Compilation of the original text: Metaverse Special Attack Team

Compilation of the original text: Metaverse Special Attack Team

Jon Radoff, CEO of Beamable, a creator platform that develops real-time games, is a veteran of the game industry. The "Building the Metaverse" blog he presides over is a rare original platform in the industry that outputs metaverse views.

Jon Radoff wrote this article to clarify the misunderstanding and reality of blockchain games for the industry, and to correctly understand the innovation and boundaries brought by blockchain to the game industry.

We’ve seen an explosion of interest in blockchain games across society — and an equally explosive increase in misinformation, confusion, and sarcasm.

My purpose is to help all game makers, no matter what business model they imagine. If someone is serious about building a game with blockchain, I will definitely support their success.

What I hope to share here is primarily to provide a "behind the scenes" view for developers who may be considering blockchain games, and for anyone curious about the dangers and opportunities of the space.

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Myth: Games with open economies are "evil"

At its core, a blockchain game is nothing more than a game with an "open economy". Before there were digital games, you could buy a board game and resell it afterwards. In fact, for most of video game history, you could buy a console, box, or machine and resell it to whoever you wanted -- just like any other personal property. Games like MtG and Pokemon are specifically designed around the open economy of our real world, where players end up trading (yes, speculating) individual game cards.

It's only with the recent advent of online games based on virtual worlds that we're starting to see how games are played around closed economies. For example, most "massively multiplayer online role-playing games" (MMORPGs) don't allow you to trade important items with other players -- most mobile games don't even allow you to trade currency. That's because the experience (and business model) of these games is entirely based on a finely tuned achievement progression system.

Blockchain is a publicly replicable ledger that enables an open economy around games. They can even provide an ecosystem for interoperable items between a bunch of games that choose to cooperate by providing a transparent, provable and consensus-based mechanism for games to exchange virtual property through decentralized markets and exchanges .

These games will be different from most current digital games.

An open economy is ethically and morally neutral. Nowfirst level title

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But people don't actually like the economy of "Magic: The Collection"

Now, some people say that they don't actually like an open economy like Magic: The Collection either - they'd rather not keep evolving trump cards and making previous decks useless. In other words, cards like Black Lotus shouldn't be so rare. Debating the benefits of any game design is perfectly legitimate, though I urge you to consider what it takes for a game to last long-term; there are plenty of collectible card games out there that no one plays, usually because they Unable to sustain its ecosystem for long. Still, the possibility of a design that some people don't like is not what makes an open economy evil.

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Reality: adrift

It's really bad, but there are a lot of charlatans in the business right now. They scam people out of their money and ruin the integrity and hard work of many.

It's similar to some of the early crowdfunding games; no doubt, if you've been following game development for a while, you can think of a crowdfunding game, get some money, and run away. What makes crypto projects different is that they often achieve more anonymity under the lure of liquidity (i.e. supporters believe they can exit or speculate in addition to supporting the game they are excited about), which makes the problem even more difficult. serious.

Eventually, crowdfunding for games became less popular as there were so many games that were not successfully backed. In some ways, this is what you should expect to happen - game development projects fail at an alarming rate because delivering a game (let alone developing a good one) is so damn hard to do.

Selling NFTs or tokens to back a game is essentially a form of crowdfunding on the blockchain, so it increases the risk of dealing with bad actors who have no intention of building.

That said, I don't think you should rule out supporting your favorite games through NFT or token sales. But learn what all of us have learned early on in crypto: do some due diligence and see if their experience matches their ambitions. Good game development teams aren't afraid to put their reputations under scrutiny.

In fact, there are likely to be pseudonymous teams that are worth supporting—often, they've earned a reputation as creators over time (and have been able to verify their identity through a public posting platform like Twitter). Their reputation is also very valuable to them.

And if the reason you're supporting a project is speculation -- not the fun you might have in your gaming experience -- realize that's very dangerous.

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Misunderstanding: Eco-environmental impact

Surprisingly, this narrative continues to circulate around gaming, but it means that people don't really understand the difference between the gaming and digital art markets - or what has happened with blockchain technology in just the past year what a change.

First, there are two main blockchain algorithms: Proof of Work (PoW) and Proof of Stake (PoS). PoW requires solving large-scale cryptographic puzzles to achieve consensus, and the Bitcoin and Ethereum mainnets use this algorithm. It consumes a lot of energy to perform these operations.

Blockchain games are not built on the Bitcoin or Ethereum mainnet. Most games are built on proof-of-stake blockchains like Solana, Avalanche, Hedera, Polygon, and Immutable X. PoS does not require any more energy than any other cloud-based service, such as the back-end technology of anything you are reading online right now. Games build on these chains for pragmatic reasons, including reducing energy consumption, as well as high throughput for micropayment microtransactions and faster blockchain consensus finality.

In fact, if one were to look at the total energy utilization of a popular game: then the total energy consumed by your players' GPUs on the frontend would end up being millions of times greater than the negligible energy consumption of the PoS backend.

If you want to criticize proof-of-work algorithms like Bitcoin, or other non-gaming applications of NFTs (such as digital art collectibles, which are indeed mostly running on the Ethereum mainnet), then this is fine-just realize that it is different from what is happening today. The game built doesn't matter.

One question to consider is:first level title

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Reality: Early Projects Often Look Bad

Let's be clear: game development is a craft. This means it depends on constant refinement, learning and iteration.

In the earliest stages of a new market, business model, or genre, few things seem perfect.

Even games that are very popular today looked pretty bad in some of their earliest prototypes.

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Misconception: “NFTs are just links”

"With NFT, you don't really own anything, you just have a token in a ledger that points to a JPG format file in some random server somewhere.", first of all, "JPG in a random server" applies in digital art collections. It's not particularly relevant to what's going on in the game. It's also a little unfair to what it means in the art market, but that's a discussion for another article.

Here's what blockchain can do for gaming:It preserves the state and transaction history of the game economy(Usually done with JSON fragments, which is a good way to serialize this kind of data).

Individual games will determine how data in the blockchain is interpreted. This includes deciding to block exploitation of items they don't like. This means that, yes, many game companies will likely be involved in things like blocking the use of items through the wallets of bad actors.

Do you "own" it? We're getting into a bit of a philosophical debate here: but if "owning" means you have an agent who can decide whether to dispose of another asset or token with a third party - then yes, you "own" it. You own it just as you own a Magic: The Collection card that you choose to sell to another person, even though you don't own the copyright to the card work itself. The paper cards it prints are not much different from the tokens on the blockchain.

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Half-truth: If the server the NFT points to goes offline, you lose the NFT

It is possible for an NFT to point to a URL on a server, and if that server disappears, the contents of the NFT are gone. However, ownership of the content represented by this NFT remains the same.

There are alternatives to relying on centralized servers. For example, blockchain-based storage systems such as Arweave provide permanent decentralized storage that does not depend on whether the server remains running.

The deeper problem with games is that the server problem is compounded: this is a game server, after all -- not simple file storage. And that does introduce more complexity. Since we haven't seen the entire lifecycle of a blockchain game becoming popular and then shutting down, we can't be sure how this will play out in all cases. But it has several possible developments, not entirely negative:

• Even if the game disappears, there can be some sort of cosmetic or trophy cabinet continuity of game content that will live outside of the game (I have more discussion on this topic below, as it is controversial in itself). There are already a number of NFT-based showrooms and galleries popping up to do just that — and interoperable, cooperative gaming networks could offer more than mere dress-up, too.

• Game servers can be open-sourced, providing a means of continuity by simply continuing to operate within the same economy within the blockchain.

• The community can build their own game client and/or game server, allowing the game to continue (assuming there is no block to the licensing of the NFT, and the owner intends to do so after the game goes offline).

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Reality: Open economy games are different from closed economy games

People often point out how previous games have tried semi-open economies (such as the unsuccessful auction house in Diablo 3) and failed. They usually don't seem to remember that games with an open economy like Magic: Assemblies exist.

Here's the problem: games with an open economy require a different game design. Most of them will not succeed by installing an open economy (blockchain) on top of a closed economy MMORPG. While there are a few exceptions, most MMORPGs that try to move from subscription to free-to-play fail for similar reasons - game design is too reliant on a business model.

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Myth: Existing technology can solve this problem better

The usual narrative is that we have database technologies that are faster, more scalable, and more performant than blockchains. While this is definitely true, this is not the problem that blockchains solve.

The problem it solves is to provide an ecosystem of people and applications with the ability to exchange value with each other without the need for a centralized gatekeeper.

Before the blockchain, the main solution for creating an open economy required a centralized service providing an API for use by all participants. Even if you trust these services to run reliably forever, you get a pivoted centralized model where everyone builds on the same economics. This exists in Second Life and their Tilia payment platform, and to a limited extent on Steam today.

"But didn't various scripture systems, like the one created by George Pullman, do the same thing in the past, and blow everybody up?"

No, that's a centralized value exchange system, not a decentralized one. It relies on the credibility and control of a central authority.In fact, this is one of the main reasons why many people love decentralization.

Centralized systems are structured as hubs and spokes. This means that every game is built around hooks into a single service, where you constantly send and receive all transactions through them. These networks are more restricted in nature.

In the case of games, blockchain allows creators to take advantage of decentralized marketplaces, exchanges, and other application code that they don’t need to develop themselves — and don’t need to apply to publishers for the right to participate. Whenever you need to rely on some kind of centralized service (such as publishing and selling your game or its in-game items), you give them the ability to extract high rents for the service. You're also at the mercy of their whims about what's right and what's not. The goal of blockchain is to enable permissionless development, where small teams can dream big — relying on a growing ecosystem that they don't have to build themselves.

In fact, there are entirely new ways games will be able to expand their ecosystems by modifying or even open sourcing their client software. We already know that people like to modify the user interface, levels, or add functionality. (If you don't know, take a look at Minecraft and Terraria and the dozen or so other games you can find on CurseForge). The blockchain extends modding to include modding that interacts with the economy (custom auction houses, charts, etc.), and even outsources gameplay to the community itself (as LootProject is trying).

The result of gatekeeping is cumbersome rent collection, which will hinder innovation and creativity.

Blockchains are inferior to centralized databases in terms of performance because they require consensus with all validators. And this is where the power of the blockchain lies. Fortunately, some newer PoS blockchains are highly performant, so the inherent inefficiency of this consensus doesn't prevent a good game from being made.

“But wouldn’t a decentralized economy mean a Wild West where everything can be done?”

No, each game can still choose how it wishes to interpret digital assets from the blockchain; their authenticity can be checked by checking the provenance of items and making sure they come from certain wallets. Items that are the subject of fraudulent sales can be blocked. Items can be instantiated with their own game properties and modified to accommodate evolving game systems (much like the rules affecting the Black Lotus in Magic: The Assemblies change over time).

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This is a legitimate concern. This criticism is usually directed at OpenSea: basically "old wine in new bottles" - they are creating a new centralized ecosystem that people rely on to buy/sell their digital assets. And they've also started introducing rules that allow them to control the sale process and even freeze assets.

If eBay is an example, the online auction platform has indeed become a (mostly) winner-takes-all market.

Platforms like OpenSea attract a lot of attention. Their value lies not only in the utility they provide, but also in the size of the audience they leverage. Since the seller's goal is to get the most bids, it does naturally gravitate toward the largest platforms. In this sense, there is not much difference from Web2.

It should also be noted that critics and curators will continue to play a role. Essentially, OpenSea is currently the largest curator. But there are also curators like SuperRare that specialize in specific types of content, and we'll likely see the same happen in games.

However, the basic structure of NFTs is such that the ability to transfer assets from one sales platform to another is much less frictional. We have seen that new platforms like LooksRare can quickly replace platforms like OpenSea. I believe we will also see the emergence of fully on-chain auction systems, with the potential to aggregate auctions across the ecosystem - enabling maximum auction bids without requiring everyone to enter the same auction house.

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Half-truths: Gamers don’t like NFTs

They're definitely going to have a backlash against NFTs.

This is the classic innovator's dilemma: adding a new business model to an existing business carries a high risk of alienating existing customers. This is the problem that Ubisoft has encountered recently, and it is also the problem that "Odaily War Frontline" encountered when trying to add free-to-play elements to high-end games.

Part of this is a branding issue - unfortunately, NFTs have acquired a negative reputation due to misunderstandings related to the ecological impact of games, and due to the reality of bad actors (criminals) who take advantage of naive people.

While there is a strong group of players who don't want to see NFTs added to their games, there also seem to be plenty of players who are receptive to the idea.

Now, there are some criticisms of the above research: the selection criteria of the survey was biased towards a large number of "interested" players. That's because the survey's selection criteria required that people either own or had owned NFTs, or had heard of them. We can assume that there are still a large number of people who don't know what an NFT is (or are so unsure that they say they don't know). So maybe there's a lot less interest in the idea than 53% in the gamer population. However, that doesn't preclude evidence that a sizable fraction of players are able to pick it up. Even with just 1%, one could build an entire industry around it.

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Myth: All NFTs will be interoperable

The core idea here is that we will have the ability to buy NFTs that represent items in one game that have some utility in another game.

Sometimes, the confusion lies in people claiming that this means that all NFTs will provide interoperability.

Some will, some won't. In cases where they do, they may be restricted to certain game worlds and avatar systems. Some of these will be single worlds, some will be galaxies of cooperative worlds, and sometimes it will be large networks united by common avatar systems.

Interoperability does have many challenges. When we talk about interoperability, there are actually several issues.

• Behavior: Things may work differently in different worlds

• Meaning: Things may even mean the same thing in different worlds

• Demo: Things need to look different between worlds

• Persistence: Preserving Economic Accounting Across Worlds

• Connectivity: communication and networking between worlds

Blockchain actually only solves the problem of "persistence". It's pretty good at envisioning multiparty interactions without the need for a centralized rent-collecting agency (cooperative worlds, interoperable marketplaces, galleries, economic applications, etc.).

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Misconception: Players Don't Care About Interoperability

Sometimes this is pointed out more as a business critique: that interoperability with NFTs is a solution-finding problem. Players don't care. Or rather, it would be a bad implementation and people wouldn't like it.

We have achieved interoperability in the walled garden ecosystem. For example, Second Life — despite the exaggerated reports of its demise — still has a thriving economy in which creators build content with each other and take it from one place to another. It’s happening at scale in Minecraft, it’s happening in Roblox (more than 250 million monthly active users by the end of 2021), and it’s happening in VRChat now. For a long time, we have achieved interoperability at the modification level of games such as "World of Warcraft", "Fantasy Westward Journey", and many other examples.

So we already know that players are interested in interoperability within the walls.

Will we see interoperability happen between crazy worlds with different aesthetics, or different worlds with different game rules? Probably not, but that just ignores the interest in taking your avatar from one world to another, as that already happens in more social settings -- and between co-op game worlds.

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Unknown: NFT has a life outside the game

Sometimes, blockchain advocates say, the value of an NFT will outlive the lifespan of the game.

Typically, this longevity manifests itself on two levels:

• Resale value to another player when the game is booming

• Retention value once the game is no longer in operation (i.e. "collection" value).

We know that players already have a desire to resell game assets -- both allowed (open market games like Magic: The Collection) and illegal (using World of Warcraft's third-party marketplace). Whether games like Axie Infinity can keep this flywheel spinning will depend on whether they keep long-term enjoyment high enough to continue to attract players. There's probably room for a game like this, just as there's room for some enduring collectible card games (and being a digital product, you'd think there would be more room due to greater usability, accessibility, and choice) .

Once a game ceases to exist, the utility value of the item is gone, only the affinity value.

This means that once an item is no longer available as a playable item, you'll see its value drop...but that doesn't mean it loses all of its value.

Personally, in some of the games I've played in the past, I wish I could have kept some digital collectibles from the gaming experience. I don't know if enough people care about this.

I don't know what the long-term value of these collectibles will be. Nobody knows. But I do know that collecting things is not new, and a lot of people want to do it.

Maybe there will be interoperability cases where games cooperate with each other and have more utility than simple collectible value. Again, this is an unknown - time will tell how important this is to the ecosystem.