How Web3 Improves the Gaming Experience
Our Head of Web3, Lucas Ko, outlines how web3 makes gaming fairer and will benefit METAPIXEL’s users
Gaming is serious business — the global population of gamers surpassed 3 billion, and the global gaming industry reached $280 billion in size. The gaming industry has become bigger than the film and music industries combined. Games are being made into blockbuster films, and gaming content dominates YouTube and Twitch.
The unfair economics of gaming
The F2P (free-to-play) model, which allows players to start playing games for free and encourages them to purchase paid items, was a major paradigm shift. F2P was a key factor in the explosive growth of the industry, hand-in-hand with the social media and mobile era. In-game purchases, which provide gameplay and performance benefits for players willing to pay more, have become a lucrative business model for game developers, allowing the industry to grow rapidly. This model is commonly referred to as P2W or pay-to-win.
Despite the debate over whether P2W can be justified in terms of game balance, many players accepted, happily and not so happily, P2W’s existence. These players could not easily quit their games of choice due to the social connections they made online and the time and money they invested in the game.
Game companies preyed on this mentality for their own profit, leading to a distorted industry ecosystem where 1% of players make up more than 50% of the sales volume. This often results in developers being forced to choose between satisfying the top 1% or the remaining 99% of their players. Regardless of which choice they make, there is inevitable dissatisfaction from the neglected side — which leaves developers between a rock and a hard place.
The driving force behind the existence of online games is players’ intense desire to play and interact with each other. Online game communities create diverse, colorful cultures that reflect the characteristics of their members. In order to create and nurture these unique, organic cultures, players establish their own rules and reinforce them. This results in living, breathing socioeconomic structures.
People gather and socialize in virtual spaces using avatars as a proxy for their true selves. They go on adventures that otherwise could only exist in their fantasies and accomplish incredible goals. While doing this, players cooperate and compete in a myriad of ways according to their characters and personalities.
Players themselves become new content, creating endless things to do.
Online gaming is a microcosm of real society, especially in the MMORPG genre. The game itself takes on a social nature and projects real emotions and experiences into the virtual world in an impactful way. The social problems we experience in real life are often recreated in-game. For example, not being able to join a guild if you lack certain stats resembles being unable to find a job due to a lack of qualifications in the real world. Players who have grown to the highest levels and farmed the best endgame items gradually reduce their playtime and leave the game, which can be seen as a parallel to retirement in old age.
Income inequality and unequal distribution of wealth also occurs in games. Because of this, game economy specialists are often forced to decide what they consider to be the lesser of two evils:
- Selling more items to core players to increase profit, even if it worsens game imbalance.
- Providing more benefits, often at little to no cost to the player, to newcomers to increase the total number of players and extend the game’s lifespan.
Web3 gives us the tools to analyze and solve these kinds of problems.
Web3 provides on-chain data that is trustable by its own nature — regardless of whether developers and users actually trust it.
It also provides important use cases where on-chain data can be harnessed.
Transparent economic data builds trust
Fiat and in-game currency both serve as a measure of value and as a medium of exchange. While fiat as a store of value is an absolute measure of the real-life economy, in-game currency is a relative measure of wealth between users.
Software determines reality within online games, so it is relatively easy, practically speaking, to alter in-game economic systems. It’s been common practice for developers to drastically tweak systems around in-game currency, such as lowering the gold value of certain levels to adjust balance, or lowering the cost for enhancements if users find enhancing items fun.
However, since all of these processes are completely undisclosed and decided solely by the developer, trust issues are inevitable. If the supply and distribution of in-game goods are controlled by a system that makes it difficult for humans to interfere and the results are recorded on-chain to provide information transparently, users will be able to fully trust the game economy. By doing so, user assets can reflect accurate economic data and subsequent economic activity, allowing their value to be determined more accurately.
Bitcoin was born as a technology to replace trust between people. By introducing blockchain technology not just into in-game currency but into the overall game system, we intend to create an ecosystem capable of growing and functioning sustainably.
Token demand determines token supply
When certain classes in a game are overpowered or items farmed by macro bots flood the market, users can feel a sense of deprivation. To structurally address this problem, web3 games emerged as a solution: web3 games release development roadmaps and operate their game economy as promised in their tokenomics. But none of them were able to accurately predict the future demand in their games.
Tokens were supplied to games in predetermined amounts, regardless of actual demand. This had negative consequences: in some cases, game assets became too expensive for new players to join the game. In other cases, the opposite happened and game assets became too cheap which reduced the fun and challenge of game content, making players leave the game. Players leaving again reduced actual demand, resulting in a drop in token price, creating a death spiral and negatively impacting token holders.
In order to achieve a sustainable game economy, tokens must be supplied flexibly according to changes in real demand. With such a foundation, there will be reduced user churn and continuous user inflow.
Demand for tokens in-game can be figured out by data such as the number of items dropped or the number of quests completed, and can be predicted to some extent depending on play activity.
We’ll go more in-depth about this model in our upcoming post about tokenomics!
A fair start for everyone
It is difficult for newcomers to compete in the same environment as players who joined the game much earlier than themselves. However, there is a solution to this: By adjusting the starting line and by making players compete within groups of players with similar stats, games can create motivation for players to play on.
If new servers are opened at set intervals so that new players can play with others starting the game at a similar time, we can provide an environment for players to start on an even playing field. Each servers’ age can determine the difficulty of the quests and the rewards that can be acquired, which eventually leads to players migrating to servers that meet their needs the best.
Everybody can play the game in a fair way, at their own pace.
Making the most of Web3: Incentivize Contributors
With the help of advanced technology, game production has become easier and more cost-efficient. Moreover, as games are distributed online and can be downloaded from online storefronts anytime, access to new gaming content has become easier than ever. However, one crucial resource, time, is limited to 24 hours a day — no matter how much media people wish to consume, there is a practical limit to demand. There is a never ending supply of games in fierce competition for players’ time and attention.
In this environment, in order to maximize profits, many game developers have chosen to cater to whales, maximizing revenue from the players who are most willing and able to pay. This approach is not sustainable, because a majority of players have to accept unwanted updates or end up leaving the game.
How can we survive in this exhausting infinite competition? I found a clue as to how in the streaming market. Low-budget content created by individual content creators in the streaming market often outperforms big-budget content produced by major studios and production companies. This is because streamers deliver a simple but essential value to online communities by actively communicating with fans to create the content that fans want.
The gaming industry should work like this, too.
Web3 in particular has great potential in this regard, because it provides a system that secures ownership and benefits for participants within the ecosystem.
METAPIXEL will provide incentives for participating and contributing to the community, as well as for encouraging active communication between users and METAPIXEL. Through open and responsive communication, METAPIXEL will be able to truly reflect users’ needs in its service and content. Users might even be able to discover needs that they didn’t even know they had.
As a gaming platform powered by its participants, METAPIXEL will seek to become an ecosystem that uses web3 technology and the ethos of web3 to empower users.
About Lucas Jeonghwan Ko
Lucas Jeonghwan Ko (Twitter) is the Head of Web3 at METAPIXEL. He has over 20 years of high-level experience in the game industry in both technical and management roles, previously working at companies such as Nexon and NeoPle.
Notably, he was Team Lead of the MapleStory development team and Team Lead of the Dungeon & Fighter development team.
Now, he’s excited to carry his expertise and experience into the world of web3 gaming at METAPIXEL, by creating an ecosystem of high-quality games with open economies.
Links
METAPIXEL Brand Site: METAPIXEL: the Complete Gaming Metaverse
METAPIXEL Twitter: METAPIXEL (@Metapixel) / Twitter
NPIXEL Site: 엔픽셀 — NPIXEL
