Whereas traditional games effectively license digital assets to players, a blockchain game economy allows for the true ownership of a digital good, since that digital good is an asset whose link to its owner is written onto an immutable blockchain. When players — and the developer — have true ownership of assets, what that ownership confers is property rights. The unique features of blockchain technology can help grant and enforce property rights, and create a system that is trustless.
In a game world with digital property rights, players have a real and transparent stake in the item economy. Rather than just purchasing goods, they can earn and resell them, generating revenue that allows them to purchase more and better goods. Some players may get ahead by spending money; others, by spending time. The value of goods is driven by supply and demand, making those goods seem more fairly priced. Meanwhile, the eddies of supply and demand give developers clear data on what kinds of items players want, allowing them to align the production of their goods with the tastes of their consumers.
All of this requires a system that removes trust from the equation entirely — something that blockchain technology makes possible by creating immutable, transparent, and redundant records of every transaction, obviating the need for trust.
For developers, this trustlessness means opportunities to participate in the growth of their game economies beyond simply taking a cut of every transaction. What does that mean in practical terms? Beyond monetization via direct sales or fees, developers can shape and participate in their games’ economy in a range of ways:
- Developers can set up fiscal policies, by determining rules for trading, fees and taxation that encourage economic growth. Developer and player incentives are more likely to be aligned to create the largest possible economy, because players are also owners in the economy, incentivizing them to evangelize the game, bring in new players and stay engaged with the game longer.
- Developers can use macroeconomic tools to encourage investments in the economy, such as setting rates of inflation or rewards for player actions — for example, developers could design a smart contract that grants in-game currency to high level players who “mentor” new players through their first time in a dungeon. And of course, developers can participate in content creation themselves to benefit from these same incentives.
- Developers can hold a reserve of game assets that grow in value together with the game economy, selling blockchain assets from this reserve. At the same time, developers are incentivized to not exploit asset reserves, since an excess in supply will lead to a collapse in pricing and thus value for everyone.
All of this can take place without altering the existing mechanisms by which developers generate revenues — they can continue to sell in-game goods that don’t exist on the blockchain, so developers are simply adding new tools to their toolbox in the process. And, as developers become stakeholders in game economies, their agenda is aligned with that of their players: Grow those economies as much as possible. Players engage more, evangelize to other players, and stay loyal to their favorite platforms — because they have skin in the game.
By enabling true ownership of goods in games, developers can empower players and incentivize sustainable game economy growth without losing control over how their games operate — but doing so requires them to understand the different ways in which digital assets can be created, and the ways they can shape gameplay and game economies and interact with one another.
Want to learn more about how the blockchain empowers true ownership of in-game assets? Read our in-depth article here.