Most people are by now aware of the basics of blockchain and how it is associated with Bitcoin (if this is new to you, start by going through this article to catch up first). However, very few people know that a blockchain can have many other uses – one of which is in gaming. Games that are built on top of public blockchains are already promising and have the potential to disrupt the entire gaming industry.
The problem with today’s trends
The video game industry is one of the most popular industries in the world and is showing strong growth each year. According to the revised Newzoo research, the global gaming market was predicted to be worth US$134.9 billion in 2018 (to compare, another fast growing tech industry, IoT was worth US$190 billion in the same year). The largest sector within gaming is mobile gaming, estimated to be worth US$63.2 billion, 47% of the global games market. Newzoo’s predictions suggest that by 2021, the total gaming industry will be worth US$174 billion, with 43% of this being in mobile gaming, and 9% tablet.
A report from Activision Blizzard Media and Newzoo, Betting on Billions: Unlocking the Power of Mobile Gamers predicted that 2.4 billion people around the world will play mobile games in 2019. That figure represents about one third of the world’s population. To compare, according to Statista, the number of smartphone users in the world in 2019 is 3.3 billion, and the number of social media users in the same year is 2.77 billion. Which means that even though the common saying “everyone is gaming” is not entirely true, it is definitely not too far from reality.
Despite this growth and popularity, the gaming industry still suffers – maybe now more than ever – from a number of deficiencies and shortcomings that leave both consumers and the producers unfulfilled and dissatisfied. One of the many problems is that current trends in video games are leaning away from the Triple A masterpieces to “freemium” pay-to-win mobile games instead.
These games are designed to be addictive and get as much money from the players as possible – while keeping the illusion that the game is actually free which raises serious ethical issues. These types of games are never fun if the player refuses to carry out the in-game purchases, and the only way to get ahead is by doing so – which means that essentially, the one with the deepest pockets will win.
In parallel with the mobile gaming, PC and console game development is also regressing: they are marketing and selling unfinished and incomplete games, and the industry is becoming increasingly tolerant towards this. The idea is that the not yet finished, core components of the games are added later as downloadable content for additional payment. While on the other side, developers earn profit with these unfinished games, and once acquired enough money, they abandon the project, leaving the game in this incomplete state, to search for the next project. Meanwhile, because aggressive marketing is winning over quality, independent developers are getting the short end of the stick: no matter the quality of work, they get paid below the minimum.
Hence, it is not surprising that game development is becoming increasingly centralized to the biggest forces in the market. Today’s video game industry is dominated by certain Triple A companies that develop and push out expensive, frustrating and unrewarding games – for the above-mentioned billions of gamers. One can only guess how this will end – unless a disruptive idea comes around.
The solution – blockchain
A disruptive idea, you say? – Luckily, some have already thought of that and discovered that blockchain could provide solutions to the distress in the global gaming industry. And after the first notable blockchain-based games, such as Huntercoin, now more and more games are developed and put on the blockchain.
What exactly are blockchain games and why could they be a solution? Simply put, Blockchain games are basically games that include blockchain technology in its backend or mechanics in general. Those who need more clarification or are simply interested, I recommend reading Adrian Bridgwater’s article: How Blockchain Works In Video Games.
As opposed to traditional gaming platforms, blockchain creates closed loops in terms of development and no one from the outside can build a different version of the game, no one other than the developer is able to see the core logic or use the existing data. In the blockchain, most of this core logic and data is governed by smart contracts, and can therefore be analysed and reused.
Game currencies (which are either the games’ own tokens or an existing token such as Ether in case of Ethereum), avatars, gameplay inputs, even entire games can be put on and secured by the blockchain. When properly executed, introducing blockchain into online games means that players can interact with each other and play the games in a manner that has never been possible before, for example, by providing possibilities for community governance through the blockchain technology. On the other side, developers can formulate new genres of games, by taking advantage of and exercising gameplay elements unique to blockchain gaming.
Most importantly, contrary to the centralization of the traditional gaming industry, blockchain games are decentralized – which could potentially make this type of gaming and game development the real solution to most of the problems mentioned above.
Instead of living in a server that is centrally controlled, like traditional games, blockchain game assets are distributed on the blockchain, among ‘players’ – thus, blockchain games are now starting a whole new era in the gaming industry.
The core concept and the terminology
Before we delve into the benefits and obstacles of blockchain games, it is important to get familiar with the core concept and the terminology.
First of all, one has to know the difference between a cryptocurrency game and a blockchain game. A cryptocurrency game represents any video game that, in some capacity, incorporates crypto assets, while a blockchain game is a game in which some or all of the gameplay takes place directly on the blockchain. To live with the widely used formula: Every blockchain game is also a crypto game, however, not all crypto games are blockchain games.
Basically, in a blockchain game, gameplay inputs and activity look like transactions broadcasted by players onto the network. If 100% of these game actions exist on the blockchain, we are talking about a “true” blockchain game, where the game world runs without a centralized server, technically serverless, on the network (the blockchain) itself. These “true” blockchain games are the ones that have the potential to be the leaders of the paradigm shift in the gaming industry as a whole.
The other important thing, a core element of blockchain games one has to understand is what the term decentralization means in this particular case. Because of decentralization, anyone has the opportunity to analyse the code used in these “true” blockchain games, which leads to transparency and makes players and creators a team, allies. No one person is able to control the outcomes of the game. If a developer attempts to complete an update that is not supported by the community, the game can be forked, and different versions can be built. This moves blockchain gaming even more towards the direction of revolutionizing the whole gaming industry, since – speaking from personal experience – it is often times a huge problem with Triple A’s that they focus so much on the profit that they forget listening to what their audience has to say.
The benefits of blockchain gaming – for gamers
First and foremost, one of the main characteristics of blockchain gaming is that it is empowering, as it empowers players to improve their experience. The following list is some of the other main benefits players have the opportunity to enjoy through blockchain gaming.
- Provably fair gameplay
Who likes hackers, cheaters or faulty gameplay? I am pretty sure that no one would raise their hands. Cheating competitors (or even outside of comp, cheating gamers in general), or times when the game does not run the way it is supposed to, completely ruins the experience for everyone. I personally, have gotten penalized for leaving a comp match early, when in fact what happened is that the game simply through me out – it did not matter and there was no way for me to get back the points I have lost because of that. And even though I do not believe I have met any cheaters while playing, if nothing else, everyone has at least seen videos of surprisingly good aiming – where there was no doubt that the player had a little help from his friend, the aimbot. This is where blockchain comes in: blockchain gaming enables a quality of “provably fair gameplay”. By placing a game on the blockchain, the developer shares the game logic and gameplay elements as well, and the consensus mechanism for securing the network simultaneously also secures the game.
This essentially makes cheating and hacking impossible: if a player’s (hacker’s, cheater’s, etc.) moves contradict the game logic, the activity is rejected by the network. It also makes for game transparency: let’s say a game chest is said have a 20% chance it will reveal a rare item, players can trust that the possibility of getting a rare item is, in fact, 20% – when in doubt, any player can look at the game logic published on the chain.
- Real-World Ownership
Any and all items and elements in the game can be placed on the blockchain, and any entity, such as rare items, hard-to-find resources, characters, literally anything can exist as a crypto asset. These crypto assets are typically fungible tokens (some form of game currency) or non-fungible token (items and avatars) on a blockchain network. When these are placed on the blockchain and the items or accounts are linked to the players’ wallets, all the loot collected and currency accumulated can be sent to the wallets as achieving them. You will see the further benefits of this in the following points.
- Play-to-earn gaming
Remember when I depicted the problems in the gaming industry, and stated that it is shifting towards pay-to-win games? The good news is, blockchain games turn this upside down. Thanks to the real-world ownership mentioned above, players have the ability to sell their assets on open markets to other players for real-world profits. So, while in the pay-to-win model, the highest ranked players would need to spend a ton of money on the game, on the contrary, in the play-to-earn model that blockchain makes possible, the best, highest ranked players instead have the possibility to actually earn a ton of money. Also, imagine if you could buy your favourite players’ weapons or skins that they used during a competition – amazing, isn’t it? These items could sell for so much it opens a lot of gates, even gamers’ involvement in charity auctions, for example.
- Cross-game communication
Have you ever felt the emptiness when finishing a game, or the disappointment and sadness when the developers pull the plug on a game or a community dies out, so you have no choice but to stop playing the game? A part of this feeling is there because you have to leave your beloved characters, and your whole inventory behind, find the next game and start from scratch. What if I told you that blockchain games change this too? You would think I’m lying but I’m not.
While in traditional gaming, where games exist in independent universes and there is no continuity or connection between different games, with blockchain, this is also radically disrupted: game assets that exist on the blockchain can communicate with any other environment on the same blockchain. So, if a developer makes a sequel to your favourite game, you don’t need to leave your items behind: you can take them with you to the second game. Or to a different game on the same blockchain, if the two games support each other.
Yes, this means that you could potentially take your favourite lucky weapon and use it in another game with no trouble! (Don’t worry, it will not cause chaos: if the two games support each other, the weapon will fit just right into both of them by having designated damage points for each.) Even more exciting is that quests or events can jump across games. One can only imagine the possibilities this cross-functionality will bring to the table.
The benefits of blockchain gaming – for developers
We must not forget about the other side of the community, without whom, the whole gaming industry would not exist: the developers. If blockchain gaming brings no benefits to this side of the gaming ecosystem, the new concept certainly would not be successful and popular in the long run. However, the fact is that there are a range of advantages for this side too.
- Emerging market
A big obstacle for individual developers and small studios is that it is hard to stand out with a game, grab the attention of the audience and create a community around a game. Developing blockchain games can be an opportunity to do so, as blockchain gaming is still in its infancy. Many traditional game studios experiment with it and see potential, but someone has yet to make the breakthrough and create the first major blockchain game that captures the attention of the general gaming population. The pioneers who will get there will be well rewarded.
- Cost reduction
The industry of game development is characterized by low payout, where the associating costs such as the burden of publishing, server upkeep or player moderation can be enormous and have the potential to undermine projects that were in fact very promising to begin with. Blockchain games turn this around as well, since building games on the blockchain means that all of these costs can be outsourced to the miners or validators. Technically, there is potential for it to be a zero-cost operation to publish these games online.
- Enhanced playerbase
The existing and potential future blockchain gaming community consists of players that have an elevated interest in their gameplay, and even heightened attention in seeking profits through such play. They are more immersed and have far more resources and investment with regards to their gaming. This can create a special, active and extremely beneficial relationship between developers and players – something that could not be done through traditional gaming.
Limits and obstacles
Reading all this, it is almost too good to be true. Suddenly, here is this magic blockchain that will solve all the problems in the industry? Well, to be honest, while blockchain gaming has a lot of potential, as of now, it still has certain limitations and obstacles it needs to overcome.
One of these is lack of talent, as the blockchain gaming ecosystem is so new, it currently lacks professional gamers as well as companies that focus on developing blockchain games. While there are a few that do, it is important to see that this type of development needs professionals who understand both gaming and blockchain. This pool is very limited at the moment, but as the problems in the industry grow, and blockchain is conquering more and more areas, this is most likely going to change.
Another clear problem is scalability, as well as sustainability and the actual usefulness of current blockchain-based games. At the moment, there is an overall lack of sustainability surrounding blockchain-based games as gas costs on Ethereum (the most popular asset used in blockchain games) can be extremely high during times of network congestion. When talking about usefulness, the fact is that the current scope of games that can be created on a blockchain network is very limited currently, mostly because of the slow network speed. However, this is also not a long-term problem: some projects, such as Decentreland are already focusing on creating three-dimensional worlds.
After analysing the benefits and the state of blockchain gaming as of today, I dare to state that this phenomenon has the potential to transform the whole industry. This intersection of blockchain technology and gaming is already promising, and it just keeps developing and more and more ambitious projects are in the pipeline. The possibilities are endless, so it will depend on the developers and the gaming community how far they will take this and what amazing solutions and games they come up with. As the obstacles are getting demolished, blockchain games may turn the current state of gaming upside down.
What legal implications, such as potential gambling issues, intellectual property, patent, liability or any other issues could arise around blockchain gaming is a subject of a next article, but I can promise you it will bring up some interesting questions.
