Weekly Developer Update #33

The Holy Grail of Gaming

This week, we’re zeroing in on two critical elements for any Web3 game: monetization strategies and engaging user experiences. As we develop our upcoming Chest NFT system for Cosmicrafts, we’ll share valuable insights that can be applied to other Web3 gaming projects, specially if building on the Internet Computer.

Without further ado, let’s get on with it.

The Evolving Game Industry

A Tale of Two Eras

The gaming industry is at a crossroads, marked by the coexistence of traditional Web2 games and the emerging Web3 gaming platforms. Each carries its own lifecycle, with unique stages, advantages, and challenges.

This WDU delves into these differences, offering insights into how they shape the future of gaming.

Monetization Models in Gaming

Web3 opens up a world of possibilities, but also introduces new considerations for creating a sustainable and player-centric economy.

Subscriptions

The classic MMO model, providing access for a recurring fee (monthly, annually, etc.).

• Pros: Predictable revenue stream, can foster a dedicated core community.
• Cons: High barrier to entry for some, demanding constant high-quality content to justify the cost.

Initial Purchases

The upfront cost of a full game.

• Pros: Simplest model, player buys in and has full access (barring potential DLC).
• Cons: Needs large sales volume, additional content is harder to monetize without fragmenting the player base.

Free-to-Play (F2P) with Microtransactions

The most dominant model in modern gaming.

• Pros: Low barrier to entry, can reach a massive audience, flexible monetization options (cosmetics, currency items, boosts).
• Cons: Prone to ‘pay-to-win’ imbalance issues if not designed carefully, can feel predatory when executed poorly.

Battle Passes/Seasons

Common in both F2P and premium games, players buy into a timed cycle of rewards and progression.

• Pros: Offers predictable content drops, encourages regular play, can be done with solely cosmetic rewards to maintain balance.
• Cons: Demands regular new content to feel worthwhile, can lead to “fear of missing out” (FOMO).

Hybrid Models

Combining aspects of the above. Destiny 2 is an excellent example.

• Pros: Provides various options for how players want to engage financially, can be tailored to a game’s core audience.
• Cons: Can get overly complex, risk alienating certain player segments if not carefully balanced.

Key Takeaway: There is no single ‘best’ monetization model. The most successful games find the right fit between their core gameplay, target audience, and the long-term sustainability of their in-game economy.

Web3 Game Lifecycles: The New Frontier

The Hype Cycle

Many Web3 titles experience meteoric rises due to novel concepts, token speculation, and the potential for earning. This can attract a diverse audience quickly, but maintaining that interest is a high-stakes game.

This initial surge often proves unsustainable.

Tokenomics Troubles

Balancing in-game economies with real-world tradable tokens is immensely difficult.

Inflation, devaluation, and market volatility can seriously undermine a game’s long-term health.

Shifting Player Base

The play-to-earn model draws in those looking for profit, creating a surge of interest. However, this focus can detract from core gameplay quality.

This can lead to player churn when token values drop or earning potential decreases.

Rapid Evolution

The Web3 space is still young; therefore, the models, technology, and best practices are in constant flux.

Games need to adapt quickly to survive, whereas Web2 titles have a bit more breathing room.

Web2 Game Lifecycles: The Established Path

Launch & Growth — The journey begins with a bang.

Begin with a strong launch and focus on continuous content updates and gameplay enhancements to retain players.

The advantage? A proven audience and monetization models.

The catch? The competition is fierce, and attracting players comes at a cost.

Monetization Models — Here, stability reigns.

Whether it’s through subscriptions, microtransactions, or paid expansions, Web2 games enjoy predictable revenue streams, shielded from the volatile markets.

The challenge: Balancing monetization with player satisfaction, avoiding the dreaded pay-to-win stigma.

The key to longevity — Regular updates and community engagement.

This strategy allows Web2 games to maintain dedicated player bases over years. However, developers must navigate the risks of content fatigue and technology becoming obsolete.

The Decline — All eras come to an end.

Market shifts and newer releases eventually erode the player base. While the decline is gradual, allowing for managed transitions, developers are left with legacy costs and the task of keeping a minimal level of engagement.

Even successful projects have rises and falls in popularity.

Examples of Games with Staying Power

• World of Warcraft: Despite declining numbers, WoW remains a giant. Regular expansions, deep game systems, and a beloved world keep it relevant.
• League of Legends: Free-to-play, constant character releases, and esports focus maintain a devoted player base.
• DOTA: Free-to-play, primarily monetizing through cosmetic items, seasonal BattlePasses, and its massive esports-driven economy.
• EVE Online: A notoriously complex space MMO with a player-driven economy, a testament to niche appeal and community dedication.
• Counter-Strike: Simple to grasp but hard to master, with cosmetics-based monetization and a massive esports scene.
• Destiny 2: Utilizes a hybrid model with a base game (sometimes going free-to-play), paid expansions, seasonal content passes, and an optional cosmetics shop.
• Minecraft: Initial purchase, but its focus on player-driven creativity, cross-platform compatibility, and a vast modding community have led to over a decade of success.

Staying power is the holy grail for any game

Foundations for Staying Power in Web3 Gaming

Let’s analyze the most critical factors in building a Web3 game with longevity, drawing from the previous examples and what we know about the strengths and weaknesses of the Web3 space.

Steady Success: The Formula

Gameplay First, Blockchain Second

No amount of tokens or NFTs can salvage a boring, unpolished core gameplay experience.

Sustainable Tokenomics

This is where countless Web3 games stumble. Tokens need genuine use-cases and a well-managed supply/demand balance.

True Ownership, Limited Power

NFTs and player ownership are powerful appeals. But, they need to be balanced for long-term health.

Community is Queen (or King)

Web3 is all about decentralization and player participation, not just profit. Players who feel invested are less likely to churn.

The Long Game

Hype gets you early players, but longevity is about adaptation and consistent quality.

It’s Not Easy

No formula guarantees success, especially in a rapidly changing space like Web3.

These factors increase the odds but ultimately building a game that lasts requires dedication, flexibility, and a bit of luck.

Understanding Player Value

Here’s what players truly value:

• Fun: At its core, a good game is enjoyable to play, independent of earning potential.
• Fairness: No one wants to feel like they have to spend loads of money to compete or be constantly outmatched by the game’s systems.
• Progression: A sense of advancement, new skills, better gear, or access to more content is vital.
• Community: The social aspect, building bonds, and a shared experience is part of the value.

It’s not just about money.

How Revenue Generation Can Undermine Value

• Aggressive Pay-to-Win: Creating imbalances where paying players stomp others erodes fun, fairness, and community.
• “Grind Walls”: Forcing excessive, unenjoyable repetition to drive token or NFT sales makes the game feel like a job.
• Exploiting FOMO: Limited-time sales or items engineered to create the “fear of missing out” can feel manipulative and damage player perception.

Strategies for Balance

Cosmetics as Core Monetization

Focus on skins, unique visual effects, and items that don’t directly affect gameplay power.

Allows for self-expression and revenue without ruining balance.

“Play-AND-Earn” not “Play-TO-Earn”

Fun gameplay should be the primary motivator, with earning as an additional layer, not the sole focus.

Inflation or sudden shifts in value destroy perceived fairness.

Additional Web3 Considerations

• Gas Fees Matter: High transaction fees on the blockchain can eat into player earnings. Choose the Internet Computer as a solution to play for free.
• Gradual Onboarding: Web3 tech can have a learning curve. 99% of gamers aren’t crypto experts, start with familiar gameplay then gradually introduce blockchain elements.

There is NO Perfect Formula

Sustainability is more about weathering the storms and having the fundamentals in place for longevity.

The Thoughtful Wrap-Up:

Understanding the strengths and pitfalls of Web2 and Web3 alike gives us the insight to build an economy and gameplay experience designed to last.

This, combined with the lessons learned from the gaming giants, gives Cosmicrafts a powerful foundation.

Play on the Quest Metaphor:

So yeah, finding the ‘perfect formula’ for Web3 gaming is like searching for the Holy Grail…there might be a few false starts and some knights who say ‘Ni!’. But hey, the adventure is half the fun.

Speaking of quests, time to get back to forging those Chest NFTs!”

Upcoming — Chest NFTs: Forget the boring loot boxes of old! Our Chest NFTs are going to turn Cosmicrafts’ economy on its head.

Get ready for the legendary loot!

Blast off for now, but remember!

Stay in Power, Stay Cosmic