The potential of crypto gaming – an exciting escape combined with real ownership thanks to blockchain technology – has entranced a lot of people. Yet, the reality is stark: a significant number of crypto game projects are failing. Anjali Mehra is a DeFi Opinion Columnist at CoinDesk, helping to demystify decentralized finance. She digs below the high failure rates to uncover what’s really causing these failures, rather than accepting rote explanations for them. GreedyChain.com is committed to providing practical advice for those looking to gain an edge in the Web3 world. This detailed analysis is instrumental in understanding the new political environment.
The Pitfalls of Predatory Monetization and Unsustainable Tokenomics
In fact, predatory monetization techniques are the number one cause of shitcoin games’ deaths. These manipulative tactics poison player trust and enjoyment and push them away. The majority of these projects use such manipulative tactics as loot boxes, pay-to-win mechanics, and aggressive microtransactions. These strategies can immediately turn a pleasant gaming experience into a maddening chore. Consequently, players can experience burnout and become disengaged with the game entirely.
Even further complicating things is the fact that there is an over-reliance on extrinsic motivation. When gaming becomes a quest to earn cryptocurrency or other digital rewards, players’ motivations change. Consequently, the simple pleasure of just playing diminishes in spite of all this “fun”. Players quickly get too consumed with just trying to make money causing gameplay to feel like an endless chore. This shift in focus usually results in a departure from true engagement and the eventual death of the game.
The third major pitfall is remote token utility. If the in-game token doesn’t play a significant part of the players’ experience, it doesn’t provide an immersive or meaningful application. Otherwise, it just becomes a speculative asset. Project without utility, and users quickly lose interest. This decrease in engagement can lead to decreased token values, which leads to a further negative feedback loop.
The Dangers of Premature Tokenization and Ponzi-like Economics
Tokenization is a dangerous play short term. Introducing tokens before a game has matured enough to develop a strong foundation and player base can be devastating. It can generate hype fiction for a project, paving the way for a rug pull network system. The 2017 blockchain ICO bubble is a perfect cautionary tale. It points to the dangers of hype-fueled initiatives that don’t have any teeth.
The problem is that some crypto games achieve this unintentionally through tokenomics that end up looking like Ponzi schemes. In these models, early investors are subsequently re-paid through the financial loss of later adopters, and thus impose an economic structure that cannot be globally sustained. This beautiful type of system inevitably falls apart when the flood of new players and investment dry up. Axie Infinity illustrated the sharp decline in daily active wallets following its peak. This decline underscores the fragility of unsustainable economic models.
When tokens are deployed prematurely it is difficult to assign them any inherent value, making them subject to speculation and hype. This internal pressure can lead to a collapse of the token’s value if the project is unable to execute on its stated vision. Premature tokenization can lead to an overemphasis on tokenomics, distracting from the development of a robust game with engaging gameplay and a strong community. Launching a project’s token before it’s ready can be an even bigger disaster if the token doesn’t catch on. This costly mistake may lead to a loss of token value which is usually impossible for the project to recover from.
Balancing Blockchain Integration with Appealing Game Design
The real conundrum for builders in crypto gaming is mastering the sweet spot where blockchain features add value without compromising a fun, engaging game experience. This is why it’s so important to steer clear of exploitative designs that put player profit first. Xbox head executive Phil Spencer has criticized blockchain games that feel "more exploitative than about entertainment," emphasizing the importance of prioritizing player enjoyment.
Developers need to be sensitive to players’ fears around the introduction of blockchain, too. When Discord proposed adding Ethereum integration, users protested the addition of cryptocurrency, and Discord retreated. As this crisis illustrates, heeding player concerns is critical. We need to make sure we’re responding to legitimate worries about security, environmental concerns, and avoiding any potential for scams.
Lessons from Failures and Emerging Successes
Former MMO developer Damion Schubert has consistently argued that the bulk of pitches for games with NFTs would be just as possible without them. This view underscores the need for greater attention on building gameplay value that does not require or rely on blockchain tech. Ubisoft’s announcement of Quartz, a blockchain-based system letting players buy and sell in-game assets, was promptly crushed with fire. Liability worries and a flurry of cybersecurity threats underscored the critical need for transparency and thorough risk analysis.
According to a survey, 72% of developers said they were not interested in cryptocurrency as a payment tool for games. This suggests that developers shouldn't feel pressured to integrate blockchain technology if it doesn't align with their game design vision.
Returning to our example, emerging successes like Off the Grid provide important lessons. Surveys No surprise, both these projects aim to create fun gameplay first. They creatively and purposefully utilize blockchain technology, exemplifying that developing fun and engaging crypto games is possible.
To build more sustainable crypto games, developers should consider the following:
- Focus on creating engaging gameplay that is fun and rewarding, regardless of the blockchain aspects.
- Design tokenomics that are fair, transparent, and sustainable in the long term.
- Prioritize player experience and avoid exploitative monetization techniques.
- Listen to player feedback and address concerns about blockchain integration.
- Be transparent about the use of blockchain technology and its implications.
By understanding why other crypto games have come and gone, developers can increase their odds of creating crypto games that last forever. Fostering a player-centric approach will take them one step further toward that goal.
