Open Crypto Gaming Ecosystems?

I recently discovered the a16z Crypto Startup School which has some pretty good videos on various topics relevant to founders in the world of blockchain/crypto/web3. Last week, I wrote a Rough Note on Chris Dixon’s talk.

This post is inspired by a conversation about crypto gaming between Forte co-founder & CEO Josh Williams and gaming industry veteran Jeff Tunnell:



Around the video’s 30-minute mark, an attendee raises an interesting question (I’m paraphrasing): How defensible are business models in crypto gaming if users can freely move their assets - i.e. content or virtual items - between games, thanks to the interoperability and transferability inherent to blockchain assets?¹

Williams argues that it’s a tradeoff: the publisher gives up control but, in exchange, gains the potential of creating a thriving real market economy around the game². Tunnell then clarifies that the technological ability to transfer assets alone doesn't mean that it’s actually possible to freely move content between games. It’s not only a matter of blockchain if you want to achieve this. Tunnel says:

"You would have to have several games who got together and talked about our design so that you could get an asset out of one game and take it into another game."

First, I think it’s really important to make that point because too often when people discuss crypto games, it’s simply assumed this would work. It doesn’t and it’s not only a question of technology.

Second, Tunnel doesn’t seem to think that such an “alliance of publishers” is likely to happen and, therefore, believes that ownership of gaming assets is most interesting in the context of building market places within a single game’s ecosystem.

I beg to differ.

Open Gaming Systems: Precedence in Pen & Paper

Open gaming systems that enable the portability of assets between games are not common in the world of video games. But they exist in other gaming markets, particularly in the realm of pen & paper RPGs. If you aren’t familiar with the term, you might have heard of Dungeons & Dragons, the best-known game of the genre; otherwise, watch this:



While D&D itself is rather strictly governed by its publisher Wizards of the Coast, there are more open systems like Pathfinder by Paizo or Fate. These allow third-party creators to use the underlying gaming system - i.e. the rules, game mechanics, character archetypes, items, etc. - to build their own compatible gaming content on top of it.

One way to think about what those publishers do: they develop standardized gaming platforms on which an ecosystem of creators can build their own game experiences.

Why is this good for everyone involved?

Platform owners:

• The game world becomes much richer much quicker, making it more interesting to players.
• In order to understand and use the basic gaming mechanic, fans need to purchase the platform owners’ content, e.g. the rule book, thus every third-party creator is effectively a marketing/sales rep. (Although some systems are entirely open-sourced, the physical rule books are still sold and players buy them).
• Learning their system in the first place - some systems are rather big books! - becomes more useful for players because they can use the system more often and in different settings (e.g. fantasy AND Scifi), thus there’s stronger ecosystem lock-in.

Players:

• They find a more varied content offering and different gaming experiences while only having to learn one set of rules and mechanics.
• It’s possible to take items and other in-game artifacts from one game to another, creating more options and stronger individualization.
• Players can easily become “prosumers” as they can develop and distribute their own content.

Third-party creators:

• Creators don’t have to start from scratch when they want to realize an idea because they built on a rich, established system. Basic mechanics and various items/artifacts already exist so they can focus on creating their gaming world and its specific content.
• Unlike other systems, where creators operate in an environment fully controlled by the publisher, they can build both more autonomous businesses - establishing their own distribution channels and customer base; having limited platform risk due to the system’s openness - and more distinct game experiences that can diverge much further from the original game.

Open Video Gaming Systems?

Let’s bring it back to video gaming. The above model would rest somewhere in the middle between the Unreal Engine (a 3D creation platform used by many game creators, essentially a technical infrastructure platform) and Minecraft (a world-building platform/sandbox that allows users and creators, to develop and sell content on the game's official marketplace).

Of course, the P&P RPG world's approach to open gaming systems cannot be taken par for par and simply put around blockchain-powered video games. Still, it can inspire a useful form of adaptation.

Here are some raw thoughts I’d like to share:

• For RPGs, adventures, and shooters, developers could create a standard system for artifacts (i.e. weapons, gear, other items) and their behaviors and allow other publishers to use the system in their games, conditional upon all items created being transferable between games using the standard (likely with setting restrictions so you can't use laser guns in a middle ages setting).
• Handle the visual design of items similar to what Unicode does with emojis: key properties of items are standardized but each platform has its own graphic implementation.
• Once basic assumptions about the gaming experience are standardized and don’t need to be developed/set for every game individually, you can create very developer-friendly tools to build with. This could, as a second-order effect, make it a lot easier for developers and studios to get into the market. It’s also monetizable.

While a lot of this would be possible without blockchain, the portability and secure transferability that comes with it makes it a very useful technology in that context. Plus, building such open ecosystems makes a lot more sense when, as Tunnell and Williams hint at, true ownership powers the emergence of market economies. I just don’t think that these markets should be limited to an individual game. It would unnecessarily restrict its size.

Long story short: I don’t see why such open gaming ecosystems shouldn’t emerge. While they would present somewhat of a paradigm shift for the industry, I think everybody would be better off. Players could own and use their things in many environments. Building rich new worlds and games would become significantly easier (and cheaper). And owning a popular infrastructure usually is an interesting proposition, so people will try to build it.

Do I overlook anything here?



¹ Both is not absolutely true as it’s possible to limit transferability and interoperability,

² As you may be aware, market economies in virtual worlds can and have worked, think of Linden Lab's mid-00's hit Second Life or even RuneScape gold that Venezuelan’s started farming en masse because of the bolívar’s hyperinflation.