Blockchain's Impact on Online Gaming
If you’re a gamer, you know how rewarding it can be to unlock levels, acquire skills, and earn tools and weapons as you explore virtual worlds and win challenges. Many players find their favorite games so engaging that they invest in them—not just with all the free time they spend playing, but also with the real-world currency they spend on items that let them customize their gameplay experience.
Longtime gamers have also experienced the sense of loss, anger, and disappointment that can come when the game you’ve invested so much falls out of fashion—or, even worse, your account gets deleted–and everything you’ve earned or bought becomes worthless.
In traditional online games, like Minecraft, Hearthstone: Heroes of Warcraft, and Fortnite, the games are hosted on the gaming developer’s server’s, which can lead to a host of shortcomings blockchain-based gaming can help solve.
Online Gaming Challenges Blockchain Can Help Solve
Distributed ledger technology, better known as blockchain, stores data in a secure and encrypted way across thousands of different computers. When a blockchain is public, it provides transparency: anyone can verify a transaction that is recorded on it. Because public blockchains are decentralized, shared, and virtually unhackable, people can use them to record and provide proof of all types of economic transactions.
Gamers and developers have long found certain aspects of gaming to be frustrating. But now that blockchain technology is here, they’ve begun to identify ways that blockchains might be able to solve some of the biggest shortcomings of online gaming to make the experience better—and potentially more profitable—for everyone.
In-game currencies are worthless outside the game
Even if you’re not a serious gamer, you’ve probably played one of Nintendo’s many iterations of Mario Bros. You’ve jumped in the air and banged your head on brick boxes to collect coins. You’ve earned extra lives for collecting enough coins, and those lives have helped you advance through the game. But if you have more coins—or more lives— than you need, you can’t sell them to another player who does. Virtual coins have no real-world monetary value.
Distributed ledger technology means it is possible to earn an in-game currency whose validity can be verified by other players. Its authenticity gives it value. Players could trade the currency of a game they’re good at for the currency of a game they’re struggling with. They could also trade in-game currency for cryptocurrency or national currency, such as bitcoins or dollars.
Players can’t easily or securely buy, sell, or trade gameplay, “in-game,” items
Online games often don’t provide a way for players to buy, sell, or trade vehicles, weapons, skins that modify an item or character’s appearance, and other in-game items with each other. They may even expressly prohibit it. By tying these virtual items to a blockchain, they can become true digital assets that players can securely exchange. A blockchain would validate their authenticity and guarantee that the same item wasn’t being counterfeited or sold multiple times (double-spent). Gamers would gain more control over the assets they’ve earned or purchased.
One of the first notable developments in the blockchain gaming space was the creation of what is referred to as ERC-721 Tokens that operate through Smart Contracts run on the Ethereum blockchain, that allows for ownership of unique digital items, including “in-game” items, that are recorded and tracked on a blockchain. The creation of blockchain-based games utilizing ERC-721 tokens allows gamers for the first time to have true ownership of there in-game digital assets, which can be collected, sold or traded on online marketplaces like opensea.io and auctionity.
Gamers can’t buy, sell, or trade their accounts
Under the status quo, a developer can ban a player’s account if the player tries to sell it. This means that a player with an account that has gained value through countless hours spent advancing through the game may lose that account in the process of trying to transfer it to another player. It also means that if the sale succeeds, the buyer could later lose what they paid for if the sale is discovered and the account gets shut down. Further, even if the developers don’t discover or care about an account being sold, the lack of legitimate marketplaces puts players at risk of being scammed on either the buying or selling side since they have to resort to black markets that lack safeguards to make their exchange.
Assets earned in one game can’t be transferred to another game.
Returning to the Mario comparison, the success of the Super Mario Maker series demonstrates players’ massive interest in combining elements from different games in creative ways to create unique gameplay scenarios. What if you could take that process a step further and use the master sword you earned in the Legend of Zelda to puncture a competitor’s tire in Mario Kart? Yes, games will have to be programmed in ways that allow for new and unusual scenarios. But where there’s an interest and profit potential, innovation will happen.
Developers lose a cut of revenue to marketplaces.
One of blockchain’s big selling points is its ability to facilitate peer-to-peer exchanges and cut out middlemen that yes, can facilitate transactions, but can also slow them down and make them more expensive. Blockchains can connect developers to gamers directly, eliminating the need for middleman such as app stores. Without a third-party platform that takes a cut of developers’ earnings, they may be able to increase their profits and/or decrease the price of their games (or in-game assets, in the case of free-to-play games).
It’s difficult to earn money gaming.
Casual gamers, and even expert gamers who don’t know how to brand and market themselves are unlikely to develop the kind of following that will allow them to earn serious advertising revenue or donations from attracting an audience of viewers who love to watch them play. The bar to earning money from gaming becomes much lower if anyone can sell things they earn in games or things they design to be used in games.
Digital Assets: The Future of Online Gaming?
Of course, none of the drawbacks to the online gaming status quo can change unless developers allow it to happen. And why would they want to allow it, or learn how to integrate an unfamiliar technology—blockchain—into their games? They already know how to make popular, profitable games.
Gaming is a huge market. PwC projects that China’s video game market alone will bring in $34.9 billion in 2023. U.S. video game revenue is projected to top $30 billion that year. And part of what drives the gaming market is the surprisingly large market for virtual items. Could bringing gamers more of what they want and removing some of gaming’s biggest shortcomings drive revenues even higher?
Although current traditional online gaming behemoths like Take-Two Interactive, Activision Blizzard and Electronic Arts, seem to be on the sidelines currently when it comes to blockchain gaming, there is no shortage of developer activity in the blockchain gaming space.
Current projects are already trying to make it happen. Here are three:
- Gameflip, launched in 2015, has created a blockchain-based platform that allows gamers to buy and sell in-game items for VR/AR, eSports/PC, mobile, and console games using its Ethereum-based token, FLP. Items in its marketplace—which includes crates, keys, skins, and more—are listed in their FLP prices and the USD equivalents. FLP can be deposited or withdrawn using any crypto wallet compatible with the ERC-20 token, such as Metamask or MyEtherWallet, the same wallets crypto enthusiasts already use for other blockchain-based assets.
- Unikrn has employed the blockchain for its Unikoin Gold (UKG) gaming utility token. UKG can be used for tournaments, bets, online shopping, prizes, in-game earning, and more, and it can be exchanged for other cryptocurrencies or national currencies. Players can bet on their gameplay and on that of their favorite streamers in popular online games such as CSGO, League of Legends, Fortnite, DOTA 2, and Halo 5; they can also bet on tournament play. Real money esports betting is limited to jurisdictions where this activity is legal.
- WAX, or Worldwide Asset eXchange™, is using blockchain to let gamers create, buy, sell, and trade virtual items worldwide through its simple, secure, and fast platform. WAX Explorer lets users see the items being traded and their prices, sort of like how users can see the outcomes of completed auctions on eBay.
The number of blockchain games continues to grow. Here are some of the most popular:
- Gods Unchained – According to their website, is the first blockchain based eSport. Gods Unchained is a turn based competitive trading card game. Each match is a 1v1 battle against another player (or computer). The goal of the game is to reduce your opponent’s life to zero. Players use their collection to build decks of cards and select a God to play with at the start of each match. Decks contain exactly 30 cards.
- My CryptoHeroes – Is a multi-player blockchain based game that can be played on a Smartphone or PC. My Crypto Heroes lets you collect and train heroes from history. Equip your heroes with special and legendary items to form the ultimate, unbeatable team. Collect and strengthen your heroes through battles and trades.
- CryptoSpaceCommanders – Get ready to embark on an adventure through the cosmos! Crypto Space Commander (CSC) is a space MMO that operates in a completely real-time, player-controlled economy. Players can travel to different star systems, mine stellar bodies for resources, craft items and ships to sell, battle pirates and other players while commanding their very own starship!
- Age of Rust – Year 4424: The search begins for new life on the other side of the galaxy. Explore abandoned space stations, mysterious caverns, and ruins on far away worlds in order to unlock puzzles and secrets! Beware the rogue machines! Earn crypto items & cryptocurrency while solving puzzles.
Blockchain technology offers an opportunity for developers to add value for gamers and for even casual gamers the potential to earn money and get a greater return on the time they invest in playing their favorite online games. Developers, too, could have more opportunities to earn money because players may be more willing to spend money on games and in-game upgrades if they have true ownership of their gaming accounts and in-game assets. Money aside, plenty of people play online games and will continue to do so purely for the fun, the challenge, and the distraction of it. But even those gamers could enjoy more and better games and a larger gamer community thanks to the incentives blockchain technology can bring to developers.