William M. Peaster Dear Bankless Nation, There’s a tremendous amount of building happening around the NFT gaming scene right now. But the work? It’s . hard That’s because designing a regular game is difficult enough as is. When you throw NFTs into the mix, there are certain challenges that can arise that can hurt a game more than help it. So what’s there to do, and what should we expect around NFT games going forward? I offer some thoughts on these questions for today’s post! -WMP Notes from the NFT gaming underground NFT game design is hard NFT games can come in all sorts of different shapes and sizes. On the simpler end of the spectrum, they can be . uncomplicated on-chain strategy games On the other side of the spectrum, they can be advanced and expansive massively multiplayer online (MMO) projects that use NFT resources to track player ownership beyond centralized servers. So far we’ve seen lots of experiments on the simpler side of things. I recently played in one, andy8052’s . Very straightforward but interesting nonetheless! Battle Royale Onchain What we seen lots of to date are the more expansive NFT-friendly MMO projects. To be fair, there are such projects in development right now, and I’m excited for some of them. haven’t many On the flip side, it’s no surprise that the sector of full-title NFT games is still establishing its footing: ! game design is incredibly hard The main challenges of NFT gaming From to in-game , regular ol’ game design has a of moving parts that are already complicated in tandem as it is. So when you have projects carelessly throw NFTs into the equation and their in-game assets, they’re only adding to the complexity and to the challenges they face. combat animations to level designs economic faucets and sinks ton over-tokenize Indeed, if done incorrectly NFTs can be game-killers. So noted 0xKepler in a July 2022 post titled “ ,” where the author highlighted how games that “tokenized the majority of their in-game assets” eventually faced two huge challenges: and over speculation. A Road forward for Web3 Gaming economy outflows Regarding economy outflows, if everything’s tokenized, then earning becomes the main goal for players, and this can lead to everyone cashing out simultaneously with little to no demand-side interest, i.e. economic collapse. 0xKepler wrote: “ .” With no one on the demand side for currencies and assets who see a value in them other than money, prices fall, which translates into lower earnings for players. The game becomes uninteresting — existing players leave, and new players are less likely to join. P2E games often relied too heavily on player growth rather than recurring token sinks, which led to economies quickly spiraling downwards And on the point of over-speculation, 0xKepler used the episode of the auction house system in to showcase how making easily tradable can drive out real players and kill in-game economies: Diablo 3 everything “ .” Easily tradable assets take away the sense of accomplishment some players look for. Therefore, games with in-game marketplaces reach fewer players of this type (who often are value addooors for the economy) and are more likely to onboard players attracted by monetary rewards (usually value extractooors). Over time, speculators drive prices up, making assets needed to play the game unaffordable for non-speculative players. In the end, only speculators remain How to make smarter NFT games When it comes to “what makes for a good NFT game,” we have to go back to the fundamentals of games period. And for that we have to understand why people play games in the first place, which I think Sal.xyz described perfectly in the tweets above: to , to have , and to . test our skills unique independent experiences connect with others With these pillars in mind, there ways to build NFT games smarter in order to optimize for these fundamentals and mitigate the challenges of economic outflows and over speculation. Here, the aforementioned 0xKepler recommends the following tenets: are — Tokenize sparsely Limit the number of tradable assets (instead of making everything tradable) and tax trades to limit speculation and allow organic players to build a sustainable economy — Isolate systems Consider making some assets tradable but avoid making all resources interchangeable — NFTs > Fungible tokens (FTs) By focusing on NFT rewards instead of FT rewards, a game can emphasize fun and in-game utility over financialization — Land value tax Avoid NFT land becoming too valuable and the subject of over speculation by using a metaverse land tax ( which I’ve written on previously! ) to optimize for builders who foster sustainable economies Why NFT games are compelling When implemented well, NFTs can lead to new types of gaming experiences. For example, consider the customizability and community empowerment that comes with openness. Let’s say you have a team building the core of an onchain game as a , which is free to use and build on forever. This could unleash the power of like never before. hyperstructure modding communities Beyond literal openness, there’s also an open window of opportunity for web3 native gaming projects that are ahead of the curve on web3 compared to big game publishers. We should use this period of their ignorance to set the tone for what great NFT games can and should be. Lastly, one of the aspects of gaming NFTs is how they can serve as a means for letting players’ achievements travel with them across different games and beyond. Right now in mainstream gaming, your game data is siloed to each respective game in contrast, which closes off tons of possibilities. coolest I’m watching Civitas As an example, one upcoming NFT game that, from what I can tell, is doing an interesting job of balancing the challenges and opportunities I’ve described above is . Civitas Due out next year, Civitas is a strategy MMO built on Ethereum + L2  that will be vaguely familiar to anyone who’s ever played the franchise before. The big difference in Civitas is that each of its Cities are subDAOs that are owned and organized collaboratively by citizen players. Sid Meier’s Civilization From mechanics like a mode to a CITI token transaction tax on resource trades, Civitas has various elements that I think can stabilize against over-speculation while still making for a lively in-game economy. Only time will tell for now though Free to-Play Nomad Looking forward What comes next for NFT games? One low-hanging fruit is there will continue to be a boom in game development efforts on and around layer-two (L2) scaling solutions. With rapid and super inexpensive transactions, these L2s represent the next onchain “frontier” for better web3 gaming. What comes next for NFT games? One low-hanging fruit is there will continue to be a boom in game development efforts on and around layer-two (L2) scaling solutions. With rapid and super inexpensive transactions, these L2s represent the next onchain “frontier” for better web3 gaming. STARKs: Verifying complex auto battler calculation on Ethereum — Scaling decentralized games Lastly, there’s a ton of fragmentation in the NFT gaming ecosystem right now, which is to say there are tons of different projects building in essentially siloed fashion across dozens of blockchains that don’t “speak” to each other. That said, longer-term look to see more interoperability solutions arise to make these fragmentation divides more trivial. Action steps 🕹️ Check out by Galaxy Digital Research, which is a great resource I used in researching this post The History of Gaming and Its Web3 Future 🔐 See my latest Bankless tactic How to maintain your crypto privacy Also Published here. https://metaversal.banklesshq.com/p/nft-game-design-is-hard

This story contains new, firsthand information uncovered by the writer.

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