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So goodbye 2021: a year in which blockchain gaming went from an interesting geeky side-project to a sector reputedly worth tens of billions of dollars and which — more importantly — supported millions of people collectively earning hundreds of millions of dollars.
But despite all that, did we learn the right lessons?
Here are some subjects I think we need to reconsider.
Axie Infinity
Like most people I’ve written a lot about Axie Infinity over the past 12 months; probably too much. As I’ve already stated, I think we’re over-indexing on a game that’s fascinating, significant and will remain in the vanguard of the whole blockchain gaming sector. Certainly I’m not selling my Axie NFTs or tokens any time soon.
But I think (and hope) 2022 will see blockchain game and economic design become more nuanced and varied.
Axie Infinity will continue to do what it’s been doing for the past four years, of course, and it will also be exciting to see how it changes as features such as land, crafting and new battle arenas are built out, and other titles launch on the Ronin blockchain.
But let’s not get overly fixated on one game, even if it is one of only three games that can truthfully be described as successful live blockchain games.
(The others are Splinterlands and Alien Worlds.)
The rise of ‘play-to-earn’
The most controversial term of the year in blockchain gaming, the trend is now to moderate ‘play-to-earn’ as ‘play-and-earn’ (or variations thereof).
Personally I’ve never liked the concept of ‘play-to-earn’ and am not sure ‘play-and-earn’ is much of an improvement but I fully understand the economic realities such terms underpin for millions of people.
And more fundamentally we shouldn’t shy away from the fact that all blockchain games need to provide the option for players to own assets with real-world value and be able to extract that value.
Nevertheless, I think that the obsession with ‘play-to-earn’, combined with the new buying power of ‘play-to-earn’ guilds, means that during the first half of 2022 we’re going to see dozen of blockchain games flounder and break apart on the rocks of trying to balance and scale a ‘play-to/and-earn’ economy.
As even Axie Infinity demonstrates, getting the balance between short and long term incentives is almost impossible to do, and the more nascent any game economy, the more likely it is to crash-and-burn.
Boom, bust and what happens next
Of course, part of the reason ‘play-to-earn’ is so difficult to operate is that the natural trajectory of most crypto projects is boom, followed by some level of bust.
You can see this dynamic with the price graph of pretty much any cryptocurrency but other examples in 2021 ranged from decent projects such as NBA Top Shot to the likes of more overt money-grabs such as CryptoBlades and CryptoMines (both of which happened on the Binance Smart Chain: that’s a clue!).
Because in any vaguely open economic ecosystem, if asset prices start to appreciate, people — logically and sensibly — attempt to inject as much value into the system as possible.
So whether it’s the creators’ original plan or not, effectively the market creates its own little Ponzi scheme. The only question is whether the bubble deflates slowly or pops suddenly.
And only after this has occurred can the real community-building start.
In that context, the strength of NBA Top Shot’s community is better demonstrated during the somewhat toxic months after its economic crash in April 2021 than in the exciting price explosion that occurred in February and March.
Brutally put, projects will only be able to succeed in 2022 if they can can survive the process of burning off speculators while hodling their core community.