HOW BLOCKCHAIN WILL REVOLUTIONISE THE GAMING INDUSTRY2020-09-15 11:04:13
Blockchain’s revolutionary potential reaches far beyond the financial sector. The gaming industry, ever-hungry for change, is now embracing blockchain – and the new technology looks set to disrupt the USD 100bn dollar global industry.
What is blockchain and why is it a potential game-changer for gaming? In a nutshell, blockchain is a new way of storing and transferring data. Its key power is that it disassembles the data into millions of pieces and distributes them across the network. This method of storing data gives blockchain a unique set of properties. First, because data is decentralised – spread across the network and not held in one place – no single individual or institution owns or maintains the data. Second, the data cannot be changed or manipulated: it is immutable. The blockchain technology constantly verifies the chains of data, which makes any changes or nefarious activity immediately visible. Third, the entire blockchain infrastructure is secured by complex cryptography that promotes robust data encryption. Taken together, these properties are now being used in new ways to change gaming as we know it.
Ownership of in-game assets
One interesting new blockchain-enabled development focuses on transferring the ownership of in-game assets from developers to players. Battle royale games like Fortnite and PUBG pioneered a shift towards free-to-play games with the introduction of in-game purchases – such as cosmetic upgrades – to generate revenue. And to encourage longer playtime, developers implemented rewards for players who put in hours and hours of effort to achieve a certain objective. But despite investing time and hard-earned money into the game, the players do not own the digital assets they have built up. Developers hold the power to change or remove items as they see fit; players are merely licensees of their product.
Games such as Gods Unchained by Fuel Games are flipping the script and enabling players to be the true owners of their in-game asset. This is facilitated by smart contracts which mean that ownership of the digital asset is automatically passed to the player when a certain predefined condition is met (such as purchasing the asset, or completing objectives). Since the data in a blockchain is immutable, the smart contract cannot be reversed by the developer. This presents a number of opportunities for players to monetise their skills and progress. For example, a tournament winner could sell or auction off their game-winning tool. Just imagine, if Bugha, winner of the Fortnite World Cup 2019 solo event, decided to sell one of his in-game assets such as his pickaxe. With blockchain, you can trace the history of each in-game asset – and owning Bugha’s pickaxe would be like owning a piece of historic sports memorabilia.
Decentralisation can introduce a number of game-changing features, but the most exciting development is the creation of a decentralised gaming economy. Age of Rust by SpacePirate Games is an example of how blockchain is fundamentally changing what blockchain is making possible within the gaming industry. In Age of Rust players can receive ‘Enjin Coin’ (ENJ) – an Ethereum based cryptocurrency – for completing certain objectives, and the ENJ can then be used to buy gift cards for a variety of well-known brands such as Uber. Essentially, you can pay for your Uber ride by playing a video game. Alternatively, you can exchange your ENJ for other cryptocurrencies such as Bitcoin. Suddenly, all those hours you spend on a video game can now provide you with additional income.
This formula of monetising in-game actions to fuel real-life transactions is an exciting prospect with an abundance of opportunity, limited only by our imagination. In theory, players could rent the necessary tools, or hire the assistance of an experienced player to complete objectives, creating new digital economies along the way. The possibilities are endless and many are excited to see how this develops.
Opportunities for developers
Blockchain technology may appear to be shifting power towards the players, but it can also empower developers. Smart contracts allow developers to regulate their gaming economies by setting specific predefined conditions to control trading. This has the potential to control over-saturation of the in-game market and ensures trades are conducted fairly. Ultimately, developers can create any world they can imagine and they have the power to set the foundations for an ecosystem that players will use to build gaming economies. Developers can then use the free economies to generate revenue by charging trading fees or taxing peer-to-peer transactions, in essence mimicking the established financial system.
We are in the infancy of this revolution and have only taken baby-steps towards what is possible with blockchain technology. The immediate future will feature experimentation which will inevitably take gaming to a completely new level.