Main Concerns of Gaming Experience Towards Web 3.0

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The psychological terms mentioned in this article are highlighted in bold and indicated at the end of the article.

The terminologies are based on APA. Note that some of the terminology is not limited to psychology, for example the term mental accounting originated in behavioural finance. However, the role of these terms in this article focuses on the explanation of psychological effects and interpretation of behaviours.

This is a very concise comparison as to the compositional concepts of Web 2.0 and Web 3.0. 

The present article also includes a critique of the mainstream revenue model, which is important to highlight given the emphasis on player experience. This is because looking at the long term impact, the current monetization method is fatal for both players and developers.  More importantly, due to the changing role of the players in the entire value chain and in order to maintain the sustainability of the business model, proactively reshaping relationships with players is key for developers to gain dominant competitiveness. 

The purpose of this article is to stimulate imagination and possibly discussion. 

Although still in the early stages of exploration, taking into account the user's perception and experience, it is important to think about the following concerns. 
 

1. The Value Proposition

This is the first concern,

In the era of web 3.0, what can game developers offer to players? What value proposition should be conveyed to players?

2. Mental Accounting,Impulsivity and Self-Correction Tendency

The current mainstream monetization models of F2P games, such as the micro-transaction model, are increasingly highlighting serious drawbacks.

This model is subject to the psychological effect of mental accounting. The economic downturn has changed consumer behaviour, in which the budget allocation for satisfying hedonic needs has been significantly reduced, and this phenomenon will continue until the economy recovers. 

One manifestation of this is a inclination of players to spend offline, amplifying the sense of gain and happiness through the acquisition of physical goods and services that can achieve immediate utility.

It’s unfortunate for the gaming industry. 

The popular art toy business can do nothing about it, partly because of the significant discrepancy between virtual skin and the real physical item, and partly due to the gambling nature of the mystery toy box.  In addition, it is difficult for art toy business to create economies of scale since the diversity of preferences leads to intense competition. 

Moreover, another serious drawback of micro-transaction is that it tend to evoke impulsivity which lead to undesirable consequences including emotional distress. In fact seeking pleasure requires a certain degree of impulsivity. Thinking carefully about everything before making a decision means cognitive and emotional overload, which is one of the causes of annihilation of pleasure. 

However, there is no denying the fact that micro-transaction model is increasingly fraught with disadvantages, especially in terms of promoting harmful gambling behaviours.

One of the consequences of impulsive purchase is that players attempt to eliminate the negative consequence of their behaviour, and in turn trace the decision-making process and discover their irrationality, thus making prudent considerations for subsequent decisions. What seems extreme for developers is players asking for a refund after making an in-game purchase. In contrast, this is an effective way for players being consumers to reverse the undesirable outcomes. Arguably, it is a very unfavourable situation for the game developers and operators. 

Our ability to survive and evolve is important because we are constantly reflecting on and correcting our mistakes. This phenomenon is described in psychological terms as decision/outcome reversibility and the functional aspects of counterfactual reasoning. This is an important part of functioning as a human being and a process of learning.

Please note that the pursuit of reversibility is not limited to the outcome of the decision itself; in some contexts, what is more important to the player is the repair of emotions. In psychological terms, this means affect regulation.

This implies that players pay less frequently or even disengage from the game. Instead of making in-game purchase, players make small purchases offline to fulfill hedonic needs. The limited budget translates into actual payment, and flows to other forms of entertainment, such as films and short-term peripatetic trips. This is typical of compensatory behaviour, through which the player tries to provide justification for decisions to satisfy hedonic needs.

Obviously, in addition to the impact of short-form videos, the mental accounting effect contributes to a loss of gaming revenue. (The "good" news is that consumers are also moving away from the live-stream ecommerce.) 

Mental accounting is a bias because total assets should be treated fungible. This does not mean that it is rational not to be influenced by mental accounting. From a functional perspective, this bias of mental accounting contributes to some extent to one's ability to plan, which is helpful in making optimal decisions.

Absolute rationality does not exist. Not even in probability arithmetic. In fact, we are all inferior at probability arithmetic. 

When there are 10 apples on the tree, we can count them. We can also cope when faced with 50 apples. When there are 100 apples on the tree, three people will have at least three different answers. 80, 100 or 110, it's all the same.   

In this scenario our brains enable shortcuts and we initiate simple mental simulations. 10 for apple pies, 20 for friends, and 30 for juicing in a glass jar, and the rest... ...  Our lives become easier when we allocate resources and money in a way we think is effective through mental accounting. At least we create this illusion of control. 

Mental accounting matters.  Mental accounting makes our resource allocation seem reasonable but it is still a bias that gives us the illusion that things are under control. 

Micro-transaction which is subject to mental accounting have made the F2P games, but its negative effects should not be underestimated.  

Micro-transaction just goes nowhere. But game developers can't just sit back and do nothing about it. 

Based on the serious drawbacks of the current mainstream monetization model, the design of the revenue model in the Web 3.0 era is particularly important. In addition to technology, there is also the problem of ethical and regulatory issues. Thus, revenue realization and maintaining the sustainability of the revenue model is the second concern.

3. Preference Construction

Research on player preferences is indispensable, no matter the era. Because preferences determine choices and affect decision-making. 

Human preferences are revealed and learned, but they are also constructed. 

Apple is a leader in this area. Talk to Apple users and you'll realize that the vast majority of them don't know exactly what they want! Apple users' explanations of their preferences overwhelmingly repeat what Apple has instilled in its users and the inferences that have been drawn based on that content. Anchoring smashes so deep.

So the third concern arises:

In the era of Web 3.0, how can player preferences be constructed in order to make business profitable without violating the nature of the player as a human being?

Because micro-transaction is largely based on human cognitive biases, which in turn trigger self-correction and amplifies the player's sense of loss. Frequent purchases instead lead to an immunity to the thrill of paying, i.e. to the potential for gain at hand.

In terms of constructing players preferences, the micro-transaction model is neither effective nor efficient. Micro-transaction is essentially based on spending patterns, and it fails to reveal the nature of decision-making, namely the cognitive processes that lead to the purchasing decision. 

Even if we have not yet entered the era of Web 3.0, it is clear that games are trending towards greater freedom. In particular, players are no longer just consumers, but a combination of producers/creators and consumers.  It is expected that the open-world genre will be the first to achieve this change. 

4. Learned Helplessness, Perceived Control and Avoidance Learning 

What is the biggest problem when it comes to the current gaming landscape?

It is the general perception among players that the entire gaming ecosystem forces them to experience a deep sense of lack of control.

It is human nature to seek a sense of control. The loss of a sense of control can lead to psychological trauma, including depression. This is one of the reasons why open world games gained such a popularity. Reviewing the current open world gameplay, there is still room for improvement. 

If the developer refuses to grant freedom to the players, in most cases this freedom exists in the form of a perceived sense of control by the player, even if this perceived sense of control is an illusion, and there is no guarantee that the various players currently active in the market will exist in the future.

Perceived control has motivational consequences, which in turn lead to behavioural consequences. The immediate and observable behavioural consequence is permanent disengagement from the game and boycotting the developer. 

This psychological effect manifests itself in the marketplace where one developer wins players at the cost of another developer's market being eroded. 

Players can't tolerate the lack of control for long, and the backlash is especially fierce among the new generations.

Since the consequence of playing the game is repeatably experiencing learned helplessness, which is essentially a deprivation of a sense of control, why not disengage? Disengagement and boycotting developers are effective coping strategies for players to eliminate such psychological discomfort, and this specific learning process is recognised by psychology as avoidance learning. Much of the research on this topic has focused on the effects of contingency learning on motivation.

This doesn't mean that developers should be indifferent to players who are addicted to paying consistently in this mode. This is sad because addicted players exhibit dysfunctional behaviours and maladaptation, i.e. the inability to enable avoidance learning in the face of learned helplessness, and the loss of even the most basic motivation to try.

The truth of the matter is that for developers, the tangible benefits of addicted players paying repeatedly are short-lived. Besides, one's natural tendency to self-correct doesn't go away, even in addicted players; it's only somewhat diminished but not degraded. Looking at the player base, addicts are a minority. Because of this, the developers’goal is not to induce addiction but to get the vast majority of "sober" players to support their games. 

Company decision makers should be very conscious that micro-transaction model, which is essentially based on cognitive biases and heavy incentives impulsive behaviours, especially the deprivation of a sense of control, is unsustainable. 

The effectiveness of micro-transaction is limited by the window of opportunity and only works in certain market conditions. For instance, don't expect consumers in the mature markets, such as the United States, to allow themselves to continually fall into this cognitive trap as players in new economies like Brazil and Mexico. Chinese consumers are also waking up.

We are witnessing the decline of giant developers and that decline is substantial and long term. 

By this point, the major concern has become apparent,

What is the best relationship between developers and players in the Web 3.0 era?

How should players be treated when they exist not just as consumers of game content, but as prosumers (producer + consumer)?

This brings us to the issue of provoking heated debate.

In the foreseen era of Web 3.0, will the P2E and C2E models really give players a sense of control?

What does it mean for the gaming industry if the threshold for achieving a sense of control is a certain level of technological mastery on the part of the player? 

Because the high-paying demographic for in game purchases are whales, only a minority of the total number of players. 

Given that, what is the most logical user segmentation? It is foreseeable that the existing model, which is centered on the player's ability to pay, and the frequency of payment, will be subverted.

The re-segmentation of the user base implies a fundamental change in the revenue structure of the gaming industry. Businesses that rely on value-added services will have a hard time surviving.

5. Value-Driving or Mental Stress？

Does the digital twin really drive value?

What needs to be cautious in mind is that digital twin and mirror world powered by Metaverse can lead to psychological burdens. There is a significant psychological cost to the user for participating in such environments.

Terminologies

Mental Accounting

a cognitive process in which individuals track and evaluate their income and expenditures by grouping them into consumption categories or mental accounts: This in turn affects future transactions by influencing how economic activities are perceived. The topical organization of mental accounts leads people to evaluate gains and losses in relative rather than in absolute terms. Mental accounting is derived from prospect theory and one of several theoretical approaches to financial decision making.

Impulse

a sudden and compelling urge to act, often resulting in action without deliberation. Also called impulsion.

Self-Correction

any situation in which an individual makes an error but fixes it spontaneously, with no external instructions or cues.

Reversibility

a mental operation that reverses a sequence of events or restores a changed state of affairs to the original condition. It is exemplified by the ability to realize that a glass of milk poured into a bottle can be poured back into the glass and remain unchanged.

Counterfactuals

in linguistics, a conditional statement that is contrary to fact. A subordinate clause that expresses a hypothesis or possibility, typically one introduced by if or unless.

Affect Regulation

the attempt to alter or control one’s mood or emotional state so as to maximize pleasant experiences and minimize unpleasant ones. Because people cannot usually change their emotions simply by deciding to feel differently, they use many indirect strategies for affect regulation. These include cognitive techniques such as reframing and distraction, behavioral methods such as progressive relaxation and meditation, and unconscious processes such as denial and dissociation. 

Compensatory Behaviour

The term compensation refers to a type of defense mechanism in which people overachieve in one area to compensate for failures in another. 

Defense Mechanism

in classical psychoanalytic theory, an unconscious reaction pattern employed by the ego to protect itself from the anxiety that arises from psychic conflict. Such mechanisms range from mature to immature, depending on how much they distort reality. 

In more recent psychological theories, defense mechanisms are seen as normal means of coping with everyday problems and external threats, but excessive use of any one, or the use of immature defenses, is still considered pathological. 

Learned Helplessness

a phenomenon in which repeated exposure to uncontrollable stressors results in individuals failing to use any control options that may later become available. Essentially, individuals are said to learn that they lack behavioral control over environmental events, which, in turn, undermines the motivation to make changes or attempt to alter situations.

A syndrome with three features developed: (a) a motivational deficit characterized by a failure to respond when challenged with further aversive events, (b) an associative deficit characterized by impairment of learning from successful coping, and (c) an emotional deficit characterized by apparent under-reactivity to painful events—although later research revealed by assaying corticoid levels that the animals were very stressed.

Coping

the use of cognitive and behavioral strategies to manage the demands of a situation when these are appraised as taxing or exceeding one’s resources or to reduce the negative emotions and conflict caused by stress. 

Avoidance Learning

a learning process in which a person or animal learns to avoid an unpleasant or painful stimulus by responding to a warning signal.

Human Contingency Learning

is strongly related to operant conditioning, that is, the observation that people (and animals in general) tend to learn whichever response has the greatest probability of realizing a particular desired outcome. Human contingency learning refers to the acquisition of implicit or explicit knowledge of statistical correlations between stimuli and/or responses.