Free-to-play Isn’t Free Enough (or How I Learned to Stop Worrying and Love Blockchain) Pt.3
This is the third of three posts on our motivations for starting Forte, a new company formed to accelerate adoption of blockchain technology in the games industry. These posts are oriented toward my blockchain curious friends in the games industry, and try not to assume too much blockchain / crypto native knowledge or jargon (except where necessary).
Most people have heard of the phenomenon of “gold farming” in games with semi-liquid secondary markets for in-game currencies and items. Gold farmers play games to earn in-game currencies and trade them for real world value (usually denominated in real world currency). They exist because there is demand for these in-game items from other players, who buy them for their own use. Publishers often react to this activity negatively because they view it as cannibalistic to their revenue, through their monopoly on in-game currency and items. However, all games that exhibit this behavior do so because *on balance* the publisher views more benefit in supporting player-driven economies (e.g. trading) than harm to their sales due to competition. This is a delicate dance, but games that support player-to-player trading through either an explicit in-game construct or by enabling enterprising players and third parties to create external markets are some of the longest-lived game properties in the world.
Game publishers like CCP (publisher of Eve Online) who have integrated this behavior and limited optionality explicitly into their game features obviously view this as beneficial to the health of their game audience and in-game economy, but they often struggle to avoid market manipulation, fraud, and arbitrage. Other game publishers take a different tact and seek to shut these secondary markets down whenever possible, banning player accounts that have been resold to other players or listed publicly for sale.
My view, both as a game designer (previously) and a player is that game economies should be multi-directional, just like real economies, supporting safe transactions player-to-player, publisher-to-player, and player-to-publisher. Game designers should be striving to build economies with these agency-positive features, economies where players can be rewarded for participating in many different ways, including ways the designer may not have anticipated. This is a major focus of our mission at Forte because we believe it provides a vastly improved foundation for games of the future and better aligns player interests (agency, rewards for chosen form of participation) with publisher interests (building long-lived healthy game economies that players also have a stake in).
The phenomena of gold farming and secondary / gray markets for in-game currencies and items is an example of a multi-sided market not operating efficiently due to misalignment of incentives and failure to include necessary and valuable participants (players) in the economic model. A similar phenomena exists in the multi-sided market of users browsing the web, publishers who create web-based content, and advertisers who try to reach users by buying digital real estate with publishers.
Some of you may be familiar with Brave, an open source browser from Brave Software (founded by Brendan Eich, co-creator of Javascript). As something of a privacy nerd, I was an early adopter of their first release in early 2016. The value proposition was that Brave would block ads and ad-tracking software (by default), accelerating performance and protecting user privacy from increasingly sophisticated tracking techniques employed by web publishers, typically without the end-user’s knowledge or consent. I thought Brave was a fantastic product, but worried about how they would support their own development efforts long-term or win market share in such a competitive field.
In early 2017, Brave published a whitepaper for the Basic Attention Token (BAT), a decentralized ad exchange platform built on Ethereum. In Brave, BAT denominates the value of protecting privacy (end users), monetizing content (publishers) and marketing (advertisers), and it affords all parties the right to participate. End users can reward web publishers with BAT directly and in proportion to their browsing habits and preferences. Advertisers can target Brave users based on privacy-preserving user profiles with ad formats that have minimal performance impact on browsing with insertion orders (IOs) denominated in BAT. Web publishers can earn rewards from Brave advertisers and users who frequent their site (and accrue balances of BAT) rather than force credit card paywalls or introduce speed crippling, privacy intruding ads and tracking systems into the experience.
Brave minted enough BAT at its ICO to provide the company with a warchest of value to offer users in exchange for giving the product a try. That’s a powerful incentive once understood by potential users in much the same way as gold farming is to games. Moreover, it aligns the interests of end users, Brave, advertisers, and web publishers.
The Brave schema is probably not perfect, but to me it looks like a large step in the right direction. I immediately wondered if a similar schema might be suitable to games as a complement to performance advertising through existing channels. Wouldn’t an end user rather participate in the marketing spend allocated to garnering their interest than a byproduct of it, excluded from such a central economic model that drives the industry? As a user and as a developer, I would certainly think so.
In our next post, we have some exciting new announcements offering a first look at Forte platform architecture and partnership opportunities for developers ready to embrace agency positive game design and design more player driven economies. Stay tuned!
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