I often get asked why the added complexity of blockchain is worth it for games.
After all, thanks to covid-19 the games industry has experienced its best year yet, at least in financial terms.
Gamers are playing and paying more than ever before and there’s little sign this trend is going to stop any time soon.
Aligned motivations
There are - I think - many reasons why games will adopt blockchain technologies.
But the more I think about this question, the more it boils down the general statement ‘because blockchain will better align the motivations of both developers and players’.
At present, value exchange between developers and gamers operates in different units.
Gamers pay developers in tangible form (money), receiving intangible benefits in return - entertainment, community, a sense of agency etc.
Using blockchains, however, means players also gain the opportunity to extract financial benefit from their experiences.
Of course, by design, this what blockchains are supposed to do. By making every interaction in a product a transaction recorded immutably on a blockchain which is underpined by a token (or cryptocurrency), financial value is inherently assigned to it.
And this makes it easier to incentivise behaviours in a more equitable and holistic manner.
How would Facebook be different if every user gained a tiny slice of the advertising dollars their activity currently generates for the platform is one simple thought experiment?
More than money
Often overlooked, I think there are also benefits for developers.
Most obviously, because they are rewarded financially only when their players are rewarded, the business model becomes more much synergistic.
More significantly, developers also start to be part of their community in a deeper way when it comes to intangibles, notably a sense of agency broader than content creation.
They are now in the business of creating communities with both financial and emotional components.
Clearly, how this all plays out in detail is hard to tell. There will be soaring success stories and squalid rug pulls.
But my gut feeling is adding blockchain will enable many more niche games to be operated successfully.
Small is beautiful
In contrast to the business models for both triple-A console and F2P mobile games, the key factor for success in this era won’t be based around the requirement to create a product with an addressable audience measured in the tens of millions that, in turn, requires the upfront investment to fund a dev team of hundreds.
Instead - as we currently see in games such as Axie Infinity and Splinterlands - dev teams of tens will make experiences played by thousands that underpin game economies worth tens of millions of dollars, even if annual revenues flows are only measured in the millions of dollars.
Of course, this doesn’t mean that there won’t also be the Calls of Duty, Brawl Stars and FIFAs - potentially worth ten of billions of dollars.
Imagine the fuss when you can buy Mario NFTs?
But, for me, why blockchain is worth it for games - what it offers that’s new - is the way creates a viable financial model for much smaller games.
In other words, blockchain decouples scale and success.