In my last post, I bored everyone with a rather lengthy description of the kinds of games I've loved to play over the years and the kinds of games that felt like a waste of time. The only reason I brought it up is because, sadly, most of the NFT games that I've seen so far have more in common with the games I wish I'd never played than with the games that will always have a special place in my heart.
Right now, most of the hype in the NFT gaming space centers on the concept of play2earn games, and for a good reason. Who wouldn't want to earn money by playing games? I know I do. The concept is sound, but the way it gets implemented matters. A lot.
The focus I've seen so far is on building hype for new games, usually centered on how much money the players will make rather than how fun the games will be. Once people get excited about the new game, the developer sells massive quantities of NFTs to players seeking to "play" the game, and then watches the inevitable market boom and bust. OK, maybe it's not inevitable, but it's highly likely. You see it all the time. A new game gets released and suddenly becomes wildly popular, not because it is so fun to play but because the earliest players are flipping assets for insane profits. People hear about how much money these early adopters are making, and they become desperate to get involved, so they will pay almost anything to get their hands on the money-making NFTs. A few months later, the market crashes and suddenly the assets you bought in the middle of the hype are worth a tenth of what you paid for them. Or less. Most of the early adopters have jumped ship by this point, having made their money back ten times over while the latecomers face a genuine dilemma. They got into this game to make money by selling off the materials they accumulated or crafted in the game. When the market crashes, however, the assets they are generating are suddenly worth next to nothing. Not enough for them to recoup the money they have already spent on the game, let alone to earn a profit.
After the market crashes, you can finally see the true value of the game you are playing. Is there still a point to playing if you aren't making any money? Would you play Alien Worlds if you couldn't exchange your TLM earnings for a different currency outside the game? What about Farmers World? Take away the earnings, and most blockchain games become remarkably boring and ultimately unfulfilling. Without a payout, the only thing left is the addictive nature of the game itself ("Gotta click the button...gotta click the button...gotta click the button"). There are a few existing NFT games (Splinterlands comes to mind) that are fun to play even if you never make a cent off of them. But most of the current NFT games would never have become so popular without promising to pay people to play.
There's nothing wrong with the play2earn concept, of course. I like the idea of earning money from playing a game, but I'd like to see a better balance between earning income and having fun. I want to play a game because it is fun to play. If I can also earn some money by playing that game, that's a bonus. It's not a requirement. For NFT games to reach their full potential, the games are going to have to be worth playing even if they don't generate income, or as much income as people are expecting right now.
In most games, users generate income by performing some menial task (clicking a button) at a scheduled interval or receiving a scheduled payout of tokens or NFTs that players can sell or exchange on the secondary market. These strategies are fine if they supplement the actual gameplay, but if these strategies become the main purpose of the game, it won't be very fun to play.
Think about it: You buy a membership in Farmers World and you get a payout of farmer coins every day. Which is great fun if you can sell those coins, recoup the cost of the membership, and start making a profit. That stops working when too many people own memberships. The market gets flooded with more players wanting to sell coins than players wanting to buy coins. Too much supply and not enough demand will always cause a market to crash. It's entirely predictable. Promises of passive income are a great way to ensure that your early adopters get a great payout from playing the game, but their success comes at the expense of the players who decide to play later on. You might get a second wind after all the people who lost money playing the game sell off their assets dirt cheap and a fresh wave of players comes along to buy up these cheap assets. For them, the game might still be profitable since the cost of entry was so low, but without major help, the value will continue to fall. In the end, more people will lose money playing the game than profit from it, or it will take so much time and effort to recoup their initial investment that they will feel trapped playing a game they no longer enjoy.
I don't know if the prevalence of these types of NFT games results from rushed development or is intentionally taking advantage of the players in order to generate quick profits regardless of who gets hurt. Either way, the result is a game that isn't worth playing in the long run. In the worst cases, it becomes a game that causes real psychological and financial harm to the players. That may be harsh, but I think it's honest. The initial upswing in the market is predictable enough the developer can promote their game as a play2earn game to early adopters. The downswing is just as predictable, though no one likes to talk about it. If every player is generating new assets every day and those assets last forever, those assets will eventually become worthless. It's only a matter of time.
The good news is that this model is not the only way to make NFT games. Nor is it the only way to make these games profitable. I think we can build NFT games that have a low cost to play, are enjoyable for all players regardless of when they get started, and still provide both players and developers with a steady income stream. Making games like this won't generate the massive revenue streams in the first few months after release, but the market won’t tank a few months later, leaving players feeling betrayed. These games will need to have a slower, more sustainable source of income that can last for many years to come. I'll throw out a few suggestions for how this might look in my next post.
P.S. I called out Farmers World in this post because it is a perfect example of an in-game economy going horribly wrong. I will talk more about Farmers World, including my personal experience with the game (which has not been bad), in a future post.
