In 2019, I gave a talk at Pocket Gamer Connects Helsinki and was surprised to see that they had reserved a complete track for blockchain games. It puzzled me that game developers were using a complicated decentralised storage solution to give the players an illusion of uniqueness and ownership. After all, the developers control the drop count of an in-game sword and how much damage it does, so why cram simple player inventory data into a blockchain shaped hole? Well, two years later, as blockchain creeps into every corner of digital ownership, coining the term Web 3.0, I’ve started finding answers.
What even is the point of Blockchain Games
Blockchain game developers always lead with the same point, people have spent hundreds to acquire skins in Fortnite, but those skins are not truly theirs. They can be taken away (I don’t think they will be), and they only exist in that game. The second argument is pretty solid, and in case you’re not sold on it yet, we will come back to it.
The Value of NFTs
I don’t get modern art. I don’t know why paintings of basic shapes can fetch an exuberant amount at an art exhibition, and I don’t get non-fungible token (NFT) art. But it doesn’t matter that I don’t understand why a seemingly random CyptoPunk avatar is worth several ETH (hundreds of thousands in USD). The fact is that people have assigned it a value that isn’t that different from us assigning value to precious metals, luxury handbags and pokemon cards. Sure, silver is more valuable than a collectable stamp but in the virtual world, so is a Sandbox plot of land than a profile picture.
If you aren’t familiar with The Sandbox, it’s a blockchain game where most items, including virtual map areas and in-game entities, are NFTs. They live on the blockchain. When you buy them, they appear in your crypto wallet. The game connects to your wallet, and that’s how it knows what game relevant items you own and then lets you do something with that item. Your in-game avatar will be able to wear the shirt in your wallet, equip the sword and deploy a house on your plot of land. The more players The Sandbox has, the more valuable the in-game items.
You’re right to ask the question: how is this different from a non-blockchain game, though? Fortnite lets you buy items in USD and use them in the game, and The Sandbox lets you purchase items in their cryptocurrency SAND and use them in the game. The difference is that your crypto wallet isn’t game-specific. If another blockchain game lets you use your Sandbox items in their virtual environment or vice versa, the value of those items extends beyond a single application or virtual space.
Let’s take the example of GreenPark Sports (a metaverse for sports fans) that dropped its in-game avatar gear as NFTs in November 2021. They announced their collaboration with The Sandbox, which means that the character items will be usable in both those games. And who knows how many more partnerships might unite all these virtual worlds together. It would be a pleasant surprise if I jump from one game to another, connect my wallet and realise that my items have some value in other virtual worlds too. The more games and metaverses give utility to an in-game item or NFT, the more valuable it becomes.
On the flip side, as the games die out or lose player interest, the NFTs supported lose their value. Also, as game designers decide to add more content to the game, a suit of armour worth thousands could be made worthless in a matter of months if the transition isn’t handled well. Secondly, implementing a particular in-game item in multiple games is a seriously complex design undertaking. Even when closed ecosystems such as Blizzard’s Warcraft or Valve’s DotA reuse characters between different games, they need to change the stats and sometimes even abilities completely to satisfy the game design.
All tech companies with a vision of the metaverse are doing something unique. Niantic, the makers of Pokemon GO, want to create a world where the virtual world map over the real world and encourage people to collaborate, which is a common theme in their games. Their AR Development Kit’s real-time environment mapping is incredibly accurate. Meta (formerly Facebook) seems to have a similar vision. Oculus has come a long way in terms of quality and affordability, and they are now looking to blend the real and virtual together using AR. And to make an AR headset in the image of a pair of glasses. Their Horizon Workroom is a glimpse of how remote work could change. Microsoft’s Hololens is probably the most advanced mixed reality headset that the public has seen.
Web 3.0 and Games
I speculate that games could possibly be the biggest adopters of Web 3.0 and the Metaverse because games have the powerful ability to create a better reality. A well-made game doesn’t overwhelm you and doesn’t bore you. It gives you a safe haven from the chore, struggle and powerlessness of everyday life. All your actions matter and are rewarded, whether by an in-game item or simple visual feedback. I have played video games all my life, and it still boggles my mind that players spend months building fleets in the Massively Multiplayer Online Role-Playing Game (MMORPG) EVE Online, which can then be lost to an epic war in a matter of minutes.
Even before Bitcoin online ledgers became popular, in-game currency and items have had real value. Freemium and free-to-play games often have multiple in-game currencies, some of which you can grind and some of which you have to buy using fiat currencies. Now, those in-game currencies can be traded on the blockchain. For example, SAND and MANA are both valued above the USD. Moreover, there has been a rise in a play-to-earn model of games. Combine the scale of EVE Online and the philosophy of Web 3.0, and you’ll realise that it’s only a matter of time that OASIS that Ernest Cline imagined in his science fiction novel, Ready Player One, will become a reality.
If you’re unfamiliar with Ready Player One, it paints the picture of a virtual world that is so vast that you only need the real world to meet your basic needs of food, shelter, electricity and an internet connection. Everything else is online in the virtual reality world called OASIS. You can go to school, meet people, play games and hold a day job. You can own property, even your own virtual planet with a mansion on it if you’re rich enough. You can buy anything in the physical world with the currency you earn in the virtual world.
We’re already well on our way to making OASIS a reality. NFTs selling at prices that can be considered a small fortune for people living in poverty is a testament to that. It won’t be long before killing an in-game boss with your virtual clan or guild will mean serious business because an armour drop might be worth thousands and will need to be split between the hunting party. People will hunt and gather in-game items to be traded with other players or sold at auction houses. Pirates will take your in-game character hostage in exchange for a payment. Wealthy traders will hire mercenaries to create a convoy for their protection. Numerous jobs will be modelled after our 9-to-5 model. Jobs such as a weapon forger or an armour enchanter will gain popularity for safety and stability. Players who want to take the least risk will stick to larger cities and safe zone. The most daring players will venture into the badlands to fight monsters and other players and bring back valuable bounties.
It won’t be long before, just like the Silicon Valley, farming towns, and industrial cities, metaverse settlements will pop up close to the locations where the game servers are hosted. The less the latency, the better the player performance. Virtual goods will be valued traded just like physical goods.
There will be other metaverses that will be more casual. The Sandbox provides the perfect opportunity for all sorts of businesses to have their in-game online stores. You could buy a pair of high-end in-game sneakers that will never get scuff marks. And you probably will be able to purchase physical items from the virtual store and get the NFT just thrown in as a part of the deal. Even if you aren’t buying anything, just the shop’s presence in a prime in-game location is endless advertising and is entirely worth the millions that people are paying for it.
Yay or Nay to the Future?
It’s going to be a dystopian future, a regular episode out of Black Mirror, I hear you say, but then some people also think it’s going to be amazing, and I agree with you both. It’s going to be no different than the proliferation of social media. Facebook reunited lost family and friends, WhatsApp lets us talk and see our parents making calling cards, and high tariff cell phone plans a thing of the past. But we also see friends sitting around a dining table consumed by their Instagram feed and our relatives indoctrinated by conspiracy theories fed to them by forwarded messages. So, yes, it will be both good and bad simultaneously. It will be up to the individuals to regulate it.
It will allow people in remote villages to get their diplomas in simulated classrooms and study groups. Nonprofits might distribute XR headsets in combination or instead of laptops in addition to scholarships and an internet subscription to the kids that can’t afford them.
Countries’ economies that create and hold the most valuable virtual assets will thrive. But it’s not unimaginable that a developing county could invest too much in the virtual as a shortcut to improve their export. Consequently, too much dependence on the virtual and not enough on the physical could lead to a crash if a virtual currency or NFTs lose their value.
Right now, I see three kinds of people, those passionately for the metaverse and Web 3.0 future, those passionately against it, and then people on the sidelines that don’t understand it. The fact is that each financial app is adding crypto trading, tech giants are working on their own unique vision of the metaverse, and big game publishers have announced that blockchain is the future of the industry. Whether you’re against it or are on the sidelines, it might only be a matter of time before we are all swept up in this rising tide.