Basic Problems of NFT Games and Their Solutions

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Apart from the main problems, nomenclature also appears to be important. The leading entities in NFT games are slowly starting to shift from Play-2-Earn to Play-&-Earn, which is more like the model that NFT game developers are trying to achieve. The Play-2-Earn system has been around for a couple of decades and is only more visible with NFT games. Just like in regular games, in NFT games, fun comes first. Therefore, the term Play-&-Earn more closely matches the desired result that most game studios are trying to achieve. It's about having fun and getting value as a secondary gaming product.

Quote from Hilmar Veigar Pétursson, CEO of CCP Games (EvE Online developers):

“Players hope that the values created from online games can be translated into the real world. The content of online games should also have certain values in the real world. The gaming industry should evolve to allow players to create “gaming retirement” plans using the money they earn from gaming.”

According to Pétursson, this would mean finding the holy grail that players are searching for. The problem that the community faces is that this genre examples are not sophisticated and are related to cryptocurrencies that the community is not interested in.

Current playing of Play-2-Earn games feels more like a chore with boring gameplay compared to regular games. The fact that NFT games are exposed to external market forces over which they have no control is also worrying for players.

A common practice is early entry by speculators who don't even show any real interest in playing the game. They drive the token price to higher values ​​and then leave a huge inflationary and destructive pressure on the price. Speculators thus use imperfectly developed monetization, which can tear the game's economy to pieces. In that case, Play-2-Earn becomes Pay-2-Play, which often comes with a loss of value and fun.

The scenario looks approximately as follows. Players are supposed to borrow NFTs from another player to monetize their NFTs. By doing so, they are bound to build that players’ “empire” until they get their own NFT and the chance to enjoy the game with their own Play-2-Earn influence. P2E game developers are then forced to implement increasingly sophisticated balancing tricks designed to keep the tokenized economy afloat. There is no room left to create engaging systems for players. The likely result will be an implosion over the next 12 months as token-based games begin to fail as players leave or find it impossible to generate sustainable income from a given Play-2-Earn game.

The best view of the issue is through the eyes of the players themselves. They are currently not interested in games with a tokenized economy connected to exchanges. The industry needs to develop balanced and robust economic infrastructures that developers could use to build the foundations of both offline and online game economies, offering a Play-&-Earn concept. But this has to be based on real economic theory and algorithms, not the spreadsheets that current games are still designed with. In the GameFi industry, it is necessary to achieve stability, security and consistency for players and developers. It's not much fun to see your time and value disappear due to token volatility, for example. It also results in value loss of game NFTs, leading to reduced earnings for developers.

The following question then follows from the imperfect Play-2-Earn concept. How to incentivize players to play NFT games while allowing them to participate in the GameFi economy and gain some of the value they bring to the gaming community? It is necessary to find a solution so that players are not forced into “a second job” that Play-2-Earn often resembles.

In other words, how to move from Play-2-Earn to Play-&-Earn?

It is important to understand that “value” is not just monetary. The real game value comes from the fun players have while playing the game. That's the value they willingly pay for.

Almost any effort the developers put into increasing the financial utility for the player will result in a decrease in the intrinsic utility/fun of the game. It is inherently unsustainable in the long term. Developers using the Play-2-Earn model have fallen into the trap of exposing their player community to the speculative influences of a free market that is merciless and extremely volatile. Under the illusion of getting rich quickly, P2E “investors” found themselves dealing with incompatible motivational structures of game mechanics. There has been a lot of speculation on those so far and most gaming NFTs and tokens have caused long-term holders’ losses rather than expected gains. Well, at least these days.

Speculators and token holders trying to maximize short-term profits are contributing to these losses. These speculators have no incentive to protect the long-term value of the game or invest in improving it. As a result, these P2E games gradually lose players, and they are replaced by “game workers” who are willing to play even a more boring game if it brings them real value. By doing so, they siphon off all possible value until it's time to move on to the next project. Speculators and the new working class are looking for new pastures to repeat their Play-2-Earn harvests to drain the publicly available value of the project.

This somewhat cynical business model resembles “Slash-&-Burn” and is a real tragedy for the new GameFi industry. This is a side effect of the short-term profit model that game studios found beneficial for the innovative NFT gaming industry.


New models are starting to appear, based on the idea of a win-win trade. It is essential to start designing self-sustaining systems with aligned incentives for all stakeholders, especially players.

Possible solutions:

  • Create game and network participants to share in the lasting value of the network they will help build.
  • Simulate the economic balance before implementation. This can help identify economic shocks, which must then be avoided via suitable corrections because otherwise the community suffers. In practice, the game’s NFTs lose value and Play-2-Earn rewards shrink.
  • The Matanomic platform proposes an algorithmic solution to address such economic requirements. It features both an Engine and a Hub for a complete Play-&-Earn solution. Not so long ago, we brought you an analysis of the game GLOBULA, where the developers mention a similar algorithmic solution to the game's economy. Then we noted that the developers of Gala Games also had to deal with the economy after their fiasco with cheaters in Town Star. They started working with economists and talking about the Play-&-Earn concept, which they say is more aligned with the direction they want to proceed in. In the upcoming game Spider Tanks, we will see if they succeeded in the transition to an economically balanced game world; that economy is already algorithm driven and flexible.

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