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Web3 Gaming is Now Officially Under-hyped

July 31, 2023 | Matt Stephenson

Early approaches to Web3 gaming had mixed success.  The single metaverse vision was always dystopian and play-to-earn, which had questionable economic foundations, foundered after a few early successes.  And while in-game item economies transacted via the blockchain presented a reasonable approach, it required the game designers to sacrifice control over their in-game economy. Despite these false starts, I believe Web3 still has much to offer the gaming world. I will focus on two areas where I think Web3 would be straightforwardly beneficial to games, right now:


  • Digital Property Rights for Memorabilia

  • Market Information for “Shapley Valued” Game Design

Memorabilia in e-Sports


In the world of physical sports, we have countless examples of memorabilia taking on value far exceeding their material worth due to their provenance. Consider Michael Jordan’s jerseys: while there are innumerable replicas available for purchase, there’s a singular distinction reserved for the one he wore during the first game of his last NBA Finals series. A good quality replica Michael Jordan jersey can be had for around $100, but this particular piece of history — the jersey worn during that memorable NBA finals series — costs $10.8 million.


Why should the world of e-sports be any different? It’s a domain filled with its own legends, triumphs, and narratives. Just as we did with Michael Jordan’s jersey, we should make the same distinction between, say, the skin an e-sports star wore during the finals of a championship and a ‘visually identical’ skin that wasn’t part of that moment. NFTs create both the “objectness” and the provenance required for such memorabilia.


What’s especially appealing about this approach is its seamless integration into the existing structure of the gaming industry. Utilizing NFTs to assign unique value to e-sports memorabilia doesn’t necessitate a relinquishment of control over the in-game economy by the game designers. It’s an addition that enriches the existing landscape rather than uprooting it.


The Informational Benefit of Markets


One of the appeals of e-sports memorabilia is that it allows game designers to do “business as usual.” And business as usual is, let’s face it, creating command economies where they try to control the flow and value of all the items.


Command economies have their benefits (at least to the people in charge!) but markets have some advantages too. One advantage is that market prices are incredible channels of reliable information, and this information can used to improve the product itself. It turns out that the InfiniGods does exactly this, using market prices to inform and iterate over their approach.


If you could see into the mind of a great game designer, like those at InfiniGods, you’d likely see something that looks like a Shapley Value. The equation is a gigantic, Nobel-prize-winning, thing that looks like this:



But what it says in game design is simple: the value of a game item is how much value it adds in all relevant situations.


Imagine you’re playing a shooter where enemies have 110HP, and your weapon is a bow that does 100HP worth of damage. If you have an upgrade that increases your bow’s damage by 10%, how much is that upgrade worth? The bad game designer says “10%”, the good game designer, consciously or not, uses a Shapley Value.


The Shapley Value gives the boost credit for taking you from “two shot kill” to “one shot kill”. That “small improvement” actually makes your bow twice as good!


Shapley gives us the value of the bow. And if there are markets in your goods then you can use the Shapley Value to compare. Is an item is trading at a discount to its use value? At a surplus? This allows for rich, explanatory, data analysis that can be used to improve the game experience.


Web3 Features Will Win Out


The potential benefits of Web3 in the gaming industry transcend mere hype or surface-level interactions. Two concrete applications – utilizing NFTs to assign unique value to e-sports memorabilia and harnessing market information to inform game design – illustrate this. By recognizing the inherent value of digital objects and utilizing the informational wealth of markets, we can deepen player engagement, enhance game economies, and add layers of richness to gameplay. As we continue to explore the possibilities of Web3 gaming, we’re not merely envisioning a more immersive gaming landscape; we’re actively constructing it.



Follow Matt on Twitter: @stephensonhmatt


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