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Axie Infinity is a pioneer in the play-to-earn gaming concept. As a blockchain-based game, Axie allows players to earn rewards through gameplay, making it one of the first games to truly put the power of ownership into the hands of its players.
With a focus on creating a fun, engaging experience and a vibrant community, Axie Infinity allows players to collect and battle unique creatures called Axies, build and manage their own gardens, and participate in various in-game activities. The game is built on the public blockchain, ensuring that all Axies and other in-game items are truly owned by the players and can be bought, sold, and traded on the open market.
The “play-to-earn” concept in gaming has seen a surge in popularity since the launch of Axie Infinity, with numerous games emerging in its wake, all promising to offer players the chance to earn rewards through gameplay. However, many of these games, including predecessor Axie Infinity itself, have struggled to live up to their promises, falling short due to flawed economic game design mechanisms.
Check out our post on tokenomics to learn how the law of supply and demand plays out in crypto projects.
A play-to-earn (P2E) game is an electronic game that allows users to earn in-game rewards that are easily transferable into real-world money, mostly through cryptocurrencies or NFTs. In some sense, the P2E concept is a dream come true: you get to play a fun game while earning money from it.
Earning income from games is not exclusive to Web3; the idea has existed for decades. Top esports players and teams earn thousands and millions in prizes. Twitch and YouTube streamers get income through donations or ads. However, blockchain-based P2E brings the concept directly to the masses: any user can earn digital assets from playing.
On paper, play-to-earn games sound cool, right? Ownership of hard-earned in-game items and the opportunity to earn more money than in your 9-5 job. So probably, every game studio should replicate the game model and earn tremendous money by introducing this concept to hungry gamers’ audiences. Let’s pause right here because it ain’t as easy as you think.
Game design is a challenging and complex field, with many moving building blocks and intricate mechanisms that must all work together to create a seamless and enjoyable player experience. It’s easy to underestimate the amount of work and thought that goes into creating a successful game, and even the smallest mistake can have a big impact on the player experience.
Mechanics: This includes the core rules and systems that govern gameplay, such as movement, combat, and resource management. The mechanics must be well-designed and balanced to ensure that the game is both challenging and fun to play.
Art and Visual Design: The look and feel of the game are crucial to creating an engaging and immersive player experience. This includes the character design, environment design, and overall visual style of the game.
Story and Lore: A strong narrative and well-defined lore can help to bring the world of the game to life and engage players on an emotional level.
User Interface (UI) and User Experience (UX): The way players interact with the game is crucial to their enjoyment of it. The UI and UX must be well-designed and intuitive, making it easy for players to understand and control the game.
Sound and Music: Sound and music can greatly enhance the player experience, creating atmosphere, setting the mood, and adding to the overall immersion of the game.
Economy: In many games, the economy plays a crucial role in the player experience. This includes the balancing of in-game resources, the implementation of trade and commerce systems, and the design of reward systems.
I haven’t mentioned all the building blocks, but anyways that already sounds complicated and complex. Now add a token (or multiple tokens) and in-game assets as NFTs to that. If digital assets are implemented incorrectly, it can create a lot of friction and additional challenges which weren’t foreseen.
Axie Infinity SPL is the native cryptocurrency of the Axie Infinity platform. It is the primary means of exchange within the virtual world and gaming platform. The utility of SPL varies depending on the specific use case, but generally, it is used for trading and breeding Axies and making in-game purchases.
Before experimenting with blockchain game design, especially the economic side of things, it would be perfect to know the most common failure patterns so the game could be optimized to avoid those obstacles. Let’s take a look at the most common hurdles:
Hyperinflation of the native currency: If the supply of the in-game currency is not properly managed, there can be an overabundance of currency, leading to hyperinflation and a devaluation of the currency. This can have a negative impact on the player experience and the overall economy of the game.
Speculation and unsustainable rewards: Usually, play-to-earn games offer high rewards to players, but these rewards may not be sustainable in the long run. This can lead to speculation and market manipulation, causing the value of the rewards to fluctuate dramatically.
Unbalanced reward structures: If the reward structure is not balanced, some players may have an advantage over others, leading to an unfair distribution of rewards. This can reduce player motivation and engagement, and undermine the overall success of the project.
These economic problems can be difficult to solve and can cause significant harm to the player experience and the overall success of the project. As such, it is important for play-to-earn games to carefully consider these challenges and implement robust economic models that can help ensure the long-term stability of the project. So how can we do better?
First, we need to understand for whom we optimize the game, and in order to do that, we need to comprehend the motivations behind why players engage with games in particular.
For players who seek unique and personalized experiences, games should offer the opportunity to explore and experience new worlds and storylines in a way that is tailored to their individual preferences. These players value creativity and independence and enjoy the freedom to make choices that impact the game world. Games that offer deep player customization and non-linear narratives can be especially appealing to this type of player.
For players who seek connections with others, games should provide a way to interact and engage with others in a shared virtual environment. These players value social interaction and the sense of community that comes from playing games with others. Games that offer robust multiplayer features and encourage player interaction can be particularly appealing to this type of player.
For players who enjoy challenging their abilities, games should provide a way to test their skills and push their limits. These players are often competitive and enjoy the sense of accomplishment that comes from overcoming difficult challenges. Games that offer challenging gameplay and a clear sense of progress can be particularly appealing to this type of player.
Imagine making niche, hard-to-earn items freely tradeable, would that affect players? Probably, yes, and in a negative way because that, in the long run, would eliminate the satisfaction of completing a task and demotivate players to engage with your game.
So obviously, player motivation is essential to the creation of successful games. By catering to these motivations, game designers can create games that appeal to a specific range of players and provide a fulfilling and enjoyable player experience.
So we already know that hyperinflation, unsustainable rewards, and unbalanced supply mechanisms are the enemies we should fight but with what weapons?
Implement Dynamic Supply Mechanisms: To prevent speculation, games can implement dynamic supply mechanisms that adjust the supply of in-game items in response to market conditions. This can help to reduce volatility and create a more stable in-game economy.
Implementing Progressive Taxation: Imposing a progressive taxation system that increases the cost of trade as the frequency and volume of trades increase can help to reduce speculation and promote a more sustainable economy.
Creating In-Game Utility: By designing assets with in-game utility rather than solely as collectibles, players are more likely to use and engage with the assets rather than simply trade them for profit. This can help to promote a more sustainable economy and reduce the risk of speculation.
Encouraging In-Game Progression: By creating clear paths for player progression and offering meaningful in-game rewards for progress, players are more likely to focus on the fun and gameplay experience rather than solely on the financialization of the game.
Offering a Diverse Range of Assets: By offering a diverse range of assets, rather than just a few highly sought-after items, players are less likely to concentrate their efforts on a small number of assets, reducing the risk of speculation and promoting a more sustainable economy.
Monitoring Market Behavior: Regularly monitoring market behavior and making adjustments to the game design as needed can help to reduce the risk of speculation and promote a more sustainable economy. This may involve adjusting the supply of assets, adjusting the tax rate, or making other changes to the game design as needed.
Of course, the game economy is important but do not think about economic parameters and optimization only. Think about the positioning of the game as well. To avoid becoming solely focused on economic speculation, games should be fun.
If a blockchain game is only about making money, it will likely attract a player base that is primarily interested in exploiting the game’s economy for financial gain. This can lead to a situation where players are not engaging with the game itself but instead are only concerned with buying and selling virtual assets in order to make a profit (extracting value out of the game). When this happens, the in-game economy becomes driven by speculation and market manipulation rather than by the actual use and enjoyment of the game. This can have a negative impact on the player experience and the overall health of the game’s economy.
Cultural narratives and storytelling play a crucial role in making blockchain games fun and engaging. A strong cultural narrative and compelling story can help to create a sense of immersion and connection for players within the virtual world. It can also provide context and meaning to the various in-game activities and interactions.
For example, a well-crafted cultural narrative and story can provide a backdrop for the in-game economy, giving players a reason to care about the virtual goods and currencies they exchange. It can also create a sense of ownership and attachment to the virtual world, which can help to drive player engagement and investment in the game.
In addition, cultural narratives and storytelling can also help to foster a sense of community among players. Players can share their experiences and engage in collective storytelling, creating a sense of belonging and shared purpose within the virtual world. This can lead to a more dynamic and thriving in-game economy, as players are more likely to participate and invest in the virtual world if they feel connected to it and other players.
The nature of blockchain game economies provides a unique opportunity for economists to test and observe economic systems in real time. In a blockchain game, players can buy, sell, and trade virtual goods and currency with each other in a decentralized marketplace. This creates a functioning economy that operates independently of any central authority and is driven by market forces such as supply and demand.
Because these economies exist within a virtual world, they can be manipulated and experimented with in ways that would not be possible in the real world. For example, economists can test the effects of different monetary policies, such as inflation or deflation, by adjusting the supply of virtual currency within the game. They can also observe how players respond to changes in market conditions and how they make economic decisions based on these changes.
In addition, blockchain games provide a large and diverse player base, which can help to increase the validity and generalizability of economic findings. This is because the player base is made up of individuals from different countries, cultures, and backgrounds, all of whom are interacting within the same virtual economy.
Overall, the nature of blockchain game economies provides a unique opportunity for economists to test and observe economic systems in real-time, allowing for a deeper understanding of the workings of real-world economies and the potential for new and innovative economic theories and models.
When implemented well, digital assets can lead to new gaming experiences. Game economies are highly customizable and community empowering, which comes naturally from blockchain openness. Adding cryptocurrencies to the mix provides a unique opportunity for players to participate in a functioning economy and experience real-world economies’ workings in a fun, engaging, and unexplored environment. We have already seen the power of Axies and StepN. Even with a lot of economic flaws, those games were able to attract probably more users than any other blockchain application. So, imagine what a decent new-gen blockchain game with economic flaws solved could do! Exactly – the future for blockchain gaming is bright.