How to Read Fully Onchain Game 2.0

Key Takeaways

• How do you describe a FOCG to someone who doesn't know what it is? I think there are two main ways to explain it: 1) as a game, and 2) as a world-builder.

• As a game, I think FOCGs are best viewed as a sub-genre of indie games. As a world, FOCGs have great potential as the most similar world to the real world.

• There are many questions to think about surrounding FOCG, including governance, incentive mechanisms, and sustainable business models.

1. Introduction

It's been almost three months since I first covered Fully Onchain Game/Autonomous World (FOCG/AW) in June this year. Over the course of those three months, I've played a variety of FOCGs, shared my thoughts with others, and read a variety of resources, so naturally, my thoughts on FOCG/AW have changed from three months ago. This article aims to summarize my thoughts on FOCG/AW at this point in time, as well as some questions to think about.

1.1 FOCG vs AW

Before we get into the nitty gritty of FOCG/AW, there's an issue that needs to be addressed first. So far, I've been using the vague term "FOCG/AW" because I haven't yet clearly defined the relationship between the two concepts of "Fully Onchain Game" and "Autonomous World". I think there are two points of view here.

1. FOCG = AW

2. FOCG ≠ AW

The first perspective is that FOCG and AW are actually the same thing, and AW is just a better branding of FOCG. To use an analogy from Scott at Argus Labs, if FOCG is sparkling wine, AW is champagne, or if FOCG is H2O, AW is water.

The second view is that FOCGs and AWs have a common ground, but are not exactly the same. For example, a AW not in the form of a game may not be an FOCG, and a FOCG that is simply a board game may not be an AW.

I was in the second camp when I first encountered FOCG/AW, but now I think I'm leaning a little closer to the first camp, which is that FOCG and AW are actually the same thing. My arguments are as follows:

• First, I think that if we take a broader definition of "game", the world can be seen as a type of game, since it has a game-style syntax.

• Also, while FOCGs may not be in the form of a world at the moment, I believe that eventually FOCGs will have to take on the form of a world in order to be competitive.

Therefore, for the purposes of this article, I will use the terms FOCG and AW interchangeably, instead of FOCG/AW.

1.2 How do we explain FOCG well?

The idea was born out of the question, "What if I had to explain FOCG to someone who didn't know anything about it?" Ultimately, it's a question of what strategy is best for answering the following questions.

• How should we approach FOCG/AW?

• When introducing FOCG/AW to others, how can I best communicate it?

There seem to be two main ways to do this.

1. Approach as a game

2. Approach as World Building

Both methods have their own advantages and disadvantages. Describing FOCG as a game has the advantage of making it more clear to the listener and giving them a better sense of what it is, but I also think it can limit their imagination about FOCG. On the other hand, if you approach it as worldbuilding, you can emphasize the potential of FOCG, but the question "So what is a FOCG fr?" may still exist in the back of the listener's mind.

My conclusion from this question is: use both strategies together. Each strategy has its own strengths and weaknesses, and they are complementary, so using both will make it easier to explain FOCGs to people while also conveying their potential as world building.

Now let's dive into reading FOCG.

2. Approach as a Game

2.1 Functional categorization of games

There are many different ways to categorize on-chain games, but I prefer the following classification.

1. OCM; Optional Cosmetic Mints: Game logic and assets, all off-chain, but users have the option to mine certain kinds of assets as NFTs.

2. OCA; Onchain Assets: The game logic is off-chain and the user's assets are on-chain.

3. FOC; Fully Onchain: All game logic and assets exist on-chain.

This categorization comes from Jump's Gaming Infrastructure Part 1: Defining On-chain Gaming, which you can read for a more detailed explanation.

2.1.1 FOC vs OCM & OCA

When comparing FOCGs to OCM + OCA games, I naturally think of Chris Dixon's distinction between strong tech and weak tech. FOCGs are a type of strong tech, where it's unclear how they'll be monetized at this point, and they rely on the passion of a small group of builders. Conversely, OCM + OCA games can be seen as relatively successful businesses compared to FOCGs by borrowing some of the technology of blockchain (or are they?). However, if there is a day when "on-chain gaming" truly becomes a buzzword in the traditional gaming world, I believe it will be driven by FOCGs.

The conclusion of this analogy is that while FOCGs and OCM + OCA games share the commonality of leveraging blockchain technology, they take different paths, and it's hard to say which is superior.

2.2 Two important questions

2.2.1 Why implement your game on-chain?

The first of the two most important questions when it comes to FOCGs is "Why should I build my game on-chain?" which should be answered by FOCG designers. This leads to the story of the advantages and disadvantages of FOCGs, and it's been written about so many times that I recommend Matt Dion's "The Importance of Being Permanent" and Paradigm's "The Open Problems of Onchain Games" for those who want to learn more. In a nutshell:

• User Generated Experience (UGE): Permissionless modding allows players to play with not only content but also game logic.

• Open economy: Users can trade assets that are not defined by the developer without additional trust, which can further expand the game's economy.

• Verifiability: Being able to verify the logic of a game by anyone can strengthen the trust between the user and the game.

• Permanence: For some users, the permanence of a FOCG can be an incentive to get more involved and contribute to the game.

All of the aforementioned differences have their own problems, but as designers of FOCGs, they need to make some reasonable answer to the above questions to convince some users.

In addition to this, it's important to design games that are unique to the FOCG. When mobile first came along, there were many attempts to port console games to mobile, but it wasn't until Angry Birds that the true potential of mobile gaming was realized. FOCGs are currently simply porting games that already exist, but at some point someone will design a game with a genre or logic that only FOCGs can do, and a lot will change after that point. tonk is one of the best at doing this, and this paragraph was heavily inspired by baz's ethcc talk.

2.2.2 Why not make a game onchain?

For infrastructure builders, I think the goal is to get to the point where the question is, "Why not onchain?" If we can remove the various technical limitations and obstacles that currently exist for FOCGs and provide a similar experience in terms of UX/DX to traditional server-based games, then there may be a world where there's really no reason not to implement game onchain. Of course, there are a lot of hurdles to overcome at this point, including throughput, event driven runtime, UX, cost, and asynchronous information processing.

2.2.3 Complementary Questions

The concerns of FOCG game designers and infrastructure builders may seem independent, but they are actually connected. In fact, I think we can find better answers to these questions when we think about them together, and that's why I'm excited about teams like Argus Labs and Curio that are building infrastructure alongside their role as game studios/publishers.

2.3 What I'm Waiting For

So what am I currently waiting for?

I personally agree in the cycle of application → infrastructure → application → ... mentioned in 'The Myth of The Infrastructure Phase' by Union Square Ventures, and I think FOCGs are evolving in the same way. Since the first application, Dark Forest, appeared, we now have various infrastructures such as MUD, Dojo, Keystone, World Engine, etc. and I think it's time for more diverse games to come out through these infrastructures. In fact, there are already good FOCG games such as Sky Strife, Shoshin, and Rhascau, so I think the second application phase has already started, and it will be important to find out which games will cause the next infrastructure development.

3. Approach as a World Building

From a human perspective, the real world we live in is the most autonomous world that is run by its members. The world built with blockchain is the most autonomous world after the real world, which is probably why we call FOCG an Autonomous World. The key point is that the rules of this world are enforced by code and cannot be modified by any one entity. The perspective of understanding FOCG as a World Building was covered in detail in the last article, so we will not cover it in this article.

3.1 Real-world testbeds

The most positive scenario I envision is that FOCGs serve as a test bed for the real world. FOCG is the World which can best mimic the real world for the following reasons:

• FOCGs are the only World that can implement complex social interactions at the level of the real world. While some online games have been able to implement social interactions between clans, there is no way to represent the ambiguous social interactions between individuals within each group. Curio's treaty is a solution to fill this need.

• As in the real world, there is no distinction between those who enforce the introduction rules of a world and those who follow them. As an example, in the Naruto world, there is a clear distinction between Masashi Kishimoto, the author of Naruto, who enforces the rules, and the Naruto characters, who follow the rules, but this is not the case in the real world and FOCGs.

• There is real economic value, just like in the real world.

Because of this, I have delusions that in the distant future I will be able to apply conclusions or insights from FOCG to the real world. Maybe, just maybe, we will be able to do some huge scale social experiments in FOCG that we wouldn't be able to do in the real world.

4. Topics to think about

4.1 token & Onchain governance

Some say onchain governance is essential for FOCGs. But is it really?

First of all, onchain governance has a very large history of failure, and as you move from the protocol to the DAO level, i.e., the more off-chain elements you add, the more corrupt and attackable it becomes. Onchain governance has a fundamental dilemma: too loosely structured and it's easy to attack, too sophisticated and there's a high barrier to entry for those participating. If we're being really honest, most of the important conversations happen in private TG chats and IRL meetings. Also, the reason I'm more wary of on-chain governance is that it's often used as a rationale for the native token, which is why I don't think it's essential for FOCGs, and even if it is, I don't think one-token-one-vote is the best choice.

4.2 Incentives

The story of Naruto is populated by the Naruto writer, but who populates the FOCG? At the end of the day, a game or a universe doesn't mean something just because it exists, it only means something if it's truly ‘lively’. The problem with FOCGs is that anyone can populate them, but no one is obligated to do so, so there needs to be some sort of action to encourage users and developers to come and contribute.

The most straightforward solution is to provide economic incentives via tokens. However, we already know from experience that this approach is not sustainable. There's no reason to repeat the same experiment. The question of how to make FOCGs more lively, other than through tokenized economic incentives, is an important one that is directly related to the longevity of FOCGs.

4.3 BM

For FOCGs to thrive, FOCG studios need to make enough money. Of course, grants and VC investments will extend their runway to some extent, but a sustainable BM is clearly important. In fact, non-FOCG onchain game studios have not found a clear BM other than pre-selling tokens or NFTs, so the lack of a BM is not unique to FOCGs.

4.3.1 Risk to Earn(R2E)

The Risk to Earn (R2E) model, where two players stake their funds, play a PvP game, and the winner takes the loser's money as a reward, with a portion going to the game company, is already a common and proven model in the traditional gaming industry, with Skillz and Player's Lounge being some of the most prominent examples. As we've seen with Friends Tech, users don't care about the 5% fee when they're aiming for 2x, so it can work well for on-chain games that currently lack a BM.

R2E BMs are better suited to FOCGs because the process of staking players' shares, determining whether a match is won or lost, and distributing winnings between players and game developers can all be programmed simply, cheaply, quickly, and safely through smart contracts. In fact, not all FOCGs will be able to adopt the R2E model, but it seems to work very well for games with PvP elements, such as Rhsacau, Shoshin, and Sky Strife.

4.3.2 Subscripton model by Sokpop Collective

Source: Sokpop Collective patreon

I stumbled upon an indie game team called Sokpop Collective, and I found their BM to be very interesting and something that FOCG studios could probably borrow from. Sokpop Collective releases two games every month, and those who subscribe for $3 per month get to play them for free. Of course, you can buy the games separately on Steam, but at $3 each, so it's cheaper for gamers to subscribe. The games are released every two weeks, so they don't have a lot of playtime or depth, but there's a lot of enthusiasm for them because they cover a wide range of genres and Sokpop Collective's signature style and fresh ideas. Additionally, $3 is the most basic subscription tier, and you can pay up to $10 to get access to the source code for each game. Sokpop Collective has created 100 games this way, and now they're looking to slow down the pace a bit and increase the quality of their games.

Rather than investing a lot of resources and time in one game, FOCG studios could try to create a variety of games quickly and lean, like Sokpop Collective, and monetize them with a subscription model. There are already FOCG studios like Small Brain Games that create a new game every six weeks, which seems like a good fit for BM. Also, since many FOCG players are also FOCG builders, I think there's enough demand for higher subscription tiers to give players the opportunity to learn about game structure directly from developers.

5. Wrapping up

If FOCG studios can continue to make better games, I don't think they need tens or hundreds of thousands of users to play. Crypto users have a very high ARPPU compared to traditional users, so mass adoption is unnecessary if you can capture an enthusiast audience with purchasing power.

The reason why plugin and module creation was so active in Dark Forest was because there was a strong need to create better and more convenient modules and plugins to win the game. Therefore, FOCGs that want to encourage modding should first make sure that users are immersed in the game itself.

As worlds, FOCGs may be different, but as games, I think they should aim to establish themselves as a small but manic genre of games. If someone tells me that all games will evolve into FOCGs, I have a hard time disagreeing with them.

What I'm most wary of is FOCGs being consumed as just another investment narrative. There's nothing stopping FOCGs from gaining traction as a narrative as they evolve, but it's hard to know what you've planted in an area once the locusts have swept through. Personally, I'd rather have my own little FOCG and grow it slowly and away from token pumping as much as possible.

Thanks to Kate for designing the graphics for this article.