Blockchain in Game Industry


Alexander Pirlya - 15 November 2018 - 0 comments


Various industries are gradually finding new ways to use blockchain technology. While most people would think of cryptocurrency and finance every time the word blockchain is mentioned, there is more to this technology than just shuffling money around.

 

There’s a steady increase in usage of crypto technologies in computer games, though only a small number of these have actually used the Ethereum or Bitcoin to provide a decentralized gaming experience. In most cases, the blockchain part of gaming is more of an added feature rather than a baseline mechanic. So, are crypto-video games truly going mainstream, or is it just another industry trying to capitalize on the blockchain hype?

 

Lots of games are turning to decentralized tech for added leverage in terms of market worth. Yet there are several arguments that prove the other claim to be true as well – crypto-based games already have a modest history and entered the mainstream some time ago. The most famous example came at the end of last year with CryptoKitties, the cat-breeding game that uses the Ethereum blockchain to trade and prove ownership of crypto-cats. However, the first legit title that matched the concept of a crypto-game was Dragon’s Tale, a massively multiplayer online role-playing game (MMORPG) that allowed players to use Bitcoins as gambling chips of sorts in a variety of minigames.

 

An even earlier crypto-game prototype can be traced back to an MMORPG called HunterCoin. The game is based on an open-source cryptocurrency similar to Bitcoin, but with a major difference – around 80% of the coins are obtainable by collecting coins in a virtual universe placed inside the blockchain. A simple game is played to collect coins on a map which has Player vs Player combat capabilities to fight over resources. This can be termed Human mining, and the competition which has gotten more difficult over time can be called a Human Difficulty level.

The business angle of cryptogaming

Gaming, much like any other industry, is first and foremost a business. Aside from regular sales of fully developed AAA games, the publishers have been searching for more ways to make more money off of their creations. At some point, many of them realized: characters, buildings, saved games – any virtual asset, for that matter – can have a price. The concept, rather than the game itself, is the important point here. This monetization type has been used extensively to capitalize on the ‘freemium’ business model that’s widely used in gaming today.

 

The latest and most successful example of this is Fortnite’s Battle Royale mode – a free downloadable game with in-game purchases. Even though Fortnite exists for just a bit over 12 months, it gained a cult following and became a global phenomenon. Social gaming was worth $117 billion in 2017 and mobile gaming developers, in particular, keep pacing the industry in terms of earnings.

 

Blockchain games are not even in the same ballpark as Fortnite, but they don’t have to be to become successful. It seems inevitable that online casinos and sports betting will eventually switch to the decentralized blockchain for added security and P2P opportunities, but actual games might be a step too slow to adapt to the blockchain ways. Ethereum is a lot more complex and unproven if compared to the established game platforms like Android or iOS. Same goes for the pool of developers – there just aren’t many Ethereum developers who double as game dev enthusiasts.

 

The benefits of blockchain in gaming

Even though the perceived benefits of decentralized tech in gaming are still a matter of deep exploration and research, blockchains provide a useful toolkit that includes decentralized asset exchanges, verifiable virtual objects and collectibles, fast and secure payment networks, and, most importantly, an ability for developers to monetize their games.

 

Collaboration between game and blockchain developers is not a one-way street either. Crypto innovators developed new features and functionality while trying to combine both domains. The most popular implementation of blockchain technology for gaming is based on non-fungible assets. In gaming, these assets can be anything from game skins to items, with their authenticity guaranteed using smart contract standards. One such example is a Kyiv-based startup Dmarket – the world’s first blockchain-based marketplace for buying, selling, exchanging and collecting in-game items.

 

One more solid example of gaming benefiting from blockchain is DreamTeam – another Ukrainian startup that aims to disrupt the booming eSports industry. A major problem that DreamTeam tackles is financial regulation within an immature business niche. The platform provides a blockchain-based payment system similar to PayPal to ensure the payout of all prize money, player salaries, transfers, sponsorship, and advertising deals.

Gamers were some of the early adopters of cryptocurrencies as they were already familiar with many in-game virtual currency models and saw the benefits of integrating cryptocurrency networks into the domain. While the fusion of gaming and blockchain shows some great potential, there are still many hurdles facing its development that need to be overcome for it to reach mainstream adoption.

The current landscape

Despite CryptoKitties providing a proof-of-concept back in December 2017, the majority of the gaming market is yet to realize how blockchain and cryptocurrencies could be exploited to deliver a novel gaming experience. Most common use cases of cryptocurrencies in games still revolve around rewarding players for their gaming efforts. However, developers are starting to explore other venues of blockchain implementation in gaming, and here are some notable examples.

 

Ubisoft

If you haven’t been living under a rock for the past decade, you’ve probably heard of franchises like Assassin’s Creed and Prince of Persia, with the former becoming somewhat of a global phenomenon and the premier source of revenue for Ubisoft. Aside from AAA game development, the company has also been exploring how to incorporate blockchain in its upcoming releases.

 

One area of implementation is providing greater protection for intellectual property. Another is the possibility of allowing individuals to play a role in creating their own games. For example, Ubisoft has experimented with a prototype game called HashCraft, where gamers can upload worlds of their own creation and be rewarded with digital currency.

 

Many companies have looked to the tech for digital publishing or social VR spaces, however, Ubisoft’s application shows off one of the ways in-game content can be stored and shared using the blockchain.

 

Etheroll

Etheroll is a straightforward betting game where players gamble on the outcome of dice rolls. The main difference is that by using Ethereum, players can be sure the game is fair. Each dice roll is random and cryptographically secure thanks to the nature of the blockchain. The smart contracts are completely transparent, meaning players can examine the code behind the game and find out how the odds play out against them.

 

The only caveat behind Etheroll’s mechanics is quite simple – the dealer has only a 1% advantage over the players. By removing a centralized authority from the game (i.e. casino), blockchain could be used to level the playing field in a host of other betting-based games.

 

Fuel Games

In-game purchases have become extremely lucrative for video game developers with the advent of the ‘freemium’ business model. One might argue that the economics are heavily rigged in favor of video game publishers. Gamers have no way of selling assets back and whether they even ‘own’ them at all is a matter of extensive debate.

 

Sydney-based Fuel Games is an eSport start-up looking to leverage blockchain technology to ensure that developers no longer have centralized control over in-game economies. Their Apollo platform allows game publishers to integrate decentralized assets fast and accurately at scale with no middleware-coins required. With the company’s first release, Etherbots, participants can purchase parts, build robots and battle against each other. These digital assets can subsequently be sold to other players, with some items having reached prices as high as $18,000.

Conclusion

The fusion 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 emergence of a new gaming landscape is inevitable. Tokenization of virtual goods, improved betting, and secure payments are just several of the existing benefits – with many more to arrive as blockchain itself keeps scaling and improving at an exponential pace.

 

Got any questions for our team or are you up to discuss blockchain and gaming? Feel free to reach out to us!

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