// Originally published July 21st 2022 on the Delphi Portal
It’s no secret by now that most gamers hate crypto. We’ve witnessed heavy community backlash around announcements such as Ubisoft Quartz and even more recently with Dr DisRespect’s Midnight Society. Video game commentators such as Asmongold, Josh Strife Hayes, and many more continue to hound the sector—often with good reason. Perhaps you’re surprised to hear a crypto-native company admit this, but we understand where the sentiment comes from and believe there are grounds for it. As a team of gamers and some of the earliest supporters of blockchain games, the dismissal of a space we care for so much caught us off guard. Initially, we assumed it was a case of people not understanding the benefits that crypto could bring to gaming. In time we’ve listened, debated, and listened some more.
After much discussion, we believe there is a lot of validity to many of the critiques surfaced. Not just towards crypto gaming, but more broadly the evolution of the game industry's core monetization practices over time. In this post, we’ll share our insights and an evolved thesis they helped formulate. We’ll provide historical context for where we find ourselves in the games industry, share some reflections on crypto’s entrance into the arena, and frame several models for where we think crypto belongs in games. In particular, we will explore a new model called PlayFi, developed by Brooks Brown and the team at NOR. We strongly recommend watching our inaugural Disruptor’s Episode with him. We built our thesis upon many of these principles, adding in some modifications based on our experience.
To begin with, it’s worth zooming out and developing a high-level framework for understanding why people are drawn to games. Let’s explore the concept of magic circles, first pioneered by Johan Huizinga way back in his 1938 book Homo Ludens and later expanded upon in the context of gaming by Katie Salen and Eric Zimmerman in their 2003 book Rules of Play: Fundamentals of Game Design.
The term magic circle refers to the imaginary boundary between the real world and the game. Reality, with its often unfortunate baggage and constraints, is what many people seek an escape from. A game’s magic circle can offer them this haven. Within a magic circle, seemingly mundane actions can take on extraordinary forms due to the remarkable nature of human imagination. For example, the simple act of kicking a ball into a net can be totally transformed. Perhaps that ball traveling into that net actually represents a winning goal in a World Cup Final. Suddenly, billions of people care and the moment carries with it significant, enduring meaning. The difference here is that it has happened within a magic circle, a shared illusion, that society has placed value in.
It might strike you as odd that we used a sports example in a post about video games, but they have far more in common than what sets them apart. Far back in human history, physical sport has been a dominant entertainment medium. It’s appreciated as a great source of meaning all across the world, with an ability to conjure enormous passion and tribalism at a global scale. Sports are respected as people understand the skill involved to truly excel, often having practiced the sport themselves. Moreover, they have undergone thousands of years of evolution to optimize for what people truly enjoy and love in games. The result has been a very particular model for monetizing around games, which we shall explore later.
Reverting to the magic circle, it often serves to induce a flow state—a well studied psychological phenomenon which ranges far beyond gaming or sports. It’s the state that emerges in situations of high challenge and high skill. If successful in crafting a compelling magic circle, the player should be so engrossed in the experience that all other needs become negligible. The outside world should necessarily fade into the background. You, dear reader, may well have experienced that sensation of “being in the zone”. It’s what many people enjoy about video games—the true meaning of play.