Video games have fast become one of the predominant uses for blockchain and cryptocurrency technology, accounting for as much as half of all blockchain activity.

Evangelists point to games as one of Web3’s early successes; publishers can distribute games free from the tyranny of big platforms run by Apple, Microsoft, Google or Valve, while players have personal ownership of their in-game assets and can monetise their play time. Games like Axie Infinity and platforms like Phantasma paint a picture of the future where developers and players work together to make money with games.

Most of the claimed benefits of blockchain gaming are unlikely to come to pass, says Queensland University of Technology’s Ben Egliston.

But according to Dr Ben Egliston, postdoctoral research fellow at Queensland University of Technology, most of the claimed benefits of blockchain gaming are unlikely to come to pass, and at best could be described as speculative. Some are downright deceptive. Blockchain games are generally run purely as investment platforms, or to further increase the use of crypto in general, he said, despite promises of more fun and equitable experiences.

The Age and The Sydney Morning Herald spoke to Egliston for our weekly series You, Me and Web3, which aims to examine, challenge and demystify the ideas behind the emerging industry by speaking to the people who live and breathe it.

What part of the crypto gaming space exactly are you researching?

I’m working on piloting a project later on in the year, which will be a more informant-led project looking at how Australian game devs [developers] are using blockchain. Particularly for production. But at the moment I’m doing a bunch of stuff around the discourses of crypto gaming proponents. So it’s really about the promises that are often never delivered upon.

So if we think about the overall pitch of blockchain games, in terms of what’s being sold to players, what kind of promises are being made?

Well, the common thread is basically if you’re playing games and you’re not making money, you’re a total rube. You should be making money. If you’re doing anything you should be making money, that’s the way a lot of people in these kinds of spaces think.

There’s this broader notion of retaining value that you hear about a lot when you listen to crypto people speak. And so there’s this big emphasis on the idea that, if games were made on top of these blockchain infrastructures which theoretically provide a verifiable record of everything that happens in games and provide these kinds of tokenised assets, you have this means of quantifying and therefore making measurable and remunerable everything that somebody does in a game. And therefore you can pay them an amount for it.

The real pitch here is around the kinds of things that people do in games that are genuinely value-generating for game developers, but are typically not remunerated in any way.

So right now a player might make a modification for a game, or some custom content for a game, out of sheer passion. But the idea is they should get a cut of the monetary value those things create?

Right, and I don’t think this is a completely flawed belief. Big game publishers do benefit in immeasurable ways from the things that players do in-game, and in even less concrete ways than creating a mod [modification]. If you play an MMORPG like World of Warcraft, those kinds of games are only really popular because they have culture and community.

One VC [venture capitalist] on Twitter, in the midst of Microsoft buying Activision, pointed out that only shareholders were seeing any kind of return from the buyout, and not players who create the real value. His point was that, if the games were using some decentralised autonomous organisation, theoretically that would lead to fairer remuneration for players. And again I don’t disagree with the basic point, but I don’t know that you need to make everything quantifiable and remunerable. Especially when it’s arguable whether volatile gaming tokens do have fundamental value.

I’m having a hard time picturing a player who’s had years of enjoyment playing a game with their friends, and helping cultivate a culture, and then expecting cash for that.

It’s a relatively new space, so there’s literally no good academic research that tries to understand what are the motivations, who are the users that are involved in this space. What do they think? I also have a very hard time imagining an actual person ever thinking like that. I’d be very curious to see what a real existing blockchain user thinks.

Well, every time there’s a new blockchain game announced, they always say they’ve pre-sold millions in NFTs [non-fungible tokens] and have so many users, right? So the players are out there. Or is it the case that all those so-called players are just speculative investors?

I’m very careful not to take those sort of claims at face value, when you have one of these companies saying we’ve got a market cap of however many millions of dollars for our coin that we just minted two weeks ago. A market cap is a pretty misleading yet very common metric.

A lot of it is speculative investment; it’s essentially whales who come into the game, they have a lot of money and buy most of the assets. And then what happens is you have guilds, which are kind of a financial investment organisation. They pool together assets, either sell them or lease them out, and split any returns. If you look at some of the really big guilds that have received a lot of money from [venture capital] firms like Andreessen Horowitz, look at Yield Guild Games for example, they’re some of the most highly funded companies in the blockchain space.

NFT game Axie Infinity became a primary source of income for some users in the Phillipines.

A lot of the devs [developers] working in the space talk about this kind of tension, between making a game that a normal person would enjoy or making a speculative asset for a financial investor. Some focus on making a game enjoyable and fun, and some really lean into [the investment aspect].

Developers making blockchain games that are marketed at actual players rather than investors will often say the blockchain allows them to do things that are impossible in traditional games. Do you think that’s true?

Most of the time when people talk about blockchain in games, they’re talking about the future, about things that could potentially one day exist. And that’s kind of the key point here. They’re not just pointing to the future, they’re pointing to the future and then saying that future is much better than what we have today. You can look at the idea of interoperability between games, which is a really common imagined future for blockchain games. This is something that I think is pretty widely understood, particularly by game developers, as something that will just never exist.

Right, given our current understanding of games it would be impossible for an object you created in Halo to come with you to Final Fantasy. But in this imagined future, maybe there are video games that exist almost as a totally different creative medium than what we know today? Decentralised and community-owned, as some crypto evangelists might say?

Again, the idea of a community-authored game, it’s a common imagining, but it’s extremely rare that those kinds of things exist. It’s speculative media. The whole thing is characterised by financial speculation, but the entire project more generally is just almost entirely speculative.

So where do you think it all ends up? The biggest publishers in the world — EA, Ubisoft, Square Enix — are investing in blockchain. Do games just become value-making salt mines? Does it fall apart and we forget about it? Does it stay a niche?

I guess anything’s possible. More money than ever is going into tech and games, these companies probably can will anything into existence they want.

But while I am very critical of blockchain in games, I think that relative to other applications of blockchain they are very good at highlighting what the technology actually does. Ownership and verification and things like that. So in terms of what people in the space will do, I think gaming as a use case is about getting more people across blockchain as a concept. It’s about selling blockchain as a medium, rather than selling crypto games.

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