Twitch Founder Justin Kan: Web3 Games Don't Need To Lure Players With Profit

An anonymous reader quotes a report from TechCrunch: Top crypto VCs are constantly touting the potential of video games as one of the most compelling use cases for blockchain technology. [...] TechCrunch talked to Justin Kan, co-founder of Twitch and more recently, Solana-based gaming NFT marketplace Fractal, to get his thoughts on what it will take for this subsector of web3 to live up to the hype. Kan said that web3 gaming has a long way to go -- while there are about 3 billion gamers in the world, including those who play mobile games, he noted, far fewer have bought or interacted with any sort of blockchain-based gaming asset. Kan sees this gap as an opportunity for blockchain technology to fundamentally change how video game studios operate. "I think the idea of creating digital assets, and then taxing everyone for all the transactions around them is a good model," Kan said.

In some ways, web3 gaming was been built in response to the success of games such as Fortnite that were able to unlock a lucrative monetization path for gaming studios through micro-transactions from users buying custom items such as outfits and weapons. Web3 game developers hope to take that vision a step further by enabling players to take those custom digital assets between different games, turning gaming into an interoperable, immersive ecosystem, Kan explained. Kan has made around 10 angel investments in web3 gaming startups, including in the studio behind NFT-based shooter game BR1: Infinite Royale, he said. Still, he admitted that building this interoperable ecosystem, which he sees as the future of video games overall, doesn't technically require blockchain technology at all. "Blockchain is just the way that it's going to happen, I think, because there's a lot of cultural momentum around people equating blockchain with openness and trusting things that are decentralized on the blockchain."

[T]he appeal of an open gaming ecosystem is more about the principle of the matter than it is about making a living. "I actually think that people equate NFTs and games with this play-to-earn model where people are making money and doing their job [by gaming], and I think that's completely unnecessary," Kan said. "Having digital assets in your game can work and be valuable, even if nobody is making money and there's no speculative appreciation or price appreciation on your assets," he added. It's common for popular games to attract new development on top of their existing intellectual property. Kan shared the example of Counter-Strike: Global Offensive (CSGO), a video game in which custom "skins" have sold for as much as $150,000 each. "I funded a company that builds on top of the CSGO skins," he said. "CSGO changed the rules about what was allowed and actually confiscated over a million dollars just from this company -- so yeah, I don't want to build on top of these non-open platforms anymore." "Kan sees blockchain-based games as just a 'more economically immersive' version of the marketplaces that already exist in video games," adds TechCrunch. "He doesn't think users will flock to blockchain gaming just to make money, though."

"I think that web3 games are just being more open and saying, instead of this being a black market, we're going to make this a real market and people's economic participation is going to vary to different levels. There's gonna be people who only play the game and never buy things with money. There's gonna be some people who are making some side money because they're really good at the game, and they're getting some things in the game they're selling [or trading]."

He added: "In order for this market to actually be big, it's going to require normal people who want to play games for fun to play these games. That doesn't exist yet. I think most of the market today is people who are crypto-native."

It's not that they don't need to

[rsilvergun]

It's that doing so completely breaks the games. Blizzard learned that when they tried to do the real money auction. Play to earn games only attract players that want to earn money. That creates an economy where everyone is trying to earn the in-game currency but nobody cares about spending it. Any attempt to balance the two results in either too much currency and not enough to spend it on or an impossible grind that makes playing the game miserable. You can of course try to use nasty psychological tricks to get around that but then you're competing for the limited number of whales.

Also spare a moment for the fact that we as a species are so obsessed with work that we take our leisure activities and try to turn them into a job. We are dumb fucking apes

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[bistromath007]

It's not "we as a species." This is mostly an anglophile disease. The problem is that the internet, and thus the cultural momentum of the entire world, is still mostly controlled by Five Eyes. The sun never sets on the neo-Victorian empire, and it demands that all human experience be instrumentalized for the Great Work: making shitty people richer than the pharaohs.

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[bistromath007]

Ugh, god, I read that three times and it's still wrong. Anglophone, not anglophile.

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[ConceptJunkie]

Don't worry. I'm sure /. will allow you to edit your comments by the year 2060.

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[ac22]

"Axie Infinity" was developed by Sky Mavis, a Vietnamese game studio, and most of its players are/were from the Philippines. You can read more about it in last week's story on Slashdot, "Axie Infinity Has Left Filipino Gamers Despondent and in Debt":

https://games.slashdot.org/sto... [slashdot.org]

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[phantomfive]

The problem is that the internet, and thus the cultural momentum of the entire world, is still mostly controlled by Five Eyes. The sun never sets on the neo-Victorian empire

What are you talking about? This makes no sense. Besides being historically inaccurate (the US was never part of any Victorian empire), it also claims that Australia is more of a power on the internet and culturally, than France, or Japan.

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[bistromath007]

I said "neo-Victorian." That qualifier is there for a reason; I recognize that the historical link I'm talking about here is indirect. The US was never "part" of any Victorian empire. In the aftermath of WWII, one of many changes to the world order was that the UK handed most of its remaining power over to us. We *are* the new Victorian empire, it is the other Anglophone nations and our cultural colonies which are "parts" in the way you mean it. (such as Japan, which cooperates with us enough in "security"

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[phantomfive]

LOL that's a conspiracy theory that a high school student would come up with. Why do you call it Victorian if it originated with the Germans, as you claim? Wouldn't it make more sense to call it neo-Bismmarkian?

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[bistromath007]

Because Queen Victoria was the actual head of state who enacted it, and that is how people generally refer to the relevant time period. The things I've said are, individually, undisputed fact. What makes them a "conspiracy theory" is that I've drawn a connection between those events. Believing that actions have consequences is frequently very inconvenient for the establishment.

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[phantomfive]

The things I've said are, individually, undisputed fact.

Not really LOL. The purpose of school is not to get kids to work for 14 hours. You made that up.

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[bistromath007]

Yeah, because that isn't exactly what happened.

Oh wait, it was. That's exactly what early capitalism was like, and the people who *invented* the Prussian model actually *wrote* that this is why they were doing it. We had to have years of global civil unrest to get sane working hours and labor protections which are now being rolled back, which I'm sure isn't a sign of the resurgence of that ideology or anything.

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[phantomfive]

Nah, you're listening to weirdos on youtube or something. I don't know where you got these ideas from.

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[bistromath007]

Perversely, I got many of them from *history class.* The "years of global civil unrest" I refer to are what drove FDR to tell his fellow oligarchs to chill out for a few decades. The Prussian model and its purpose is also discussed in many textbooks. The history of this system isn't hidden from people, because that isn't necessary if you just present it in a context where only weird, disaffected nerds will care about it.

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[phantomfive]

Perversely, I got many of them from *history class.*

Probably not.

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[sysrammer]

I recently started playing Eve Online. Beautiful artwork, interesting concepts. A giant monolithic system of programs added over twenty years or so. Playing it feels like working IT, only I'm paying *them* for the privilege.

Will I continue? IDK, I'm conflicted. It is an impressive effort. And raw capitalism can be fun as a game. Warlords, robbers, schitzos, gankers--what's not to love? Searching through various menus for configuration settings? Check. Constant upgrades? Check. Bosses assigning tasks that th

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[war4peace]

All those are reasons why I quit that game, years ago, after playing for several years on three accounts.
The general level of paranoia in that game is pathological.

Re: It's not that they don't need to

[IdanceNmyCar]

Eve-O is effectively the most complicated strategy game in the MMO genre. I devoted years to it before I decided it just required too much time to be part of the real events.

The best part about it is how you can grow a history, I was first part of Goonsquad in the days of swarming with frigs. Moved on to pirating and drug running. Finally joined some 0-sec corps. At the end of my career I was a mercenary and this doesn't include alts. But by this point, if I didn't play for a few days it was easy to find my

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[sg_oneill]

Yeah I was in Goonfleet too back in the early days (SEFTE #1) for quite a few years and it did turn into a massive drag after a while. Honestly, it was the supercapitals that ruined that game. Once you start having spaceships that require years worth of manpoower to aquire, but can wipe out 200+ players on a battlefield *without actually being there* (The original Titans, they nerfed that horrible nonsense eventually) it really just did stop being fun.

Prior to that you really could just get a swarm of a few

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[Opportunist]

I stopped playing EvE when I noticed that not only is it a second job that you pay for the privilege of doing, you're not really playing the game, you're playing the players.

At least at the level that we did it.

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[Powercntrl]

That creates an economy where everyone is trying to earn the in-game currency but nobody cares about spending it.

That's not just for-profit gaming, that's the entire internet. There's way more people who are trying to figure out how to turn their YouTube/Twitch Stream/OnlyFans into a revenue generator than there are people who are willing to throw money at someone's Patreon or pay to see their naughty videos. It's like a large portion of the internet has just turned into the world's largest street corner where people beg for money.

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[gweihir]

Indeed. The whole idea is stupid as it targets a different user population and regular gamers see this as something that makes them stay away from a game. If I read "Microtransactions", I do not even look at the game review anymore. I just stop being interested because either the game sucks or somebody that sucks and has enough influence to push this is involved with the game.

Also, "web3" is just a fantasy to drive more people to the crypto-scam. It has no future.

Then why the fuck do you want NFTs to begin with?!

[Lisandro]

The entire point of tokens is to have a "valuable" (heavy emphasis on quotes) asset tied to your games. So what are NFTs good for if one cannot extract that value from them?

The only reason to have crypto tokens in games is to create a secondary market.

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[bistromath007]

Before I saw all of the past couple years happen, I used to think some kind of blockchain something or other might be an interesting way to facilitate inventory management and trade in something like an ARPG.

Unfortunately, absolutely no developer who touches this technology is interested in anything other than creating "markets" which are actually casinos, and all the users are either Filipino slaves creating content and engagement for American whales, or phishermen. If there was anything good to be done wi

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[UnknownSoldier]

> So what are NFTs good for

Wasting your time to find a sucker to buy it. /s

Nitwits Financial Trading.

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[gweihir]

The only reason to have crypto tokens in games is to create a secondary market.

Indeed. And the whole overarching reason to do that is to keep the scam alive a while longer.

Get out of my hobby.

[bistromath007]

Crypto nerds need to get cultural momentum around some bitches. The liberating potential of the blockchain has been forever destroyed by the fact that 100% of the early adopters were scam artists. This idea is dead, and we're going to be stuck with fiat for the considerable future. Great work, assholes.

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[Opportunist]

Because tulips are just beautiful to behold for a while, then you start to wonder what the fuck to do with these bulbs.

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[Powercntrl]

The liberating potential of the blockchain has been forever destroyed by the fact that 100% of the early adopters were scam artists.

That's because the whole decentralized/deregulated thing meant there was nothing to stop bad actors from ruining it. When you can't do much more than sarcastically ask them to not do it [tenor.com], what outcome did you expect?

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[bistromath007]

That's some capitalist realism horseshit. The internet is full of greedheads because America is in charge of it. There are plenty of places on earth where people don't act like this, because they don't have a wealth distribution so hopelessly tilted that millionaires are theoretically at risk of homelessness if Bezos sneezes.

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[bistromath007]

I haven't read that book. Where I've seen the phrase used, it refers to the system of propaganda, perverse incentives, and affordances that makes it difficult for people to imagine any solution to the problems caused by capitalism. They're all just "how the world works" and trying to do anything about them means you must be either an idiot or a scammer, regardless of the existence of historical and contemporary counterexamples. Chief among the lies of capitalist realism is that greed is immutable human natu

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[TimothyHollins]

Has anyone tried emphatically asking them not to do it?

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[gweihir]

Crypto nerds need to get cultural momentum around some bitches. The liberating potential of the blockchain has been forever destroyed by the fact that 100% of the early adopters were scam artists. This idea is dead, and we're going to be stuck with fiat for the considerable future. Great work, assholes.

Yes, that nicely sums it up. There are still some ETH people that think they can do something actually useful with it, but they took way too long with moving away from poof-of-work to get there now. I also think it is quite possible that proof-of-stake will be worse with the current scammer-vs-scammer "business model".

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[bistromath007]

Proof-of-stake is a bad idea on its face. It's "rich guy makes the rules," which is what we already have, but explicitly.

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[gweihir]

Yes, likely. Effectively, proof-of-work is the same thing, just that the "rich guy" needs to invest more. Seems this whole crypto-"currency" idea is pretty much bad and possibly unfixable, even if you ignore the current greed-driven mess.

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[bistromath007]

I actually had an idea a while back for a model that has the potential to be less trash, but it's such a weird, pie-in-the-sky concept that the best way I have to describe it is literally a joke. That's in addition to the fact that I don't have a degree in anything and I'm an unlikeable, disabled, paralyzed wreck of a person, so I'm the wrong guy to have any idea, no matter how good it might be.

Like I said, the core of it was originally a joke: proof-of-wags. The reasoning is thus: human economics and gover

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[gweihir]

You are not entirely wrong. The problem with most forms of getting rich is that they scale and that the mentally defective of the "greedy" variant can continue to accumulate riches long after they are comfortably set for life. A workable fix to this is to limit the accumulation of wealth to what one person can personally do as there are natural limits to this, i.e. remove the basically infinite scaling that exploitation of others and "virtual" money gives us today and which is at the root of all greed-drive

Web3 Games Don't Need.

[splutty]

That about sums it up, there was no need for anything else in that title.

What's the point then?

[fuzzyfuzzyfungus]

It's certainly not false to say that a 'web3' game doesn't need to lure players with profits. It can just not do that; but if that's the plan why bother with the 'web3' bit?

Sure, 'web3 lets people freely trade their NFTs!(unless the 'smart contract' is built to give the vendor a cut of the action each time, forever...)' you say; but that's markedly less interesting the second you step outside the context of the game that treats the NFT as some sort of game asset, rather than just a cryptographic receipt; and, especially given the fairly tepid efficiencies and high transaction costs of a lot of the most popular publicly distributed blockchains odds are pretty solid that an NFT-based cosmetics market will be clunkier than a vendor-blessed fiat one so long as the vendor is extant and approves; while if the vendor goes belly up the NFTs will be more durable; but suddenly a lot less interesting; while if the vendor doesn't wish to bless the market they can more or less as easily break the link between an NFT and an in-game item if they think it has been transferred in a way they don't like as they can break the link between an internal database entry and an in-game item today.

I'm just not sure what the point is. Yes, it is technically true that you could build a substantially normal game that happens to use NFTs (whether on a vendor-controlled pet blockchain that's just a pathological database with buzzword value; or on a genuinely more or less open one) to store ownership data of certain in-game things rather than some other backend; and it's also possible to treat the existence of a secondary market outside the game as acceptable rather than something to be crushed(whether that secondary market is based on the items being NFTs or just ebay and in-game handoffs, doesn't really matter); but I'm not sure why you'd bother doing it the 'web3' way, given the disadvantages, unless the whole exercise is to build a volatile financial instrument with a thin skin of alleged gameplay, Axie Infinity style.

With enough brute force you can use 'blockchain' and 'NFTs' to replicate more or less any flavor of internet-connected storage(potentially barring certain situations where confidentiality and protection against inferential attacks are required); but that's a long way from being a meaningful argument that such structures are actually fit for purpose(they tend to combine practically comical performance with some theoretically interesting but less-useful-than-they-appear exotic properties); and the more you try to design the game to give you an excuse for 'web3' being the logical implementation the greater the odds that you end up with something like Axie, where the 'game' was essentially a distraction from the dysfunctional financial market; or like 'Wolf Game', which manages to be genuinely 'NFT-based', rather than just swapping one in, but only by the rather extreme sacrifice of having 'gameplay' that's essentially just a dash of flavortext.

Get a real job

[devslash0]

I know this has been said a billion of a billion of times all over the Internet already, but...

Please speak to your children and make them aware that becoming a "professional" video game player is not a valid job. Allowing your children to pursue this idea in their young years means that they are losing valuable learning time and when they finally realise that they are being exploited by money-hungry corporations for virtual, non-existent goods, it will be too late to correct the trajectory of their life an

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[gweihir]

I do not agree. Streaming to whatever audiences _is_ a job. This can be games, "just chatting", cooking, but also porn. The lines are blurred and some people actually play several markets or mix content.

It is just not a very predictable job and everybody doing it needs a credible fallback-plan. Also, most people never get audiences that are large enough to make it sustainable, so do not depend on this working out or working long-term. It does have its pros as well, for example no clueless asshole boss.

Essen

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[JThundley]

It is a valid job, it's just that very few are successful and make it to the top tier. It's the same with pro sports. Being a professional football player *is* a valid well-paying job, but you have to be exceptionally dedicated and good at it to make it your career.

To clarify, I'm talking about progamers, the ones that play in real tournaments. I agree with you that nobody should dedicate their life to "play to earn" schemes as you're 100% correct about being exploited by money-hungry corporations.

I don't know what Web3 games need or don't need

[Opportunist]

I only know I don't need them. Keep your ponzi scheme, I'll be over in indie-land playing games that are actually games played for fun. You know? Fun? What we played games for before they became second jobs and a life service chore?

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[gweihir]

I only know I don't need them. Keep your ponzi scheme, I'll be over in indie-land playing games that are actually games played for fun. You know? Fun? What we played games for before they became second jobs and a life service chore?

I think many people in this culture do not have a place for "fun" in their lives. A whole pathology of its own and one that comes with burnouts, depression and suicides. Probably affects people that do not understand that mental issues can be just s lethal as a stroke or heart attack. As to web3, personally, I think web3 will go away with the current burning down of crypto-fantasy-land.

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[Opportunist]

I think one of the reasons why life service games are even a thing is that more and more people don't have anything that's fulfilling in their life. Something that gives their life meaning and something to be proud of. Work is for most a matter of spending 8ish hours a day at some place doing whatever to get the money they need to sustain their existence. It's by no means something that could be considered meaningful or even something they want to be proud of. Same for their private life. No achievements, n

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[gweihir]

I think one of the reasons why life service games are even a thing is that more and more people don't have anything that's fulfilling in their life.

Yeah, pretty much. Not sure where that comes from though. Maybe times have gotten too stable and predictable and, I don't know, "optimized", where getting somewhere is not enough of a challenge and getting there feels hollow?

It's kinda sad when people consider achievements in games something worth pursuing.

As part of getting entertained, nothing wrong with that. But it cannot be all you have and it needs to be part of leisure time, not something to do with grim determination. I am doing some pretty intense gaming from time to time, but I would never see it as a way to get somewhere. It is

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[bistromath007]

Times are only stable and predictable if you're fairly privileged. While that remains the case for many suburbanites, it's a rapidly eroding situation, and suburbanites were never actually most of America no matter how much it feels that way. We do not have a meaningfully representative government, a problem that persists largely because the privileged have their disenfranchisement hidden from them by an unsustainable illusion of wealth. The 2008 housing crisis was the most visible of many waves of such pri

There are some worrying ideas here

[Malenfrant]

This idea that you can transfer digital assets between games disturbs me. The only real way to achieve that is by making the games so generic that they are interchangeable. It prevents anything truly innovative because it has this artificial constraint that forces it to include assets from other games. If it doesn't it will face a huge uphill battle to attract players because they won't want to lose their hard-earned assets from games that do include them.

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[gweihir]

Pretty much. The difficulty to make a certain amount of fake "money" needs to be closely aligned in the different games and that means they get generic. It also likely means that cheating will be rampart. At that point these things stop being legitimate games and anybody looking for entertainment will stay away.

Trust?

[jythie]

Heh. So the guy's main reason for why things should be 'blockchain' is that 'people equating blockchain with openness and trusting things that are decentralized on the blockchain.'. So his target audience in gaming is mostly scammers....

I don't understand how blockchain makes it "open"?

[nothinginparticular]

What would be Epic's motivation (for example) for allowing third party skins on their game? If their business model is based on people buying their assets, surely they can't allow a plethora of lower priced content (eg. from lower cost areas like India)? The whole thing doesn't doesn't quite stack up as far as I can tell.

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[bistromath007]

The new buzzword is always all of the other buzzwords that are still considered good. It really isn't deeper than that.