The gaming industry is pretty colossal. It’s totally global, estimated to be worth upwards of $100 million, and only seems to be growing.
It’s also packed to the rafters with generally tech-savvy people, interested in communicating internationally and building virtual networks with the other 400 million or so people in the community.
But while blockchain is making headway in what seems like every other industry imaginable, it hasn’t played as big a role in the video gaming sector as you might think.
I mean, we’re living in a time when blockchain is being looked at by Wall Street firms and police forces, for crying out loud. Surely it should be making a much bigger impact in the world of video games, populated by people with a similar mindset.
The process might have been a bit slower than expected, but it looks like blockchain is finally gaining traction in the world of gaming.
Let’s take a look at how that’s happening.
Virtual Item Trading
The trading of virtual, in-game items like weapons and ‘skins’ (that modify the appearance of players and their tools) is the basis for a surprisingly big industry.
In fact, it’s not unusual for these items to sell for thousands of (real world) dollars at a time, as rarer items are seen to be more valuable. When players decide to quit a game, they can’t take their items with them. Often these items have a high in-game value, and have taken hours of e-toiling to obtain.
One way they can ensure their work wasn’t all in vain is by selling the items on to other players. The issue is, the systems for this are primitive and normally involve something like logging onto Reddit and hoping a potential customer stumbles upon your sale post.
There’s also the issue of trust between gamers, a high risk of scams, and the problem of having to pay extortionate currency conversion fees and transaction costs to send money across multiple international borders.
One solution that quite a few platforms are working on is using blockchain to build decentralized marketplaces. This allows for peer to peer trading where video gamers can trade items for cryptocurrency, removing worries about fees. Smart contracts help ensure security and minimize the risk of fraud, and everyone is happy.
By using tokens, it’s possible to give a real-world value to virtual items, and promote a whole new online market.
Betting on eSports
The eSports industry is huge, and is predicted to hit $696 million by the end of the year. It has a customer base larger than the population of the USA too, which definitely makes it an area to watch.
Basically, eSports involves competitions between people and teams in the setting of a game. League of Legends is one of the most popular arenas for eSports, and the market as a whole is expected to bring in a staggering $1.81 billion in revenue by 2020. It was only worth $24 million two years ago.
This enormous sector might not look like it needs much help, but there are a few problems that will only grow as the eSports market booms. For example, there’s a lot of concern around corruption and lack of efficiency.
Blockchain could help to massively reduce the corruption element, by allowing bets to take place on a peer-to-peer basis between players, without having to place their trust in a shady third party betting company.
Smart contracts will hold the funds in escrow until the competition is over, and then award the winnings to…the winners.
It’ll also help increase efficiency by removing the need for an intermediary party, and blockchain’s transparency will hopefully dramatically reduce foul play.
Virtual Real Estate
As we’ve seen in Georgia and Ukraine, governments are looking at blockchain as a way to verify property ownership and stop corruption in the housing market. Because blockchain is so transparent and tough to corrupt, it means records of who owns what are much more secure.
Now that’s all well and good with real, brick-and-mortar houses, but who the hell owns THOSE anymore!? Not many people, that’s for sure.
Fortunately, there are vast swathes of online real estate, rooted firmly in the virtual universes of games like Second Life. These are often the property of video gamers and, while they might not be quite as valuable as a real house, the owners have often worked hard for them.
Blockchain offers a way of securing these houses, using smart contracts and distributed ledgers to minimize the possibility of fraud and stop players being scammed. One online platform called Decentraland uses blockchain to manage ownership of the virtual property in-game.
Just like with virtual trading, blockchain is a really promising solution to the many problems faced by people who buy and sell digital assets. In the past, scams were frequent and there wasn’t much (legally speaking) that you could do if someone duped you out of a hard-earned item.
With blockchain, things are becoming a little more organized and a lot more secure.
Does blockchain belong in the world of video gaming, or is it a futile endeavor? Let us know your thoughts.