FTX Deep Dive: What Makes Blockchain Games "Fun"?

Author: FTX.US

Compiled by: TechFlow

1. Why Games Are Fun

To determine whether a blockchain game is fun, we first need to define what a "fun game" is. However, the obstacle in defining it is: everyone's situation is different, and each gamer is an individual with different needs and motivations. Game designer Nicole Lazzaro outlined four primary reasons why people play video games in her work "Why We Play Games: Four Keys to More Emotion Without Story":

1. Intrinsic Experience:

We play video games to generate new ideas and feelings. Forgetting worries and trading boredom for joy feels great. Remembering those happy times, whether it was an 8-hour binge on a favorite single-player game on a snowy day, a summer spent playing multiplayer games with friends, or even mindless app games while waiting in line. Video games are like a book, a movie, or a TV show, but they are more interactive than those media, projecting your consciousness into another dimension.

2. Challenge and Achievement:

People engage in meaningful challenges in video games—chasing higher scores than before. Achieving a top 100 rank in a specific competitive game or spending over 100 hours in an RPG (role-playing game) brings a sense of accomplishment that often surpasses achievements from external activities. A good game can provide a sense of challenge that differs from the real or perceived risks presented in the real world.

3. Immersion:

Slightly different from intrinsic experience, immersion is rich in surprise and mystery. One reason many people enjoy gambling as a pastime (most casinos aren't that entertaining) is because it offers moments of anticipation and surprise. The dopamine rush we get from each revelatory moment in a game plays a crucial role in determining whether we find the game enjoyable.

4. Social Experience:

Many people play primarily for social reasons. In other words, we play video games just to have fun with friends or family—not for the game itself. This motivation has become prevalent among younger people, especially as the COVID-19 pandemic forced many to stay home. Due to this playful motivation, the game itself is secondary; more importantly, the game has the ability to bring people closer together.

To answer the question "What makes games fun?" in simpler terms: most good games are a perfect blend of strategy and surprise. Chess is a purely strategic game, while most children's games rely more on surprise. Card games fall somewhere in between, as players have some control, but unexpected events (like the cards you draw) also occur. The human brain naturally enjoys controllable surprises, and games that balance individual player agency with surprise tend to be the most enjoyable.

2. Blockchain Games

Having provided an overview of "What makes games fun," let's explore how blockchain technology can make traditional games more interesting. I will first discuss a "traditional" video game case and then enhance it with blockchain technology.

Case 1: True Ownership of Digital Assets

NFTs have garnered worldwide attention because they are one of the best ways to prove ownership of digital assets while reducing and decentralizing the difficulty of buying/selling/trading assets within an ecosystem. The technology facilitating transactions already exists, but the issue is not the technology; the problem lies in market interoperability.

Whether through a few legitimate platforms or "gray market" transactions outside of games, people can technically exchange in-game assets or money, although there are many frictions and risks involved. However, these transactions generally only apply within the same game ecosystem, for two core reasons.

First, the buyer/trader market is limited to a closed ecosystem of a specific game, rather than an open market that aggregates all game assets for interchange. This reduces liquidity. Second, while cash can serve as an equivalent in trading items between two different game systems, cash lacks the authenticity and provenance guarantees that on-chain assets provide, posing a high risk of fraud.

Traditional Game Example

Fortnite: Millions of players are interested in collecting game skins in Fortnite, which is also a core driver of Epic's "free-to-play" game revenue. This mainly concerns aesthetics and does not affect actual game mechanics, helping to alleviate players' fears of "play-to-win." For developers, this is also an effective and very important reference point.

How Ownership Makes This Game More Fun

Fortnite skins serve as a form of social expression. In the real world, we wear different clothes for different occasions as an extension of our identity. However, we can only wear one outfit at a time and may want to discard or swap out clothes we no longer wish to wear. This analogy extends to skins in Fortnite, where flashy skins represent a form of status flexibility.

My friend might have a rare skin that I want, and I might have one that she wants; perhaps we both enjoy and accept trading with each other, but the current system does not allow for such exchanges. Beyond blockchain technology making skin trading easier in the future, reducing the friction of exchanging digital assets will also enhance the gaming experience. For many, the joy of gaming comes from social interactions, and in a social environment, "image" is an important component of the enjoyment players derive.

Higher stakes can further enhance the gaming experience. Imagine a scenario in a 100-player battle royale match in Fortnite, where the top 10 survivors win rare skins. You and your friend both participate in the match, and she ultimately wins the skin you really want. Later, your friend gifts you the skin because she knows how much you wanted it. This digital asset represents a small memory between two people, a gesture of goodwill and a moment of joy. While this hypothetical scenario cannot happen yet, it will be realized in the near future!

Case 2: Proof of Achievement:

One of the most overlooked opportunities in blockchain games is single-player narrative games. Due to the crypto space's intense focus on trading, most developers are creating MMORPGs (massively multiplayer online role-playing games), FPS (first-person shooter games), and strategy games. These types of games typically have larger player bases and are well-suited for building economies among players. However, this does not mean that the next game like "The Elder Scrolls: Skyrim" or "Horizon: Zero Dawn" shouldn't be built on-chain.

A growth trend from last year is the use of POAP (Proof of Attendance Protocol). Simply put, this is a verifiable asset that can confirm whether someone (or the person controlling a wallet) participated in an event. The real-world equivalent could be conference badges or concert band posters.

This proof provides a natural crossover for games. If you search for content related to a specific game on social media, you will see countless screenshots and clips of game content, the reason being that people love to showcase their achievements in games, whether it's defeating a big boss, finding clever ways to complete quests, or just doing something fun in the game, like designing the game environment as a set of emojis.

Traditional Game Example

The Legend of Zelda: Breath of the Wild: Small games like Wordle (a web-based word game) allow people to easily share their achievements, but single-player story-driven games provide players with hundreds or thousands of moments to showcase their victories and funny failures along the way. One of my personal favorite games is "The Legend of Zelda: Breath of the Wild," a modernized version of the classic adventure game. The game requires you to explore a world, defeat monsters, and solve frustrating puzzles. Today's players typically post screenshots from their Nintendo Switch on social media to share these personal moments. The most surprising or impressive moments often receive viral attention, flickering in and out of the growing digital content.

How POAP Makes This Game More Fun

First, when someone shares game content, no one can determine if that post was copied from elsewhere. Most of the time, this kind of appropriation is legitimate, but 100% verifiable legitimacy can help games build greater resilience. Just like high-score boards in old arcade games, this is something that cannot be faked. A player named "AZZ" who scored 1,069,420 points in "Galaga" is the best player in the game.

More importantly than verification is putting proof of achievements from single-player games on-chain. Being on-chain helps transform single-player experiences into more competitive gaming experiences. Overcoming challenges in a game is an impressive internal achievement, and sharing that achievement through screenshots expands it into a social accomplishment. Competitive achievements will be further realized through verifiable proof on the blockchain.

If your goal is to complete Breath of the Wild faster than anyone else on Earth, then a game that tracks, verifies, and publicly displays this data will provide players with an undeniable way to prove their title. This does not affect any other participants and does not rely on economic incentives. Blockchain can bring pure optionality and additional joy to games. That said, seeing game publishers return a portion of profits to top players who achieve such accomplishments in the game would be even more exciting.

Case 3: Game Economy:

The game economy is the largest area of development, investment, and analysis in blockchain games. With the release of "Diablo II" and "Runescape" in the early 2000s, mature digital economies have existed for decades. Game economies make games more immersive, challenging, and enhance social experiences. Blockchain games can fundamentally change game economies, but this is also the most challenging dynamic to integrate on-chain. Establishing a game economy unrelated to "real-world" value is already difficult, let alone adding immutability and hard currency to a fictional economy.

Setting aside the challenges of technology, regulation, and competition, this type of blockchain game creates an opportunity for seamless exchanges between currencies like time, attention, and money. The biggest challenge in analyzing what makes MMORPGs fun is that players have various different needs. Some might argue that Lazzaro's four motivations are clearly present in such games, and as the demand for digital assets grows, "making money" will become a more powerful motivation. A friend once told me, "The value created in a game is like owning a house rather than renting. When I truly own a house, I feel satisfied with the time, money, and skills I invested in flooring or painting the bedroom. I spend a lot of time and money and do my best because it's my house; it's both my expression and a place of 'love,' as well as a means of storing value."

Thus, the delicate balance that needs to be achieved with on-chain game economies is as follows:

• The economic incentives of the game must not harm the experience of players who choose not to engage in currency exchange.

• The game economy should reflect the direction/desires of the majority of its community (free players and owners), unless such commands conflict with the first law.

• The game should maximize the value of its various economic units unless such mechanisms conflict with the first or second laws.

It is important to emphasize that the balance mentioned above cannot be underestimated, as it is difficult to establish.

Traditional Game Example

World of Warcraft: When certain game elements are nerfed or buffed, core gamers can become very emotional. This feeling is even stronger when changes involve the entire game economy. Setting aside the specific mechanics of how the in-game economy operates, the greater dissatisfaction lies in who is making the decisions, rather than the reaction to how the economy operates. In "World of Warcraft," we have seen decades of player anger towards Blizzard due to the centralized nature of game economic decisions.

How On-Chain Game Economy Makes This Game More Fun

First, it is important to emphasize that games should not be designed by committees. The ideas of game creators are important and worth preserving, which is one of the main reasons why many parameter-light sandbox games fail to become mainstream. Game studios should be responsible for developing characters, stories, and key mechanics. The latter can certainly rely heavily on the game economy, but even so, I still believe that the central power of the game should be supreme. The role of blockchain should intervene after the game economy's inception, which is where it can enhance the fun of the game.

Just as Bitcoin no longer relies on its original creator Satoshi Nakamoto, the carefully designed game economies in MMORPGs like "World of Warcraft" should also rely little on their original creators. Just as the real world is slowly but surely moving away from the concept of central banks, a trustless and player-controlled game economy will inevitably attract the largest player base and maximize the fun of the game.

As mentioned earlier, such games incentivize players in various ways, with players investing value into the game to receive returns. Today's traditional games invest time and attention, while the best blockchain games of tomorrow will provide opportunities for investments of time, attention, and money, carefully balancing these three to ensure that one does not overwhelm the others. Such games will not only be fun, but the actions that allow the community to play an important role in maintaining balance will represent a new form of enjoyment. Does all of this need to be achieved using blockchain technology? Not necessarily, but game studios that choose to use blockchain technology will have a competitive advantage over those that simply ask players to "trust us."

Case 4: Community Ownership and Collaboration

Previously, my friend Zeke often had to drive across Pennsylvania to participate in tournaments for his beloved fighting games, spending 3-4 hours on the road to win $50. For him, it wasn't about the money; it was about seeing his friends in the community. Video games have a wonderful ability to bring people together and coordinate them, whether online or offline.

Traditional Game Example

Super Smash Bros.: There is a very special aspect of the Smash Bros. community worth analyzing. Top players often have preferences for specific characters in the game, as each character's balance is quite different, with varying strengths and weaknesses. Most players refer to these specific characters as their "main." In Smash, aligning with a main character is akin to being part of a PFP community, such as Cryptopunks or Doodles. Players enjoy showcasing how powerful their specific characters are and love to mock those who choose what they perceive as inferior characters.

How Community Ownership and Collaboration Make This Game More Fun

Because Smash Bros. is a mix of existing intellectual property owned and monetized by large game publishers, the idea of rewarding the player community based on their preferences for main characters is not feasible. However, for the sake of this idea, we can imagine that Mario, Sonic, Cloud, and Solid Snake are characters co-owned by different DAOs, similar to the ApeCoin community created for the Bored Ape Yacht Club.

Games like Smash rely heavily on careful balance, with no character being stronger than others. This should be managed by a central authority, as every good game needs to start with specific rules. Ultimately, these rules become the game, rather than the story, characters, community, etc. But we can imagine how interesting it would be if a large group of supporters and owners of main characters were eligible to manage and decide other matters, such as aesthetics and the use of IP; for example, bounties for recruiting and training new members for specific characters outside of the game; or tournaments, streaming, and other economic activities driven by players sharing the popularity of their mains in Smash. Of course, this is also a hypothetical scenario, and the impact of blockchain integration on the game itself is absolutely zero, only benefiting players.

Case 5: Prize Distribution and Competition (and Gambling)

Humans have an innate love for gambling, and blockchain technology can make gambling in video games easier. The feasibility of gambling in video games is not up for debate, as most Western societies have widely accepted it in other activities. More importantly, how blockchain (and traditional) video games can enhance the fun and fairness of games through blockchain technology.

Traditional Game Example

Rocket League: Rocket League is a fast-paced competitive game where two teams try to score more goals. Players can choose "casual" mode, allowing them to simply enjoy the game or score rankings. But for top players, there is also an important RL tournament where winners can earn cash prizes.

How Prize Distribution and Competition Make This Game More Fun

While the moderate rewards provided by Rocket League benefit participants and event organizers, fans are often excluded. One of the main reasons Fantasy Football is so popular in the U.S. is that it allows viewers to engage in the game, making the spectator sport of football more enjoyable, whether through monetary stakes or just bragging rights.

Blockchain technology simplifies and enhances fan engagement in countless ways, which can be added as "fun" elements to the core game without affecting the game itself. Oracles can help ensure that activities in the game are authenticated and allow all participants to view them, verifying results without the need for referees. L2 solutions can ensure that fans can quickly make small bets without incurring disproportionate fees, and tournaments can pay out various digital assets as rewards. Unlike Fantasy Football sports platforms that provide cash rewards for players' successful outcomes, blockchain-based distribution systems can also reward participants with rare NFTs that have utility in the game, granting players access to participate in online/offline events.

3. Reminders for Blockchain Game Developers

• Over 10,000 new games are released weekly on Steam alone. Are these games fun? Most of them are not, or they are merely copies of other successful games. Making games is genuinely hard. When someone asks you if blockchain games are really fun, you should talk about mechanics, lore, and art, not blockchain. The biggest mistake I see blockchain games make is showcasing economic incentives and details on their websites instead of the gameplay.

• Blockchain games do not need to scale to player bases comparable to traditional games because their funding sources and players will increase in value over time. The "fun factor" of a game should not be measured by the number of players it has. The reason so many traditional video games have large player bases is that most of their players do not have to spend too much money on the game. Use or create games that are better suited to bring blockchain technology to players.

• Most people know that economic rewards are a support, but do not be afraid to use this support for fear of being criticized as "artificially enticing players." The reality is that traditional games spend a lot on user acquisition through advertising, referral programs, fan payments, and discounts; they just extract their users in different ways. Ideally, your game attracts new players because it is fun enough, but do not criticize the user acquisition costs of blockchain games. Most free-to-play games will spend 100% of their revenue on marketing in the initial years because they are pursuing terminal LTV (lifetime value). Redistributing this expenditure is actually a positive optimization for the industry, allowing it to fall into the hands of players rather than advertisers.

• Aesthetics and identity are very powerful monetization elements in blockchain games. Creating a game economy is challenging because it can significantly impact the fun of the game. Changing the appearance of something in the game does not alter its gameplay. What Fortnite does as a free game, your studio can also do, focusing on unique game mechanics that can be enhanced through blockchain rather than forcing it into every nook and cranny of the game.

• Reflecting on the initial introduction of this article, ensure you know how to talk about the "fun" of games. Cultivate your understanding as a game designer, design mini-games as pastimes, play games made by others with a critical eye, and finally focus on the moments in games that bring you the most joy. When someone asks you if a game is really fun, do not snidely ask them, "How do you define fun?" Instead, use the appropriate mental model to help them arrive at a reasonable conclusion.

It's playtime!