Since the emergence of technology, the game industry, especially video games, was developed in the late 20th Century then went on to attract people worldwide. Also, players started to have a lot of fun and enjoyment mutually with their friends and large online communities. The game industry was and still has the potential to attract new users by offering a better experience in every single day.
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Blockchain technology being one of the trending concepts which also has been making a lot of waves in various industries, The gaming industry not being an exception. Thus, also started to have interest on this unique technology which offers players asset ownership, transparency, engagement with community, and others. Therefore, decentralized and transparent nature of blockchain technology has been seen to have the potential to restructure and reorganize the gaming industry by providing new opportunities for gamers and developers alike. This article is aimed at exploring and revealing the potential impact of blockchain technology on the gaming industry, The benefits, Limitations, Role, and future of Blockchain technology in gaming, The gaming market and economy.
The Gaming Market and Economy
From the below points about to be highlighted it is vivid that the gaming sector is booming and burgeoning. As technology improves so will gaming products, video content, virtual reality, and video game tournaments thrive. These are just part of the means the gaming industry is turning into a reoccurring profit template and maximizing on increased demand. According to Newzoo’s Global Games Market Report, 2.3 billion gamers from around the world spent around $138 billion on games in 2018. This figure represents a 13% increase from the previous year, or an extra $16.2 billion. Consumers spending on games grew to $180.1 billion by 2021, a Compound Annual Growth Rate of +10.3% between 2017 and 2021. Newzoo also reported that Nearly 3.2 billion people played games in 2022, spending a combined total $196.8 billion with their forecasts showing that the market will be growing in that dimension in this year being 2023 till even 2025.
The gaming industry is consistently being transformed by the introduction of new technologies such as AI, VR, and AR. Blockchain technology has the potential to restructure the future of gaming by revolutionizing what has been known to be a leisure activity into a potentially economic venture. Based on an online survey of 5000 people released by Electronic Entertainment Design and Research in 2018, showed that nearly 70% of the American population, or roughly 211 million people, play video games on at least one type of device. The results showed that 90% of those surveyed play games on their smartphones, tablets, or both. The study also found that U.S. gamers spend an at least average of 12 hour per week on video games. Video game engagement continues to expand and that could mean a very big revenue for the gaming industry.
Irrespective of the encouraging appearance of the gaming industry, large sums of money are constantly lost to unrealized returns. Based on 2015 research conducted by Apsalar (a mobile marketing cloud company), for every legitimate virtual item sold and downloaded, there were 7.5 virtual items downloads lost to scams. This number was much greater in countries like China where there were 273 fraudulent virtual items downloaded for every legitimate one. Furthermore, fraudulent in-app purchases allow some players to gain an unfair advantage. This corrupts the economics of the game and ruins the experience for other players. Attack techniques encountered by mobile gaming apps industry are rapidly evolving to elude existing sensing methods. There is a real cost associated with lost virtual goods, and significant negative impact on both user growth and gaming industry profits.
The Role of Blockchain Technology in Gaming
Blockchain technology can be used in gaming in various ways. One of the most remarkable ways is through the creation of non-fungible tokens (NFTs). NFTs are unique digital assets that can be bought, sold, and traded like physical assets. In gaming, NFTs can be used to represent in-game items, such as weapons, skins, and other virtual goods. This allows gamers to truly own their in-game items and even sell them for real money.
Another way blockchain technology can be used in gaming is through the creation of decentralized marketplaces. These marketplaces allow gamers to buy and sell in-game items without the need for a centralized authority. This creates a more transparent and fair system for gamers, as they can see the true value of their items and sell them at a fair price.
The paradigm shift from traditional to blockchain game development needs a raring concentration on the economy. A sustainable economy could be possible in the game if the users are integrating more assets than the game pays out. The development stage of the game involves support from gamers and the community. More so, compared to traditional games, blockchain games have a game funding method to encourage small investors to venture into their projects with promise for assets or coins in return.
The Benefits of Blockchain Technology in Gaming
The use of blockchain technology in gaming provides several benefits for both gamers and developers. Gamers were among the early embracers of cryptocurrencies as they were already used to in-game virtual currency templates and understood the importance of integrating cryptocurrency networks into the domain.
Blockchain can transform the gaming industry in the following ways:
- Full control of virtual assets: It is no longer a secret that gamers don’t actually own their purchased virtual assets (games) and they are not allowed to buy, sell, or trade assets outside of the game. This is because gaming companies often store in-game assets on centralized servers to protect assets from being tampered with or duplicated. Blockchain technology allows full transparency and decentralized control of virtual assets, which enables gamers to have ownership of their virtual assets and trade these assets with other gamers without restrictions.
- Rewards users’ interaction with video games: One unique thing about Blockchain is its ability to reward users for making use of the platform. Therefore, Blockchain-based games enables players to earn tokens for playing, reviewing, or sharing games on social media.
- Credibility and accountability Increase: Due to the use of a peer-to-peer network which is an immutable ledger that records all transactions, including gamers’ interactions, player history, and trading of in-game items, and allowing players to use their account across multiple games services. These records which are publicly available, therefore encourages players’ good behavior within the community and promoting transparency within the gaming ecosystem.
- Improves security to minimize fraud: This is the solution the problem on the research conducted by Apsalar. In the past, expensive virtual games were often copied by fraudsters and resold, making these games neither unique nor valuable. Blockchain technology creates an immutable, encrypted ledger of a virtual asset and to whom it belongs to, making duplicating, hacking, and stealing keys impossible.
- Anticipates transparent and faster payments: Blockchain anticipates a safe environment for players to make their purchases more rapid, while ensuring their payments are secure. The technology enables developers to process nano-payments rapidly there by eliminating the need for credit or debit card companies.
- Improving User experience with Smart contracts: Blockchain technology provides a better option of storing data generated in games in digital assets form. The technology will make it possible for the gaming companies to put their terms and conditions fortified via smart contracts, to join hands and create parallel gaming universes.
- Enables unrestricted gaming economies: Blockchain technology provides unrestricted gaming economies and does not require strict inspection. The technology enables developers to collect ongoing eminence for items on trade across the gaming industry. Developers can decide whether to allow the trading of items with no restrictions or to stop the selling of the assets.
- Enables creation of limited supply and asset scarcity: it is possible for a game developer to create a rare virtual asset or to customize certain assets such as armors, swords, and other in-game cosmetics to make them more valuable using Blockchain technology.
- Democratizes the gaming industry. Voting is somewhat popular within online gaming community. The current methods of corruption and manipulating of votes lead to unreliable feedback from the voting system. Thus, Blockchain has the potential to democratize voting in games featuring a decentralized smart contract that makes it difficult to meddle with the voting system.
Limitations of Blockchain Gaming
Blockchain gaming has been known to have the following hurdles:
- Scalability: Scalability has been a significant issue legitimately hindering the development of many blockchain games at this point.
- Sustainability. Recently there is an overall lack of sustainability for blockchain based games. There is significant lack of users for blockchain games and decentralized asset exchanges.
The Future of Blockchain Technology in Gaming
The potential impact of blockchain technology on the gaming industry is significant. As more developers and gamers adopt blockchain technology, we can expect to see more innovative use cases for it in gaming. From creating new revenue streams for developers to providing a more transparent and fair system for gamers, blockchain technology has the potential to revolutionize the gaming industry.
Conclusion
Blockchain technology has the potential to transform the gaming industry by providing new opportunities for gamers and developers alike. The use of NFTs and decentralized marketplaces can create a more transparent and fair system for buying and selling in-game items. It also allows gamers to truly own their in-game items and even make money from them. For developers, blockchain technology provides a new way to monetize their games. By creating NFTs for in-game items, developers can create a new revenue stream for their games. It has also been noticed that blockchain technology also provides a more secure platform devoid of fraud, hacks and unauthorized duplication.
Author: Alvano Da Silva
Medium: https://medium.com/@chrisbobby310
Discord: AlvanoDaSilva#7127
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