Multi-Game Economies
Apr 15, 2022
by John Conway
Community Member


  • From a business perspective, free-to-play is the most lucrative game design. The majority of free-to-play profits come from whales: players who spend big figures on pay-to-win elements

  • Web3 enables us to create free-to-play games wherein pay-to-win elements come in the form of NFTs

  • We can create multi-game economies in which the rewards (NFTs) from one game can be utilized in other games

  • Multi-game economies will enable gamers to engage in an entirely new market: servicing free-to-play whales with the spoils of play-to-earn


The crypto boom has created many new frontiers for entrepreneurship, from crypto exchange startups to NFT artists, Solidity consultants, play-to-earn scholarships, and smart contract auditors. Play-to-earn gaming in particular has received a windfall of media attention recently, and for good reason. Gamers spend on average 14.8 hours per week gaming, with many going even further beyond that—to the point of it becoming a second job. In fact, gaming has been a career for decades now, albeit limited to streamers, gold sellers, and tourney pros. What if this hobby could become profitable for the average gamer as well?

Previously, I've written two articles on the subject of HCS-based game records and its possible use cases. This third and final article will synthesize these concepts into a new subject: multi-game economies.

Free-to-Play Economies

Before exploring multi-game economies, it's important that we have a firm understanding of the current free-to-play gaming market. If you're already familiar with concepts like free-to-play and whale theory, feel free to skip to the next section.

Playing for Free, but Paying to Win

Free-to-play (f2p) does not mean "unprofitable," in fact it's quite the opposite. When gamers think of Activision Blizzard (ATVI), they typically recall their flagship products like Call of Duty and World of Warcraft. However, there is a third company integrated into ATVI: King, the makers of f2p icon Candy Crush Saga. King's f2p-focused library has actually out-earned Blizzard for three years running.

F2p games do not cost money to play, as the name implies, but money can still be spent in-game. Typically, f2p gamers spend money to shorten cooldown timers, acquire resource packs & rare items, or "pull" gaccha characters. These features are referred to as "pay-to-win" (p2w), because they allow players to pay for in-game advantages (though some are purely cosmetic). It's the accumulation of many, smaller p2w purchases that makes f2p games more profitable than any other design. The more players spend, the more they succeed, and it turns out that some are willing to pay a lot for success.

Whales & Shrimp

A f2p game's profit distribution is not evenly spread across its playerbase. A common phenomenon in f2p (and other systems) is that 80% of a game's income is sourced from 20% of its playerbase, and the majority of that 80% comes from an even smaller slice of the 20%. This high-spending demographic, known as "whales," consists mostly of executive and middle-class men in their thirties. They derive entertainment from winning in f2p games by capitalizing on their p2w elements. They can also be attracted to purely cosmetic purchases, such as premium wearables for their in-game avatar.

Because whales account for the majority of f2p profits, it becomes conducive to target them specifically. For example, if a f2p game's model requires it to earn $50 per 100 players on a weekly basis, then a whale that spends $1,000 per week single-handedly accounts for 500 players' quota. Given this, many f2p games are designed entirely around whale hunting.

2022 HCS Gaming 3 Image 1

Diagram 1: A Typical Free-to-Play Ecosystem

Despite f2p's whale focus, no f2p game can survive without fish (low-spenders) and shrimp (no-spenders). Whales do not spend inordinate amounts of money in order to dominate a vacuum; their status needs to be asserted over others. And since a f2p developer's profit is sourced almost entirely from whales, there's less incentive to target shrimp for p2w elements (they might be unwilling or unable to ever put money into the game). Therefore, the economic relationship between whales and shrimp is actually symbiotic (though undoubtedly the opposite in-game). Shrimp can play the game for free, because developers only really need the whales' money, and whales need lots of lesser aquatic life to tower over. This relationship forms the ecosystem of a typical f2p game.

HCS-Based Meta Records

As I've written previously, the Hedera Consensus Service (HCS) offers a novel use case to play-to-earn: meta records. Multi-game economies will rely on these decentralized player histories. If you've already read the previous article, and don't need a refresher on this concept, then feel free to skip to the next section.

In short, developers can use the HCS to track player histories via a unique topic tied to their Hedera ID (or DID). This topic would store information such as statistics and achievements. And, because this topic is accessible to Hedera smart contracts (or even other chains via oracles), it can be used to gate NFT minting rights. This enables NFTs to retain a skill-based scarcity, with rarer NFTs being locked behind more difficult "attainments."

The relationship between attainments and NFT minting rights is abstracted through what I call "faux tokens," or fauxkens.


Fauxkens are HCS topic-contained variables that imitate fungible tokens. When a player achieves an in-game attainment, their unique HCS topic is updated with a message incrementing the relevant variable. When they utilize their attainment to mint an NFT, that same variable is decremented. The front-end that players interact with during the minting process would give these variables a visual representation, such as gems, runestones, etc. However, they aren't actual tokens on the Hedera Token Service, hence the term "faux tokens."

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Diagram 2: Example Meta Record Architecture

Of course, developers could always associate each in-game attainment with a separate, trophy-like fauxken. But a generic, tiered system like in the above diagram (diamonds, rubies, onyxes) allows for more flexibility. By using generic fauxkens, developers can easily associate new attainments, change reward structures, and create additional tiers.

The Case for Faux

I expect a common reaction to fauxkens to be "why?" We already have real tokens, fungible and otherwise, so why resort to incrementing and decrementing centralized variables in an HCS topic? The answer revolves around overhead.

  • First, mutating HCS topic variables is much cheaper and less risk-prone than minting and issuing actual tokens

  • Games will evolve. A sufficiently aged game might have five or more token tiers to maintain, each requiring exchange listings, liquidity pools, etc.

  • The circulating supply for attainment tokens is likely to be very low, given that each one is locked behind an individual in-game triumph. For extremely difficult attainments, the ecosystem might go days without seeing one awarded. This creates liquidity problems

Furthermore, the intent behind attainments is to simply provide an abstraction layer for the NFT minting process. If developers intend for players to trade their attainments, then yes it's conducive to use the Hedera Token Service (or any other given chain). But it's a question of whether being able to exchange fauxkens on a DEX is worth the overhead, when players could simply mint and sell the resultant NFTs.

Play-to-Earn and the Multi-Game Economy

Play-to-earn (p2e) is made possible by abstracting game data in the form of tokens: gold coins as cryptocurrency, magic swords as NFTs, etc. Currently, most p2e projects are self-contained by design; their tokens' only utility is in their original game. This limits players to either re-investing their p2e rewards into the game, staking them in liquidity pools, or selling them off. This creates a constant sell pressure, as p2e gamers can only "play to earn" by dumping their reward tokens onto an exchange. HCS-based meta records enable us to alleviate sell pressure by sinking p2e tokens into skill-gated NFTs. But now the question is, how will those NFTs retain a value greater than their minting cost? The answer lies in the concept of a multi-game economy.

A multi-game economy is, as the name implies, an economy shared between multiple games. The simplest interpretation of this concept would be a cryptocurrency token that's utilized in both Game A and Game B. But what would be the purpose of allowing price fluctuations in Game A to affect Game B's market? This implementation would only complicate both games' economies without adding value to either. I wouldn't recommend implementing multi-game p2e tokens. Instead, a sustainable multi-game economy should be based on an inter-game transition of resources through NFTs.

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Diagram 3: Basic Multi-Game Economy

In the diagram above, p2e gamers play the Feeder Game in the hopes of achieving difficult attainments. These attainments are then used to mint NFTs which retain utility (boosts, resource bundles, etc) in the Eater Game. Because the Eater Game is free-to-play, it would attract whales and shrimp in typical f2p fashion. However, under this architecture whales aren't purchasing p2w elements from the developers, but rather from an NFT market stocked by a new class of p2e gamers which I'll call "sharks."

Shark-Focused Architecture

The introduction of sharks radically changes the f2p ecosystem. The developer's profits would no longer be sourced directly from whales, but rather from sharks competing to service them. The developer would charge sharks to play the Feeder Game on either a pay-per-play basis (like the arcades of yesteryear), or through a subscription fee. In return, sharks gain the opportunity (but not the guarantee) to profit many times over their entry fee through NFT sales.

But what are the advantages of adding what—at first glance—appears to be a middleman? First, this source of profit is more reliable than the typical f2p affair, as the speculative risk of whale hunting is offloaded onto p2e sharks. And second, revenue from a high volume of sharks could actually be greater than the whale-sourced profit. Another analogy would be: rather than mining for gold, developers are selling shovels and pickaxes to gold miners. Not every gold miner is guaranteed to strike a motherlode. In fact, that's mathematically impossible—especially for player-versus-player games. On the other hand, every miner still needs to buy a shovel in order to get digging.

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Diagram 4: Shark-Focused Ecosystem

Yet developers have an incentive to keep as many sharks playing as possible. If weak sharks cannot survive in the Feeder Game arena, then the developer will lose revenue as they quit. This includes new sharks, who might be turned off of the game by constant losses before they can get their bearings straight. A solution to this would be using the game's p2e token as a consolation prize. Win or lose, all sharks should come away from a match with at least some tokens.

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Diagram 5: Shark Incentives Relationship

If the NFTs' minting costs are higher than what a strong shark earns from an individual win, then they may need to purchase additional tokens. This will create buy pressure, and enable weak sharks to mitigate their losses through token sales (or hold onto their tokens in the hope of attaining future minting rights).

Wealth Creation in Play-to-Earn

The most uncomfortable question for p2e developers to answer is "where does the wealth come from?" P2e promises us the wonderful fantasy of getting paid to game. However, you cannot sit five players down at a board game, and at its conclusion tell everyone they've won $500. Where did that $2,500 come from? It can't be created out of thin air.

The unfortunate answer is that—in most p2e games—wealth is created from late entrants. Early adopters buy into the system for cheap, and late comers pay the early adopters out of hope that the well still has some water left. The developers profit, and so do the early adopters, but they do so at the literal expense of late entrants. Oftentimes, this entire cycle plays out before the game is even playable.

In a multi-game economy, the wealth comes from servicing f2p whales. This pie is not evenly sliced, and not everyone can come away a winner. But this is a dynamic that's intrinsically understandable to gamers: the fastest hunter gets the prey, and slow hunters go hungry.

The best support developers can give to this kind of system is a successful Eater Game that draws in a large number of whales. That, and a fair and balanced Feeder Game arena.

Sophisticated Multi-Game Economies

The simplest form of the multi-game economy is a two-component closed circuit consisting of a Feeder Game and Eater Game. However, developers can continue slotting new games into this architecture thanks to the flexible nature of fauxkens. This enables the multi-game economy to cover a wide breadth of gaming genres, and can even provide durability in the case of a flop. Adding additional Eater Games would also increase the demand for NFTs, and could even be used to replace a stale and dying entry.

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Diagram 6: Sophisticated Multi-Game Economy

Of course, having two Feeder Games that produce identical NFTs would create an inter-game competition that's unlikely to benefit both economies. It would also be difficult for developers to balance attainment volume between two or more games. Therefore, as more Feeder Games are added to the economy, developers will need to increase the Eater Games’ p2w offerings. They could also shift existing NFTs onto the new Feeder Game's attainments. The flexibility of fauxkens will prove useful when rearranging a growing web of NFT flows.

Hybrid Theory

In the proposed architecture, games are classified into Feeder and Eater varieties. Feeder Games are competitive, skill-based games that cost money to play. Eater Games are casual, time-based games that are free (with p2w elements). But there’s also a third possible type: Hybrid Games.

Hybrid Games would be f2p games that are both p2e and p2w. A real world analogy for this would be street racing, where players compete for prizes with their custom, souped-up rigs. In order to prevent shark-whales from completely dominating Hybrid Games, developers would need to institute a sort of economic weight class system. Highly-geared players would compete against each other for the most valuable attainments, while lesser sharks are divided into subsequent tiers for lesser attainments. This should prevent predatory whales from dominating the competition with premium gear, and allow gamers from all economic backgrounds to engage in p2e.

Entry Barriers & Rent-Seeking

Rent-seeking is commonplace in p2e/NFT gaming. The entry barriers to these games are often prohibitively expensive, especially to those demographics most likely to engage in p2e. Therefore, rent-seekers arrive early to p2e economies, buy up the ecosystem, and then use renting/scholarship features to profit from their original investment in the long-term.

In a shark-focused architecture, we gain no benefit from this rent-seeking behavior. The sustainability of this system depends on giving sharks the maximum possible incentive to game. Sharks should not lose any portion of their hard-won earnings to a virtual landlord.

Theoretically, the most conducive demographic for p2e is gamers living in regions with widespread internet access but low incomes. Therefore, in order to achieve a rent-free Feeder Game arena, the entry costs must be kept low. The barrier to playing a Feeder Game should be measurable in cents, not dollars (and certainly not hundreds of dollars).

Despite this architecture's rejection of rent-seeking, non-gamers can still profit by speculating on its NFT market. It's only critical that they're unable to interfere with the crux of our system: the Feeder Game arena.

Metaverse Representation

Although this system's NFTs are primarily designed to be fed into Eater Games, there's also an opportunity for metaverse interactions. Metaverse projects are likely to attract a large school of whales, and these whales will be looking to acquire status items that’ll undoubtedly come in the form of NFTs. Therefore, we can increase the range of our sharks’ market by seeking out metaverse partnerships for NFT representation in the form of displayable objects and avatar wearables. This will give sharks access to another market of potential buyers, though it would behoove developers to ensure these NFTs use separate attainments as to not steal NFT offerings away from the Eater Games.


Through p2e, we can empower gamers with discrete access to a market normally reserved for mobile game companies: f2p whales. Through fair and balanced competition, gamers will be able to benefit from their unique, competitive skill set. This arena is no cake walk, but it does provide a more earnest competition than p2e’s current affair, where the “game” is won by buying early and selling the top.

Hopefully, the implementation of a shark-focused economy will provide a new way for gaming to become profitable to discrete individuals: a sort of gentleman farmer armed with a rocket launcher.