A Mental Model for Web3: Money games and Leisure games
A simplistic mental model on what's wrong with 'web3 gaming' today and how to fix it
To clarify, I don’t think web3 games today are bad. I say they are wrong and needs fixing because there’s misalignment between what people think an (online) game should be versus what’s actually available today in web3.
We’ve only seen the prototypes of web3 gaming. There’s plenty of room to improve and you should be on the look out for the gaming studios trying to do it right.
What makes us so entitled to earn while playing games?
To preface this post, take a step back and think about simple games: basketball or chess. Unless you’re a pro, do you expect to earn money for every second you play on the court or win a match of chess?
In fact you probably expect to pay money. You’ll need to pay for access to a basketball court, you’ll need to buy your chess set, or pay a fee to enter a local tournament.
The majority of time you spend playing a ‘game’ is and has always been pay-to-play. Because you don’t play games with aim to earn, but rather to receive entertainment.
99% of ‘players’ are in leisure games, not money games.
Money games or Leisure games
Money games attract a crowd, but only some get a payout
Money games are like playing professional poker, being in a sports pro league, competing as a pro-gamer, day-trading financial instruments, or systematically investing in startups. Passion and fun exists in those games, don’t get me wrong, but top of mind for the players is return on investment i.e. earnings > cost to play.
The reason is simple. These are games that take all of a player’s time. Poker players practice; Athletes train; day-traders refine trading strategies; investors pick enough losers to find the big winners. People who make best use of their time are able maximize return on that time.
The business model is also different. In money games, players are paid to play in exchange for their time and expertise. Spectators and fans pay to be entertained.
Leisure games can cater to a larger player base, but it won’t make anyone rich
A lot of people can play un-professionally. Friends casually play poker, basketball, League of Legends, and have a lot of fun. But, you won’t see cash exchanging hands across these casual games. At least, not enough cash to replace someone’s salary. You need to go to the big leagues for that.
The primary function of these games are to create leisure for its players for a limited amount of time. It’s not work nor a full time job. Even if you paid hard earned cash to play, you’d still be happy because you got want you wanted—a good time with friends!
In contrast to money games, players of leisure games pay to play because they are paying for their own entertainment.
In mature environments, it’s easy to tell when you’re playing a money game or a leisure game
You can probably tell when you’re a professional basketball player versus a casual weekend baller. The same distinction is clear when playing LoL with friends compared to competing in the global tournament.
This clear-cut distinction is important to call out because of two implications:
A ‘game’ can both have a money game and leisure game aspect
Despite playing the same game, a player’s expectations are very different (and therefore how they measure ‘return’ i.e. fun vs funds) is different depending on the game they are playing—money or leisure
I can’t think of a mature game today where all players get paid more than the time they put into the game. Casual players play games for leisure and they are expected to be out-of-pocket in exchange for the entertainment they receive. Otherwise, they’d be playing the money game and devoting a disproportional amount of time and skill. For which, the best of them deserve to be paid top dollar to play.
Leisure games pay (money) to finance money games which, in turn, entertain leisure players (as payment)
In a normal mature game, that’s how value usually flows. The most entertaining players get a large payout while the rest pay for said entertainment with their dollar.
A true sustainable game is either:
A leisure game only (people pay for entertainment), or
Has both a leisure game and a money game
But it can’t be just a money game! Or else, where would the money come from?! 🤷♀️
If you want more detail, here’s another chart:
Web3 games are money games, which have yet to #buidl leisure
Web3 games today are unsustainable because they’ve built the money games first and have yet to figure out the leisure game component.
That’s okay. Think of it as a proof of concept.
Phrased differently, the player demographics of web3 games are imbalanced. There are too many so-called ‘players’ looking to be paid for their time and not enough players paying for entertainment. Gaming companies are left with no choice but to keep printing money (tokens) to incentivize the artificial increase in ‘players’. That leads to unsustainable payouts (inflation) and ultimately the devaluation of their tokens (hyperinflation).
A quick search will easily lead to these cautionary tales.
So what’s the solution?
IMO it’s simple: play-to-earn isn’t enough. A complete web3 game needs one more component to balance the equation: pay-to-play.
Web3 game = x (play-to-earn) + y (pay-to-play); y > x
There should be significantly more pay-to-play gamers (y) compared to players getting the opportunity to play-to-earn (x). Or else, you can bet it will be unsustainable.
I also post web3 stuff in Twitter: @nigelwtlee