Since its emergence, blockchain technology has come a long way from being associated only with cryptocurrencies.
Today, the technology has been integrated with finance and banking, healthcare,cyber security,real estate,insurance, supply chain management, logistics and video games. Given its multifaceted utilities, blockchain technology firms have been receiving a boost in funding all across the globe even as the overall venture capital (VC) funding is on a downward spiral.
Blockchain has long been considered as a natural choice for the video gaming industry given how both developers and users are keen on the monetization part of games. Today, developers are introducing new features and trends in their games through the use of blockchain and its aspects.
In this article, we evaluate the convergence of blockchain and gaming industries as an emerging concept, the recent trends and future growth prospects.
Convergence of Blockchain and Video Games
Cryptokitties was the first video game to have used blockchain technology in 2017. The game had a concept of users purchasing “virtual pets” as Non-Fungible Tokens (NFTs) through Ethereum. As per gameplay, the user could breed their virtual pets NFT with pets of other users in order to create a cross breed of pet NFTs. The game Cryptokitties was an instant hit among global users thereby paving the way for more blockchain enabled video games.
Emerging Trends in Gaming Industry
Freemium Model
The gaming industry today is home to a diverse section of promotional and monetization methods at present. Among the most popular examples of this are the “freemium model”, which is chiefly associated with mobile gaming. Freemium model relies on placing content and progression behind paywalls, effectively encouraging players to continue to invest in the experience.
iGaming and Blockchain
Blockchain technology has revolutionized the iGaming sector with many betting platforms now allowing major cryptocurrencies on their platform for trade. It has long been the norm to offer bespoke bonuses on select digital table titles – for example, a free spins no deposit deal for use on slots titles. This has proven as such a core part of the modern iGaming industry that dedicated platforms, such as VegasSlotsOnline, have risen in prominence over the past years.
Micro Transactions
A third distinct monetization model increasingly gaining ground in the gaming space is that of micro transactions. These are small pieces of DLC (downloadable content), ranging from weapon or character skins and outfits, to badges and emotes. Part of the value in these items is their relative scarcity, and there has been much talk of the potential for minting such digital items as NFTs. The micro transaction market today is big business, with games like Counter-Strike: Global Offensive 2 supporting an enormous economy in the trade of rare items, with some – such as the elusive Karambit Case Hardened Blue Gem knife, commanding an asking price in excess of $1.5 million.
While there has been some limited pushback from some sectors over the adoption of NFTs in these markets, everyone from small studios to big publishers like EA have expressed their interest, and excitement, in embarking on this new approach before long.
Play to Earn
Play to Earn games are titles that are expressly built on top of the blockchain in such a way that any or all of the in-game items, events and activities can be stored as redeemable tokens, or even be converted into leading cryptocurrencies like bitcoin.
How this works varies from game to game, but a popular and leading example is to be found in Axie Infinity. This title, which on the surface has much in common with the popular Pokémon franchise, utilizes the blockchain to ascribe real-world value to in-game items like health potions or coins. What makes this decidedly novel is that the work done by a gamer to acquire a healthy inventory in the game can, at any moment, be cashed out as real-world funds in the form of crypto.
What Future Holds?
It is highly unlikely that anyone will turn a millionaire overnight through playing video games. The value of in-game items amounts to minuscule fractions of a coin, but it still serves as a compelling proof of concept for the integration of crypto into games.
However, with emerging trends of ‘e-sports’- where users compete against each other with attractive prizes- the stakes are now high for integration of crypto and games.
A deep integration of Play to Earn tools into leading esports titles could result in the ability for people to compete from anywhere in the world and be earning money in the form of crypto in real time. Not only does this hold out the prospect of making esports an ever-more viable career for committed gamers, but it will contribute to the overall development of the scene and create a more accessible competitive pyramid.Therefore, we are currently witnessing a boom in investments when it comes to blockchain technology and gaming sector. A fusion between the two is a natural selection customized for future.
