Games and blockchain: 2023 update

A year ago, I wrote a post about Games and Blockchain. Admittedly, it was a reactionary post as I was pretty tired of the VC hype “A huge wave of AAA games will change the blockchain landscape in 6-12 months and onboard the next billion users”. I had first started writing about blockchain scaling on reddit in 2020, but no one really cared till I went bombastic and hyperbolic deliberately in mid-2021 - very much against my own nature - and it worked. So, having learned from that, I used some of the same tactics here. My main goal was to point out that a vast majority of traditional AAA games cannot and will not benefit from blockchain tech in anyway - particularly singleplayer games. A year later, a lot of that hype narrative has died away, so I can instead just focus on the optimistic parts of that post.

Where blockchains still don’t make sense

Pretty much most games, forcing blockchains and financialization will destroy them. True, certain games are financial-oriented - particularly in the MMO and mobile space - those are exempt from the above, but also, most of them still don’t benefit from blockchains and work just fine with traditional finance.

Slapping ponzis onto a terrible nonchain game, which is like 99% of crypto games today.

Sharing assets between games, impossible and pointless without underlying infrastructure or a good reason.

I don’t need to be reactionary now, so let’s cut this section short and focus on the progress we’ve made on the topics from the 2022 post.

Decentralized gaming infrastructure

So, firstly, I don’t think “decentralized” is the right word, perhaps “distributed” is more accurate. Either way, decentralized gaming infrastructure, distributed gaming infrastructure or onchain gaming infrastructure - whatever you want to call it - has made a ton of progress in the last year. We have two very promising frameworks - MUD and Dojo. I expect these frameworks will mix and match, be compatible with each other, plug into traditional game engines like Unity or Unreal and middleware like Simplygon or Wwise. This infrastructure goes beyond blockchains, and is indeed being built. However, like I mentioned last year, it’s a daunting challenge and will take several years to build out to maturity.

In a previous post about Fractal Scaling, I had thought of onchain games as being 1,000 app-specific validiums settling on a L2 rollup. But the design space for infra for onchain games and autonomous worlds is wide open and there’s just as much innovation to come offchain.

Game development studios as DAOs

Not much progress on this front, but this remains a clear space which makes sense for blockchains. Particularly MMO and platform-type games.

Game distribution

Some attempts, but no real progress on this front. Perhaps we’ll have to wait for onchain games to go live before this happens, and maybe that’ll be a trojan horse for onboarding nonchain games? Maybe, still skeptical about this for reasons mentioned last year.

Novel mechanics using smart contracts

We have seen some pretty cool ideas emerging at the Autonomous Worlds hackathon. I’ll add that these mechanics do not necessarily need to be “novel” - they can be riffs on existing ideas, as long as they make sense to do on smart contracts.

What happened to AAA games?

Pretty much every AAA publisher has given up on blockchain stuff, and a lot of the games VCs claimed to be AAA were never AAA to begin with. However, I must mention Project Awakening, a game in the EVE Universe. Based on their announcement and discussions, it checks all boxes I mentioned!

  • EVE Online already a successful economic-oriented game, so financialization makes sense; indeed, blockchains have the potential to remove friction from certain aspects of financialization

  • No asset sharing or “web3” or other half-arsed memes mentioned

  • Game development as a DAO - while they don’t mention a DAO, “truly open third-party development” pretty much implies this

  • Key game systems are onchain, driven by smart contracts; and I’d assume a ton of infra is offchain

I hope to see more of this, both from the established gaming industry, and also the emerging onchain gaming space. I will say, though, my personal interest is more in non-financialized games and cooperative storytelling, so hope to see that too! Network States sounds promising.

Concluding, the blockchain gaming space has made progress in the last year, and everything I had wanted are emerging trends, with some of the games-as-ponzis fad dying out. To be clear, those will resurrect in bull markets, but I’m confident the true onchain games with systems that actually make sense onchain will stand the test of time. However, unlike some of the topics I have written about in the past, onchain games and autonomous worlds are easily the most complex software development in crypto, and I expect it to take at least 5 years for this space to start maturing. There’ll likely be shorter-term manias, but it’s a long game.

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