The Future of Gaming with Web 3

A New Frontier for Design and Play

At the beginning of 2018, I wrote an article discussing the principles behind Bitcoin and cryptocurrency. In it, I gave a non-technical description of what is interesting about the technology. Overall, I think it held up pretty well. Cryptocurrency is back in the news, and there have been many developments since my last article. I want to revisit the topic, explore new ideas, and discuss how the technology can apply to gaming. 

Terminology: Web 2, Web 3, Crypto, DAO and NFT

First, some terminology: Cryptocurrency is now too small a term to cover what I want to discuss.  Cryptocurrency refers specifically to transactable tokens like Bitcoin and Ethereum. However, this same technology now underlies many more elements (discussed below) captured under the broader term Web 3. Web 3 is intended to differentiate from the two previous phases of the internet. Web 1 is the original Internet. It was built on open-source protocols. Think Email, Websites, and RSS Feeds. Web 2 is characterized by centralized portals and controls that make the Internet more convenient and accessible. Think Facebook, Google, and Amazon. But in exchange for accessibility, large corporations and algorithms manage more of what you see and require you to give up control of your data.  Web 3 envisions a world where you get the same convenience and accessibility as Web 2 but with more of the open protocols of Web 1. It promises decentralized control and that your data remains in your hands.

I believe in the power of Web 3 because it allows us to remove the middleman from transactions by shifting trust from institutions to open-source code. That being said, the promise of Web 3 and the reality don’t always line up. Insofar as we can make a more efficient exchange of resources from one person to another, society benefits—cheaper lending and borrowing, fewer bank fees, more efficient markets, etc.

When I wrote my last article, these advantages were largely theoretical due to Web 3's cost and inefficiency. Since then, there has been enormous progress in making Web 3 systems more efficient, with less energy usage, faster transaction times, and lower costs. I expect these trends to continue, which opens the door to more development and adoption.

Let’s look at two areas of innovation: DAOs and NFTs.

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DAOs

I am passionate about building great communities. DAOs (Decentralized Autonomous Organizations) are a new type of community that relies on smart contracts. Smart contracts are agreements written in code that will execute themselves on the blockchain. Just as cryptocurrencies remove the middleman of banks and financial institutions, smart contracts remove the middleman of lawyers, courts, and executives.  DAOs allow members to vote on actions, receive financial compensation, and do work within the community, all without the need for centralized management or oversight. Put another way, DAOs are designed to enable truly community-owned organizations.  

The more I learn about them, the more I see smart contracts and DAOs as a powerful tool for game designers. In games, you build rules and award points to encourage or discourage behaviors.  In my deckbuilding game Ascension, I assign honor points to cards to create tension in every decision about what card to pick. I strive to make as many cards as possible that are enticing to the player. I also put a limited number of honor points in the game so that it ends soon after the most powerful effects start happening. Ending the game at peak excitement encourages players to want to play again.  With rare exceptions, Ascension does not include ways to attack other players directly.  This makes the game feel more friendly and lets you enjoy it even when losing.

We have all experienced toxic online communities in gaming and social media. Player contracts and cryptocurrencies could incentivize a more positive community. Imagine an online community where you are rewarded for helping each other, sharing positive comments, and helping the community grow. Imagine if Counterstrike had a rating system like Uber where you ranked your opponents based on sportsmanship and that awarded currency you could spend in the game. Imagine if you could gift items to new players and you earned currency if those players ended up with a high community ranking. The possibilities to create incentives that subtly push players to enjoy themselves in a game and help create content, help others, and grow the community are intriguing. On the other hand, this could turn into a black mirror nightmare if done poorly.

Figuring out which roles are best distributed and which are best centralized is critical. Crafting a great game is not easy, and game design skills and instincts are cultivated over a lifetime. I don’t believe games designed by majority rules will be any good. That being said, certain decisions, like what features should be prioritized and what types of player events should be rewarded, are great places for the community to have a voice. Any good game developer will spend a lot of time listening to players, but having areas where players know they have ownership would increase engagement and likely lead to better decisions in the long run. Wizards of the Coast (Hasbro) took many years to recognize the importance of the fan-created Commander format for Magic: the Gathering. Now, it is the most popular format. DAOs promise to give players a more direct voice in the future of their favorite games and enable community-owned games that can outlast even the game developer’s involvement.

NFTs 

Since my last article, there has been a huge explosion and subsequent implosion of “NFTs,” or non-fungible tokens. An NFT is backed by the same principles as cryptocurrencies like Bitcoin, with the most significant difference being that each NFT is meaningfully different from the other (rather than fungible). 

Simply put, Bitcoin is like a quarter. Any quarter is just as good as any other. An NFT is like a Magic card or a piece of art. Each one is unique (though there may be copies). Some are worth more than others and may have different functionality.

NFTs that represent in-game assets such as cards, characters, skins, or items offer the promise of true digital ownership. This means players can own, trade, and sell their digital assets in a way that was not possible previously. Though game developers can (and occasionally do) allow for the selling and trading of their items in-game, it is rare. Building these systems is costly, and the legal ramifications are tricky.  Magic: the Gathering was one of the first online games to sell digital objects, and though trading was allowed, they refused to let you sell those cards for cash. A black market was created to fill the need. The newer version of Magic Arena doesn’t allow you to trade at all. 

As someone who lives and breathes trading card games, I know NFTs have a natural appeal. Like with my physical TCG cards, I can own them, use them in my deck, and then sell them when I no longer want them. NFTs also offer many more interesting options, like tracking ownership and in-game achievements, making them more valuable over time. Imagine buying not just a rare Black Lotus but one used to win the world championship or one that Keanu Reeves used as a weapon in a John Wick Movie. Cards could get exclusive cosmetic or functional upgrades based on their tournament performance. 

NFTs promise that the game objects I spend money on are mine to do with as I please. The ability to freely transfer or sell those objects on various platforms gives players the option to recoup some of their investment in a game or even make a profit, as I did when I sold my Magic collection. 

Common Objections to Web 3 in Gaming

There is a lot of justifiable suspicion around the use of Web 3 in gaming. There have been instances of theft, dystopian cash grabs, and outright fraud. After a brief rise in popularity, the gaming community at large shutdown Web 3 in games with a combination of solid arguments and over-the-top ridicule.

I want to take the concerns seriously but not knee-jerk against something that can benefit gamers and create interesting design space in the long term. Anytime a new business model in gaming shows up, this kind of hate and backlash is common. Subscription games and software are often looked at as the death of ownership. Free-to-play games are derided as pay-to-win cash grabs. The best instances of both models (now dominant in gaming) lower the barrier to entry for players and help creators generate more predictable revenue. The best games ensure the design and the business models fit naturally together. My personal mantra is to provide so much value that players are happy to pay for content.

Isn’t Web 3 bad for the environment?

Bitcoin uses a very energy-intensive proof of work system to secure its network. This led many to worry about the environmental impact of Web 3.  Fortunately, this concern has been heard by the Web 3 community, and steps have been taken to drastically reduce its environmental impact. Ethereum recently switched to a proof-of-stake system, which reduced its energy usage by over 99%. Solana promotes that it is carbon neutral.  I am happy to see these developments, and I recommend anyone who develops Web 3 games use one of these more environmentally friendly platforms to minimize environmental damage.

Can’t you do all of this without Web 3?

This is the objection I hear most often from game developers. Hell, I’ve given this objection myself. Games like Second Life and Roblox let you create content and profit from selling items. Games like Kind Words create positive online communities through the subtleties of the design itself. In theory, everything I list as a benefit of NFTs or DAOs could be done through traditional server-based games and legal agreements—I think this is all true.

The question is, what is most efficient and beneficial to both the developer and the player? Modifying existing smart contracts and joining an existing blockchain like Ethereum or Solana makes it much cheaper and easier for a developer to add player ownership and trading than to build the internal systems to support it.  Each blockchain has passionate communities eager to check out new games. This can be helpful to smaller developers looking to get noticed in a crowded marketplace.  

NFT Ownership isn’t actual ownership

An NFT for a piece of game content isn’t worth much if the game isn’t working. Currently, the technology is too costly for all but the simplest games to function entirely on-chain, so you still depend on the developer to support the game. Your NFT can’t be taken away from you, and you are free to trade or sell it, but you still have to trust the developer to maintain the game. The idea of interoperability in NFTs (i.e., I can use my magic sword from World of Warcraft and bring it over to Ultima Online) seems far-fetched to me, as few developers will be incentivized to manage the heavy burden of integrating other games’ items into their own game.

Over the long term, the technology will evolve to fulfill the promise of true digital ownership in games. In the meantime, guaranteeing the ability to sell and trade digital goods is still valuable to the player. I believe that over time, more fully on-chain games (and maybe even interoperable games) will make NFTs more valuable and interesting.

Fans, Fads, and the Future

I hesitated even to write this article. Most discussions about Web 3 on the Internet feel more like religious wars than reasoned discussions. Are NFTs a scam? Is Web 3 here to stay? Will governments dissolve in favor of nomadic DAOs? (My answers are Sometimes, Yes, and Not likely.) 

I love to experiment with the gaming frontier as new technology enables new modes of play. Ascension was the first deckbuilding game to come to mobile and the only deckbuilding game in VR. SolForge Fusion uses digital printing to create one-of-a-kind physical decks that can be scanned into an online account. Our goal, as designers, is to add value to our players and create great games. Web 3 opens up new avenues for design and play, and I am eager to see where the industry goes as we learn how it impacts the only metric that truly matters in game design: player experience. 

Web3 is a rapidly expanding space to explore. Let’s discuss—I’d love to hear your thoughts.