Today, web3 games leverage economics as its core gameplay. Traditional games have had asset trading implemented in it in many ways, such as sharing weapons or exchanging skins for money, but the economics was never built into the game.
The blockchain technology is a product of the rising need to bring ownership to the users. But the way things played out in the first tipping point of web3 onboarding. This being a nascent industry, it is fairly free of regulations, which lead to most of the capital going into bad tokenomics in 2020-21. I’m not trying to highlight just the bad things because we know all the good stuff that came out of it.
Now that we are in the bear market, all the weak projects have either shut shop or have taken a massive hit, calling out the bad economics behind it.
Looking forward, we need to proceed with caution. Have we learned our lesson, now that the bear market is here? We covered this in another piece. Check it out – https://coinmarketcap.com/community/articles/31294
The markets will soon turn, the bull will come. That will re-activate all those who are now taking a break from investing in crypto. The next bull will also bring the next wave of new users onboarding to web3. We need to be prepared for it.
Therefore, here’s my guide on how to spot a good web3 game.
Product: Is the product not generating an income for the company? When this is not the case, the developers depend on the capital that they raise, say from an IDO, IEO, INO etc. This is combined by massive funding from VCs. In this situation, the project pumps capital back into the economy to create a temporary high income for the players. But when new users stop pouring in, the company’s income is affected and the whole system comes crashing down like a house of cards. So if you see a massive hype marketing before a product launch, proceed with caution. Games like CropBytes were built boot strapped for over 3 years post which the team went for fundraising.
The product is strong when the project has:
- Fun gameplay: Web3 games should not forget that gaming should be fun. Users should not mind spending time on gameplay.
- Supply and demand: Be it asset utility or monetary policies, the demand for assets should never crash even if there are no new users joining in.
- Wide audience: Since web3 games have a strong element of economy, the users should have different roles to play in the system, bringing in their skills, contributing to the nuts and bolts of the economy. An economy based game should host Investors, Traders, and Players equally.
- Slowly built a strong economy: If you see a web3 game having a huge tipping point early on in its journey, it could be a result of just hype-based marketing. It takes time to build a strong economy and get it to pick up pace. Imagine a country: Rome was not built in a day.
Economics: Is the game’s core loops just increasing the earning potential of users in a linear manner? It will most probably come crashing down. A strong game economy will have the following features:
- Utility: Game tokens need to have strong utility within gameplay. Further, these tokens need a high frequency of usage. Today’s Web3 games suffer from low transaction volumes due to the inherent difficulties of buying & selling NFTs.
- Liquidity: For an economy to prosper, there is a need for assets to be liquid. NFTs, due to their unique nature, suffer from liquidity issues. On the other hand, fungibles enable investors & traders to participate efficiently and provide liquidity.
- Gameplay: A game that engages players getting them to invest time and money is the hallmark of a great game. In a Web3 game, as players produce and consume in-game assets, opportunities arise for non-playing participants – traders & investors.
- Differentiated thinking: Slapping on a crypto angle to a traditional game using NFTs does not make for a successful Web3 game. Developers need to think through the entire user experience and how crypto can enhance the game experience.
As the creator of Vine stated through a humble tweet: If X+Y = X+Y+1, you’re reading a P2E whitepaper. If players are constantly generating more value than they are putting in, it’s a bad recipe.
Why web3: Using web3 as a gimmick, to raise hype based money, to get rich quick, devs taking huge cuts of the token supply, etc have been quite a thing in the space. As long as the game’s whys of web3 tech is to build something that’s eventually stable enough for the community to then take forward, it’s okay for it to be centralised. A poorly designed game cannot be sustained only through blockchain tech.
Crypto gaming is a fast moving space. The key to make the right investments in this space is to get into a project that’s built for the long term. Make sure to study the tokenomics, read the white paper, speak to old players, don’t dump all your money on day 1. Whether you’re investing into a retirement plan, or skilled daily trading, or just earn through providing value to others in the economy, there will be a game out there that’s perfect for you. If you like a casual simulation genre game, CropBytes is perfect. The team has been building CropBytes for over 4 years. The economy has seen multiple market cycles. Even through the current bear, the in-game markets are stable and highly liquid.
Check it out: https://www.cropbytes.com/