Deconstructor of Fun

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🎮 What Web3 Games Should Learn from Designing Fun Game Markets

In Today’s Email

🚀 Today, we dive into the critical components of game markets needed to make them fun, and applicable in web 3.0 and beyond.

🎉 SAVE THE DATE! The Deconstructor of Fun x Google Istanbul conference is coming up on March 9th, 2023! Signups liver January 25th!

On the go? Listen to one of our podcasts from this week, we’ve got:

🎧 TWIG #216 Ubisoft Staff Threatens to Strike over 4-Day Work Week / Laying out the Bull case for Mobile

🎧 5 Secrets Behind Mr. Autofire's $40M Success with co-Founder Miikka Ahonen

🎧 How to Plan and Nurture Your Career in Games - with Sophie Vo and Mishka Katkoff (Rise & Play podcast)

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Designing Game Markets to be Fun

Markets are increasingly a component of games. The most storied game markets come from MMOs, like the WoW auction house or Maple Story’s storefronts. While the “single-player market” may sound like an oxymoron, innovative games like Shop Titans and Space Warlord Organ Trading Simulator tell stories through their in-game markets. More recently, web3 games like Skyweavers and DeFi Kingdoms are designed with game markets as the core system at the heart of the game – the market IS the game, and all players are expected to interact with it.

Even non-game markets are increasingly “fun”. Memestocks, sports betting, auction sites, dating apps, etc. are growing phenomena. You can trade Air Jordans on StockX, Monet paintings on Masterworks, or rare Pokemon cards at TCG Player. Not to mention the entire cryptocurrency space. While these assets don’t have the returns of traditional investments, they grow in popularity largely due to the “fun” factor.

What makes a market game “fun”?  I propose three core components:

  1. Fun Assets. Items of trade are emotionally salient and complex to evaluate, making it fun to research the market.

  2. Outcome Revelation. The process that reveals the success or failure of your market trades is fun to observe.

  3. Skill curve. At every point in the skill spectrum, players should see a path to improve, as well as see greater winnings as a result of their improvement.

Fun Assets

Thematics make dull things more fun. Clicking on dots that move around a screen may be tedious. However, if the dots are monsters and clicking shoots a fireball, it becomes fun.  Moreover, different thematics appeal to different people – mobile games will relaunch the same game with a reskin (ex: change the dragons to fairies), to attempt to appeal to a broader audience. The same applies to markets.

Millennial day traders enjoy speculating on popular consumer brands like Gamestop and Tesla, known as “memestocks”. If you replaced Gamestop with a staid company like Sherwin-Williams Paint, retail traders would show far less interest. Outside of stocks, “fun” assets like Pokemon cards and vintage wines attract traders despite more friction and worse returns. Sports betting is the prime example, where fans wager on their favorite teams to show support, even in losing situations. The wager puts fans’ money where their mouth is, showing their faith to ride or die with their favorite team. The engagement of sports betting seems to go beyond base financial gain.

Cultural and emotional attachments are key here. fans’ out-of-market experience offers information that might give them an advantage in the market, encouraging them to trade. For example, competitive Pokemon card players are assessing which cards are powerful and popular and could trade-off that information. Likewise, art history buffs tapped into the declining prestige of Jackson Pollock. Conversely, traders will enjoy researching assets that they are personally interested in, so they remain attached to the community. Gamers or sports fans are naturally tapped into community trends, so they enjoy researching Gamestop’s earnings report or the NFL draft results.  

Fandom, identity, or childhood nostalgia also create an emotional attachment to amplify financial success or failure. To a diehard sports fan or competitive gamer, winning the fantasy sports league provides emotional value on top of the financial value of any prize money.

Outcome Revelation

Once a position has been taken and money is on the line, players must wait for the outcome to be revealed. The reveal itself can be engrossing. A cold calculating trader would only care about the outcome, but human beings seem to love watching the outcome unfold - a puzzling topic for economists. Sports betting is probably the best example, where the outcome of a wager is a live sporting competition; the bettor’s stake makes them all the more invested to watch the game. The tie-in between wager and outcome is likely a large factor in sports bettings’ massive $75bn (and growing) industry.
Volatility by itself is entertaining. The volatility of the stock market provides live excitement, watching the price charge swing back and forth. While stock exchanges shut down at night, crypto exchanges run 24/7, so there is always some dramatic news to trade against. In contrast, markets are boring when prices rarely move or transaction frictions are high. These “set-it-and-forget-it” markets like housing don’t attract day traders or hot news cycles.

For a market game designer, revealing information should be an orchestrated event. For example, a balance patch to Skyweavers that changes the power (and thus price) of different cards will shake up the market considerably. Major balance patches should be a planned event, similar to the Federal Reserve’s monthly meetings. The changelist could be made more transparent with more lead time, smoothing out the information revelation. Players could even propose and vote on potential changes. Volatility should be an important design lever as well.  Too much volatility might deter the faint of heart, but too little volatility is dull and uneventful.

Skill Curve

Skilled players should win more. This is the key to the engagement loop of competitive games.  

Players work to improve their skills by trying new strategies or polishing their execution. As they improve, players begin to win more and rank up, providing positive feedback to continue improving. Moreover, this improvement should be smooth. Players at all points on the skill spectrum should see opportunities to improve and see tangible results for their efforts.

Day trading stocks do not have a smooth skill curve. The vast majority of traders are no better than random and lose to braindead strategies like passively holding index funds. Only at the extreme upper end are skilled traders actually able to beat the market. Since all traders are competing in the same market, it’s like a battle royale with skill-agnostic matchmaking. The guppies, minnows, and sharks are thrown into the same pool. It doesn’t matter if the minnows can beat the guppies because the sharks will end up eating both.

In contrast, most skill-based games have matchmaking that creates even, 50-50 matches.  Even in notoriously complex games like chess, players at all skill levels are able to find even matches and notice their improvement. In wagering games like poker and sports betting, skill-based matchmaking doesn’t work because skilled players can simply create new accounts.  Instead, poker players self-sort based on table stakes. Low-stakes tables are a waste of time for high-skill players, so they naturally seek out higher-stakes tables, leaving the minnows to play against other minnows. However, market games aren’t able to use matchmaking, since an open market inherently has all players of all skill levels competing together in a battle royale.

How can market games smooth out the skill curve? One method is to reset player skill levels by changing the rules. Competitive games often shake things up purposefully to reduce skill gaps: League of Legends has biweekly balance patches and semiannual overhauls; Magic the Gathering releases new sets of cards to shake up the metagame and force players to adapt; Street Fighter releases a new sequel every few years. These changes shake up what skills are required – you may have failed last season, but this new game might suit your skillset better.  Additionally, learning a new game is fun in and of itself, driving engagement. Market games can similarly shake up the rules. Market mechanisms could change, introducing new auction formats, changing fee structures, or adding new asset types and derivatives.  Alternatively, the old market could simply be abandoned and a sequel game with a new market could be created.

Attached game systems can also be a source of disruption and skill growth. In games like Albion Online or DeFi Kingdoms, a huge component of the game is resource management outside of the market. Players can succeed by optimizing their farming operations and bringing more goods to market, rather than playing the market itself. Disruption to these attached game systems also creates market shocks and opportunities, such as how cycling Magic sets to change the market value of key cards.

Power-based matchmaking is also a common option in games with vertical progression.  Fantasy sports like Sorare create different leagues based on the teams’ point totals. Card games like Magic the Gathering have low-power formats like Pauper, where only common cards are allowed. MMOs often have low-level dueling, so that players can access dueling arenas without having to grind all the way to max level. Markets could similarly give preferential treatment to lower-level players, such as an auction where only low-level players are allowed to bid.

Simplest of all, niche economies with small playerbases naturally have smaller skill gaps. The skill difference between the few hundred sneakerheads trading Yeezys on StockX is relatively small, and even the most sophisticated sneaker traders aren’t using AI or high-frequency algorithms. Some people want to be big fish in a small pond, and these niche markets offer that opportunity.

The Takeaway for Web3 Games

Two big mantras in web3 games at the moment are: 1) the game needs to be fun first, and 2) less market volatility is good. This is largely a reaction to notoriously boom-and-bust web3 game economies. However, this is throwing out the baby with the bathwater. A fun market is not as simple as low volatility. The market is part of the game, and the two work better when designed in tandem.

Web3 games usually tout their markets as their unique hook to differentiate from traditional games. Innovative design in their markets will be key to proving that there really is some juice there. However, the current design craft feels immature. Robust frameworks like those described above will help develop the craft of game market design. As the space grows and matures, I hope to see more games designed with a focus on fun markets.
Written by
Eric Guan. Eric is an ex-Riot veteran and currently does economy design at SuperLayer.  You can catch more of him on the Game Economist Podcast

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From the Rise and Play podcast: the host, Sophie Vo, sat down with her business partner Mishka Katkoff, who’s the CEO at Savage Games, and the founder of Deconstructor of Fun.  

In this episode, the pair discussed "How to plan your next career moves, how did Sophie make the decision to join Savage (instead of building her own company or continuing with her former studio at Voodoo)? How did Sophie ensure an effective integration at Savage, even before she officially started and how should you develop your personal branding?

Check out the full episode on YouTube: