The video game industry is always dreaming of new digital futures. Once one innovation passes, it's time to start conjuring the next one, and when there's a lull between the console generations, different trends elbow each other for a rent-free apartment in the minds of industry executives and developers.
DICE 2022 has been a chance to tour those apartments, admire the layout, and check the corners for unwelcome insects. We knew going into this event that buzzwords like "blockchain," "the metaverse," and "hybrid work" would be top-of-mind for attendees. What we didn't quite know was where the priorities of said attendees would lie. And after a year of investor excitement and backlash from developers and players alike, blockchain tech, its proposed upsides, and its worrying downsides, was what got people talking.
Is a year of pushback having an effect on how executives are thinking about this new tech? Yes. But there's still plenty of whet appetites for what the evangelists are advocating for—even if some of those promises come with possibly upsetting consequences.
"I don't know what the metaverse is."
If there's one reason crypto chatter ran high over buzzwords, it's that there are a number of concrete business plans and mechanics that can be debated or discussed. Meanwhile, Avengers: Endgame director Joe Russo was able to take the stage and quip "I don't really know what the metaverse is" in a chat with Epic Games chief creative officer Donald Mustard (though Russo's commentary was more of a dig at Facebook-parent Meta rather than Epic's proposed metaverse ambitions).
Russo's surprising divergent on blockchain tech may have decently summed up the positive impressions we gathered from DICE attendees. He described himself as being a longtime crypto fan, but didn't see the value of cigar-smoking monkeys immortalized as non-fungible tokens (NFTs). Across the event, advocates of this particular brand of decentralized technology had a well-represented voice, often coupled with arguments for the value of digital ownership.
Those arguments were given a platform in a panel moderated by Bonfire Games' Min Kim, who brought three executives from the world of blockchain tech up to the stage. Said panel expressed many of the same positives you've read across the internet by now, but what was obvious was an increasing savviness of the arguments.
Not...universal savviness, to be clear. It's hard to take advocates seriously when all of the panelists described concerns over blockchain tech, NFTs, and play-to-earn models as "misconceptions." Environmental concerns over NFT and Bitcoin minting were practically dismissed as solved problems, just because newer blockchains run on proof-of-stake and proof-of-authority protocols.
The last time I checked, the bulk of NFTs were still being minted on Ethereum, a proof-of-work blockchain that is using more energy than the country of Argentina. It was especially gross when Yield Guild Games' Breyl Li said there were less emissions produced by blockchain technology than in the minting of fiat currency like the U.S. Dollar. Sure, the minting of paper money and coins, and managing the digital transference of currency uses a lot of energy. It's also a ubiquitous financial system that can pay for food, medicine, transportation, or luxuries wherever you go. Blockchain technology does little of this, and in a far more inefficient manner.
Skeptics of blockchain tech put the environmental damage at top-of-mind in conversations held around the rest of the show. One developer speaking to Game Developer called it "ethically evil," expressing anger over what the climate crisis is doing to impoverished communities around the globe.
Back at the panel, Li gave her own take of how blockchain games could empower low-income communities. She shared the story that's made the rounds by now about communities in The Philippines and Malaysia becoming "scholars" in the NFT-driven game Axie Infinity, able to grind "smooth love potions" (SLP) that could be exchanged for necessary fiat currency.
She did not mention that since that flash-in-the-pan phenomenon, the value of Axie's coin tanked below the minimum wage of The Philippines. She did however, sing the praises of how Axie players recruited their friends, becoming "managers" of Axie-farming teams to earn more income.
The model she proposed sounded beat-for-beat like a multi-level marketing scheme. It didn't help that the praises of "true ownership" across the event sounded like the mantras of that shady, extortionary world.
I've mentioned before that making money off of playing games is an unattractive pitch for me. But blockchain technology is a tool, and tools can be used for problem-solving. But in an industry that's solved a heck of a lot of development problems in 50 years of iteration, what can blockchain do that hasn't been done yet?
I got some interesting answers from the developers and executives in attendance at DICE. "Decentralization" has actual appeal among technologically-minded leaders, not just business executives. Clay Token Game Studios chief technology officer Bilgem Cakir shared some of his own speculation about practical purposes for the tech (though he stressed that Clay Token isn't using any of it for its own games).
Cakir discussed a model that we've actually heard of before in some of the blockchain startups that Ubisoft has invested in. He described the idea of having game servers for multiplayer games that don't run on centralized machines in a datacenter, but are manifested by a decentralized network of computers running a mining executable.
The advantage? "The game wouldn't ever go offline," he said. In this model, the decentralized network becomes the server operator. If the developers go under, or development is sunsetted because of poor market performance, the game could live on.
It's a solid pitch, though still head-scratching. It's currently possible to preserve multiplayer games after development on them has ceased, to a certain degree. Open-source code releases and fan servers are some of the ways that online games have been kept alive. It's the cease-and-desist letters that disrupt many of those efforts.
Cakir's journey to this proposed process is worth presenting. He described himself as being an "extreme skeptic" of the technology until only recently. Only after some dedicated research did he think of this possibility. He wasn't proselytizing for the tech; he shared a proposed blockchain-driven solution for a problem that does indeed plague developers.
If there was nervousness around discussing practical applications for blockchain tech, it wasn't for fear of backlash. The financialization of digital assets spooked plenty of developers. Solve for the environmental issues, and you still have a technology whose selling point is "make line go up."
Are games dedicated to driving value for those objects even fun or compelling? Kim had thrown that question to the blockchain panelists—and didn't exactly get a resounding "yes."
Strange Scaffold founder and game designer Xalavier Nelson Jr. offered a worthwhile perspective on his chats with other game developers. "We've come up with some interesting ideas within the limitations of blockchain (if we put aside the environmental impact)," he said. A conversation about the tech limitations with his collaborators might lead to some interesting hypothetical game mechanics.
"Then comes the depressing part of that conversation, which is that [this] interesting game idea would not be of interest to the blockchain audience. Those ideas don't work as an engine for continued speculative profit."
What problems did the cryptocurrency panelists think the technology could solve? Andreessen Horowitz general partner Jonathan Lai described how decentralized autonomous organizations (DAOs) could shape the development of games like Apex Legends.
In his example, Lai explained how instead of having a development team make decisions about balance, patches, and new characters, holders of blockchain tokens could vote on what decisions are made to balance games. His comments seemed to imply that players invested in the game could make better decisions than developers working on them.
An Apex Legends designer who spotted my tweets about the panel seemed skeptical of that idea.
Designers and developers I spoke with expressed further skepticism about what blockchain tech could do, but it was GLAAD associate director of games Blair Durkee who pointed out one big draw of blockchain tech for executives and investors. "Blockchain is a tool for financialization," she said. "The profit motive is front and center."
If more games expand to include NFTs or play-to-earn assets that players can make money off of, players have a material motivation to keep engaging with games. "If people play your game to earn money, they'll play more," she said grimly. When monthly and daily average user counts are of special interest to investors, it's no wonder any tool that could drive those numbers up—even at the expense of players—would be coveted.
So is crypto dead on arrival in games?
It's a fair bet that several major game companies (beyond Zynga) will deploy cryptocurrency features in the next few years.
Designers, developers, programmers, and marketing types all groaned at the subject of blockchain games when we asked for their thoughts at DICE. Executives did not. One company founder (who requested anonymity in order to speak freely about their views on blockchain game development) expressed sincere excitement about what "real ownership" would mean for players.
They described what players could do if they owned a digital asset, and how they could trade it, modify it, or sell it to their heart's desire. Our conversation turned toward the comparison of tabletop miniatures—physical game pieces that players can customize on their own, or resell when they're done with them.
It didn't come up that when players sell physical game models, the parent company can't take a cut. With blockchain tech, they can—and will. Mythical Games co-founder John Linden described how they gave a set of evolving NFT avatars away to users, who would trade them amongst each other for about $10-$15. "We did take a cut of each of those transactions," he said with a bit of a laugh.
We heard other founders musing about the technology's "potential" across the event—even from companies who aren't currently running any free-to-play or live games.
What motive is driving them beyond the new revenue streams? Linden and Lai tipped their hands slightly during the NFT panel, comparing the growth of blockchain games with the explosion of mobile games over the last decade. The rough comparison they made was that mobile and free-to-play games expanded the video game audience to new users, who then took interest in traditional games.
By that logic, there's apparently some untapped market of potential players who would only commit to video games if they could make money off them (and to be clear, not draw a salary to interact with them, but to acquire blockchain tokens of speculative value). Lai mused that such players might migrate to places like Grand Theft Auto Online role-playing servers, and take the role of NPC-like characters in exchange for tokens.
It's grim stuff, to be frank, and mirrors the brazenly cynical comments made by Square Enix president Yosuke Matsuda when he described the idea of "play to contribute." The vibe seemed to be that the cost of user acquisition in free-to-play has climbed so high, the only way to get new players is to pay them—just not in actual currencies.
There seemed to be broad acknowledgement that there's a sharp divide between "blockchain gamers" and conventional game players. Cakir was up front about the fact that whatever cool blockchain tech he could think up wouldn't benefit his company because they were hoping to target a "hardcore" game audience for their upcoming MOBA.
Even the NFT panelists admitted that few of the games making use of blockchain technology are what one would consider "fun." Everyone in the space seems to be looking around, waiting for the first game company to take the leap, release a conventional game with NFT or blockchain tech, and survive the backlash.
Will anyone make that leap? Linden and Mythical Games sure seem like they might. Of the members assembled for the NFT panel, he seemed most interested in reigning in some of the wilder dreams like game-balance-by-DAOs, and speaking to the practical everyday lives of game developers. Mythical's recent acquisition of Polystream also indicates some forward-thinking about what user acquisition and retention will look like in these games.
Everyone has their eyes on players right now. The blockchain enthusiasts are looking out into the crowd, describing an unseen playerbase that supposedly hasn't been captured as of yet. Conventional game developers are looking nervously at their fans, who've bristled at proposed systems that sound a lot like enhanced, often environmentally damaging microtransactions.
Nelson had one of the most sharp-eyed observations of the field though, and he might be speaking for a large number of the game developers who've expressed indifference or outright hostility to blockchain technology to date.
"We can talk around the uses of the technology, where it will be, and whether it's relevant," he said. "But its core, the motivation for the loud audience advocating for it does not—in most circumstances—go outside of becoming the landed gentry of a new web3 world."