A Blockchain Gaming Bearpost from a Blockchain Gaming Bull

Ian Emerson
5 min readMay 18, 2022


Have blockchain games actually achieved anything that a centralised game couldn’t have? Breaking down what is actually beneficial and what is repainting value extractive business models.

It is easy to get stuck in an echo chamber on Crypto Twitter that everything is amazing and every new project revolutionary. Recently I had a lengthy discussion with my brother, an avid gamer and crypto gaming-sceptic, in which he detailed the various ways that blockchain gaming was worse for the gamer. For context, we played games throughout our childhood, teenage years and into adulthood, further he is extremely bright, tech-savvy, and an early adopter of all other gaming innovation. So if he had concerns then they were certainly worth listening to. Inspired by that, I will try to distill what I see as actually a step change in play and what is for all intents and purposes still web2 gaming but with “NFT” plastered on the box.

I’m going to frame this from the perspective of two types of players, the net spender and the net earner (for net neutral i.e. F2P players, there is no difference to web2 until they become one of the other categories, perhaps by earning their way into ownership. A notable benefit).

1. Net Spenders

The financialisation of everything doesn’t necessarily make games more fun. Where core gameplay is unchanged, for the net spending player, their experience may be unchanged by introducing an open economy e.g.:

  • A single player game where you are just in it for the story e.g. The Last of Us, The Walking Dead (and others within the genre). A lot of gamers may well prefer to buy a game for $XX, play it through, and feel like they got >$XX value out of it. Here I concede that blockchain gaming may not change much.
  • Perhaps one improvement would be permissionless UGC, but this is only a marginal improvement on web2 modding, with perhaps better monetisation for the modders to be fairly compensated (a problem we have not yet actually solved in web3).
  • Another improvement is simply that the community can have a better input if they are direct financial beneficiaries and hold some kind of pseudo-governance rather than passive stakeholders.

Some game publishers are just using NFTs as a new value extraction tool

  • See Ubisoft Quartz, a horrendous flop, met by horrendous backlash. Both communication and implementation were lacking. There was no clarity on use cases, and launching those use cases closer to launching assets to avoid them just being speculative.
  • This I agree with. If there is someone from Ubisoft who could correct me then please do reach out, I am all ears.

To a gamer for whom the blockchain interaction has been abstracted (a thesis many of us hold for blockchain gaming to reach the broadest mainstream audience) and whose on-chain game assets (NFTs) are only used by a single game publisher (as is the case for the vast majority of games currently), their items are indistinguishable to off-chain game assets stored on that publisher’s private database and traded on that publisher’s centralised marketplace. Trust is required in both cases for the value of the assets not to disappear.

  • The corollary of this is that for blockchain games to provide extra value to the net spending player, on-chain assets must have other use cases e.g. DeFi lending (for yield), borrowing (as collateral), fractionalisation (for liquidity and price discovery) or be used by other independent games that permissionlessly integrated them.
  • On the former we are yet to see huge traction, but I am excited for what is being built… NFT collateral / NFT lending /NFT fractionalisation.
  • On the latter we are also yet to see huge traction, perhaps the most active ecosystem would be Loot see TheCrypt / Realms / others. One of the problems so far has been the lack of incentive to use someone else’s assets when you can issue your own and retire off the primary sales, see Pixelmon. Let’s see what happens now as audiences start to grow around particular ecosystems and speculation for the average asset decreases across an increasingly saturated market of new game projects.

All of that is not to say that there are not great leaps of innovation to be made, but just that for net spending players, there has not been a significant change so far except speculation. This is to be expected, game development takes time.

2. Net Earners

The vast majority of value in web2 is captured by centralised game publishers, there are some instances of UGC rewards, but this is a minority.

Web3 (spearheaded by Axie Infinity) has created far greater wealth generation from in-game activity than we previously saw in web2. We had gold farming, power lvling, other resource trading across MMOs, but the scale and rapid growth is on another level now, enabled by superior liquidity, on/off-ramps, and community coordination to develop tools that solved previously high risk problems like the trust required in transactions for exchanging game currencies, items, and accounts.

But why are they being paid? And how can this be sustainable?

  • Money has to come from somewhere, if net earning players are being paid in a hard currency (stablecoins) then someone must have originated it, or if they are paid in an unpegged currency (game tokens) then someone must be supporting the sell pressure for it to be converted to useful currencies (outside of some cases where e.g. SLP has started to show more currency-like features as a unit of exchange).
  • They are being paid to create assets. Whereas previously game devs might have just printed new assets and sold them, now gamers are grinding to earn currencies and assets, whose values are supported by the demand of future net spending players (or speculation that there will be a demand from future net spending players). At some point you need those future non-speculating players to materialise or you run out of speculators and everyone tries to get out as they realise this.

So the question to sustainability of such a system boils down to: how can we create net-spending players? Ultimately they have to want to spend on the game with no expectation of making profit. So expenditure for access, to advance more quickly, be more competitive, or just be aesthetically pleased by their cosmetics. These are web2 mechanisms also, so we should learn from the broader game community on how to achieve them.

To learn more about Fabric Ventures, you can visit our website, follow us on Twitter and read our investment thesis.