In this article, we are going to discuss how two giant industries (based on market potential) can come together to disrupt the market and to enhance their revenue together.
The blockchain itself is already seen as a potentially valuable tool in today’s gaming world as it can provide a decentralized asset exchange, verifiable scarcity of virtual objects and collectibles, fast and secure payment networks, and an ability for developers to monetize their creations properly, because gaming assets are almost as important and valuable as tangible assets, the blockchain offers discernible proof of provenance of specific virtual items. Moreover, the digital tokens from blockchains add huge payment benefits, especially useful for e-sports, creating native in-game tokens and driving seamless transactions on decentralized exchanges.
But, blockchain is no longer just a tool for the gaming industry to utilize and incorporate, it has also become a market unto itself with several companies actively pursuing the creation of high-end gaming experiences based on a blockchain backbone.
Gaming + Blockchain
We will first discuss each industry separately and then explore the potential capacity of blockchain and gaming together.
We all know the scope and potential of the gaming industry, Video game revenue in 2018 reached a new peak of $43.8 billion and the total blockchain gaming token market currently sits at around $488 million and includes major names like Enjin (ENJ) and Theta Token (THETA), up 18 percent from the previous years, surpassing the projected total global box office for the film industry, according to new data released by the Entertainment Software Association and The NPD Group.
And the market has seen gamers around the world spend around $138 billion on gaming in 2018 and blockchain will help take that beyond $500 billion. And one way to do that is to create more roles and ways to play for gamers so that they get engaged and stick around.
Gaming industry itself hold huge amount of audience, from cassette video games to PlayStation and now AR games (Pokemon), the gaming industry has rapidly increased no of users as well as generates high revenue as compared to other industries, we will discuss more about the gaming industry and how the gaming industry can enhance growth using blockchain but first we will discuss about potential strength of blockchain industry alone.
Now let’s discuss the most emerging technology in the last three years. Blockchain technology is at a very crucial phase, where the existence of this technology is questionable.
But people know and have seen already the power and potential of blockchain technology.
From the above picture, you can see how rapidly the blockchain market is growing and estimated to grow.
Till now we have faced many big attacks like DAO, parity and some other attacks on the ethereum blockchain, because of all these attacks on blockchain, existence, and acceptance of this technology is still questionable.
In this article, we will not discuss the coins (bitcoin, ether) and tokens(ICO’s), we will discuss the use case of blockchain other than crowdfunding.
Firstly we will do a SWOT analysis of Blockchain technology and later we will sync blockchain with the gaming industry.
- Transaction cost
- Potential attacks
- Gives back control to the user e.g. instead of Google and Facebook using your data, you can control who gets access to your data. All these permissions will be stored on the blockchain.
- The world is becoming more digital.
- Jobs creation
- Scalability issues: too many transactions (overload), although several solutions are present.
- Unwanted centralization: mining pools and large mining farms.
- Quantum computers (in the future) who have the ability to decrypt data.
- Hype and fast-changing environment.
- There is always the possibility of mining attacks and hacks.
From the above discussion, we have concluded that there is a very high capability of blockchain technology, as we can see people getting more attractive towards blockchain technology due to lack of unavailability of features like immutable data, decentralization, in traditional technologies.
Blockchain and Gaming Industry together
Now, we will discuss how the gaming industry can be boosted using blockchain technology.
The first taste of blockchain gaming involved either card games, breeding digital cats, or digital casinos with games of chance benefiting from a lack of centralized control. But game producers are now taking big and ambitious steps into the realms of multiverses and MMOs. The advantages of decentralization and asset provenance start to become key when one starts expanding the gaming sector into world creation where no one actor can shape the rules.
As games have become more multiplayer and co-operative in the internet age, there has been a significant focus on fairness and trust. It is a familiar narrative where when there is a large assembly of different players from a broad spectrum of the global society, centralized control is often shunned as it is easy to become discriminatory.
We believe that the traditional gaming industry is a perfect target for blockchain integration, which could potentially result in mass adoption and popularization of blockchain technology as well as improve the present gaming industry.
Blockchain Game will also become a crucial member of the Dapp ecosystem. Focusing on the problems with the current traditional video game industry, blockchain integration will revolutionize the game industry through
- Fair and trustworthy on-chain governance with proper incentive design.
- Self-distributing networks.
- True ownership and trustless circulation of in-game virtual assets.
- Improved gameplay design and interactivity between virtual worlds.
First of all, we need to design a business model for integrating blockchain with the gaming industry, a perfect business model that might be complex to use but with good gameplay, design can be popular in gamers or crypto lovers and stands out to be a successful blockchain game.
We can use native tokens (non-fungible tokens) for a particular game on the blockchain, native tokens have multiple usages in blockchain games, we will later explain the necessity of native tokens in gaming.
An in-game item can be considered an NFT, and if an item is an NFT, it can be recorded on the blockchain to prove ownership and authenticity. This, in turn, opens up new avenues for game design. In doing so, in-game items can be stored on the blockchain – for example, a rare sword. This sword then belongs to the player indefinitely. This concept is powerful because it provides tangibility and exclusivity to the player – they don’t just have an item in-game, they own the item.
The same player could then sell that item for fiat or crypto – giving them an avenue to make money themselves – or they could retain the item for bragging rights. NFTs have been the first step in blockchain gaming innovation, but the innovation does not end with this concept. It has much more powerful implications.
A big question that might come in your mind if you want to have your own game on the blockchain.
Whether to design a new game on the blockchain or to rebuild traditional game (already designed ) with blockchain technology?
It’s totally up to you to design a new game on the blockchain or to redesign your existing game that is already designed in a traditional way. Let me tell you about the advantages of redesigning existing game on blockchain first.
By redesigning existing game on blockchain :
- You gave more power to users.
- Users will be able to trade their assets.
- Reconstructing the relationship between game publishers and players(kick out centralization).
Launch your current or new game on blockchain:
QuillHash Technologies helps you to launch your currently live or new Game on Blockchain with features Like NFTs/Crypto Collectibles, In-game asset management, Rewards, and Payment Gateways. Talk to our blockchain experts today –
How blockchain integration is helpful?
One could argue that gaming is an art form. One could also argue that blockchain technology is a tool for redefining the old and the new. So what happens to an art form when a new tool emerges? Innovation and reinvention.
Blockchain integration makes in-game virtual assets more valuable, liquid, and worth collecting, thus opening up the era of digital collectibles. Trading in-game virtual assets on the blockchain could also be implemented by smart contracts for frictionless peer-to-peer transactions in a trusted environment, where all transaction history could be accessed by anyone on the blockchain.
Now we will explore how NFTs (ERC721 standards) are useful in the gaming industry.
“NFTs are unique and distinguishable tokens, mostly implemented on the Ethereum blockchain as ERC-721 tokens, which have individual traits and identities.”
What is NFT and how they are different from ERC20 tokens?
Non-fungible tokens (NFTs) are a form of a digital asset (or item) created using blockchain technology that are unique to the owner. When these items are purchased or earned, they become the property of the owner (not the game or another 3rd party) and are written to the blockchain. Till now, NFTs have gained the most attraction in the gaming and collectibles space, most notably with CryptoKitties, ERC20 tokens are not unique and cannot be represented as an asset.
The success story of NFTS
In December 2017, the blockchain based CryptoKitties video game became so popular that it congested the Ethereum network, causing it to reach an all-time high in transactions. In some cases, people reportedly paid more than $100,000 for a CryptoKitty non-fungible token, or NFT. By March 2018, CryptoKitties had been spun off as an independent company that received over $12 million in venture capital.
“CryptoKitties has shown that giving users a personal stake in the creation of an NFT makes them more attached to them and more likely to value them highly.”
Not only NFT (ERC721) tokens are helpful in the gaming industry but all other blockchain features can be used in the gaming industry to enhance the gaming industry, you can take an example how Esports is using blockchain technology.
Some of the big names of the gaming industry also joined the blockchain revolution
and started building dapps.
Highlights of Esports blockchain program
The eSports industry is projected to bring in revenue of over $1.5 billion by 2020, popular game ‘Fortnite’ brings in $1.5 million per day on iOS alone, and ‘Red Dead Redemption 2’ made $725 million in its opening weekend.
This model offers rewards based on participation or viewership. Participants can earn tokens by signing up to the relevant service, then either running a browser plug-in or watching an esport through a particular website to earn loyalty tokens.
The difference between a traditional points scheme and a blockchain points scheme is that the tokens are part of a cryptocurrency and carry a potential for value that can be used with anyone who accepts such tokens. They can even be sold and converted to other cryptocurrencies (on exchange), or all the way back into a traditional currency.
So instead of earning points that can only be used inside one given company’s platform, these schemes aim to extend value far beyond the game space to create something more attractive for participants. Should any given loyalty or incentive cryptocurrency build a presence across multiple games and streaming platforms the value to users grows much larger, which in turn may increase the impact on growing viewing times and therefore, ultimately, revenue?
The collision of blockchain technology and gaming holds great promise for the growth of both industries. Innovations in the budding field of blockchain gaming have pushed the limits of non-fungible assets and are poised to keep supplying novel developments in other areas like scalability. So far we have discussed about the gaming industry, blockchain industry and how these two industries can come together to boost the economy, we all know the power of the gaming industry and also fan base of this industry, blockchain technology have also shared the same stats in terms of popularity and potential capability, developer who love crypto and gaming have already joined this league.
The emergence of the blockchain gaming trend is not without its hurdles, however. Scalability issues are legitimately prohibiting the development of many games at this point and will need to be overcome before the industry can reach its potential.
The intersection of blockchain technology, cryptocurrencies, and gaming is promising. Coupled with the meteoric rise of eSports and an opportunity for developers to properly monetize and participate in the gaming community, the intersection will assuredly facilitate a new gaming landscape.