Community drives lasting games, not financial incentives
What do esports, UGC, and blockchain gaming have in common?
This article is for informational purposes only and should not be considered investment, trading, or legal advice. The views and opinions expressed herein are exclusively those of the author.
TLDR:
Esports are mods and mods are UGC
Mods drive community engagement in games
Blockchain gaming should focus on community, not interoperability or liquidity
The community first approach
How to engage a community?
Esports has soared in popularity over the last 20 years. What started as a pipedream is now an emerging industry with over 550 million fans worldwide.1 The esports community is a force to be reckoned with.
Over time, I’ve noticed a recurring theme in successful esports games. So I’m going to draw a few parallels between esports and user generated content (UGC) to show how the blockchain gaming landscape can (and will) evolve. Let’s unpack this path to success and discuss how blockchain gaming can take a note from industry titans to craft lasting experiences.
Just ripped espresso #3. Let’s rock.
Esports are mods and mods are UGC
Huh? Let’s take a walk down memory lane.
Video game mods are alterations / modifications of one or more aspects of a video game. This can take several forms (individually or in combination): replacing in-game assets to fit a new theme, adding new gameplay mechanics, an extension of the base game, etc. The general point is that mods are created by the gaming community at large to extend the replay value of games. This is UGC.
Ok, so where does esports come in?
Well, before League of Legends, there was a Warcraft 3 mod called DOTA (Defense of the Ancients) which birthed the multiplayer online battle arena (MOBA) genre.2 And before Valorant, there was Counter-Strike which was originally a Half-Life mod and kicked off the attack first person shooter (FPS) genre. This cycle of genre defining games and subsequent mods persists across almost all of esports.
Moral of the story is that games go through iterations, are unbundled and repackaged by various studios, and often licensed to create new or derivative intellectual property (IP).
Confused? Here’s a quick breakdown by genre (organized from earliest to latest release date).
Class-based shooter: Doom > Quake + Quake 2 > Team Fortress + Team Fortress 2 > Overwatch
Attack FPS: Quake > Half-Life > Counter Strike (1.6, Source, CS:GO) > Valorant
MOBA: Warcraft 3 > Defense of the Ancients (DOTA) > League of Legends (LoL) > Heroes of Newerth (HoN) > DOTA 2 > Heroes of the Storm (HOTS)
Battle Royale: Arma > DayZ > H1Z1 > PUBG > Fortnite > Apex Legends > Call of Duty: Warzone
Auto Battler: DOTA 2 > DOTA Autochess > Teamfight Tactics (TFT) > DOTA Underlords
Mods drive community engagement in games
Mods (and UGC) can drive community growth (both casual and competitive) through the stickiness and network effects that games provide. For example, in competitive games player density enables skill-based matchmaking to connect similarly skilled gamers. While skill-based matchmaking has a first order effect of enabling gamers to compete for a rank, it has second order effects such as slimming the margins between players of varying skill and connecting these similarly ranked gamers. As a result, matchmaking can be considered a social platform within games.
This shows how community forms organically through competition in games.
Games are sticky, but mods can foster this stickiness through community forming and engaging practices. For example, a modder could take “popular game A”, fix broken mechanics, balance over and underpowered characters / guns / skills / etc., reskin the game, and now you have supplementary content that extends the replay value of the “popular game A.” Now replace “popular game A” with “Skyrim” and you have a single player role-playing game with a diehard community that has persisted for over a decade through third party mods.
This community engagement flywheel often rhymes:
Good game, new experience
Modders experiment through (i) an in-game sandbox or (ii) remixing the game itself
Devs (original game) unlock financial rewards to incentivize the modders
Modders (i) supplement existing games or (ii) create new IP in exchange for financial upside
Cross-pollination of ideas (between og devs and modders) creates new experience (potentially creating a new studio & game in the process)3
Repeat steps 1-5
Mods are beneficial for games because they help form, involve, and engage communities. But mods also add depth to the original game, - increasing shelf-life and the experience as a whole - which inevitably increases the bottom line appeal for a game. Mods can be viewed as art, but at a minimum, successful mods prove that a community exists for the original game. Who created the mod, anon?
On the other hand, modders sometimes relinquish control of their creation. This can occur when the modder teams up with a studio / publisher to monetize their creation.4 Additionally, the IP rights extended to mods are often limited (e.g., exclusive licenses, commercial rights, etc).5
The point is this: mods do more good for games than bad.6 Further, mods cultivate community which often materializes in the form of a vibrant social scene and lasting game.
“Bruh, you haven't mentioned crypto once.” Don’t worry, we’re getting there.
Blockchain gaming should focus on community, not interoperability or liquidity
If mods are a strong driver of community and a vibrant community enables success in the gaming industry, then why isn’t this more of a focus in blockchain gaming? “But what about interoperability?” echoes crypto twitter. “The Diablo 3 Auction House did everything crypto enables” shouts a reply guy.
Well, do gamers care about interoperability? I don’t. I identify as a gamer but couldn't care less if my AK-47 skin from Call of Duty: Warzone could be ported over to Fortnite. Nor do I care if my Marshmello skin in Fortnite could be repurposed as an avatar in Second Life. Now, does this mean no one cares? Absolutely not. But it does mean that some gamers are growing tired hearing the same blockchain gaming sentiments reskinned over and over.
I also consider it a feature that one can have multiple avatars across multiple worlds. Look at social media today - do you act the same way on Twitter, Reddit, and Linkedin? I’d prefer to have various versions of myself across socials, metaverses, game worlds, or whatever the narrative is today.
Interoperability can also break the immersion of games. I won’t go too deep into this, but my general belief is that immersion is driven by fidelity, a compelling narrative, and the ability to enter a flow state in gaming (further discussion here). However, if you transpose assets between games, you quickly unbundle the cohesive, spatial presence of the player such that they no longer feel like the character they are playing as, start losing interest in in-game choices, and ultimately become less emotionally attached to the experience as a whole.
In other words, as you break down the walls of a game (through interoperable assets) you lose consistency of the in-game world, making it increasingly difficult to rebuild those walls and regain the “trust” of the gamer. This effectively hampers the developer’s ability to maintain an engaging story and gameplay loop for the gamer, breaking the immersion of the experience itself.7
^ I’d argue there’s more immersion here with 500 mods enabled than Vanilla Skyrim
What about liquidity? Well yeah, I would absolutely inject more money into Valorant if I knew I could make a return (even if negative EV). I mean the game was free right? I play the game because I like it. I buy skins because I want to support good devs / studios, and in return, those skins let me craft a digital identity. I have no desire to play a game just because the in-game assets are liquid.
This repeated focus on secondary trading promotes the wrong incentives for games. You really want to build / invest in a game that attracts liquidity locusts? I mean … go for it, but if you really wanted to align devs and gamers, you probably wouldn't be exclusively focused on providing a monetary return for the entire community … would you? I don't think gaming is the right industry for this liquidity element to remain a predominant focus.
Instead, games should align with their social community, which often takes form in a competitive scene. Still here? Great, now the alpha.
The community first approach
Let me translate for the crypto-initiated.
Crypto games should focus on one of two approaches: (i) creating new experiences enabled by moving assets and/or game mechanics on chain (long term approach) or (ii) modding an existing game with an existing community (short term approach). By refocusing on community, blockchain gaming can emphasize the experiences of games rather than corresponding token price action. And by minimizing the focus on token price action, new agents in blockchain gaming (e.g., speculators, investors, guilds, scholars) can peel back the hood on whether these games offer lasting experiences that communities want to continue engaging with.
“But Alex, tell me where the space is going.”
I’m not entirely sure. The lawyer in me wants to say “it depends,” but let’s stick with the facts today: the global video game market is ~$200 billion,8 blockchain games accounted for 60% of all blockchain activity in July 2022,9 I play too much Valorant,10 and there were ~74 million concurrent viewers for the 2021 League of Legends World Championship.11 The opportunity is ripe to create a lasting community and audience in blockchain gaming - especially once a social infrastructure metalayer is built to better support these growing communities of gamers.
How to engage a community?
Going to drop a few ideas and corresponding examples on how to further engage gaming communities. Please reach out if you are researching, building, or just passionate about any of the below.
Devs create game, but relinquish a subset of IP and esports rights (i.e., cc0-lite approach for games).
Community game development (come on not the entire game, I’m a realist).
See Midnight Society / Deadrop “snapshot” approach (i.e., community development through NFT ownership)
See Project Honor content creator approach (i.e., community development by proxy of content creators / streamers)
On-chain tournament crowdfunding.
E.g., on-chain Dota 2 Compendium
E.g., sell an event battle pass which can be leveled with sweat equity and/or tokens -> assets earned from leveling up the battle pass have (i) a price ceiling during the event and (ii) scarcity created post-event
Back to the metaverse
Until next time, DM me on twitter and let’s connect on linkedin. Would love to chat with others passionate about gaming and the crypto space!
-Alex
https://resources.newzoo.com/hubfs/Reports/Newzoo_2018_Global_Esports_Market_Report_Excerpt.pdf
https://www.pcgamesn.com/warcraft-iii/warcraft-3-mods-dota-league-of-legends
https://www.redbull.com/se-en/history-of-leagueoflegends#:~:text=The%20idea%20of%20League%20of,company%20Riot%20Games%20in%202005.
https://www.ign.com/articles/2017/09/19/h1z1-dev-there-wouldnt-be-pubg-without-h1z1
Disclaimer: I’m a recovering intellectual property (IP) attorney - more on this IP conversation in later pieces
Disregard mods that provide unfair advantages in games such as walling, aimbotting, etc
Query whether there will be “interoperability games” built from the ground up to support canonical games with metaverse assets layered on top (eg, tower defense, match 3, etc.)
https://www.statista.com/statistics/292056/video-game-market-value-worldwide/
https://www.coindesk.com/business/2022/08/04/gaming-claimed-record-60-of-blockchain-activity-in-july-dappradar/
Shoot me a DM if you need a sick Fade to round out the squad for a VCT run
https://www.lolesportsmedia.com/League-of-Legends-Esports-Breaks-World-Championship-Viewership-Record#:~:text=This%20year's%20Finals%20match%20saw,a%2060.33%25%20increase%20over%202020.