Intro to the Gaming Industry
Do you remember what was the first video game you played in your life? Was it Space Invaders, Super Mario Bros. on a NES, or The Sims? Either way, most likely you’ve played video games more than once, be it on a console, PC, or a mobile phone between meetings or while queueing at the bank. Video games have kept us busy during leisure times and, most importantly, they’ve become part of our lives.
According to Business Insider, “video games are more than just a booming entertainment business — they're reshaping the way we interact with the world.” Experts forecast that by 2022, the gaming industry will produce $196 billion in revenue. Currently, there are 2.5 billion gamers in the world, which suggests that 1 in 3 people play video games, and it might reach 3.5 million by 2024–more than half of the total population.
One of the cornerstones of the gaming industry is how revolutionary it has become, welcoming the most advanced technologies and innovations that include virtual reality (VR), augmented reality (AR), artificial intelligence (AI), and now, blockchain.
What Is Blockchain?
Blockchain is one of the new technologies part of the industry 4.0 and a foundational technology that can integrate into countless use cases. A blockchain is a decentralized ledger shared among a network of computers or “nodes” to securely and immutably register data. The data is cryptographically stored and since there is no single point of failure, a blockchain is resistant to cyber attacks or hacking attempts.
Additionally, blockchain adds new layers of transparency, offering complete traceability of transactions that cannot be altered. Blockchain also enables the deployment of smart contracts, which are computer codes that can execute autonomously and automatically when meeting the contract’s requirements, allowing more efficient transactions and cutting expenses related to transaction processing.
To read more about blockchain technology, go here.
How Blockchain Impacts Video Games?
1. A Fairer Industry and Ecosystem
The gaming industry involves many stakeholders. From game developers, to game publishers that oversee how a game reaches gamers. However, across this value chain, there are big opportunities for technologies like blockchain. Blockchain’s capabilities have shown that it can improve trust and transparency when registering sensitive information and transactions.
For instance, Microsoft XBox is reducing the operational costs of processing payments for creators by deploying smart contracts. Smart contracts enable Microsoft Xbox to encode game creators’ IP rights, calculate royalties efficiently and transparently, and automate payment processing.
Another cool example is what pixEOS is doing. The project deploys EOSIO technology and features an art gallery, a hub to experiment with user interfaces, and an avatar creator. It encourages gamification and uses blockchain-based tokens to interact with the platform.
Moreover, blockchain allows users to interact with decentralized, open-source gaming servers and claim ownership on their content. With this technology, there are countless possibilities to grow fair ecosystems in which content creators and gamers can lead their experience.
2. Better Digital Assets and Collectibles Management
Blockchain technology allows the creation, management, and verification of digital assets. It enables ownership of these assets by anchoring it to a verified account. The owner can then either collect, trade, or sell the asset by deploying the same technology. What’s interesting about digital assets in games is that gamers need these scarce items to complete missions or stand out. Either owning a better gun at any shooter, a special-edition skin to look fly in Fortnite, or just collecting art pieces in Animal Crossing: New Horizons, in-game items play a big part in the gaming experience.
However, blockchain comes to solve issues such as the lack of accountability and transparency when managing digital assets. Let’s remember these are virtual goods, so it’s easy for game creators to just mass-produce these items and the player has no way to know if theirs are unique or not. So, are these collectibles actually as “special” as we want to think they are?
Such is the use of non-fungible tokens (NFTs). NFTs are unique, rare, and indivisible cryptographic tokens representing crypto-collectibles, digital artwork, tickets to an event, or in-game items, among others. Perhaps the most known example of NFTs in gaming is CryptoKitties, a game in which you can collect and breed digital cats. The platform deploys NFTs where each token has distinctive “cattributes,” thus making each token special. When breeding cats with different features, the offspring would be rare and hence more exclusive than others.
Another great use case of blockchain is trading or selling these in-game assets outside of a game ecosystem. Game creators often work on enclosed ecosystems where trading outside of their virtual world is hard or impossible. This limitation has led to the creation of grey markets outside of their game environments. For example, blockchain can enable game developers and publishers to embed rules into their digital assets and try to build a profitable market that is better organized and safer for gamers.
On the other hand, Mythical Games is a games developer that deploys EOSIO blockchain technology. They recently released a private beta for Blankos, a game that leverages a social MMO-based gaming experience where the player owns their digital toys. The player can then create minigames, hang out with friends, and participate in challenges. Blankos uses NFTs to guarantee ownership of the characters and virtual objects, and even encourages an in-game market.
Additionally, Immutable offers a platform that allows game developers to deploy blockchain technology into their games. Games such as Gods Unchained, a digital trading card game, are currently using this platform. Also, leading video games company Ubisoft is deploying NFTs. The company launched Rabbids Tokens to raise money for UNICEF through Rabbids tokens that can be traded like cards.
Moreover, blockchain technology can enhance the gamers’ experience. Anatol Hooper from CoinTelegraph states that “NFT’s can be used to increase player engagement and improve the ARPPU (average revenue per paying user). Game publishers have been noticing that blockchain-enabled games produce much higher ARPPU metrics due to the greater perceived value by the user.”
3. Improved Security for Gamers
One of the core features of blockchain technology is enabling an environment where two strangers on the internet can interact with each and make transactions in a safe and trusty way. Blockchain is practically unhackable, becoming the safest way to store value, since there is no single point of failure.
For example, IBM has been working on a blockchain protocol for the gaming industry. This protocol can be implemented in games with a large user base such as Call of Duty, Warzone, and Fortnite. This blockchain is set to facilitate smart contracts and move it to the gaming server if the gamers have enough computing power. Moreover, it will facilitate transactions between unknown players verified by the peers connected to the network.
4. Faster Transaction Processing
As previously mentioned, blockchain can help create a haven for transacting collectibles, tokens, and other digital assets among players. However, game developers must also ensure that the experience of exchanging these assets is as streamlined as possible.
Blockchain has demonstrated its ability to manage fast, secure transactions in trusty environments. The technology is capable of enabling authentication and automatization of transactions. These features can be replicated in the gaming industry and allow instant, cross-border payments without traditional methods restrictions.
On this line, a notable example is what Ubisoft is doing along with Ultra, a gaming platform that deploys EOSIO blockchain technology that can be described as Steam on a blockchain. This innovative application of blockchain for gaming can enable users new groundbreaking features such as earning digital currency, buying games online and then reselling them among their peers.
Moreover, Upland offers an in-game economy that maps the real world and deploys blockchain and NFTs. Recently, Upland launched the first virtual asset trading platform of NFTs for fiat money where players can put their digital properties on sale and withdraw USD directly to their personal account.
We’re currently living a transformational time for the video games. It is shaping the future and innovating day by day. To no surprise, they are naturally implementing new technologies and blockchain is added to the equation.
There currently is an initiative called the Blockchain Game Alliance committed to promoting blockchain within the game industry with dozens of members worldwide.
Blockchain in video games is an exciting endeavor that is only getting started. From creating a fairer industry in which multiple stakeholders can interact in a safe environment to enhancing the overall gaming experience with NFTs and collectibles; blockchain is changing the rules of the game for the industry, and will continue to do so in the upcoming years!
Contact Us for More Information About Open-Source Blockchain
EOS Costa Rica operates since 2018. Our team develops blockchain-based solutions with great attention to detail in creating user-centered dapps for enterprise use. We also provide resources to the EOSIO infrastructure and promote the local EOSIO ecosystem. Let’s talk about how you can implement this technology into your organization.
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