What Blockchain Games Can Learn from older (Failed) Projects

The closest to a stable coin driven MMORPG – Entropia Universe

In early 2003, five years before Satoshi Nakamoto published his whitepaper, MindArk a small Swedish startup introduced the first “stablecoin” into the gaming world.

MindArk and their “Project Entropia” introduced the first real cash economy with an interchangeable stable currency into the gaming world. The “Project Entropia Dollar” had a fixed exchange rate with the USD at 10:1, and over the years, Project Entropia became more of a speculative market or a gambling hall than a real MMORPG.

The initial skepticism of a game based on a real-world currency made it hard for a significant player base to grow. The game mechanics were challenging for free-to-play players, since the only income stream they could generate was “animal sweat collection,” which earned them a couple of cents a day, or trading, which without money was quite hard. The cash turnover in the game was low, so even the best items rarely hit a price higher than 20 USD (Modified Fast Action Pack, circa 2004).

It all changed with a few entries in the Guinness Book of Records and the publicity following these.

In December 2004, MindArk organized a public auction on their in-game auction platform for the first player-owned land area called “Treasure Island.” The winning bid was placed by Zachurm “Deathifier” Emegen at a staggering price for virtual real estate at that time, 26,500 USD. The subsequent publicity around the sale, the profitability of the sale (Deathifier made a positive return on investment within a year after the purchase) from taxes generated through activities on “Treasure Island,” and the Guinness Book entry became a clarion call for gamers and investors alike.

The “loot hoarders” and grinders like Pham Pham Neven, crafters and monopolists like Ruthless “NZR” Tony Demonoe, or investors like Bo “Silverfox” Stahlsparre started to emerge, and the economy, with a significant influx of external funds, started to explode.

While the Modified Fast Action Pack mentioned above was sold for only 20 USD in 2004, by 2006, it was 2000 USD, and by 2009, over 40,000 USD.

With so much money in circulation, the global loot did not significantly increase for the average player, but the random “all-time high” wins became much larger. From a maximum of 2,000 USD in a single drop, which was held by Pham Pham Neven for years, it switched to almost daily 2,000 USD loot drops, with the “All-time high” sitting at over 33,000 USD in a single drop in 2013.

Furthermore, the auction of an Asteroid in Project Entropia for over 100,000 USD, won by US DJ and long-term player John “Neverdie” Jacobs, further boosted the publicity, and the player influx scaled appropriately.

Since land areas, banking licenses, and asteroids were the first step into player-owned property, it later turned into individual planets, and it was looking like one of the success stories in business until it semi-imploded…

While the minority were making headlines, the majority of players were playing on a budget and working on efficiency.

MindArk introduced mechanics that turned the MMORPG grinding, mining, crafting experience into a casino over time.

  • Loot “levels” became bound to mob HP.
  • Mining amplifiers were introduced, allowing players to spend additional funds with every mining attempt to get a higher return.
  • Crafting got the option to work interchangeably between quantity (more successful attempts, less payout) or quality (less successful attempts, higher payout chance).
  • Limited items were introduced into the gameplay which could not be repaired and cost additional markup to the base cost when buying. Average loot quantity on lower levels dropped while playing expenses stayed the same.

The average cost per hour of playing significantly increased, and at one point, it became barely affordable. The player base started to dwindle, and while there are still a handful of players in the game, the mechanics and the casino-like feeling of playing have chased the majority away.

Real Cash trying and failing to be introduced into gaming

There were multiple other tries of introducing a real cash system into games, but they all failed due to bad execution, from “Second Life” over Diablo 3 real cash auction.

What is universally clear is that some of the issues (other than bad management decisions) which plague the real cash MMORPG world would have been remedied with the use of blockchain technology.

Where there are active gamers and randomized loot drops, there will be cash exchanges happening. For example, the CS:GO / CS2 Skin market has an average daily turnover of over 5 million USD only on Steam; other platforms like cs.money, buff, or Skinbaron are not even included and have a major share of any P2P real cash transactions due to the fact that on Steam, you can only trade for Steam balance. Even during the Diablo 2 era, people found ways to sell rare drops, mainly on eBay though.

A positive example of a semi-functional, semi-real cash economy can be found in Eve Online, where the premium currency (Plex) can be bought for real cash but can also be obtained through the auction and exchanged for the in-game currency ISK. Beginners are not forced into using a premium account and can slowly build their skills to earn in-game currency, which they can exchange for Plex later on to upgrade their status and unlock additional game content with their Omega subscription.

While we are anticipating games like Gunzillas’ “Off the Grid” or “Star Atlas,” I ask myself, what can we improve, and how can we utilize the benefits of blockchain to finally have a AAA game which, in the long run, rewards players for their grit, skills, or business acumen, in order to break the wall between gaming & career and make a gaming career viable outside of competitive gaming.

As a lifelong gamer who played his first games as a 5-year-old in arcade bars (I still remember the first time I played Karate Champ), I am looking forward to the possibilities for future gamers to make a living from gaming, but the basics of good gaming should only be enriched by blockchain technologies and not solely based on the fact that the new games implemented an aspect of blockchain technologies.

What can game developers do differently than the projects which failed?

My takeaway from countless games and attempts to get into real cash economy or blockchain-based gaming is:

  • Don’t be greedy. Make the game affordable for any and no budget. No one means that the gaming company should give money for free, but don’t lock the opportunity to make money behind a “paywall.”
  • Help players to build lasting communities; allow them to invest in what they love with fractional ownership (guild buildings, guild items, party items, etc.).
  • Make the entry into your world as smooth as possible for people who are in it for the first time (Second Life… I am looking at you).
  • Don’t change the game balance abruptly; allow for a stable economy to develop naturally.
  • Make investments and withdrawals a seamless process (MindArk had a payout time of over 45 days which chased players away).
  • Build relationships with your top 10% of players; they will be your best brand advocates.
  • Do NOT make your game a casino…
  • Make transactions secure and revocable and help players who got scammed.
  • Be the facilitator of a bridge between the real world and your gaming world; help top performers feel real-life changes.
  • Create a good game worth playing and use the real cash / blockchain aspect only as the cherry on top. There are many examples of bad games promoting their blockchain-based nature… No one really wants to play them.

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Shane Shown

The entrepreneurial spirit burns brightly in Shane Shown, whose business journey began as a young child creating and selling Pokemon Bookmarks. His ambition and tenacity have propelled him to work with major international companies including Facebook, The Climate Corporation, Zillow, and College Works. In 2017 he launched Nxt Level Recruiting which specializes in high-level head hunting for the Technology and Video Game sectors with highly customized recruitment services. The year 2020 saw a successful move into Nashville for the company. 2023 brought the launch of three new divisions, Nxt Attorney, Nxt Level Civil Engineering, and Nxt Level HealthTech. Outside of the office, he serves as Co-City Leader for Founders Live: an international pitch competition empowering entrepreneurs around the world with funding opportunities.

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