I. Introduction.
While GameFi has been defined in the market as the blockchaining of games, the logic is actually ambiguous. If the popular NFTFi and SocialFi are seen as a combination of simple elements, namely NFT+DeFi and Social+DeFi, then GameFi should also be properly seen as a combination of Game and DeFi.
GameFi is not a blockchainization of a traditional game, but it is very different in nature from a game. Traditional games are about the game experience as the first priority of game development, and the profitability of the development team. GameFi’s priority is to encourage Play to Earn behavior and allow users to earn significant revenue in return. The difference in core aspirations makes GameFi more distinct from traditional games, despite the overlap in development thinking and operational logic.
In traditional games, there are different classifications of game genres: MMORPG, SLG, RTS, etc., all of which have different successful works presented. But the same game genre, in GameFi, is likely to appear unexpectedly fresh due to the change of environment and purpose.
II. Traditional Games and GameFi
In the gaming world, there is a special term: Game Feel, which is used to describe the first feeling that a game brings to the player’s experience. Regardless of the type of game design and target audience. If the “game feel” is poor, then players will not continue to experience it.
Some people may think that complex or esoteric games have a good “game feel,” but this is not the case. Not all types of games require complex mechanics.
Different game genres have different design patterns and different user groups.
At present, in the field of traditional games, the main games are divided into the following categories.
- RPG (Role-playing games): Role-playing games usually have a complete storyline in which players can leave their identities behind and play certain roles in the game to get some kind of alternative satisfaction. This requires the construction of a logically complex and fully self-contained game world, as well as a game environment full of freedom. RPGs can be subdivided into Strategic Role Playing Games (SRPG – Simulation Role Personate Game) and Action Role Playing Games (ARPG – Action Role Playing Game) depending on the way the combat is conducted. (Action Role Playing Game).
- MMORPG: Role-playing category is the most popular, and heavy games are still the main money-absorbing force; however, the threshold of game development and operation is high, and most mainstream products come from large factories.
- MOBA: This genre is rising due to its fast pace, but only a few products currently occupy high positions in the game market due to high-intensity interactions and longer game lengths (20 minutes to 40 minutes).
- FPS (First Person Shooter): FPS games are a game genre based on 3D technology. The most important feature is the change of the player’s perspective, with the screen acting as a medium for the player to interact with the game world, making the player immersive and bringing a strong visual impact.
- SIM (Simulation): SIM games are divided into RTS (Real-Time Strategy) real-time strategy games and SLG (Simulation Game) strategic wargames. The typical representatives of the former are “StarCraft” and “Age of Empires”, while the representatives of the latter are “Total War” and “Civilization” series, etc.
- Card-based SLG is becoming popular: card-based SLG is popular among users and has become a priority choice for many studios and project teams because of its low development cost. At present, card SLG is also a category with double growth in quantity and revenue in the U.S. handheld game market (about 5.3% of the Top 100 head games in 2019 and about 6% in 2020) and has maintained a market share of over 20% in the Japanese handheld game market in the past two years.
The above genres can be said to be a more comprehensive coverage of the traditional game genres currently on the market.
Strictly speaking, GameFi, which also has game properties, should also develop comprehensively in various game fields, and one or two phenomenal games should appear in each type of game, but what we have seen so far is that in GameFi, more games are mainly based on nurturing, sandbox, cards and management strategy, and games of action shooting and sports racing are also tried, but the DAU (daily activity number) is not as good as it should be. However, the DAU (daily activity count) is not as good as expected.
III. Different types of games GameFi, with different difficulties.
Traditional games depend on retention, i.e. game publishers pay more attention to user’s game experience, and have been committed to improving user experience to keep more user retention and cultivate users’ paying habit.
In fact, for GameFi’s game development team: the core logic is to provide early money-making effect (time to cash), then bind a larger community of interests, a larger narrative, redistribute the benefits of the traditional game industry chain, etc. On this basis, keep the ecological value of the system stable.
Unlike traditional games, GameFi games have three major requirements.
- an economic model that cannot be avoided.
- an intrinsic financial core.
- a user with profit as a priority goal.
Regarding GameFi, it can be divided into four types as follows.
- Native GameFi games: decentralized finance through DeFi’s borrowers with NFT assets, to achieve the effect of “mining” like earnings. These games are mostly card games, with a relatively prosperous secondary market and a well-established ecosystem of head GameFi games and a large user base.
- Realistic financial mapping GameFi: This kind of GameFi game maps the real financial system to the blockchain industry, GameFi plays the role of centralized bank, in this kind of chain game players can experience all the financial methods in traditional finance such as stocks, funds, futures, etc.
- GameFi that focuses on game experience: this kind of chain game focuses on immersion and aggravates game attributes, while taking into account the ecology of digital assets within the game, making the game interesting and generating digital assets similar to the mainstream digital assets of the game.
- Virtual mapping of real behaviors: such as Stpen, Letmespeak, etc. Such games give gold farming real behaviors by combining real behaviors with real behaviors.
Three main features of GameFi lead to deviations from traditional games in the development of GameFi games.
The gold-farming nature of GameFi has led to a natural preference for low-complexity interactions and a natural rejection of high-complexity transactional game genres such as action shooters and contests, as well as dimensional outcome theory games such as MOBAs.
On the other hand: Axie’s success led many teams to start imitating on the basis of their existing experience, with high costs for trial and error
In fact, in the process of evolution, the user habits (User Behavior) were educated by Axie, and the barrier to entry for card games playing gold was lower.
We can’t say that other types of games are not suitable for the game, just that there is not yet a game that can combine both gold playing and playability.
GameFi represents a decades-long shift in the value paradigm from game officials to gamers. Starting with pay-to-play (P2P), users will pay to play games created by game studios. The roots of this value shift lie in the structure of GameFi’s inherent economic model.
IV. Problems with the transition from traditional games to GameFi
Although from chess to 4X strategy, from traditional RPG board games to AAA open world, games have never been mere entertainment, but a platform for players to compete for limited resources. As such, game coins, which have circulating value and usage value, play a critical role in a game’s user retention and business cycle.
But there has never been a way to quantify and tie the power and benefits of users to Tokens like GameFi has. In fact, since Axie became popular, almost all traditional game companies have looked into Axie, but none have dared to do it. On one hand, it involves issuing coins, which gaming giants are naturally against, as it is still in a gray area globally.
On the other hand: the shift from traditional games to GameFi is more than a simple economic model implantation, it is more of a value conversion. GameFi essentially uses coin issuance to solve all the previous game middlemen. The more you play the game, the more you become a shareholder in the game. Gamers are no longer players, but investors. The increase in intermediate elements, from game teams to intermediate users, guilds, etc., has also left game developers struggling with the loss of control over their games.
AC Capital has come up with a term called: Guild overflow, which refers to a game that welcomes Guild (brings liquidity) early on and goes Guild (big digs at McTee to destabilize the ecological economy within the game) late on.
A GameFi game will host a lot of guilds, and this effect will not manifest viciously in the early stage of the game, and even benefit the development of the game ecology to a certain extent, but when the game enters the end of the ecology, it will produce the phenomenon of guild outflow, so that the game ecology and the number of guilds can maintain a balanced state.
Can traditional game teams cross this psychological threshold? This is something that needs to be considered.
V. Traditional games and GameFi may meet in the meta-universe
There are many debates in the market about whether a game should be P2F (Play to Fun) or P2E (Play to Earn), which is one of the biggest highlights of GameFi.
In fact, the most important issue for GameFi is the sustainability of its economic cycle, rather than strengthening one of its Fun or Earn properties. The different properties of GameFi can be reflected by different game types, gradually increasing playability by releasing different games, but the underlying economic model of the same pass remains universal. As long as a GameFi pass economic model can work effectively, its Fun and Earn attributes can be realized with 4 to 5 games together. This is what the Axie team is currently doing.
How do you ensure the sustainability of the economic model?
On the one hand, it is attracting new players, which means that GameFi needs to lower the barrier to entry even further.
Currently, new players know more about GameFi based on white papers and materials, and often need to pay to play. The free single player trial model is becoming a trend.
On the other hand, embrace the meta-universe.
As a subset of the metaverse ecosystem, games are also an important way to generate and transfer ownership of metaverse assets, and will also be responsible for the operation of the underlying metaverse ecosystem.
