to promote and acquire customers, the reachable user range will always be limited to participants in the cryptocurrency industry, rather than a large number of players in the traditional game industry. Existing chain game projects should try to jump out of this cognitive circle, and need to realize that the announcement of games is not limited to the above.

The importance of games in publicity is self-evident. If Chain Games wants to break the circle and attract players of traditional games, in addition to cooperating with well-known brands outside the circle (such as Sandbox and Stepn), it also needs to learn from the publicity of traditional games. Way. At present, traditional game promotion methods that can be referred to mainly include omni-channel advertising coverage, celebrity endorsement, KOL promotion, game community communication, etc. How ChainGame learns traditional games in distribution channels to successfully publicize and promote, and to successfully break the circle is a long-term compulsory course.


This article does not put too much emphasis on Play to Earn in the current market chain game report. It mainly believes that the real charm of chain games lies in the asset ownership of game props and the decentralization revolution (interest and governance) of the game. If a game focuses too much on financial attributes, it will backfire on the long-term ecological development of the game. The chain game that can really create long-term value must be a product that is fun enough to attract players to pay for it.

Play to Earn is a very exciting narrative, especially the rendering under the epidemic window adds color. After seeing the success of Axie, many project parties are eager to try, thinking that they can create a better gold game than Axie. Starting from this dimension, they have gradually deviated from the original design intention of the game. Players in real life, many of them play the role of students in school or employees in the workplace. After facing daily frustrations in their studies and careers, they all try to enter the game world to realize their own in real life. Unrealized social status and self-worth. An inconspicuous subordinate in the workplace may be an alliance leader who responds in a certain game, and an introverted student in the school who is bullied on campus is likely to be the top player on the ladder. For real players, the charm of the game is not money, but higher-dimensional emotional value and social attributes, and they are willing to pay and work hard for this emotional value; for the project side of the chain game industry, a game High-quality playable games need to maintain the concept of “Mind over matter” and elevate the design dimension of the game rather than just limited to short-term monetary effects.

An article titled “Technology Giants Metaverse Series Report” pointed out that the Metaverse is a huge and complex project. If the Metaverse is to really work, economic activities are indispensable. Other technologies in the current Metaverse (such as 5G, AR, AI, etc.) are essentially just infrastructure. The most important feature of the Metaverse is the need for a set of economic systems that communicate with reality and virtuality, and the cryptocurrency system in blockchain technology is one of the key structures established [11]. As the business form closest to the Metaverse, the blockchain technology is a crucial part in shaping the Metaverse technology system. The chain game that empowers the ownership of blockchain technology assets will surely have a huge and far-reaching impact in the future.

The entire crypto industry is developing rapidly, and major capital institutions have invested a lot of money to set up a chain game fund with a scale of hundreds of millions of dollars and spread the chain game track in a crazy way. This scene can not help but remind people of the words of former Google executive Sirdhar Ramaswamy when facing the continuous migration of employees to the Web 3.0 field: “There is a huge call in the field of cryptocurrency, which feels like the Internet era of the 90s, It’s so early, so chaotic, so many opportunities.” In this great hustle and bustle, we also call on entrepreneurs to cut out the noise and truly realize the revolution that blockchain technology and the spirit of decentralization have brought to the gaming industry. Keep the original intention and combine the core innovation of blockchain games to bring players a truly fun blockchain game.

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