How Web3 gaming is disrupting traditional player economics

The gaming landscape is experiencing a profound transformation. Decentralized role-play games (RPG) are precipitating a shift from developer-centric economies to something entirely new and exciting: player-driven economies. 

It’s more than just an innovation; it’s an evolution that recognizes the player and their unique contributions to the game’s dynamic ecosystem. It is increasingly clear that in a decentralized world, everyone has a role to play and every role matters, echoing a fundamental truth: We are all integral pieces in the grand tapestry of the game.

Business models affect content

Gaming platforms, their business models, and the content they deliver have always been closely intertwined.

Take arcade gaming, the first to meet the consumer’s eye, operating on a simple “pay to play” model. Games of this era — Pac-Man, Galaga — were tied to individual machines due to hardware constraints. They were also straightforward, with high replayability that nudged players to keep feeding the machines with coins.

Enter home consoles and PCs. The business model pivoted toward selling physical copies of games — the “boxed revenue” model. This shift not only meant more revenue for developers and publishers but also enabled them to create games with diverse narratives and expansive worlds, catering to an ever-widening range of player preferences. 

For instance, Atari 2600, a landmark console, sold over 30 million units, showcasing the commercial success of more content-rich games. 

But change is a constant, and we’ve seen a slow shift toward “games as a service” (GAAS) and “free-to-play” (F2P) games on consoles, albeit a minor one. Subscription models have started to shape content creation, offering a rotating selection of games for a set fee, keeping players interested with continuous updates.

Mobile gaming, meanwhile, leans heavily on ad revenue. To incentivize players to watch ads, games are built around frequent minor rewards, resulting in a saturated “incremental ARPG” genre and inexpensive games crammed with ads.

Shifting to player-driven economies 

An innovative disruption to these traditional models is the emergence of player-driven economies in decentralized RPGs. Here, it’s the players who steer the economic wheel within the game, creating a more vibrant and dynamic in-game economy.

Indeed, the industry is catching up to this emerging trend: pushing player involvement in in-game economies to fuel engagement and ensure long-term commitment. Games aren’t just platforms for fun anymore; they’re arenas for economic activity, where all in-game items — whether characters, equipment or materials — hold value and can be crafted, traded or sold.

But a player-driven economy isn’t just about monetization and revenue models. It’s about recognizing that every gameplay mode is vital to the ecosystem and celebrating diverse player interests and roles. After all, the seemingly trivial hobbies of some players could be essential needs for others.

Peer-to-peer transactions upending traditional models

The key enabler of player-driven economies in decentralized RPGs is blockchain technology. Its introduction of peer-to-peer (P2P) transactions has upended traditional business-to-consumer (B2C) approaches. Games now generate revenue by receiving a small cut of player-to-player transactions. It’s a unique model that aligns the incentives of developers and players: As players trade more resources, the game earns more, and so do the players.

Tokenizing in-game assets adds another layer of appeal. Assets, fungible or not, turn into standard-format tokens that can be freely traded, integrating them into a unified crypto asset marketplace. This direct tie of assets to a player’s private key amplifies player engagement.

Property rights form another cornerstone of this model. With a clear and fair ownership structure, players can dispose of their assets as they see fit, free from any external interference. This autonomy fuels an open market economy within the gaming world, spurring healthy competition and trade.

Community-building and cooperative economy

A major upshot of this shift is the fostering of robust player communities. In this emerging play-to-earn paradigm, players are more akin to investors than traditional gamers. Their early support and investment become the lifeblood of the development and release of a game. Without such backing, reaching key developmental milestones can be a challenge.

The role of the community is not solely financial. Players also act as an organic marketing force, spreading the word about the game. Chart-topping games have attained and owe much of their success to the powerful, loyal communities behind them.

In blockchain games, a game economy fosters an environment where trade cooperation builds player connections and friendships. An enduring testament to this can be seen in existing online multiplayer games, which often refer to themselves as a “friendship machine.”

In support of trade and economic innovation, players in these decentralized RPGs are also encouraged to build their own decentralized finance tools within the game itself. This cooperative game economy innovation aligns with the ethos of blockchain and cryptocurrency, where community involvement in development is a central tenet.

Resistance and adaptation

Every major technological transition in the gaming industry has been met with resistance, but the criticism and vitriol against blockchain gaming — as seen in the recent GDC report — seem unusually severe.

Why? Traditional game companies, built on business-to-consumer models, see blockchain’s player-to-player trade and asset portability as a direct threat to their well-established practices. The scale of this opposition may reflect just how revolutionary — and disruptive — blockchain gaming is.

However, it is important to note that this resistance is less about the inherent value of blockchain gaming and more about fear of change and loss of market control. History has shown us that such resistance isn’t insurmountable but quite the opposite — it signals the dawn of industry-wide innovation and progress.

Gaming’s new horizon

The rise of player-driven economies in decentralized RPGs marks a promising shift in the gaming industry. Built on the blockchain, it paves the way for novel game experiences and genres that were unattainable in traditional platforms. Fundamentally, blockchain games are reshaping the industry by empowering players and reaffirming their value as active contributors to the game’s economy and community.