In the Token Gamer Discord early today, a brief discussion started on whether developers of a blockchain game can ever truly walk away or shut a project down that they have created. It was an innocuous enough observation, but it’s one that I cannot escape now I’ve thought about it.
Blockchain Games: Everything an Investment
We have explored the subject on several podcast episodes and have floated a number of theories, but what I consider to be my best guess at present on the question of why people spend so loosely in crypto is the above-embedded tweet. That is, everything you buy in the crypto world feels like an investment.
There are few industries in which you can spend money and expect no financial return from the purchase whatsoever, but gaming is one of them. Where once you might gather your game cases and CDs and take them to trade-in (I am showing my age here), the digital did away with that. So for some time, if you bought a game — or even worse, something for the game like a skin — that money was gone.
The extent of this “everything an investment” philosophy is exemplified in blockchain gaming. It should follow suit with ordinary gaming in that the money you spend is an exchange of currency for fun. My Dad has a system where he will buy games but then require a certain number of hours out of them to justify their price, and I doubt he’s alone. Blockchain gaming is a different beast.
The amount of money spent on blockchain games of all descriptions is eye-watering. Take Farmers World — a hugely successful clicker Play-to-Earn (P2E) game on WAX — it has over $200 million in NFT sales. There is undoubtedly a multitude of reasons for this, but I would be as bold as to say that the chief justification for most purchases in blockchain gaming is that they can be considered an investment. This is true not only insofar as you can resell the NFTs, but that many give access to direct or indirect income too.
The Rise of Play-to-Earn and Its Troubles
The rise of P2E games has been as uplifting as it has been unexpected. Countries that struggled with a liveable income during the pandemic — the Philippines for instance — found an unlikely solace in games like Axie Infinity. There are many stories of P2E games acting as a lifeline and it has been great to see. However, with the popularity of Axie came a problem for it: the cost of entry to get started was so high that it was prohibiting the very types of players who helped make it a success
This was overcome to an extent by Axie academies where the initial NFTs you needed to start earning were loaned to a player. Nevertheless, it brought about questions of the fledgling P2E genre. What has followed has been a torrent of P2E games from primarily indie developers and issues have arisen en masse.
I have been on a campaign to jam my coined term “rug slip” into the crypto vernacular after I noticed that not all “rug pulls” were alike. Rug pulls are essentially projects that aim to raise money selling NFTs and then when they have hauled enough money, they vanish into thin air; that is their intent. The issue was, with blockchain gaming being new and indie-driven, many projects were being called rug pulls when they were actually the result of accidental collapses; mismanagement of the game economy, or the introduction of exploitable mechanics. The result is the same: the price of the game’s token and its NFTs nosedives.
With P2E being indie-driven, many development teams are inexperienced and then, the successful projects, are thrust into unthinkable wealth quite suddenly. Furthermore, they’re often trying to cultivate intricate mini-economies for their games which can rise and fall in hours. The desperation of blockchain gamers (read: investors) to get into the next big project early to reap the juiciest returns leads to the unusual scenario of wild and sudden success for often inexperienced have-a-go-developers.
The indie developers are the lifeblood of blockchain gaming and this is by no means meant as derision towards them, but rather highlighting the mismatch of success (both in monetary terms and in playerbase), how suddenly it can arrive, and the relative lack of necessary experience in the field. And then there is the ferocity of backlash that will occur even if the rug slips rather than is pulled. That is, even if the project abruptly freefalls to its death without deceitful intent from the developers, hell hath no fury like a blockchain gamer (investor) scorned.
The question that initiated this article is in some ways a similar discussion to that of the rug slip, but with a wider scope. If money can be made in a game — and in some instances, a living wage — and therefore the game’s assets (token, NFTs including land) could rightly be considered an investment, do the game’s developers have a special and new responsibility to their players?
The Ethical Dilemma of Play-to-Earn Games’ Direction
The creation of a game doesn’t seem too dissimilar to the creation of any product in that it must do what it says it will do. Not everyone will enjoy your game and that isn’t really the developer’s responsibility, but it must be of a standard that is expected from pre-release materials. When the game has run its course and has a dwindling playerbase, the frequency of content and patches usually slows down and in extreme cases, the servers are turned off.
Now, contrast that with P2E games. The games in this space are all still so young — even the earliest projects — but we are beginning to see games die in familiar ways. However, when playvestors (coining it) see your game as a way to make money, the landscape changes. There is often inordinate amounts of money being invested in a project and if the game stops receiving updates or the roadmap comes to an end, what happens next?
Any whiff of a P2E game’s demise — even if mere rumor — and the price will likely reflect as much. In CryptoMines’ case, where the developers unwittingly held most of the token’s supply, the price of their $ETERNAL token went down 99% more or less overnight. This is how quickly the tide can turn, but the decay can be more of a slow bleed if there’s a lack of content. The FUD (Fear, Uncertainty, Doubt) can grow and it has a habit of snowballing once it gets going.
So, what is going to happen when the current and future P2E projects want to wind down? Nothing lasts forever, and unfortunately, we are seeing more and more that indie developers getting suddenly wealthy isn’t always great for their motivation. The issue is, how would one go about the shuttering of the doors or the abandonment of the project? Announcing either would have catastrophic ramifications on the project’s prices which directly impacts how much a player can earn.
There is simply no clean dismount. Interestingly, though, I believe there is a larger and more important question over the ethics of abandoning or closing a P2E game. If I’m being kind, I wouldn’t say this is an issue for all blockchain games, even if it is possible to earn from them. The issue arises from games that advertise that they are P2E. If part of your game’s allure is that its players can E while they P, the unexpected removal of it could be severely detrimental. If Axie had decided $1B in sales was enough, tipped their caps, and wandered off in early 2021, communities in the Philippines might have gone hungry. That isn’t hyperbole; players become reliant on the income they could earn in the game.
So, the question becomes: do developers have a larger duty of care and responsibility towards their players if their game is P2E by design? That is, the game has been designed in a way that players can use it to earn money, not simply that it is possible to do so.
I don’t yet have an answer, but real-world examples of this problem are lurking outside our door like a big hairy delinquent and I’d be surprised if we escaped 2022 without him gaining entry.