Five fundamental issues which are preventing mainstream adoption of blockchain games
Summary
There are five key hurdles to overcome before blockchain gaming becomes mainstream:
- Players broadly understand blockchain and its benefits to gaming
- Blockchain-to-game market fit is found
- Players have seamless UI/UX in their blockchain interactions
- Scaling issues are fixed and the blockchain can cater to millions of players
- AAA studios apply their multi-million dollar budgets to blockchain games
Current state of games
Despite the rising evangelism for blockchain gaming, the current ecosystem is in its infancy:
- Game developers are primarily small teams or studios who are experimenting with different applications of blockchain
- Total DAUs of all blockchain games are less than 20k. This is equivalent to 0.04% of Steam’s 47m DAUs
- A majority of the participants are speculators and crypto-natives as opposed to ‘mainstream’ gamers
Blockchain gaming is not there. But what will it take? This article aims to highlight the key steps to taking blockchain gaming mainstream.
Taking blockchain gaming mainstream
Below are five factors which I believe will take blockchain gaming mainstream. I define mainstream as >50% of players having played a game that uses the blockchain.
1. Mass-market blockchain understanding
Here is the standard response I get when I tell my (hardcore) gaming friends what I do:
“What is the blockchain? How does it work in a game? And don’t I already own items when I buy them in a game?”
The only way to disrupt an industry is to solve a problem. But how can you solve a problem which people don’t know exists?
Basic education is required before blockchain gaming will become mainstream. Players should understand broadly what the blockchain is (a ledger) and what it provides (true ownership).
Without a broad understanding of blockchain, mainstream players will not turn to a blockchain game.
There is a significant amount of education required and we are only in the first phase of the adoption curve.
Exhibit 1: Innovation adoption curve
2. Blockchain-to-game market fit is found
Blockchain allows for many new game mechanics. The terminology for these are not yet standardised in the industry. Some non-exhaustive examples include:
- Secondary marketplaces — Players own their in-game items and can trade these on a marketplace for real money
- Play-to-earn — Players can play a game and get rewards (ETH or items) which allow them to monetise their time
- Share-to-earn — Content creators/players can recruit players for a game and be rewarded (e.g. earning a % of all players spend when you refer them or when they fight on your ‘land’)
- Invest-to-earn — Speculators can make trades and investments without playing the game, with the intention to make a profit
- And more: Decentralised decision making, aligning incentives with 3rd parties, play-for-keeps, etc.
The problem with these are that they are all in their infancy. Currently it is not fully clear which blockchain-enabled mechanic works the best, how effective they are, and under what circumstances they are effective.
Once these blockchain mechanics have been refined (and blockchain-to-game market fit is found), blockchain games will have an innate advantage over normal games.
Games need to evolve from ‘simply using blockchain’ to being ‘sufficiently better because it can use the blockchain’.
Exhibit 2: Product market fit diagram
3. Seamless UI/UX
In order for blockchain gaming to become mainstream, it must have seamless UI/UX. The well known usability issues around blockchain MUST be solved before blockchain gaming will appeal to the mass market. There should ideally be a seamless UI/UX which mimics a normal game:
- Marketplaces behave as they do in-game, with no time delay due to blockchain processing limitations
- Blockchain items operate across platforms, with mobile, PC and console functionality
- Managing your items in your wallet should be seamless, and players may not even know they are dealing with the blockchain (but know they ‘own’ their items)
- Credit card purchasing is standard, to take away the pain of having to sign-up to a 3rd party exchange and purchase cryptocurrency before you can play in a game
4. Scaling issues fixed
Ethereum is the most popular blockchain for games. However, ETH transactions are currently limited to 10–15 per second. This presents major issues to a game where players may be doing 100s or 1000s of transactions a second.
Games currently cannot operate at a mass market level without breaking the Ethereum network — even if they had enough players.
Therefore ETH scaling solutions must be solved before games can reach mainstream adoption. Potential solutions include:
- Game level adjustments to cater for transaction limits (using non-blockchain solutions or partial centralisation)
- Ethereum scales as a platform via ETH2.0 or other mechanisms
- Games turn to other blockchains which can process more transactions per second
5. Big studios succumb to blockchain
Blockchain can only take a game so far. Players will still be attracted to a game that is high quality, well designed and fun.
Current blockchain gaming developers have limited budgets to compete with AAA games, so even if they design a better game, it is difficult to pull in mainstream players.
In order for blockchain to truly become mainstream, the big studios like Blizzard, EA and Ubisoft (who have begun exploring already) will need to add blockchain to their games. Their big ones.
Currently there are strong disincentives for them to do so:
- Drastic cost to implement
- Massive risk of disrupting current player base
- Requires changing their monetisation model
However, the time will come where the value add of blockchain outweighs the risk and cost, and we will see the AAA studios switch to this new technology.
When this happens, we will see games which have quality and gameplay at a level of say World of Warcraft or League of Legends, but with the added benefits of blockchain.
