NFT Monetization mechanics for AAA Video Game Publishers
0xB618
December 22nd, 2021

This blog will outline ways AAA Video Game Publishers can leverage NFTs to give gamers some ownership while still milking them with the usual predatory practices found in loot crates and battle passes.

The NFT Battle Pass

The NFT Battle Pass
The NFT Battle Pass

Battle passes (BP from here on) are the absolute worst monetization thing to exist since loot crates. They create FOMO for gamers and force them to sacrifice fun for completing agonizing challenges in exchange for experience points that level the pass up. Each pass usually has 100 different rewards and gives players an unlockable item each time they level up. They work on the premise of seasons so that means you’re never truly done grinding battle passes. You can pay money to skip levels in most models. After a few seasons, most gamers burn out on the game because grinding a battle pass sucks.

Let’s look at a few mechanics for an NFT based battlepass.

Model 1: The Season Pass NFT

In this model, gamers purchase a battle pass (BP) like usual. This BP is an NFT and is sent to the player’s wallet. When the player levels the pass, the NFT evolves as well. The items unlocked from the BP are not individual or unique NFTs. The unlocks are tied specifically to the BP NFT level.

Unique mechanisms:

An NFT battle pass will allow users to sell or trade their battle pass. Why is this good for publishers?

  1. Allows players that burnout to exchange their work for currency or other assets they value more.
  2. Publishers can add a royalty to sales and collect additional profit from the sale or transfer of the battle pass.
  3. Players that miss a season can purchase older season battle passes and get access to cosmetics they didn’t earn.
  4. Publishers don’t have to rerelease items which is good because when they do this it demoralizes gamers who spent the time grinding the battle pass to begin with. It is considerably easier to just purchase an item to save 40 hours than to grind out challenges. Reward players who grind and protect developer goodwill by not reissuing older seasonal items.
  5. Royalties from battle pass sales can go directly into server costs, extending game server shelf life and creating a deep playerbase which is rewarded for both playing the game and participating in the economy behind it.
  6. Players who purchase levels on their battle pass will treat it like an investment and be able to enjoy playing the actual game without worrying that their purchase will disappear once the game dies.
  7. As the BP isn’t stored in the game database but is instead attached to a player’s wallet, the BP shelf life can extend beyond the game’s shelf life. For example, the battle pass can be imported into future sequels for unique rewards or into other games released by the same publisher.
  8. Licensed cosmetics (like Marvel skins) can get a split from secondary sales without the publisher needing to worry about lengthy contractual commitments.

Model 2: The Itemized BP

In this model, the BP is an NFT. The rewards are also NFTs. The BP itself acts as a badge of achievement, while the drops from it are individual assets that are sent to the player’s wallet. The publisher can make the BP non-transferrable to incentivize players to purchase it while making the actual item drops tradeable.

Unique Mechanisms:

  1. Items dropped can be traded or sold by players on a secondary market. This means that players can offload cosmetics they don’t like, while keeping ones they do like. Higher leveled items become more rare as less people complete the full battle pass and reward players who have grinded it out by creating a naturally weighted economy.
  2. Players who don’t purchase the battle pass can still have an opportunity to buy or trade for an item they really want.
  3. Each item can have a royalty associated with it and the publisher can receive dividends for players’ economic activity.
  4. Items dropped can be leveraged in future games or across partner games. Strong battle pass rewards will keep players farming your game and smart leveraging of assets from competitors games can create interesting opportunities to vampire attack (or steal players) from your competition.Example: A level 100 Fortnite Assault rifle asset is held in a player’s wallet. Microsoft decides to allow anyone holding this asset to import it into Halo Infinite. In Halo Infinite this asset is represented as a SPNKR rocket launcher that shoots glitter and confetti and says “HOW BOUT THEM APPLES” every time a player is killed.
  5. Licensed cosmetics (like Marvel skins) can get a split from secondary sales without the publisher needing to worry about lengthy contractual commitments.

Make a good game, players will stick around. Create a vibrant economy and players will stick around even longer.

The NFT Digital Game

The NFT Game Cartridge*
The NFT Game Cartridge*

We’re all used to purchasing our digital games through various online marketplaces such as Steam, Epic Games Store, Microsoft Store, Playstation Store… whatever. In the past, these games exist as long as the platform hosts the data in their server. Over time, as consoles phase out many of these games are lost to time. NFT’s can’t really solve that server hosting longevity model but what a game that’s purchased as an NFT can do is allow some interesting mechanics that fix problems publishers have with second-hand resellers like GameStop. Pesky physical copies can be sold used without the publisher receiving any sort of returns. To publishers, they don’t like it! That’s why we’re stuck with so much goddamn DLC and loot crate mechanics these days because just selling a game for $60 bucks isn’t enough to cover the cost of development. Let’s look at what a NFT game cart can do.

The NFT Cartridge Model Mechanics

An NFT Cartridge would basically act as a form of DRM. The player can download and play the game as long as the NFT cartridge is held in their wallet. No pesky CD keys required, no database of user accounts needed, no tricky password recovery. A player can login to the game by signing in with their web3 wallet and developers can leverage systems like ENS (Ethereum Name Service) to allow players to have a shared name across all their games - just like a username on steam.

Mechanics

  1. The NFT game cart should be allowed to be transferrable and sold on secondary markets. “Why would we allow someone to resell a digital game?” the publisher may ask. Well Mr. or Mrs. Publisher, if you allow for second-hand sales through NFTs, you now can get a cut of each ‘used’ game sale. Program a royalty into your NFT game cart and hell make that royalty up to 50% of the sale. Suddenly, you’re not losing money to GameStop (unless they figure out they can bypass your marketplace by doing an over-the-counter sale… but you’ve already figured that one out by making your game NFT only tradeable and sellable through your centralized NFT platform and other platforms that support your monetization models).
  2. You have the opportunity to generate goodwill to the players that bought and held your game. Let’s say the XBOX 17866 becomes antiquated and all my games tied to it are just sitting in my wallet… waiting. When you release the XBOX 299999, you can scrub player wallets for game carts and give them access to their old games once they have been properly ported to your new console. While it may seem like this could kill the profit from selling the same game twice - you’ll quickly realize that because the actual number of game NFTs issued are capped at the shelf life of the old console, the only means to purchase one of these old games would be through secondary markets. Secondary markets that allow you to take a cut of the secondary sales. Suddenly you have an opportunity to recreate ancient antique game collecting in a digital space and rarity of games will be based on how popular they were at the time of release. It’s actually very cool, publishers, and gamers will be very happy to have the chance at owning a piece of history.
  3. You can start thinking of cool designs and instruction books again. Cartridge design will be a huge flex for people who hold them. NFT unlockables means you can toss a whole bunch of neat shit like instruction manuals into the game NFTs. You could even do different versions of the game like you do now with deluxe versions holding access to art books or rare in-game items that transfer when someone trades it.

NFTs give digital assets the same properties as real-world items, allowing people to actually own a digital item and exchange it in the same way you can any physical item. Exploring this with NFT game cartridges would be huge. Platforms like Steam already have a community marketplace and adding actual games to these marketplaces would be easy-ish and a little better than the DRM systems we have now.

The Character NFT

The NFT MMORPG Character
The NFT MMORPG Character

Since the very beginning of MMORPGs, there has been a black market for selling characters that have hit max level. Publishers and developers do backflips trying to disincentivize this economy but smart publishers will lean into it.

Issuing player characters as NFTs may create many interesting mechanics.

Mechanics:

  1. When a player gets bored they can sell their character. When a player gets bored of their class they can trade their character for another. Burnout is going to happen to most players at some point but creating a character that is owned by the player can reward that player for the time investment by giving them a chance to sell it to players who are looking for the opportunity to harvest time they didn’t earn. Like all of the above, character sales can have built in royalties that go to the publisher.
  2. When modern technology makes your game feel old, NFT characters can be used to import into the next iteration of your MMORPG. Need a graphics overhaul? Need to build a new engine to support THOUGHT CONTROLLERS? Want to get your playerbase to try out your other MMO that is a space one and not a fantasy one? Just scrape your players wallet and carry their character’s legend over into the other game. Simple metadata can go a long way.
  3. Record character achievements to the NFT. Let’s say a player has played your game for 10 years. There’s a large amount of experiences they may have had! When a new game comes out, they start from 0. Their legend is expired. By supporting character NFTs - you can record player achievements directly to their character and if you allow importing that character into a new game, it can share some of the player’s alternate-life history with others, revealing how dedicated they are. I’ll talk more about conventional achievements in the next section.
  4. Fuse multiple character NFTs into new classes or characters. Let’s say your game has incentivized the need for multiple characters. If you have a class-based system, you can build quests into the game that change both the character NFT and player class by completing certain actions. The old NFT evolves. Some players may choose to not undergo these quests in order to keep the benefits of their old class, while others may farm multiple characters to give other players a way to change classes and properties without overwriting their own character. I don’t know exactly how this will go but you have smart game developers working for you. You figure it out.

Achievements as NFTs

Achievements have been around since at least the XBOX360? I think that was where they were introduced. Anyways, achievements are cool for flexing but they don’t really DO much outside of just show you sunk a ton of time into a game. Let’s add some utility to achievements.

  1. Unlocked achievements are tied to a user’s wallet. That means that no matter the console or platform, people can see ALL of a players achievements in one place.
  2. Achievements can be used to access hidden content or unlock items in games. If I completed all of the achievements in Donkey Kong, perhaps I can secure a rare Donkey Kong car in the next iteration of Mario Kart. Perhaps 10 years down the road, I can get a crown for DK in Donkey Kong Country 47. Perhaps my Quake achievements can unlock levels in Doom Everlasting.
  3. Burn achievements for in-game currency to make other purchases, level my battle pass, or prestige to get a more rare version of previously unlocked achievements. Since we’re flexing with these things, why not make them upgradeable or redeemable. Steam badges have various levels that require multiple cards to level them up to show even more blingy-ness. There’s a myriad of ways to incorporate similar mechanics with way more utility into an NFT version of achievements.
  4. I guess you could sell them to people who don’t want to do the work to earn them but I’m still on the fence about whether achievements should be transferrable.

A few other considerations:

  1. NFTs can be used as an incentive to play unpopular games. Example: If you play 2 hours of “Shitty Unpopular Game”, you can earn an NFT AWP in Counter Strike.
  2. NFTs issued in one game as a gun can be represented as literally anything else in another game. My AWP I earned for playing “Shitty Unpopular Game” can be leveraged in the Fortnite Metaverse as a fancy car with super boost. Cross-game economics is not a bad thing and I think it will have a reverberating effect for game shelf-life.
  3. NFTs in wallets of in-game assets can act as an advertising vehicle for the game. If a player has a huge stash of Warcraft weapons in their wallet, it may incentivize their followers to pick the game up.

Finally, I’m just going to remind publishers that all I want is to be able to trade a Fortnite skin for a CSGO knife and that if you don’t restrict how these things are transferred it’s probably actually a good thing. I know it seems counter-intuitive but NFTs don’t excel because they are a form of DRM or because they restrict visibility into something. NFTs are more likely to excel with the more social sharing they have.

You have the power to transform your industry to empower your players. Nut up and do it because someone is going to do it before you.

Have a battle pass on me. It’ll give you access to all the great content I’ll probably write in the future which will also be available to read without the battle pass because it’s a joke.


*Game cartridge template borrowed from here:

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