Blockchain and Gaming
New technologies have been able to find themselves into the world of gaming an astonishing amount of times. Although initially used in a very specific niche, interestingly often for war efforts, technologies regularly find a second use case in the entertainment sector. What’s even more fascinating is the phenomenon where the gaming sector and the new technology strengthen each other’s development.
The first computers were initially produced for, and by, a small niche market. And although substantial progress was made transitioning from enormous room-wide and noisy machines into the first ‘primitive’ computers that we can somewhat recognize, it wasn’t until games like Pong could be played that the masses learned about these machines. The interest sparked continuous technological advancements both by curious scientists and engineers as well as investors and businessmen looking to profit from the new possibilities. Considering the gaming industry is now worth 135 billion dollars, they appear to have had the right foresight.
We saw the birth of consoles and later on even the so-called ‘console wars:’ Multiple companies located on different continents trying to outpace each other in a tech race. All the while PC’s almost annually made giant leaps in processing speeds, memory size, graphical power and more.
And although gaming wasn’t the sole reason for these technological advancements, we can’t argue that it has been one of the main drivers of adoption and commercialization.
The space kept evolving, even taking over some places which initially didn’t seem to be each other’s competitors. More and more young guys and girls are taking on eSports instead of regular sports. It’s becoming a more professional space with each passing year, and the prizes far exceed what these youngsters could earn doing anything else. For reference, Fortnite has a total prize pool exceeding 100 million dollars this year. Not a bad day’s work for often teenagers.
Later on, we saw how mobile phones made it even easier for people to enjoy playing games. Although in certain parts of the gaming community the mobile games are frowned upon, we simply can’t ignore the impact it has had on the availability and ease of gaming experience. Apps can be downloaded on the go from wherever, and they delete the need to buy a console. In 2019 there are an estimated 2,1 billion people playing mobile games, and half of them are female.
Recently we’ve seen gaming developers harnessing the power of virtual reality. Although it has been the subject of imagination dating back as early as the 1980s, virtual reality is still very much in its early phase. The first real playable experience was launched with the Oculus Rift in 2016, enabling everyone to use their ‘hands’ instead of a controller for the first time, while having a 360 degrees view powered by their (pretty enormous) VR- headset. So far it seems we only scratched the possibilities and no doubt we’ll see the entire experience become more user-friendly, and a little more affordable.
And now we see yet again that the gaming industry is embracing a new technology. Blockchain has found another use case in the entertainment sector and while developers are still learning how to harness the most power out of the possibilities, games using the technology are already available and playable.
This time though it seems that the prior technologies seem to align and strengthen each other.
How blockchain can take games to a whole new level
There already are a lot of games that have implemented blockchain technology, but we haven’t seen the real next-level game or killer app that will entice the masses and causes real adoption.
Just as with the Automotive, Real estate and Social Media sectors developers are still looking for the best ways to implement blockchain technology in the gaming sector. However, a couple of advantages are getting more and more apparent.
Truly scarce and digitally owned in-game items
In the last decade, we have seen an ever-increasing amount of money being spent on virtual items. A courier (a non-playable character that helps deliver items to ‘heroes’) in the popular online game Dota 2 changed hands for an astonishing amount of $38.000,-, and other in-game assets such as swords and maces were sold between $15.000 and $18.000 in the games Diablo 3 and Age of Wulin Sword. Blockchain technology enables the verification and ownership of these items while making sure it’s authentic at the same time, with each item being registered on the blockchain making sure it can’t be tampered with or duplicated.
A digital marketplace powered by blockchain
The layer of security that blockchain technology provides also facilitates a much safer environment to buy and sell in-game items, both in the game environment itself as well as on a (virtual) marketplace. These items can be traded without the need for an intermediary, Its history can be checked before making the purchase and the transactions can be made across different platforms. But potentially the biggest gamechanger will be the possibility to extract the value of these items outside of the game environment and into cold hard cash. Since cryptocurrencies are traded on an ever-increasing scale, the winning platforms of the future should have no problem in selling their tokens for other cryptocurrencies, for example, Bitcoin.
Interoperable profiles across different games and platforms
Blockchain-based games have another unique feature that can be added to the list. They can communicate with other environments on the same blockchain, and in the future possibly on different blockchains. This means that the players’ gaming profile, with all its accomplishments (levels gained, items bought, quests completed, etc.) can be transferred over to another game. For the first time in history peoples’ efforts will not be rendered useless after completing a game. The in-game character will become much more (emotionally) valuable to the player. In essence, it could mean that players don’t have to start from scratch ever again.
Increased competitiveness, risks, and rewards.
An increasing amount of young guys and girls are taking on eSports instead of regular sports. As we stated before the prize pool of eSports tournaments is increasing every year. Nevertheless, these prices are generally reserved for the top players only. Games using blockchain technology are giving birth to the first generation of games that increase the size of rewards that can be earned, for example by linking every death or person killed in a first-person shooter to an amount of Bitcoin lost or earned, or by setting up a wager between players or teams before starting a multiplayer game.
Lightnite (the name is an obvious link towards the before mentioned game Fortnite) just announced that they are using the Lighting network to ensure fast transactions. This is a major shift in how games are being played, adding a new layer of competitiveness upon games and making it an even more thrilling experience. It also opens up the possibility for the masses to start earning some funds while playing games, spurring the growth and increasing the talent pool of potential eSport gamers.
Companies like Plair are offering players the option to raise the stakes in games by adding the ability to add a bounty for winning the game. Just as with the ‘normal’ sports industry we are seeing Esports gambling sites popping up. Unikoin gold delivers the opportunity to wager a bet on a wide selection of games, and taking that a step further we see companies like Funfair building an entire casino based on (the fairness of) blockchain technology. And did you ever dream about running or owning a football club? Soccer manager elite enables you to manage a club and adds a new layer of complexity since for the first time you can actually buy or sell shares in that club.
Entire virtual worlds are being developed using blockchain technology. In Decentraland people are able to buy plots of virtual land build on the Ethereum blockchain. Owners can transform this land as they wish and the blockchain is used to ensure that users have complete ownership of the land purchased on the platform, plus it gives users complete control of all the contents associated with their land (the virtual world is already showing where the real estate market is heading to). This means people are able to monetize their property. For example, there is a museum area where people are showcasing their digital art and selling them, there is a ‘Las Vegas’ area where people are able to gamble. People are renting out their area’s and of course, this also means that people are speculating on the future worth of the area. The in-game currency is a cryptocurrency called Mana that can be used to transact in Decentraland and is easily tradeable on most exchanges. If desired into fiat money. Most people wear VR goggles to completely get immersed in the experience but the area is also available via your browser. It shows yet again how gaming and other technologies are intertwined and advance each other’s usefulness.
We’re not there yet
Although we are confident that blockchain technology will propel the gaming industry into the next era, there still are issues and problems that need a solution. Most of these are inherent to the current state of blockchain technology itself.
Developing blockchain games first and foremost start with finding the right developers, and to be honest, the talent pool is rather limited. There simply aren’t that many people on earth that are not only able to develop blockchain applications, but that are also interested in spending their time developing games (for people out there that aren’t sure what they should learn, it might be a good idea to skip the traditional and costly university route and apply yourself to learning how to code. The salary is amazing and the amount of jobs available is exploding!)
Another big problem is accessibility. People that have been spending quite some time in the crypto space take it for granted that you have to get a wallet, save your mnemonic phrase, install metamask, buy some crypto send it to an exchange to trade it for your specific cryptocurrency before even being able to play the game. This reduces the potential target group to only people that are familiar with all these actions, even worse, it causes ‘ normal’ people to not even be bothered with the game altogether.
If we look at the blockchain itself we see that there are a couple of lingering problems that need to be resolved before blockchain gaming can reach a mainstream audience. The speed, scalability, and costs of today’s blockchains are simply not sophisticated enough to deliver the desired results. Luckily there are companies working on making a blockchain directed to the needs of a gaming environment but it will take some time to develop. Xaya has been very busy building a platform that solves a couple of these problems. Another possibility is using the lightning network, just as the beforementioned Lightnite has done, but setting up a lightning account takes the accessibility problem to a whole new level.
The next 10 years
The gaming industry has shown us in the past that it can be an accelerator for emerging technologies, both in the development area, the accessibility area and in the usability area. Already we see VR, eSports and virtual marketplaces harness the power of blockchain technology. The games of the future will consist of avatars and profiles embedded with the entire play-history of a particular person. Gamers will be able to show off accomplishments of all previous games played, and either exhibit their accolades or sell them for real valuable currency, able to be spent outside the virtual world. An entirely new era of gaming, in which winning games can provide income while losing games can cost you dearly, is being created as we speak, adding a new layer of excitement to the experience.
Entire new ecosystems and virtual worlds are being developed where players can pay with cryptocurrencies for virtual experiences, show-off their talents and skills and earn cryptocurrencies, build monuments or simply speculate on the expansion of its user base. There is a distinct possibility that the real world and all the virtual worlds will be more intertwined than ever and we believe that either for entertainment purposes or for investment purposes the gaming industry will give us a plethora of possibilities.
We will make sure to take a deep dive into the most promising projects and we will share this knowledge with all of you.