NFT game design is hard 👾

Metaversal is one Bankless newsletter for weekly levels on NFTs, virtual worlds and collectibles

Dear Bankless Nation,

There is a huge build going on around the NFT gaming scene right now.

But the work? It is hard.

That’s because it’s hard enough to design a normal game as it is. When you throw NFTs into the mix, there are certain challenges that can arise that can hurt a game more than help it.

So what is there to do, and what can we expect around NFT games going forward? 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.

On the simpler end of the spectrum they can be uncomplicated on-chain strategy games.

On the other side of the spectrum, they 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 Battle Royale Onchain. Very straightforward, but still interesting!

What we has not seen many to date are the more expansive NFT-friendly MMO projects. To be fair, it is many such projects in development right now and I am excited about some of them.

On the flip side, it’s no surprise that the full-title NFT gaming sector is still establishing its foothold: game design is incredibly difficult!

From campaign animations to level design to in the game economical faucets and sinksplain old game design has one ton of moving parts already complicated in tandem as it is. So when you have projects carelessly throw NFTs into the equation and over-tokenize their assets in the game, they only increase the complexity and challenges they face.

In fact, if done wrong, NFTs can be game killers. So noted 0xKepler in a July 2022 post titled “A way forward for Web3 Gaming,” where the author highlighted how games that “tokenized the majority of their in-game assets” ultimately faced two major challenges: economic outflow and overspeculation.

In terms of financial outflows, if everything is tokenized, profit becomes the main goal for players and this can lead to everyone withdrawing money at the same time with little or no interest on the demand side, i.e. economic collapse. 0xKepler wrote:

“With no one on the demand side of currencies and assets seeing any value in them other than money, prices fall, leading to lower earnings 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, causing economies to rapidly spiral downward.”

And on the point of overspeculation, 0xKepler used the episode of the auction house system in Diablo 3 to show how to make everything easily tradable can drive out real players and kill in-game economies:

“Easily tradable assets take away the sense of achievement some players are looking for. Therefore, games with in-game marketplaces reach fewer players of this type (which often add value to the economy) and players are more likely to be attracted by monetary rewards (usually appreciating extras). Over time, speculators drive up prices, making assets needed to play the game unaffordable for non-speculative players. In the end, only speculators remain.”

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

With these pillars in mind, there is ways to build NFT plays smarter to optimize for these fundamentals and reduce the challenges of financial outflows and over-speculation. Here, the aforementioned 0xKepler recommends the following principles:

• NFTs > Fungible Tokens (FTs) — By focusing on NFT rewards rather than FT rewards, a game can emphasize in-game fun and utility over monetization

• Land value tax — Avoid NFT land becoming too valuable and subject to over-speculation by using a metaverse base tax (which I have written about before!) to optimize for builders promoting sustainable economies

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

For example, consider the adaptability and community strength that comes with openness. Let’s say you have a team building the core of an onchain game as one hyperstructure, which is free to use and build upon forever. This can release the power of modding community like never before.

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

Finally one of coolest aspects of gaming NFTs is how they can serve as a means of allowing players’ achievements to travel with them across different games and beyond. Right now in mainstream games, your game data is added to each respective game, which closes tons of possibilities.

Case in point is an upcoming NFT game that, from what I can tell, does an interesting job of balancing the challenges and opportunities I’ve described above. Civitas.

Coming out next year, Civitas is a strategy MMO built on Ethereum + L2 that will be vaguely familiar to anyone who has ever played Sid Meier’s Civilization franchise before. The big difference in Civitas is that each of the cities are sub-DAOs that are owned and organized cooperatively by citizens.

From mechanics like a Free to play Nomad mode to a CITI token transaction tax on resource trades, Civitas has different elements that I think can stabilize against over-speculation while still providing a lively in-game economy. Only time will tell for now!

What’s next for NFT games?

One 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 super cheap transactions, these L2s represent the next “frontier” on the chain for better web3 gaming.

Finally, there is a ton of fragmentation in the NFT gaming ecosystem right now, meaning there are tons of different projects being built in an essentially siled fashion across dozens of blockchains that don’t “talk” to each other. That said, the longer term looks to see more interoperability solutions to make these fragmentation divides more trivial.

William M. Peaster is a professional writer and creator of Metaversal– a bankless newsletter focused on the rise of NFTs in the crypto-economy. He has also recently contributed content to Bankless, JPG and more!

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