The techies in the gaming industry have always been the early adopters of technology and right now, they are excited about blockchains – now believed to be the world’s leading software platform for digital assets.
After being successfully applied in almost every field, like finance, agriculture and in geospatial areas, blockchain – the decentralised technology developed by an elusive Satoshi Nakamoto, is now making an entry into the gaming space as well. In fact, some believe that the gaming industry will be the first to see the next generation using blockchain technology.
The journey of the gaming industry
Since ancient times, games have been a part of human culture. Back then, games were limited to the real world. With the advances in technology, the era of video games began, followed by games on PCs and mobile phones.
These games were first limited to just one player or multiple players who were physically present with each other. But all this changed as game developers launched massively multi-player online (MMO) games, which involved competing with a large number of remote players on the same server. Now, these game developers are shifting their focus to blockchain technology.
A look at today’s gaming industry
The gaming industry has tremendous appeal for developers as well as the players and investors. However, the industry still has several pain points for both developers and players. Let’s get introduced to some of these so that we know how blockchain can resolve them.
The fear of losing precious digital assets: Players spend so much time and sometimes money to acquire their precious assets in the game but there is always a fear that they may lose these any day. This could occur because of several reasons such as the game creator going out of business or some central authority banning them from playing the game. This happens all the time as players do not own these digital assets, which reside on a centralised server.
The digital assets of one game have no value in another: Let’s suppose a player has spent a lot of time and money to obtain a sword, in one particular game. When he completes the game or just wants to move on to another one, he cannot use that sword in the new game as it never really belonged to him, even though he has spent time and money on acquiring it. He can no longer use this sword or even exchange it for something else in another game.
Separate servers for different regions: In the massively multi-player online role-playing games (MMORPG), separate servers are needed for different regions. In fact, many sub-servers are also required to form the whole system. So, even if there are only a few players, but they are from different regions, a large number of servers will be in use. Besides, if one server crashes, players from an entire large area will lose connectivity.
Micro-transactions are a myth: The ‘free-to-play’ games are entirely based on the strategy to offer early users low-cost items and then upgrade them, step by step, by luring them into spending what seems like almost negligible amounts of money, but which finally adds up to a large sum. For example, a game company may offer a sword for US$ 15 and then upgrade it to the next level at the rate of US$ 0.25. Game developers can add hundreds of upgraded features in this way, and players do not think too much about buying something worth US$ 0.25 at one time. Hence, many players buy the sword and keep updating it, at different stages of the game, without actually knowing how much they end up spending on it. But traditional payment methods do not allow these micro-transactions. Even payment channels like Paypal charge US$ 0.25 + 2.5 per cent of the transaction amount. Thereby, true micro-transactions are a myth in the gaming industry right now.
Developers lose money in customer support: The credit card companies, especially in western countries, are pretty good at protecting their customers’ rights. If you have any issues regarding a purchase on your card, you are free to raise a dispute and ask for your money back. In such cases, there is very little a game developer can do, since the credit card company rarely listens to them. Moreover, game developers must pay US$ 25 for every disputed transaction. Because of this, the gaming industry loses millions of dollars in customer support.
Blockchain to the rescue
Blockchain technology has the potential to end all these problems in the gaming world. The games based on blockchain technology will offer solutions for game developers as well as the players. There are infinite possibilities that a blockchain has to offer but, for starters, there are several benefits that no one can ignore. Here are some of them.
True ownership of virtual assets: In blockchain games, the virtual assets of the player will belong to the player and the creators cannot take them away. These virtual assets may be stored in the form of tokens in the player’s digital wallet. These tokens can be fungible (replaceable by another identical item) or even non-fungible. With blockchain games, the players will not have to worry about losing their digital assets even if they get banned from the game, if the company shuts down or they quit the game.
Inter-game compatibility: As the characters, items or ‘karma’ of the games are stored on your blockchain, it will allow you to see your existing characters or items even on a completely unrelated game. It could open an era for a new type of game in which characters from separate game genres could play together in one game. In case you are building your own game, instead of building new characters, you can use assets of an existing game or invite players from the large game communities to instantly jump into your game with the characters they already have. This is one of the coolest features blockchain technology has to offer in the gaming industry.
Uniformity in the virtual assets of different games: The design of blockchain games is fundamentally different from that of traditional games. It does not allow the in-game currency to get generated infinitely. Currently, in some games, while gold coins can be generated by just killing some monster, in others, they might be a scarce resource. Blockchain will end this infinite generation of coins in some games.
No Need for sub-servers: The blockchain technology in the MMORPG will end the need to have different servers or even sub-servers for a different region. Hence there will be no blackout in a particular region due to the failure of local servers.
Cheap and secured trading of virtual assets: Blockchain will allow users to convert their virtual assets into a token, making these free for buying, selling and trading, at the will of the owner. The record of the transaction will be on the blockchain itself, eliminating the threat of fraudulent activities. The game characters, items, etc, can be managed through smart contracts as has been done in Cryptokitties – a blockchain game that has created much hype in the blockchain industry. Blockchain technology even has the potential to offer micro-transactions involving the cryptocurrency
Cases of early blockchain based gaming
Realising the potential of blockchain technology in the next generation of online games, some developers have already started using it. Successful projects range from blockchain game development platforms to innovative payment gateways to buy games. While some of these blockchain based games are already in the market, some others are in their beta phase and some have raised funding through the process of Initial Coin Offering (ICO). Every project has different aims but all of them together hold much promise to build the future of gaming.
Blockchain games in the market
There are several blockchain based games available in the market. Many of them are built on top of the Ethereum blockchain, with Cryptokitties being the most well known. This game uses ERC 721 tokens which are non-fungible, indivisible and unique. It uses smart contracts for ownership and for the distribution of virtual cats. This is considered as the first non-financial application of blockchain technology.
Other blockchain games that are available in the market are Ethermons, Cryptopets, Cryptopuppies, Etherarmy, etc. Ethereum is not the only blockchain to attract game developers. A blockchain game called Spell of Genesis is built on the Bitcoin blockchain.
Payment systems for games
There are several blockchain based platforms which have been built that offer users the option to sell, buy and promote online games. Some of these are GameCredits, Enjincoin and Refereum. Some gaming corporations like Valve are even allowing users to buy games using Bitcoins.
Platforms for building blockchain based games
Platforms for building blockchain based games promise to offer all the new features that we just discussed. They aim to simplify the ownership, sharing and trading of virtual assets. Such platforms like BitGuild and Chimaera are expected to get launched this year. There are several other platforms like Decentraland and Voxels which are offering a virtual space for blockchain based 3D graphics and games.
From the tokenisation of virtual goods to improving betting and payments, every area of gaming is undergoing experimentation using blockchain technology. While this technology has a lot to offer, there is an issue of speed, especially when we talk about MMORPG. At present, there is a blockchain based MMORPG, but it is still in its beta version.
The author is the Editor-in-Chief of Open Source For You magazine.