Cryptogaming has to be fun to be successful – money doesn’t matter

When I worked for Riot Games as the Head of Player Acquisition in the EU, I learned about player onboarding and long-term retention. Both are critical to the success of player acquisition. I have seen the mechanics of user retention in games and what I have learned is that most cryptocurrency games today lack the mechanics to keep players interested for even a short period of time.

Why haven’t more top teams introduced real-world rewards into their games? These are the titles where 99.9% of players are not professional eSports players and enjoy no monetary rewards for the thousands of hours they spend playing their favorite games. The possibility of introducing monetary rewards has always been on the table. Why hasn’t anyone done it?

The answer lies in one of the cornerstone behavioral patterns that accompany motivation: overjustification. This well-documented mechanism reduces people’s interest in an activity.

It is the presence of extrinsic rewards, such as cash and prizes. Money saps intrinsic motivation, which traditional developers say is critical to long-term player retention.

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Games must avoid injecting monetary rewards into an experience designed to be inherently rewarding. The joy of beating a tough boss in a Dark Souls game stems from the fact that it requires considerable skill.

If you add a $0.50 reward to that experience, you’ll end up ruining it. Entering a FIFA video game tournament with your friends just to earn $0.15 would take the fun out of it. Offering zero dollars removes the financial consideration and channels the focus entirely on the gaming experience.

Each game has a set of mechanisms designed specifically for user retention, monetization and reactivation. These should be more in-depth than expecting players to return just for tokens.

Economics without psychology

An economist who is ignorant of human behavior or gaming might first consider how to motivate users to play more. The more hours a user plays, the more value players can extract from their transactions; consequently, superusers are more likely to pay for items and in-game transactions.

Therefore, it is crucial to increase user retention. It increases monetization and projected revenue per user. Suppose a user generates $0.60 per hour of gaming on average, and you know from data and behavior patterns that there is a risk that they will stop playing altogether. The logic follows that you can start paying them $0.30 to motivate them to continue.

This is where over-justification comes into play.

From a purely financial standpoint, paying $0.30 and generating $0.60 is a 100% return on investment; this apparently makes complete sense. Yet, adopting such an approach is precisely where gambling to make money is wrong.

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Extensive studies in child behavioral psychology demonstrate the principle of overjustification. We do many things because they have intrinsic value for us. We are willing to do these activities and enjoy them most only when the intrinsic rewards exist.

If a child enjoys playing the piano, a $1 reward each time they play will reduce their motivation over time. The same goes for hard, challenging hobbies where our bodies or minds operate at peak levels. A state of flow is achieved when we operate at our full potential. Losing that laser focus will likely set us up for failure.

A good matchmaking system in multiplayer can match us against opponents that we have exactly a 50% chance of defeating, and it comes down to who performs just a little bit better during the match.

Our brain processes activities that offer monetary rewards differently than those that do not offer financial rewards. Introducing monetary rewards in a flow state is like throwing a wrench into a spinning wheel. Our brains focus on the financial results and not the joy of the challenge.

The state of flow

The move mode is the optimal place you want users to find themselves in. Great games like League of Legends and Overwatch excel at creating matchmaking systems where win rates roughly balance out, as it puts players in a position to operate in state flow where they push themselves to their absolute maximum limit. This generates the highest intrinsic reward by recognizing the player’s abilities, giving players the conditions to improve and ultimately succeed.

Cryptocurrency games, on the other hand, are mostly designed around tokenomics and play-to-earn mechanics. The game loop and the joy of playing the game takes second place to crypto rewards. It is no longer a game, but an auxiliary function to an economic model.

No one wants to invest hundreds of hours in an activity that isn’t fun unless it makes them a lot of money. And you can only pay out a lot of money if a critical mass of users work to create significant value. This quickly becomes a death spiral for nascent crypto games, as the games cannot create the amount of value needed to adequately reward players for spending hours inside an unprofitable gaming loop.

Developers need to make games people want to play and make this a primary goal instead of either starting with economics or randomly adding crypto into a working game loop. Even a great game with great retention numbers can still have its retention ruined with a play-to-earn mechanism.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.