What are the value and challenges of the full-chain gaming industry, from the perspective of a former YC investor turned entrepreneur?

Source: Tax_Cuts
Translation: Odaily Star Daily Wenser


Editor’s note: As one of the hopes for mass adoption in the Web3 field, full-chain games have always been a hot topic of market attention. However, due to factors such as entry barriers, operating costs, and game playability, they have not yet become mainstream in the industry, and the user base is relatively limited. Odaily Star Daily has found an article from Tax, a former Alliance DAO member, YC investor, and co-founder of Primodium, to share the value of full-chain games and the existing problems. It is provided for reference and should be considered dialectically.
The 4 practical problems solved by full-chain games.
Firstly, new products need to solve problems that could not be solved before, otherwise existing products will occupy all market shares. Fortunately, full-chain games are a blue ocean field with few manufacturers competing for attention in this area. In other words, we don’t need to compete with Web2 game giants like Rockstar for player attention.
But to do this, it is essential to ensure that new problems are effectively solved.
For full-chain games, this means providing players with new experiences that cannot be found in other games. Full-chain games are relatively slow and clumsy in operation, so the experiences they provide need to be different from traditional games. Their value is mainly reflected in the following aspects:
Value point one: Real value assets
Strictly speaking, encrypted assets are just numbers, but due to the decentralization (the strength of the network), we can truly give them economic value. For traditional games, giving economic value to game assets often relies on the support of large and mature companies. However, for full-chain games, this attribute is inherent from day one.
Value point two: Value transfer freedom
Game assets in traditional games are often restricted by custodial supervision and technical limitations. Developers usually cannot custody US dollar cash funds, and banks do not have API interfaces for developers to build corresponding applications. In contrast, full-chain games allow players to transfer assets through in-game actions.
Value point three: Betting chip attributes
Betting chips can make boring gameplay (due to its inherent game nature) more interesting. Poker, which is often mentioned by many people, is a typical example. The gameplay of full-chain games can be simple, but betting chips can make the game results more anticipated because they are built on the cryptocurrency system (closely related to the market performance of cryptocurrency).
Value point four: Removal of consumption restrictions
Traditional game channels usually have certain restrictions on in-game purchases. For example, the in-app purchase limit is $99, which makes the user experience of purchasing any in-game asset that costs more than about 0.03 ETH (about $100) very poor. In contrast, there are no restrictions on consumption in the cryptocurrency market, and the market depth is sufficient. Therefore, full-chain games can continue to operate in this risk environment.


The ideal and reality of full-chain games
The 3 hidden problems of existing full-chain games
You may have noticed that the common advantages of full-chain games, such as decentralization, persistence, and composability, have been omitted. In my opinion, these “features” of solutions often do not reflect the actual problems of full-chain game players, so they are not good reasons to build on-chain games.
Problem one: Decentralization
Players usually want more game updates and game content. Real-time operations in traditional video games are an important part of game studio work. Decentralized games weaken the centralized role of “game studios”. In traditional games, balancing and weakening data is usually done for the benefit of players. The “centralization story” of World of Warcraft experienced by Vitalik has its merits, but in the long run, imbalanced gameplay will hinder the participation of more players. However, for the operation of the in-game economic system, trustlessness will play an important role in its survival. In other words, an economic system that does not rely on a specific role is healthier for the game ecosystem.
Problem two: Game persistence
The lifeline of full-chain games lies in their click-through rate (whether it is traditional games or full-chain games). It is quite rare for a game to maintain operation for ten years and maintain a certain player retention rate. The problem with most games is not that they have been taken offline, but that players lose interest in them. Just because it can “exist on the blockchain forever” does not mean that more people are interested in playing this game.
Problem three: Composability
Writable plugins are beneficial for creating more interesting player dynamics, but full-chain games are not the only way to achieve this feature. Web2 games themselves have usable editing plugins, but many people do not use them. Because players prefer to consume game content rather than produce content for the game. Players may have other reasons to participate in the production of game content, but composability is not an absolute reason to play games.
Summary: The key lies in a brand new gaming experience
Overall, full-chain games can solve problems that Web2 (even Web2.5 games that combine traditional Web2 games and blockchain games) cannot solve. However, most of these problems largely depend on the first principle of “why everything must be built on the chain”. However, the most important point is that full-chain games should be able to provide a brand new gaming experience. However, today, almost all encrypted games have not followed this idea. They are either traditional games with token systems (usually referred to as Web2.5 games), or ordinary games that run entirely on the chain and provide conventional game experiences. In the long run, no real players will experience these games just for consumption.
Therefore, we still have a lot of work to do, and full-chain games still have a long way to go.