On the metaverse and play to earn games
For the past couple of months, the word metaverse has been practically everywhere. We seem to have instantly transported ourselves into a new “Ready Player One”-style reality, and even Facebook has changed the company name to “Meta”.
But what is this metaverse?
Let’s start by saying that the metaverse as a concept is not new at all. The movie Ready Player One is from 2018, the video game Second Life is from 2003, while the Oculus visor was created in 2012.
The fact that this word is back in the mainstream now has nothing to do with the virtual reality in which you can access cool parallel universes like in the one in the aforementioned movie. Instead, all this hype is attributed to something much simpler: video games that use blockchain technology.
Thanks to the blockchain, you can store items and consumables from the game in a distributed way, in the form of NFTs. In this way, you can create a secondary market for these items where users exchange them for money, and the blockchain can even help you earn tokens by playing, tokens that can then be sold; hence, the play-to-earn model was born.
There are games where, if you’re good at them, you can make $100, even $500 a day, with a minimal initial investment. What if you don’t have time to play but you have the money to be able to invest? Well, you can rent your items or characters to some other user who can’t afford them and they will play for you and you will split the earnings.
Then, there are some new games, such as “walk to earn” games, where the user has to buy an NFT shoe, worth around $2000 at the moment, and, to put it simplistically, the more he walks, the more he earns. He earns in-game tokens, which he can then use to upgrade his shoe and increase its earning power or convert these tokens into euros or dollars. These games are meant to incentivize a healthy and active lifestyle — although we have already seen some people lending their NFT shoes to friends so they can take more steps, and thus earn more money.
So, to recap, there are games where you make money just by playing and winning, games where you just need an initial investment to buy characters, armor, shoes, and you can have a pretty good salary. And if you don’t have the money, you can always ask a lazy player to rent you his objects and split the earnings.
But is this really the case?
More importantly, how sustainable is such a model that screams pyramid scheme from every side that you look at it?
Here, although it has not been declared a pyramid scheme, it is very similar to one. The tokens that you earn have a value given by the market. Today, they can be $1 and tomorrow 1 cent. So, if my $100 gain today can be a dollar tomorrow, would you ever play a game for a whole day for a dollar?
The value of these tokens, as well as the value of the items, is given by the market. If there are a lot of players today, there is a lot of demand and therefore the value is high. However, if tomorrow the game is forgotten, it also becomes cheaper to play, but the gains will tend to zero. And the people who bought that NFT at $2000 may never get their money back.
Think about if a game like Pokemon GO had been made with NFTs: in the first few months after it launched, an exorbitant number of people had downloaded the game. With NFTs, there would have been an absurd demand for items, and maybe a Charizard would have cost one million dollars, and, after a few years, maybe it would be worthless given the decreasing number of players.
But this is not even where the real problem lies.
The pyramid component (ponzinomics) of these games is not even the real problem; to understand it, we must first ask ourselves :
Why does a company, a private entity, that produces a videogame want to decentralize its database?
NFT is a trendy word today, a business word that is used by a company’s press office in a release, along with the other word “metaverse.” These words can produce instant publicity and a guaranteed front page. This would not be the case if that press release talked about “collectibles.”
The new technology makes the news, and the word blockchain is everywhere in the news, but a blockchain is nothing more than a database that performs poorly, especially compared to regular SQL databases. The only difference is that it is a distributed database and therefore slower and more accessible to everyone.
If the company that developed a game from one day to another decided to stop developing it, or even went out of business and shut down all the servers, thus making the game unusable, those NFTs would surely still remain on the blockchain, but they would be useless because they would be unusable. No new company would want to create a new video game where you can use NFTs that have already been created, with the profits received by another company.
Those who believe that NFTs are the best technology for objects in video games also justify their choice by the fact that with this technology it is easy to create a marketplace for them. Players are thus free to exchange or sell various objects to each other for tokens or money, using the blockchain and without intermediaries.
Beyond the points made earlier, namely that the blockchain is the least optimized database that exists and that those items are tied to the game anyway and without it are worthless, it should be considered that marketplaces for items in video games already exist without NFTs and without the blockchain. And they work well.
Taking as an example something that I know well, the soccer video game FIFA has its own internal marketplace, where users can sell players, stadiums, and various items to each other. It works very well, and there is the possibility to have auctions or buy now, like eBay. The fact that these items cannot be sold for real money but only for in-game tokens is a business choice, and also the right choice in my opinion, which keeps the gaming experience authentic and fun.
Video games are for fun, not speculation. This is what stock markets are for.
Conclusions
Between video games that resemble a Ponzi scheme and ugly videogames, really ugly “metaverse” videogames that look like games from 10–15 years ago, I certainly cannot say that the combination of videogames with blockchain has been a successful experiment so far.
The high volumes and market capitalization surely tell a different story, but videogames were not born as a tool for speculation. The fact that the prices of these NFTs are so high is only due to the bubble in which we are in now. The true gamers, the ones who look at the quality and purity of the game and not how much money you can make, have never heard of these games on the blockchain.
At the technological level, I have already roasted this mix of videogames and blockchain so I won’t add more fuel to the fire. For now, NFTs are a solution looking for a problem, and they haven’t found it yet, certainly not in speculative video games.
I believe that, with time, after many failed attempts, we will come to understand what the best use of blockchain and NFT technology is in the video game industry. But, until then, I will stay far away from it.
If you liked this article, you might want to follow me on Twitter for more interesting content!
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
