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Cover image for NFTs provide a new funding model for free-to-play games.
Garrett / G66 / megabyteGhost
Garrett / G66 / megabyteGhost

Posted on • Updated on

NFTs provide a new funding model for free-to-play games.

NFTs are a potential funding model for free-to-play games.

You can decide whether or not that funding model is suitable for you.

NFTs are highly debated, maybe even more so in the games community.

I'm not interested in arguing about NFTs.

If you're against NFTs in video games or against NFTs at all in any capacity, stop reading now.

And definitely don't waste your time commenting just to hate on NFTs.

That said, I do appreciate the honest discussion.

Discussing ways to fund game development is vital to the industry, especially for Solo Game Devs like me.

And I would like to have an honest discussion.

Please, poke holes in my ideas here.

Help me make them better.

We can figure this out together.

First, let's address some funding models of the past.

Self Funded Games

Self-funding games are how the first games were made and how many indie games are still made today.

This is usually people building small games in their free time.

Or big games in the case of Stardew Valley.

This is still going on today and will probably go on forever.

But it's not ideal.

It sucks to work a day job 40 (or more) hours every week, build a game, and still find time to play games and spend time with friends and family.

Investor Funded Games

Some people can get funding from investors.

This means someone is paying you to build your game for a cut of the profits.

I don't think this happens very often, but I know it does happen because I have been approached by investors wanting to fund my games.

This isn't ideal for me because I don't like being accountable to someone in that way.

Crowd Funded Games

Crowdfunding through platforms like Kickstarter or IndieGoGo is a currently popular way to get the ball rolling, but I have found most of these fail.

There are games I have put Kickstarter money into almost a decade ago that still haven't come to fruition.

To be successful in crowdfunding, you first have to have a large following.

It's infrequent that something on Kickstarter takes off without already having a decent-sized audience.

People are much warier of crowdfunding now because many don't make it to total funding, and often projects that do make it never end up getting finished.

I don't think most projects are maliciously trying to make money and run.

They just mismanage or underestimate the money needed to finish the project.

How to Use NFTs to Fund a Game

Now let's look at the pros and cons of using NFTs to fund your game and how to do it right.

First things first, the controversy around NFTs.

Anyone who has a problem with NFTs is not your target market.

So forget about them.

I frequently have to explain to my marketing clients that you can't be everything to everyone all the time.

"You can't please everyone" is a well-worn refrain I'm sure you've heard.

It's true, so don't try.

Focus on the people interested in NFTs in games, and don't worry about anyone else.

Next, you need to be fair about the NFTs.

Building a pay-to-win game is not sustainable.

But as we've seen with many games such as Roblox, Guild Wars 2, Fortnite, etc., people are willing to spend real money on aesthetics even if no advanced power comes with it.

On top of that, you should design a game where skills are more important than power.

Diablo III's real-money auction house was not a good idea because it's a game based on power.

Plus, the gameplay loop is Kill => Acquire Loot, and the auction house removed the need to Kill.

The design of your game is essential when adding something in that can be purchased with real money.

Another thing you can do to keep it somewhat fair is not sell any of the NFTs yourself as the game developer.

The players can sell them to each other, but someone has to earn or unlock them first.

That way, people who want to spend real-world money to acquire things can't flood the market by just buying the item off of the developer.

There may be some really awesome-looking armor that is very difficult to obtain.

When you see someone running around with that armor, you know someone there worked really hard to get it.

The person wearing it right now in front of you may have just paid for it.

But someone out there worked very hard to get it.

Which increases the value of the item by a lot.

This is where I think NFTs in games really shine.

The developer makes money off of the trades.

With enough players trading enough in-game, this could easily fund continued development and allow a game to be free to play.

It's essential to maintain a fair percentage of the trade as well.

Too small of a percentage, and your game won't be funded.

And if it's too large, players aren't incentivized to trade.

This also gives players a direct stake in the game that is much bigger than just being a player.

I don't know if Play-to-Earn games will ever reach a point where the average player can earn a living wage.

But if I'm going to play video games anyway, and I enjoy a game, and I can get some real-world money out of playing it, that's the game I will choose.

Even if it only affords me ordering a pizza once a week.

And giving players a reason to help grow the player base will make your game successful.

In fact, I would work in some sort of referral incentive for players to bring their friends in.

Long-term referral incentives would be great.

That way, it's not based on how many people they bring into the game, but how long those people actually stay active.

Comments are open, but as I said, if you're just here to complain about NFTs, don't bother. You'll just get blocked.

Legit discussion is encouraged!

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