State of Cryptogames in 2018

by Joseph Benjamin Pacia and Kerin Kokkhour
Game Designers, Altitude Games
Source: Pexels

The cryptogames space remains new and uncharted, with technology developing at a rapid pace. Our studio Altitude Games took a look at current cryptogames to determine how we could join in. We think that our findings might be beneficial to other developers, so we are making our little write-up available publicly.

This article aims to summarize the cryptogames market, its upcoming technologies and innovations, and recommendations on what future cryptogame developers should do. It assumes some basic knowledge of cryptocurrency and the blockchain; here’s a great beginner’s guide on Medium with links for further reading.

What are cryptogames and how do they work?

Imagine hundreds of games — digital card games, strategy games, RPGs, sports games — that all adopt the ERC 721 standard for in-game items. Items you earn in-game can be sold and bought on open markets in exchange for cryptocurrency, and can be used in other games that support them. A powerful item you earn in one MMORPG can be transferred to your inventory in another game, so long as the developers of the second game choose to support it.
Imagine that you’re a game developer about to release a new RPG. You decide that the audience for a popular FPS might really like your game, too. To draw people into trying your RPG, you offer the players of the FPS a really good exchange rate or special bonuses when they bring their FPS items into the RPG. Maybe a group of games all decide to share a common set of in-game items, or a shared currency, to benefit from the network effects of giving players more to do with their “money”.
Josh Stark, “Digital Collectibles and the Weird Future of “Digibles”, Dec. 22, 2017

Cryptogames make use of the platform of trust that ERC721 creates in terms of ownership. Player-owned game items (referred to here as cryptoitems) are on the blockchain; they’re tokens, but can be anything within the game — cards, characters, etc. Once owned, these cryptoitems can never be taken away and stay with the owner even if the game goes down and ceases its service. They exist separate from the game and can be used however the owner wants.

Because these items are independent, they can be used in other games. Depending on whether the developer made a functionality for them in their game, cross-game items are possible. An example for this in the real world is Nintendo’s amiibo, a collectible toy that can be scanned into different games for goodies. Cryptoitems are a digital version of it.

‎A cryptoitem can gain value somehow, whether from player action or market speculation, meaning if a player resells this item the cost can change. Starting price is determined by the game (on creation) but after that, players determine prices. Until recently, cryptoitems could not be modified.

The present market

Currently, cryptogaming is still an emerging market with new technology all around. Competition is fierce with everyone trying to be the “first” or “best in genre”.

There are a number of cryptogames already out, but with minimal gameplay. Most of them are collectible games like CryptoKitties (the first well-known crypto-collectibles game), CryptoCountries, CryptoCelebrities, etc. where you collect digital cats, countries, and other things, interact with them (minimally), and trade them with other players.

Lots of games are in development and will be released soon, and they are more complex in gameplay. Most of them are trading card games (Nova Blitz, Age of Rust, etc.), followed by RPG games (CryptoSaga, etc).

Cryptogames are mostly on Ethereum due to its technology that allows a wider range of data to be put into blockchain, which is suitable for game objects.

Developers see cryptogames as their new fresh market and want to be part of it, while players see cryptogames as a new, fun way of making profit apart from the cryptocurrency trading itself. They still approach this with an investor mindset.

Current problems of cryptogames

There’s much to be improved on with the current iteration of cryptogames, whether you’re a veteran cryptocurrency holder or a new user entering the space.

1. Frequency and placement of transactions

To make any change to the blockchain, a transaction must occur. The way cryptogames are set up right now, all in-game actions require a transaction, making the game experience a string of transactions rather than gameplay actions and choices.

2. Transaction cost transparency

For the games and/or platforms to make profit, they attach fees to these transactions. While these are not unwarranted, many cryptogames do not show these transaction fees until the payment is being made through the wallet. They are not shown on the listed price, action page, or purchase page. This can cause many users to have a misleading and dissatisfactory experience, especially if they are unfamiliar with cryptocurrency.

The displayed price is different from the full payment (Source: CryptoKitties)

3. Lack of clarity on item value

Players have a difficult time discerning the value of their cryptoitems without a knowledge base as to what the item’s traits mean or do. Not knowing what your items do without a game surrounding it gives it value only as a collectible without function, and those do not age well into the future.

4. Ethereum blockchain limiting scalability

As the usage of the Ethereum blockchain grows, the time it takes for transactions to resolve becomes longer and longer. (CryptoKitties’ popularity once nearly brought down the blockchain.) Increasing transaction counts in your game further worsens the problem.

5. Barrier to entry

There is often a high price tag to enter into a cryptogame. Purchasing your first cryptoitem or partaking in a battle to earn one requires a decent amount of currency to start. Games with starter sets or more approachable prices prove easier to get into, while those without lean toward a smaller community.

Emerging trends and market prediction

1. Changes in item properties

Cryptoitems are changing from pure collectibles with static content to items with properties and values nurtured from player interaction. An item’s properties are continuously updated through gameplay, which increase the item’s usability and value not just in the original game but future ones that use it. However, there are still nagging problems about transaction cost.

A notable example is a game currently in development called Neon District, which focuses on a character token’s development from a blank slate into something worthwhile by playing the game.

2. Cryptoitem trading platform

Not limited to just games, developers are also competing to release a platform for cryptogames, be it game portal (Enjin) or central trade platform of cryptoitems (RareBits, OpenSea.io). However, cryptoitems can only be put up on one platform at a time as of now.

3. Smart contract games

Some games are now using smart contracts as a way to play, which usually directly involves cryptocurrency exchanging hands. Cryptogambling (such as Etheroll and VDice) uses the randomized number function of Ethereum’s smart contract to determine if the player won their bet and what the payout amount is. Since it’s on the blockchain, there is no way the house can rig the bet; the code is available to view on the chain and cannot be changed, fostering trust and transparency. If you are code-savvy, you can see its inner working here. There will surely be more creative ways of using smart contracts for game development in the future.

4. Migrating traditional games into blockchain

Some already existing games are making an attempt to move their own old centralized economies into the blockchain, giving players full ownership of their game items.

For example, existing trading card games like Spells of Genesis converted some cards into blockchain-based cards to allow true ownership and peer-to-peer trade. Trading hubs like Book of Orbs now exist solely for trading these digital blockchain assets.

What will the market look like in six months? This is our prediction:

  • Ethereum will grow both in value and platform scale, with more players causing an explosion of transaction traffic
  • More games (and publishers like Ubisoft) are going to start adopting blockchain capability with decentralized digital ownership
  • Now that enough time has passed, cryptogames will have higher production value and gameplay complexity
  • Collectible-only cryptogames will see a huge decrease in item value, and either seek to find new strategies or end their service

What would we recommend for a good cryptogame?

Based on the findings above, we recommend future cryptogames to do the following:

1. Design your cryptoitems based on the desired player experience

The design and implementation of your cryptoitem should reflect what you want your players to experience from play.

If you plan to make players earn the cryptoitem, then the item itself wouldn’t have a function written on it. Your game can use it one way but other games can use it another way. This creates more flexible cross-game compatibility.

If you plan to make players grow their items, then the item should have that progression written onto it. A cryptoitem that grows in value through gameplay should have that reflected on the blockchain, instead of keeping that progress on a centralized system that can overwrite trust.

2. Minimize or group transactions together

Don’t place all transactions directly and frequently on the blockchain. Frequent transactions carry a lot of processing, which also requires gas to complete that transaction. That creates a slow and unwieldy experience for players.

One suggested solution is to make minor calculations off-chain when possible, and only do on-chain token update when absolutely necessary. Keeping some parts off-chain reduces blockchain usage so gas spent is less and wait times to confirm actions are not as long. Less frequent blockchain transactions can be saved for impactful gameplay events (like your character levelling up) and not regular gameplay (each XP earned).

This would require the game to have a centralized server to process the game calculations, but still worth it if it can minimize the player’s cost to play the game.

3. Have intrinsic value to the collection of your cryptoitem

Many cryptogames have basic to no gameplay. A cryptoitem’s value should come from the gameplay and not just its market value. Engaging and enjoyable gameplay makes items truly desirable for ownership rather than for security.

4. Show transaction costs

In a platform where trust is a selling point, you should display your transaction costs. Players will see the total amount in the wallet confirmation anyway; placing them at least in the purchase page before they commit to the transaction would be good. This reduces cases of people asking and complaining about extra fees on social platforms.

5. Display rarity/scarcity of cryptoitems and attributes

Unless your game is fully established, players may not know which cryptoitem is rare or valuable. It is ultimately up to them to place value based on the economy we want, but giving information openly is ideal. Also, this information is good for new players coming in so they can readily know and approximate the value of their earnings.

Rarity is inferred by number of tokens in the market (Source: Ethercraft)

6. Lower number of cryptoitem types

Aside from making production more manageable, reducing the number of item types gives clarity to the value and purpose of each. This helps players understand more clearly the value of an item and how it interacts with other tokens, and also lets the game be more balanced and clear in its goals.

7. Have fiat in mind for the economy

Gamers that will enter and populate your community will be coming from other platforms that still use fiat money (government/legal tender). They will still think about purchases in that scale rather than cryptocurrency. Keeping prices comparable to what players are used to can make them less likely to bounce off the game and the crypto space as a whole. At least for your marketplace items/initial item offering.

Conclusion

The cryptogames scene is changing fast. Our findings should be incorporated into all stages of cryptogame planning and production in order to maximize your chances of success.

We hope this article is useful to you readers in some way, and we would be really happy if our findings can give you some insight into the fun ride of the cryptogames market.

Also, if you’re interested in discussing more on cryptogames, we have a telegram channel here.

Thanks for reading, and godspeed!