Written by: CaptainZ

I have been studying the blockchain gaming industry for almost two years, and have almost seen all the game projects in the market. From the initial excitement to the later confusion, and then to the surprise of seeing the whole blockchain game, it has been full of ups and downs. Here, I will try to summarize my thoughts on the future development of blockchain gaming, hoping to be helpful for VC investment and game builders.

As a web3 application in the blockchain industry, the chain game used to bear the responsibility of mass adoption in the industry, but as everyone can see, almost all projects are short-lived. Previously, ABCED's Lao Bai (@Wuhuoqiu) mentioned that there are three directions for the future of chain games, which are:

• 3 A level GameFi (games with strong playability, blockchain is only used for coin issuance)
• GameFi at the level of casual games (games with relatively weak playability, blockchain is only used for token issuance)
• Full on-chain gaming (game logic written into smart contracts)

I also deeply agree with this proposition, but I have a different view on the outcome of the development.

Let's start with the first one. The initial popularity of blockchain games started with projects like Farmer World and Spaceship. To put it simply, these projects lacked any gameplay and were more like virtual mining Ponzi schemes. However, people felt that the games lacked playability, so from 2020 to 2022, various VC firms invested heavily in traditional studios capable of producing high-quality games. But does having gameplay at the level of a AAA game guarantee success for a blockchain game? Not necessarily.

First, it is necessary to introduce the concepts of 'investment-type users' and 'product-type users'. Tracy (@CTracy0803) first mentioned these two concepts in the article 'Web3 Marketing Transformation: Building a New Framework Centered on Investment-Type Users'.

• Product users refer to consumer users who focus on the user experience and functionality of the product, and expect to obtain satisfaction or convenience through the product.
• Investment users: refers to those users who expect to obtain investment returns through the product. Their focus on the product lies not only in the user experience, but also in the economic value and future development potential of the product.

Obviously, the typical user of Web3 is an investment-oriented user, or in other words, a very speculative degen (gambler). You can't expect this group of users to play a 3A game honestly. They don't have the time or the mood for it. If you set the yield of play to earn a little higher, it will quickly collapse. The production cost of 3A games is quite high, and if it collapses too quickly, the cost cannot be recovered.

Putting 3A blockchain games into the Web3 circle is obviously inappropriate, the logic is not convincing, this is called PMF mismatch. What to do? In fact, you can go to the traditional gaming circle, just change the customer base from Web3 to Web2. Isn't the playability very strong? Isn't it AAA level? As long as the quality is excellent, the target should be the tens of billions of potential users in Web2, why focus on the tens of thousands of potential users in Web3? And even if a very low profit rate is set, players will still be happy and grateful.

Let's talk about the second one, which is GameFi at the casual mini-game level. There are currently two forms: those based on social platforms and those not based on social platforms. A typical example of the former is Hamster Kombat, while an example of the latter is The Beacon. Hamster Kombat is a click game based on the Telegram mini-program. Users only need to open the game link in the Telegram app on their phone (which is actually an H5 page) and keep clicking on the Hamster avatar to generate points, which can be exchanged for tokens (but the tokens have not been issued yet). The game is extremely simple, but the number of participants is also extremely large. The official statement last week indicated that the number of players has exceeded 150 million (although we know that there are many bots, the remaining volume is still huge). The Beacon, on the other hand, is a dungeon adventure game incubated by TreasureDAO. The playability of the game has been enhanced, and players use the keyboard to control characters to dodge and kill various monsters in the dungeon (actually, a full-stack single-player game studio can develop it in 3 months). Currently, the game only supports running on a computer browser and does not support mobile devices. It is estimated that the cumulative number of players for Beacon should only be a few hundred thousand.

Currently, neither of the two games has issued tokens. It is obvious that people are participating in anticipation of some kind of 'Airdrop', and we can even say that the day the tokens are issued for both games is the day of their demise. Although Beacon is more playable than Hamster, Web3 users are basically investment-oriented users. They even believe that Hamster's mass adoption outreach is much higher than Beacon's, so shouldn't its market cap be higher too (refer to NOTCOIN)? So, I believe that blockchain mini-games based on social platforms have better development prospects, because:

• Social platforms are all mobile apps, making it easier for users to participate using their smartphones
• Participating in the mobile app makes it easier to make use of fragmented leisure time
• Easier to leverage social media for viral marketing and dissemination
• Users are more likely to retain their own (tg channel, twitter account, youtube channel, etc.)

Finally, let's talk about on-chain gaming. On-chain gaming involves writing game logic into smart contracts to achieve decentralization and trustlessness, similar to DeFi (Decentralized Finance). It is currently in a phase of technical exploration, but the basic infrastructure such as game engines has begun to improve, and a dozen or so test games have emerged. It was popular for a while last year, but now it has quieted down. I think the reason why on-chain gaming hasn't taken off is simple: it lacks speculative targets. Especially in the context of a bull run, market hotspots change quickly, and if a track lacks speculative targets and profit effects, retail investors' attention will immediately be drawn to the most aggressive track in the market. Of course, there is another reason: I tried playing several on-chain games and found that the gameplay was too complicated, making it difficult for ordinary users to get started. Always remember that 'Web3's typical user is an investment type such as a degen,' without coins for speculation and complicated gameplay, users will keep their distance. Currently, on-chain gaming urgently needs a new token distribution (mining) model similar to 'liquidity mining' and 'rune forging.'

In summary, from the perspective of VC or blockchain gaming project parties, my opinion is as follows:

1. If the technology is strong, the first consideration is to develop a decentralized on-chain casual game based on a social platform. Why? On-chain games decentralize the game, which is in line with the industry's correct worldview and is the core narrative. By adding casual games and relying on social platforms, it is easy to acquire traffic. Take a simple example: make an on-chain version of 'Hamster Kombat'. When promoting it, you can say that we are a decentralized game, and all game actions are recorded on the chain. Isn't it sexy? Full buffs? It immediately sets us apart from other TON ecosystem projects.

2. If you have strong operational capabilities, consider starting with a centralized GameFi mini-game based on a social platform. The first choice is of course TON, which is supported by both market hotspots and Telegram officials. Although there are already dozens of mini-games, there is still room for optimization/innovation. Telegram's traffic is relatively rubbish, but there is a lot of it. The data on the books will look good and it will be convenient for future traffic transformation (telling stories to retail investors or VCs). Another thing to consider is other social platforms, such as Twitter. Didn't Solana just announce the ability to embed its blinks technology in Twitter? Can it be used for games? Can a game plugin be made based on Twitter? The key is not which specific platform, but to leverage existing social networks for viral marketing.

3. It is not recommended to invest/make large-scale 3A blockchain games for Web3 users, as it is a trap. However, large-scale 3A blockchain games for Web2 users are promising (it's a simplified version). Hope the above thoughts are helpful for VC and Builder.