Given a substantial overlap between the gaming and crypto communities, the technology behind significant crypto-currencies is starting to and its way into the gaming industry. Comments by Konstantin Boyko-Romanovsky, founder of The Abyss and Destiny.Games
The video gaming industry is growing at a constant pace. It is home to 2 billion players and viewers, hundreds of studios and publishers, together with various financiers, stakeholders, and brands doubling down on their investments. Given these numbers and market projections, there is an unmatched potential for innovation and new possibilities to encourage participation.
According to market reports, the video game industry generated almost $94 billion last year and had already exceeded $104,6 billion revenue level in 2017. By 2020, it is expected to reach $169 billion marks. The market represents the shift from offline to online business model as physical sales continue to fall and more digital distribution platforms emerge worldwide.
However, there are still multiple challenges to be solved now and in the future. Digital distribution platforms are bulky and awkward regarding interacting with developers. Advertising options are costly and are not beneficial. Also, they have to deal with fraud, cybercriminals, and complaints on a daily basis. What is more important, it is harder for smaller developers to reach the audience with their products.
With some companies already accepting Bitcoin and other cryptocurrencies, the market is beginning to see untapped opportunities for blockchain technology that extends well beyond means of payment. By design, it offers an incorruptible digital ledger able to record anything of value and keep the information tamper-proof.
This puts into proper perspective the challenges of multiple stakeholders of the industry as blockchain-based platforms have potential to deal with transparency and security issues, provide proof of ownership, cut transactional costs, allow for direct distribution of incomes and innovative loyalty programs. All in all, blockchain will further transform the video game industry — here, we explore the most promising areas.
Proof Of Ownership For Gamer-Earned Digital Items
The value of virtual items and the importance of trading process grow together with more players making a living off putting hours and days into earning rare in-game collectibles. The popularity of virtual assets and virtual trading goods is enabling a full-fledged game economy.
However, companies and platforms see the issue of players falling victims to scams and losing everything. They prefer to keep control of all game assets to prevent cheating and fraud. This leads to a situation where most players don’t own their inventory, often worth thousands of dollars, and have no ways to verify item’s pedigree or check seller’s reputation outside the game server.
The blockchain technology secures the transparency of registration and transfer of ownership. It enables players to buy, sell or exchange virtual items outside of particular game servers in a P2P manner and helps them ensure that digital assets are authentic before closing deals.
Secure And Flexible Transactions
Game marketplaces require safe and stable infrastructure designed for transactions of virtual assets at scale. Most attempts to launch a marketplace have led to the value drain for both gamers and publishers not willing to trade only within the platform with no ways to cash out. For indie developers and smaller studios, dependant on timely payments, marketplaces have always meant substantial cuts of revenues and potential earnings blocks.
And when some marketplaces started integrating blockchain and extending their existing platforms via this technology, the game community responded with interest and joined their quest to build fraud-free and secure environments.