NFT Gaming Is Returning The Power To The Players
To anyone that is both a crypto and mainstream gaming enthusiast, it is no secret that mainstream gamers absolutely despise crypto gaming. They see the introduction of NFTs into gaming as another cash grab from greedy founders parading as Web3 futurists. Players are not entirely to blame for not being able to see the bigger picture. The crypto gaming industry could do a lot better in marketing their message to the public, targeting the mainstream industry, delivering finished games in a timely manner that are on par with games that are popular in the mainstream market, and weeding out bad actors that are looking to capitalize on this growing industry.
We believe that gamers have had such a bad experience with pay to play models that anything that sounds like a potential cash grab is an immediate turnoff, which is completely understandable. However, as mainstream gamers slowly see the power of crypto gaming and how they stand to benefit, it will shift the entire paradigm of gaming as we know it….and it will be for the better.
Issues With Mainstream Gaming
The current gaming industry that we’ve grown to love has been plagued with problems for quite some time now. As previously stated, the mainstream gaming companies have become greedy, and have failed to prioritize the experience and well-being of the players over profits.
Aside from greed (which I will delve deeper into later), there are a number of problems that are prevalent within the industry:
Crypto gaming solves all of these issues. It also solves the biggest problem….microtransactions. Imagine you spend $60 - $70 on a game, you get ready to play, and then you discover that you need to spend another $30 to purchase the DLC (downloadable content) that will give you full access to the complete game. All of my mainstream gamers are far too familiar with these scenarios.
That’s only the start. Let’s talk about the cost of in-game items (ex: skins, weapons, vehicles, maps, etc). It is not uncommon to spend a few hundred dollars on game assets. Now, it is to be noted that in some games there are ways to grind your way to earning exclusive items. However, to dissuade players from avoiding the cost, they make the grind to earn these special in-game items long and tedious (some grinds take 20+ hours to earn a single item). To add insult to injury, these items cannot be resold in a marketplace for a profit. So, it is essentially a sunk cost.
Mainstream games also exploit players through the use of loot boxes.
A loot box is a bundle of random in-game items packaged into a box aka loot box that a player can purchase with real money or in-game currency. The players don’t know what’s in the box but the chance of unlocking a special item seems to be worth the risk. Occasionally, games may also offer “deals” that give off the illusion that a player is purchasing at a discount.
Loot boxes have been the subject of much controversy within the gaming industry. In 2020, the UK even suggested that loot boxes should be regulated under gambling laws.
To paint a clearer picture, in 2020 it was estimated that the global online microtransaction market is estimated to be approximately $33.4 billion. Games like League Of Legends ($1.75B in annual revenue) and Fortnite ($5.1B in annual revenue) earn a bulk of their revenue through microtransactions.
I know what you all are probably thinking. How are companies allowed to get away with this? Well, it boils down to brand loyalty and complacency. It’s almost like being afraid to leave that toxic boyfriend/girlfriend because they’re all you’ve known for the past x amount of years.
The reign of exploitative practices from AAA gaming studios is coming to an end soon, and it’s coming in the form of Web3.
The Opportunity That Awaits Crypto Gaming
Right now, the video game industry is bigger than the music and movie industry combined. Rockstar Games recently made history with its legendary game, GTA V, becoming the highest grossing entertainment product of all time. With 100 million copies sold and $6B grossed on a development budget of $265M, GTA V has completely turned the industry on its head.
While GTA V is the highest grossing game, Pokémon is the highest grossing franchise ($17B grossed since 1996).
Knowing what we know about GTA V and Pokémon –that they’re console native games – one could not be blamed for assuming that console games hold most of the gaming market share. However, this is incorrect. In 2019, smartphone games held 36% of the global market share.
In just two years, smartphone games captured another 9% of the market share, bringing the total market share held to 45% as of 2021.
The point of highlighting these numbers is to show the opportunity that lies at the feet of the Web3 community. Most crypto games are being built with the intention of them being enjoyed on mobile platforms aka smartphone games.
Web3 gaming developers have the ability to lead the next gaming revolution, but the execution must be flawless.
A Player Driven Industry AKA The Rise Of POGs
The next evolution of gaming is vastly approaching. In an industry that is dominated so heavily by the mainstream sector, the task of Web3 gaining any respectable market share can seem almost insurmountable.
The value proposition has to be attractive enough to entice players to abandon the traditional ways of gaming to become active participants of the new frontier. This is where POGs come into play.
So, what exactly are POGs? POGs is an acronym for Player Owned Games (this is not an official term, but I believe that it should be). Since NFT gaming and crypto gaming has been met with much contention and apprehension from the gaming community, I figured that it would make sense to give the sector a facelift by using a title that better describes the purpose and overall goal of crypto gaming.
At its core, POGs will give players the ability to own and control the assets and content within crypto games. Players will also have governance rights that will allow them to control the decisions made amongst the team, which means that the destiny of certain franchises will be placed into the hands of the community.
Though many people are currently failing to see the bigger picture and how revolutionary this will be moving forward, soon a lightbulb will flash and we will experience another huge gaming boom.
There are a number of positive outcomes that will result as a consequence of the support and adoption of POGs such as:
Forcing AAA studios to adhere to the best interest of the players.
Players voting with their support as well as their dollars take on a new meaning when they are in direct control of the assets and the content.
If AAA studios are determined to bring in the same exploitative practices seen in the traditional market, players will simply stop supporting the game and the ecosystem. This will eventually result in the studio falling apart.
In a way, POGs give players the ability to slay giants. So, it would only make sense for the big studios to keep the community happy.
Giving independent developers the power to compete on a grand scale.
In the past, many independent studios have been unable to compete with the game development of AAA studios due to the lack of capital. A lack of resources means that smaller studios are unable to hire the best talent – because we know that the best talent gravitates to where the money is.
However, we’ve seen smaller teams raise insane amounts (to the tune of 8 and sometimes 9 figures) of capital through NFT launches – take Yuga Labs, Star Atlas, and Illuvium to name a few.
Smaller studios now have the ability to acquire the resources needed to produce games that are on par with any AAA studio.
Forcing companies to listen to players.
Governance rights and DAOs give players the loudest voice in the room. No longer will complaints continue to go unaddressed.
This is ultimately for the good of all parties involved. An empowered community will lead to a better product overall.
Studio incentives will finally align with player incentives.
For the longest, gaming studios have had no real incentives to listen to the players that support their products.
POGs will create a win-win situation for both companies and players. The better the product, the stronger the support. This makes sense for a few reasons:
In Web3 models, studios only benefit from increased activity within the game itself.
Additionally, studios can provide opportunities for smaller players and/or creators to assist in the construction of the game while benefiting economically.
There are many reasons to be excited about the new wave of gaming that is on the horizon. The upside potential is massive.
However, in order for crypto gaming to truly live up to its full potential, the games must be able to compete with the mainstream games that we love today. This means that the game loops must be solid, and the gameplay must be fun.
Most importantly, there must be incentive alignment between all parties included. As the industry progresses, I expect that we will start to see a pivotal shift in the land of gaming. All I can say is that if you’re lucky enough to be involved this early in the process, be sure to stick around.