When I worked for Riot Games as its Head of Player Acquisition in the European Union, I learned about player acceptance and long-term retention. Both are crucial to the success of gamer acquisition. I’ve seen the mechanics of user retention in games, and what I’ve 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 tier games introduced real rewards into their games? These are the titles where 99.9% of players are not professional eSports athletes and enjoy no monetary rewards for the thousands of hours spent playing their favorite games. The opportunity to introduce monetary rewards has always been on the table. Why hasn’t anyone done this?
The answer lies in one of the cornerstone behavior patterns associated with motivation: over-justification. This well-documented mechanism reduces people’s interest in an activity.
It is the presence of extrinsic rewards, such as cash and prizes. Money weakens intrinsic motivation, which traditional developers say is crucial to long-term player retention.
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Games should avoid injecting monetary rewards into an experience designed to be intrinsically rewarding. The enjoyment of beating a tough boss in a Dark Souls-style game stems from the fact that it requires considerable skill.
If you attach a $0.50 reward to that experience, you will end up destroying it. Just participating in a FIFA video game tournament with your friends to earn $0.15 will take the fun out of it. Offering zero dollars removes the monetary consideration and channels the focus entirely on the gaming experience.
Each game has a set of mechanisms specifically designed for user retention, monetization and reactivation. It should be more profound than expecting players to return only for tokens.
Economics without psychology
An economist ignorant of human behavior or games might first consider how to incentivize users to play more. The more hours a user plays, the more value players can extract from their transactions; as a result, power users are more likely to pay for in-game items and transactions.
Therefore, increasing user retention is essential. This increases monetization and the projected revenue per user. Suppose a user generates an average of $0.60 per hour of play, and you know from data and behavior patterns that there is a risk that they will stop playing altogether. The logic goes that you can start paying them $0.30 to incentivize them to continue.
Here is where over-justification comes into play.
From a purely economic point of view, paying $0.30 and generating $0.60 is a 100% return on investment; it seemingly makes perfect sense. Yet adopting such an approach is precisely where play-to-earn games go wrong.
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Extensive studies on 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 applies to hard, challenging hobbies where our body or mind functions at peak levels. A state of flow is achieved when we operate at our full potential. If we lose that laser focus, we are likely to fail.
A good matchmaking system in multiplayer games can pit us against opponents we have an exact 50% chance of defeating, and it comes down to who performs just a little bit better during the match.
Our brains handle activities that offer monetary rewards differently from those that do not. Putting monetary rewards into a flow state is like throwing a wrench into a spinning wheel. Our brains focus on the monetary outcomes and not the joy of the challenge.
The state of flow
The state of flow is the optimal place you want users to find themselves. Great games like League of Legends and Overwatch excel at creating matchmaking systems where win rates remain more or less in balance, as they put players in a position to be in the state of flow where they push themselves to their absolute maximum limit. It generates the highest intrinsic reward by recognizing the player’s ability, providing players with the conditions to improve and ultimately succeed.
Cryptocurrency games, on the other hand, are mostly designed around tokenomics and play-to-earn mechanics. The gameplay and the joy derived from 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 will invest hundreds of hours in an activity that isn’t fun unless it pays them a lot of money. And you can only pay out a lot of money if a critical mass of users work to create a significant amount of value. This is quickly turning into a death spiral for budding crypto games as the games are unable to create the amount of value needed to adequately reward players for spending hours in an unrewarding game loop.
Developers need to create games that people want to play and make that a primary goal rather than either starting with economics or randomly adding crypto to a working game loop. Even a fantastic game with good retention numbers can still have its retention destroyed with a play-to-earn mechanism.
Anderson McCutcheon is the founder and CEO of Chains.com, a multi-chain platform with over 500,000 registered users. He is the former Head of Player Acquisition EU for Riot Games, the maker of League of Legends and Valorant, games that average over 100,000,000 players per month. A former professional poker player and Unit 8200 veteran, he has held leadership positions at 888 Holdings and at PokerStars. He studied computer science at Technion, Israel Institute of Technology.
This article is for general informational purposes and is not intended to and should not be construed as legal or investment advice. The views, thoughts and opinions expressed here are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.