DAOs will Pioneer Community Owned Games

DAOs are Decentralized Autonomous Organizations built on the Ethereum blockchain. What makes them interesting is they act like a fully autonomous company making decisions based on stakeholder votes. Stakeholder votes are based on the amount of the DAOs tokens you hold which have an initial cost associated with them (buy-in). In the future, we could see DAOs used to fund games and allow the community to control the direction (or maintenance) of the game.

When building a game, especially Indie games, building a community is arguably the most important aspect of ensuring the success of a game. Communities allow developers to test, iterate, and build excitement. One of the biggest growth hacks when selling games on Steam is getting people to put games in their wishlist so they receive a notification as soon as it’s released. This increases the chance of the game being purchased when it’s released which then can result in the game being featured on the Steam platform.

I believe the next iteration in community engagement is enabling players to have self-determination of “their” games. For example, think of how many Game of Thrones fans would have voted to change the ending and would have put meaningful amounts of resources to alter the decision the producers and writers made. In video gaming we have an opportunity to continue to blend the players and creators in a way other entertainment sources can not. Developers could release tokens to fund the game that are part of a DAO and give the community say in the direction of the game, proportional to their votes. Games selling their own tokens can get risky but we’ve seen success on platforms like Axie Infinity (AXS), Decentraland (LAND), and Sandbox (SAND). Being autonomous is important and DAOs do not easily have the ability to hold the developers accountable if they decide to go a different direction. With a traditional DAO, everything is hardcoded into a smart contract and when thresholds are reached, specific actions are executed (such as funding a project). So how would this work best in game development?

Instead of individual games, I think it would need to be a DAO platform where tools and distribution are built and then the DAO chooses what games will get resources allocated to them. Imagine Roblox, but the community got to choose, based on predetermined thresholds, which developers get extra funding to build games. With this structure, the community also has buy-in and can further support their favorite titles. Developers don’t need to build communities for their game in hopes that it gets traction because the community is already (literally) bought in.

Another reason that this would be an interesting use case for DAOs is that part of the smart contract could also be an agreement to future revenue (capped or in perpetuity) which would be easy to structure since the entire platform revolves around the DAO. This gives even more incentive for investors to support the DAO and better aligns incentives.

Players continue to want enhanced directional impact on their games. DAOs have the ability to be the future of game funding and community-based development.