It can take time for a new technology to take off and go mainstream and it often takes a small additional something that is lacking in the original concept. Radio broadcasting, for example, started at the very beginning of the 20th century but didn’t go mainstream before the 50’s, when the generalized use of transistors allowed the proliferation of compact devices. The Internet was already up and running in the 70’s, but all the network’s technical enhancements combined with the spread of microcomputers in the 80’s weren’t enough. The Internet really took off when the web browsers appeared around 1995.
The blockchain technology is only 10 years old and everyone involved in the field (developers, believers, speculators, …) are still wondering what it will take for the technology to go mainstream. We think that gaming will be the gateway to cryptocurrencies for the mainstream consumer and we will explain why and how.
As of today, Bitcoin and the blockchain technology are quite well ingrained in the mainstream culture. Chances are your mom heard about it and even know that Bitcoin is some sort of money. However, the layman is more likely to not be aware of the specifics and implications of cryptocurrencies, and there is a reason for this: only a few people truly needs the blockchain in their life to date. That situation may change soon though, for more and more people are being exposed to everyday issues that can be solved with it.
It appears that gamers are technologically educated enough to be the ones who are in the front line for blockchain adoption. Firstly, not only they know more than the average user about how The Internet works, but they also are more likely to pay for things through it. Gamers spent around $150 billion last year, a number which totally shatters the one of the movie industry. And it is crazily increasing each year (2013 was $70.4 billion for gaming vs $35.9 billion for movies). That shift in the entertainment industry is also due to a shift in the way gamers consume. They don’t simply buy games anymore, they literally lead a virtual consumerist life, like Samantha Greenberg points out by noting that “the initial purchase of a game is just the beginning of a game’s monetization”. As of today, a more than significant part of the gaming monetization occurs on the Internet, now constituting what we call the Virtual economy. Secondly, gamers are smart. They learn and adapt to the new situations in-game and on the Internet. They don’t only try to get virtually better, they also know how to profit from new technologies to get a better experience or to achieve various goals. That’s maybe why some of the biggest players in the blockchain field were also video game masters beforehand. Brock Pierce was a gamer, Vitalik was a gamer, Kim Dotcom was a gamer, Elon Musk was a gamer and, actually, most of today’s highly ranked developers are gamers. Therefore, you can be sure that if the blockchain can improve the gaming experience, it will quickly and easily be embraced by this non-stop growing population of smart consumers whatever the technical and technological challenges it entails.
Why would gaming adopt the blockchain?
Right now we can say that the gaming industry is taking an interesting but weird turn. Free To Play games are monopolizing the landscape while many players are complaining against the new wild monetization methods (random chests, DLCs, lack of microtransactions, etc.). Virtual worlds are getting bigger and bigger, allowing more and more players to interact simultaneously, while many developers make the choice to drastically limit players interaction (Starcraft 2, Hearthstone, Artifact, etc.). In-game economies are booming while there isn’t yet any global market to link them. Finally, it has never been so easy to make, publish and promote games or content as an indie creator while only a few platforms still dominate the market, allowing them to dictate the political and economical rules.
Fortunately, the blockchain technology brings a lot of features that will, in the near future, solve most of the paradoxical situations the current gaming industry undergoes.
1. Transparency and Privacy
Transacting on the blockchain can allow either full transparency or full privacy depending on the needs and that’s something you can’t currently achieve in the video game industry. The latter is dominated by opaque and centralized companies promising that the data you share through their applications is safe. Is it? of course, it is not. Blizzard has been hacked, Riot Games has been hacked, the Playstation Network has been hacked, Fortnite, EA, … mostly everybody.
Using the blockchain technology in the gaming industry would avoid such massive hacks thanks to data encryption, data decentralization and the actual absence of the need that each user shares his personal information with game publishers/platforms. Paying with cryptos means they don’t need your name and address anymore, think about that.
As a game developer, you may want to make some information unforgeable and accessible to anyone. You may also want to allow your users to converse while guarantying their total privacy. Both will be easy to implement thanks to the blockchain technology.
2. Assets Ownership (NFTs)
Probably the most awaited and also the closest to mainstream adoption in the list. Assets ownership is now a huge topic in the video game industry. Some games, like Eve Online, Second Life or Entropia, involve assets like homes, lands, ships or even planets that are sometimes traded for millions of dollars. Unfortunately, those assets are ultimately the property of the company owning the game. This fact leads to awful situations, like when Eve Online seized $620 000 worth of virtual assets because they didn’t like the gambling aspect of how they were earned.
With the advent of gigantic open worlds and virtual reality, the virtual economy pledges to a bright future if something is done to guaranty that crafted or purchased assets can be owned the same way as cryptocurrencies: with a personal wallet protected by a private key. Your keys, your assets, not your keys, not your assets… And there is not that many gamers or game developers to convince about the merits of such a concept. A recent study showed that 68% of gamers feel “they deserve to truly own the items they buy” and 66% of game developers said “virtual items are a pivotal component of their game’s monetization strategy and item value is being suppressed by unnecessary publisher control”.
We are on the right path though. For a few months now, Non-Fungible Tokens (NFT) are in the spotlight. The hype really started with CryptoKitties a year ago, but you can now play to a lot of decent games that use the blockchain to provide true ownership of 100% unforgeable assets. EOS Knights is an RPG game running on mobile and desktop computers which registers all player actions on the EOS network. It is currently quite popular because the game is funny, fast (which is still unusual for a full-blown blockchain game) and also because you can earn EOS by playing it well. Gods Unchained is a collectible card game similar to Hearthstone, ESL, Arena, etc. The difference between Gods Unchained and the “traditional” digital card games is that your cards are NFTs, so there is 1 Mythic Titan and if you get it the blockchain seals the deal and prove your ownership: no one can steal it from you, ban your account or anything preventing you to access this card. There are many more examples but you get the idea.
3. Free and Globalized Market
Asset ownership is a thing, but to complete the dream of any gamer, one should be able to freely buy and sell video game assets on a globalized market. It is not only convenient for those who want to earn money for the time they spent in-game, but also for more casual players who invested in a game by buying various items and would like their cash back in order to invest in another game. Also, the advent of a free market for video game assets would put an end to that hostile attitude big companies currently have toward second-hand markets.
This is also a very important change that will occur with cryptocurrencies being integrated into video games. Using tokens allow developers to reward players depending on their actions. While it is always possible to use centralized tokens (like the V-Bucks of Fortnite that you could cash out), crypto-tokens ensure that every transaction is definitive and every account untouchable. The possibility to audit the ledger is a guarantee of transparency as well as a convenient proof of users reputation for any work token based ecosystem.
5. Reduced Fees
Working with the blockchain at the core of your infrastructure allows you to automate many sensible operations thanks to smart-contracts. The more autonomous is your application, the less costly it is for devs and players. Win-win!
How gaming will adopt the blockchain
So far we’ve seen some examples of games that integrate the blockchain but no example of applications that allow several of the mechanisms suggested above. Here are three examples of promising projects that tackle the topic from various perspectives.
Peer-to-peer extension of the Opskins second-hand Counter-Strike skins marketplace, Wax is kind of a wallet for NFTs with various security options. It allows players to trade their crypto-assets without having to specifically go on each marketplace of the games they play. For now, there are not many tokens available (Cryptokitties, EtherBots, FishBanks, CryptoBarons) and the solution lacks a more handy app, but it is a step in the right direction for the trading of gaming assets.
Ultra is basically a Steam competitor in the decentralized world: they are building a gaming platform by combining 1) proved gaming development (SDK) and distribution technologies used by Zenimax, Bandai or Adobe with 2) the EOS software for the decentralized infrastructure. About the “proved gaming development and distribution technologies” part, we can trust the team which is composed by some big names in the video game industry: Mike Dunn (CTO) was CTO @ Dell and Time Warner and is also a member of the W3C. Edward Moalem (CSO) was Senior Director/Manager @ Apple and Google, Chris Saad (Acting Head of Product) was Head of Product @ Uber, Christian Rizea (Project Manager) was a game producer @ Ubisoft, Microsoft and Bandai Namco. About the EOS part, they already partnered with some big BPs of the mainnet to build a secure and efficient autonomous blockchain.
As it is still under development, we only have limited information about how exactly things will work out of the box, but we know for sure that it is going to be a community platform allowing developers to build and distribute small to AAA games, and players to interact in many ways, create and curate content. There will be a market for tokens (NFT or not) and the possibility to trade in-game as well as on the platform. The fees for developers are planned to be super light and gamers will be able to earn tokens by accomplishing various tasks like referring friends, participating in beta tests and market studies, watching ads, curating games, etc.
Blockchain games and applications are the current main constituents of a blooming field that will decentralize the video game industry and allow what every gamer has always dreamed of. In the near future, living off gaming will not be restricted to a few anymore. Not only many more people will be paid for having fun, but useful tasks, accomplished by playing, will also be duly rewarded. As you may have understood, it is less a matter of why or how than a matter of when for gaming to adopt blockchain as a tool for developers and gamers to emancipate themselves from the economical constraints of the current distribution model.