Question 1: Are You Using a Blockchain for the Right Reasons?
The first and most important question to ask yourself as an aspiring web3 games developer is “Why?”
Blockchain technologies can be leveraged in myriad use cases, many of which are still actively being explored. Web3 (the overarching term for a decentralized internet built upon blockchains) is reshaping not only the games industry, but also music, finance, sports, and much more. Given that gaming already sits at the intersection of several other creative, technical, and business macro trends (e.g. the Creator Economy, cloud gaming, UGC and modding, instant games, etc.), it is imperative for leaders in the space to understand what it is they’re getting themselves into and why. The opportunity cost is just too large to ignore.
Fundamentally, the changes being driven by web3 can be boiled down to a discrete set of competencies from which nearly every recent innovation in the space is derived. Most prominently, these include verifiable ownership, immutability, decentralization, and security. When applied to games ecosystems, these concepts can be further distilled to examples such as ownership and chain-of-custody of digital assets, immutable records of game activities, or fully transparent game operations (answering player questions such as “what are the true odds of receiving this reward?”, or “how are developers spending my money?”), among others.
Collectively, web3 enables what’s known as “Community Economics”: a system of cooperative economic relationships between users, developers, investors, and other participants, spanning both the physical and digital worlds in an open, trustless, and permissionless manner. In other words, a shift from centralized, tightly-controlled experiences to decentralized, open economies where no single party owns the full tech stack.
There are many reasons to aspire to create a games business that can deliver on this promise. One might argue that this sort of community-driven operation creates a healthier two-way relationship between developers and players. Even if you don’t subscribe to that school of thought, there are benefits to empowering players with ownership of their efforts, as opposed to locking their earned or purchased items into a walled garden. There are also important philosophical reasons for wanting to operate games more transparently, instilling a sense of fairness, trust, and security in the player-developer relationship.
In many ways, Community Economics boils down to one key word: cooperation. Whereas traditional games today can be described as one-sided, at best (or even predatory, at worst), the winners in blockchain gaming will embrace cooperation with the many players, gaming communities, investors, and other stakeholders participating in their ecosystem as a key element to success. In other words, a rising tide can lift all boats in blockchain gaming.
A critical component to achieving sustainable Community Economics is interoperability. Interoperability allows for the exchange of information between multiple blockchains and guards against the establishment of the sorts of walled gardens that players often encounter in web2 gaming. After all, having some games on Ethereum, others on Solana, yet more on BSC, and so on is really not that different from having Playstation or Xbox console exclusives. As developers, you are effectively limiting your total addressable market by locking your game into one platform.
Interoperability is a boon to the entire community of blockchain gaming:
For developers, interoperable games allow for user acquisition and marketing across a variety of blockchain ecosystems. It also enables payments in multiple cryptocurrencies. By ascribing value to players’ digital assets, developers provide incentives for these players to join their network.
For players, interoperable games enable freedom of choice. Players can interface with the game through a variety of digital wallets, and access liquidity for assets earned in that game regardless of blockchain.
True interoperability is easier said than done and will take many years to play out in various ways, but it’s nevertheless an inspiring idea that many in the ecosystem are aiming to build toward.
Another benefit of blockchain gaming is composability. Often mentioned in the same breath as interoperability, composability is a property of blockchain development that allows anyone in a network to take existing applications or smart contracts and modularly build on top of them in new and interesting ways.
You may have heard composability referred to as “money legos” for this reason. Different smart contracts can be swapped out and stacked together in a variety of ways to meet user requirements. This is a powerful concept that can enable faster development and iteration. To borrow a phrase from a16z general partner Chris Dixon, “composability is to software as compounding interest is to finance.”
Finally, it’s worth calling out that you don’t need a high falutin ideological explanation for wanting to leverage the blockchain. Maybe you just want to “buidl” and experiment and break stuff and iterate with a new set of technologies and tools. There’s nothing wrong with that, either.
To be clear though, there are some bad “why”s: using web3 as a gimmick to raise money more easily, to get rich quick, to give yourself a big cut of a token supply, and so on. As long as your “why” is rooted in building something great for the end user (even if just an experiment), we’re here for it.
Now, let’s talk about games!
Into the Void: Where Crypto Meets the Metaverse (Naavik) – Link
Animal Crossing: New Horizons and the Limits of Today’s Game Economies (Forte) – Link
What is Web3, Anyways? (Wired) – Link
The Creator Economy: How We Got Here, and Where We’re Headed (BITKRAFT) – Link
Interoperability and composability within Ethereum (Linda Xie) – Link