After ChinaJoy GameFi, Web3 Game, Full-Chain Game… What is the Ideal Model for Cryptogames?

In the theme discussion of ChinaJoy, various stakeholders are trying to avoid using terms like X2E or GameFi to describe our on-chain games, and instead use Web3 Game to describe them. This is certainly progress, indicating that many institutions and game developers have finally realized that the core of Web3 Game is not a Ponzi scheme of farming, but a real entertainment form centered around games. Although everyone has not completely abandoned this money-making beast that can quickly accumulate wealth, they have finally weakened the financial speculation behavior in Web3 Game.

Recently, Go2Mars participated in ChinaJoy2023 in Shanghai, and discussions about Web3 games in the game event from traditional game companies were endless. After participating in several meetings on traditional game globalization and Web3 games, we can see that both overseas traditional game giants like Ubisoft and domestic game giants like Razor Edge Entertainment have a deeper layout for Web3 games. Bandai Namco and Sega have also jointly launched the game blockchain Oasys, and there are various types of games, including chess games (such as Mahjong Meta and Immortal Games) and shooting games (like Matr1x), that have attempted to integrate blockchain technology.

Of course, what is different from the past is that in this theme discussion, various stakeholders are trying to avoid using terms like X2E or GameFi to describe our on-chain games, and instead use Web3 Game. This is certainly progress, indicating that many institutions and game developers have finally realized that the core of Web3 Game is not a Ponzi scheme of farming, but a real entertainment form centered around games. Although everyone has not completely abandoned this money-making beast that can quickly accumulate wealth, they have finally weakened the financial speculation behavior in Web3 Game.

In this article’s discussion, I don’t simply regard games as a simple entertainment tool. On the contrary, games are a trend of change, which may be a shift in interaction modes (such as Fruit Ninja-touch screen games) or iterative testing of financial products (GameFi).

Games are a leading indicator of emerging technologies.

Tokenomics: The Stigmatized Chain Game

If we go back to the beginning of 2022 when StepN became popular, the discussion in every running group was not about how far they had run, but about calculating the payback period for their entry capital – how to recover the investment and achieve maximum profit in the fastest way possible? This was the question that every player was concerned about, so at that time, chain games were more often referred to as X2E or GameFi, with the core being an alternative mining form, exchanging value tokens for NFTs or game tokens through staking, in order to earn higher returns. Of course, these are all old topics that anyone who has experienced it will understand. This is not a sustainable game model, and the tulip bubble burst rate will definitely be faster than your commercialization process. This is why GameFi always ends up with a Ponzi-like collapse.

When discussing what games can bring us, there was once an explanation that I still remember:

Addictive mechanism = dopamine feedback from the game itself + joy from social interaction within the game

I strongly agree. In the traditional gaming world, except for professional game bounty hunters, game companions, and game studios, everyone participates in games for fun and socializing. This is also why so many real gamers in recent years have criticized blockchain games. So-called Crypto Natives don’t care about whether the game is fun or not, they only care about how to calculate and maximize profits, and they don’t care about the quality of the game.

When discussing the economic systems of games, the economic mechanisms of games like “Fantasy Westward Journey” and “World of Warcraft” are worth studying for any Web3 Game entrepreneur. When we no longer mention tokenomics in the real sense, and games have sufficient positive externalities, and players play for entertainment rather than speculation, then we can move on to the next topic – what are Web3 Games playing and why do we make Web3 Games.

Casual games are a category of Web3 Games. In 2022, the game developer PlayStudios, known for the game “Tetris,” established a blockchain department and announced its entry into the Web3 market. Similarly, we can imagine which simple casual games, such as match-three games, Plants vs. Zombies, Angry Birds, Fishing Master, etc., can become a part of Web3 games after their economic systems are redesigned.

There have been too many Web3 casual games, including match-three games. Although they are easy to develop and adapt to blockchain, casual games have a relatively low demand for being on the chain. To put it more bluntly, for chainified casual games (especially those that include competitive elements), if they lose their financial attributes, the demand for the games will decrease sharply, and they will eventually become a kind of gambling tool. The core appeal of these games to players is to quickly attract new users through token mechanisms, but most of these games will ultimately end up without players entering or with a lack of players.

Compared to casual games, another frequently mentioned category of Web3 Games should be AAA-level games. The AAA game that I am most looking forward to is “Black Myth: Wukong,” but I don’t know when it will be released. The implementation difficulty of this category is indeed relatively high, considering the high technical requirements and funding needs for studios. However, these AAA games tend to be free from the speculative attributes that casual games often have – after all, people who are willing to spend time playing AAA games generally care more about the quality of the game and are “not short of money.” This is what brings a more exciting and innovative mode after being chainified. Yes, here, more Web3 features, whether it is the circulation of NFTs and tokens or the establishment of on-chain rules, can bring a better gaming experience under the right circumstances.

Of course, various types of Web3 games do not need to be elaborated on. Card games, simulation games, competitive games, RPGs, MMORPGs, etc. can be divided into many categories. Here, casual games and AAA masterpieces are used as an example to highlight the difference. The former focuses more on financial speculation and the traffic brought by airdrops, while the latter optimizes the gaming experience as a mechanism. The difference between the two is considerable.

What are our expectations for blockchain games? I think it should be “Game” rather than “Fi”.

Full-chain Games: How important are the rules?

For native crypto games, we use a widely recognized definition:

A native crypto game is a game that embraces the architecture and spirit of blockchain application development to the maximum extent.

In this definition, fully on-chain games are the right path:

  1. Blockchain is not just a data tool for auxiliary storage, nor is it just for storing asset ownership on the chain (semi-on-chain games), but it should store all meaningful data on the chain by nature.
  2. All game logic and rules are implemented through smart contracts.
  3. Games should be developed according to the principles of an open ecosystem.
  4. The game itself is independent of the client (meaning it can interact with smart contracts without using the developer-provided client).
  5. Support for RWA (real-world assets).

According to the above, most of the games we see now are semi-on-chain games, which means that player assets are only stored on the chain, but actual gameplay is conducted off-chain. Almost all GameFi games you have played are of this form.

The difference in fully on-chain games is that all game data is on-chain (directly or indirectly) and game logic is implemented through smart contracts. Of course, if all activities are directly put on-chain, both the processing speed and volume on the chain will be a problem. The existing processing implementation solutions can use delayed processing similar to Layer2’s bundled encryption and verification, or the game’s design mechanism can avoid high-frequency interactive processing. However, this is not the core of the discussion. Similarly, decentralized storage, ephemeral chains, app-specific precompiles, etc., have been attempted in terms of implementation.

For fully on-chain games, what I appreciate the most is the pursuit of fairness, that is, all game logic is implemented through smart contracts. Especially in online card games (TCGs), as a loyal fan of a chess and card online game based on the Three Kingdoms period for twelve years, it is well-known that there are problems with drawing cards at critical moments or the need to reach a certain point to get guaranteed rewards, which indicates that game developers or operators can often exploit players without restraint. This is what needs to be addressed by fully on-chain games.

“I came to Hangzhou for three things, fairness, fairness, and still fairness of xx.” Rules exist in people’s hearts, but they cannot rely solely on people’s hearts. Rules need to be enforced.

What do we expect from blockchain games? I think it is an expectation for a fair mode.

Web3 Game to Web3 Society: Where is the Future Heading?

RWA, ARVR, Metaverse, Web3… As mentioned at the beginning of the article – I don’t simply see games as a simple entertainment tool. On the contrary, games are a succession of trends.

Now, more and more on-chain and off-chain actions are combined. Our game rules can be specified by smart contracts. The assets we hold are just a few chains of on-chain data. Crypto has already changed a lot in our lives, but it is not enough.

I won’t go into a long discussion about where the future is heading, but Web3 Game may be an entertainment experiment of Web3 Society. What will the world behind it be like?

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