NFT game design is hard 👾

The metaverse is a Newsletter without bank for weekly updates on NFTs, virtual worlds and collectibles

Dear nation without a bank,

There’s an awful lot of construction happening around the NFT gaming scene right now.

But work? This is hard.

This is because designing a regular game is quite difficult as it is. When you add NFTs to the mix, certain challenges can arise that can hurt a game more than help it.

So what is there to do and what should we expect regarding NFT games in the future? I offer some thoughts on these questions for today’s post!

-WMP

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NFT games can come in all sorts of different shapes and sizes.

At the simpler end of the spectrum, they can be simple chain strategy games.

On the other side of the spectrum, these can be advanced and expansive massively multiplayer online (MMO) projects that use NFT resources to track player ownership beyond centralized servers.

So far, we’ve seen a lot of experiments on the simpler side of things. I recently played in one, andy8052’s Chain Battle Royale. Very simple but interesting nonetheless!

What we do not have many seen to date are the most extensive NFT-enabled MMO projects. To be fair, there is many such projects in development right now, and I’m excited about some of them.

On the other hand, it’s no surprise that the full title NFT gaming industry is still gaining a foothold: game design is incredibly difficult!

Of battle animations to level designs gambling economical faucets and sinksclassic game design has a tonne of moving parts that are already complicated in tandem as it is. So when you have plans, casually throw NFTs into the equation and over-tokenize their strengths in the game, they only add to the complexity and challenges they face.

Indeed, if executed poorly, NFTs can be game killers. So noted 0xKepler in a July 2022 article titled “A Way Forward for Web3 Gameswhere the author highlighted how games that “have tokenized the majority of their in-game assets” ultimately faced two huge challenges: leaving the economy and excessive speculation.

When it comes to exits from the economy, if everything is tokenized, winning becomes the main goal for players, which can lead to everyone cashing out simultaneously with little or no interest on the demand side, i.e. say an economic collapse. 0xKepler wrote:

In the absence of anyone on the demand side of currencies and assets who see value in them other than money, prices plummet, which translates into lower revenue for players. The game becomes uninteresting – existing players leave and new players are less likely to join. P2E games often relied too heavily on player growth rather than recurring token sinks, which led to a rapid drop in economies..”

And about to speculate wildly, 0xKepler used the auction house system episode in Diablo 3 to show how everything easily negotiable can drive out real players and kill game economies:

Easily tradable assets take away the sense of accomplishment that some players crave. Therefore, games with in-game markets reach fewer such players (who are often value additions to the economy) and are more likely to onboard players attracted by monetary rewards (usually value extractors ). Over time, speculators drive up prices, making the assets needed to play the game unaffordable for non-speculative players. In the end, only the speculators are left.”

When it comes to “what makes a good NFT game”, we have to go back to the fundamentals of the games period. And for that, we need to understand why people play games in the first place, which I think Sal.xyz described perfectly in the tweets above: for test our skillshave unique independent experiencesand to connect with others.

With these pillars in mind, it are ways to create smarter NFT games to optimize these fundamentals and mitigate the challenges of economic exits and over-speculation. Here, the aforementioned 0xKepler recommends the following principles:

The transaction tax is a huge sink/stabilizer of the Eve Online economy, the oldest virtual economy in existence – via 0xKepler
Via 0xKepler
  • NFT > Fungible Tokens (FT)By focusing on NFT rewards instead of FT rewards, a game can emphasize in-game fun and usefulness rather than financialization

  • Land value taxPrevent NFT land from becoming too valuable and over-speculated by using a metaverse land tax (which I have already written about!) to optimize for builders that promote sustainable savings

When implemented well, NFTs can lead to new types of gaming experiences.

For example, consider the personalization and community empowerment that comes with openness. Let’s say you have a team building the core of a chain game as hyperstructure, which are free to use and build forever. It could unleash the power of modding communities like never before.

Beyond the literal openness, there is also a window of opportunity for web3-native game projects that are ahead of web3 compared to major game publishers. We should use this period of ignorance to set the tone for what great NFT games can and should be.

Finally, one of the coolest aspects of NFT games is how they can serve as a medium for players’ achievements to travel with them through different games and beyond. Currently, in mainstream games, your game data is siloed in each respective game, which closes tons of possibilities.

As an example, an upcoming NFT game that I can tell does an interesting job of balancing the challenges and opportunities I’ve outlined above is Civitas.

Due next year, Civitas is a strategy MMO built on Ethereum + L2 that will be vaguely familiar to anyone who’s ever played the game. Sid Meier’s Civilization previously franchised. The big difference in Civitas is that each of its cities are sub-DAOs that are collaboratively owned and organized by citizen actors.

Mechanics as a Free Nomad Mode to a CITI token transaction tax on resource exchanges, Civitas has various elements that I believe can stabilize against over-speculation while creating a vibrant game economy. Only time will tell for now!

What’s next for NFT games?

A low hanging fruit is that there will continue to be a boom in game development efforts on and around layer two (L2) scaling solutions. With fast and very inexpensive transactions, these L2s represent the next onchain “frontier” for better web3 gaming.

Lastly, there’s a ton of fragmentation in the NFT gaming ecosystem right now, i.e. there are tons of different projects that are basically building in silos across dozens of chains of blocks that do not “talk” to each other. That said, we must look in the longer term to see more interoperability solutions appear to make these fragmentation fractures more insignificant.

William M. Peaster is a professional writer and creator of Metaverse—a Bankless newsletter focused on the emergence of NFTs in the cryptoeconomy. He has also recently contributed content to Bankless, JPG and beyond!

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No financial or tax advice. This newsletter is strictly educational and does not constitute investment advice or a solicitation to buy or sell assets or to make financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

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