Web3 Game Breakdown — Digital Ownership

This is the first part of a series exploring what makes Web3 games successful. We delve into user behavioural trends and how they apply to the emerging industry of crypto gaming. These are tools and techniques we have used at Sunflower Land for the past three years to become one of the most popular and sustainable blockchain-based games.

Digital Ownership

Digital ownership in gaming gives players the power to freely trade and prove ownership of their hard-earned rewards. Instead of relying on a centralized server, players use their own cryptographic keys to store their items.

There are many forms of digital ownership in blockchain games. NFTs (Non-Fungible Tokens) are used for unique collectibles, SFTs (Semi-Fungible Tokens) for generic items like skins, and ERC20 tokens for the native currency in the game.

Now, you might be wondering why players need to trade and secure their own game items. Can’t all of this just happen on a game server?

At Sunflower Land, we believe strongly in Web3 ownership. We have distributed over 5 million digital collectibles to our players, leading to a significant spike in engagement and acquisition. Here are the positive effects we observed:

• Endowment Effect
• Giving Early Adopters a Stake
• Value Framing

Endowment Effect

The endowment effect is a psychological phenomenon where people value items more highly simply because they own them. This effect can be seen in various contexts, such as when homeowners overestimate the value of their property or when people are reluctant to sell personal items for a fair market price .

In gaming, players who own in-game items as digital collectibles inherently place greater value on these items and the effort required to attain them. This increased perceived value can enhance player satisfaction and investment in the game.

In Web3 gaming, the endowment effect is amplified. Players who own NFTs or other blockchain-based assets feel a stronger sense of ownership because these items exist independently of the game server. They can be traded, sold, or displayed on various platforms, increasing their perceived value.

Giving Early Adopters a Stake

In Web3, you can distribute in-game assets to players during prototype, beta, and alpha releases. This gives players a “stake in the game.” Instead of being just players, they become champions of your community, providing feedback on proposals, early testing, creating content, and more.

This approach is particularly useful for bootstrapping a community and gathering early feedback. Rather than waiting for an official launch, you can involve players earlier, allowing them to help steer the course of the game. The project becomes theirs as well, fostering a stronger connection and commitment to the game’s success.

Value Framing

When you acquire a digital collectible on a blockchain, you are immediately exposed to the realities of marketplaces and real-world economies. Since each item can be traded, your item is no longer seen as just bits of computer code stored on a server but as something with tangible value.

In traditional gaming, determining an item’s value can be challenging, often requiring deep dives into community forums and tutorial videos. In Web3, the marketplace provides immediate feedback on the worth of your items, making rare and valuable finds more apparent.

Exploring platforms like OpenSea, Magic Eden, and MOOAR, you discover that players are willing to pay real money for your items. This marketplace exposure frames your items in a new light, making it easier to identify their value.

Conclusion

Digital ownership in Web3 gaming transforms how players perceive and value in-game items. By leveraging the endowment effect, giving early adopters a stake, and framing items within real-world marketplaces, games like Sunflower Land have seen increased engagement and player investment. As the industry continues to evolve, these principles will be key to the success and sustainability of blockchain-based games.

References

1. Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias. Journal of Economic Perspectives, 5(1), 193–206.