Does Blockchain Have a Role in Gaming?

By December 7, 2017Blog

Guest post: Alex Migitko, COO, GameCredits

Blockchain is becoming increasingly present in the gaming industry, but more as a concept than a tangible solution. That’s understandable because the technology is fairly new and I’m confident that blockchain will find its place in this industry, which has always been known for fast adoption and innovation.

What you can see so far are roadmaps and plans detailing how blockchain can be implemented in gaming. But in terms of actual use, there aren’t many companies that can show off a viable product. Most of these projects are still works in progress.

Is Gaming Ready for Wider Adoption of Blockchain?

I might be a bit of an idealist, but in my opinion blockchain is a much-awaited disrupting factor in an industry that has started to neglect its fundamental elements: gamers and the game itself.

Let me expand on this a bit further.

There are some inherent inequities that aren’t only limited to the gaming industry. For decades, there have been a few big players dominating the market, overshadowing the many independent developers who have struggled to compete with them. But that’s not the issue I want to raise here.

Being on the forefront of the IT industry, gaming companies have always been among the first to adopt new technologies. That has always been beneficial to the end user.

But in recent years, being in a state of constant development has brought about changes regarding business models and monetization. The late 2000s saw an expansion of the ‘free-to-play’ model, which led more mainstream publishers to move away from traditional subscription-based models. While this worked well for some games, it also raised a whole variety of new issues.

Making games free to some extent has meant that publishers need to rely on in-game purchases to drive revenue. This has proven to be difficult to balance, and in the past few years there have been cases of reputable companies being criticized for putting their budgets first and consumers second.

This is how the term ‘pay-to-win’ was coined. Many gamers now complain that the only way to get good at a particular game is to pay for otherwise unattainable items. Success depends on the amount of money you are willing to spend through microtransactions and in-app purchases, not on your skill level.

The other force driving change in the gaming industry is the popularization of eSports. This ever-growing segment has become practically an industry on its own, with eSports now generating millions in revenue. Given that its profits and popularity keep increasing, it’s evident that this is just the beginning.

This is where blockchain technology can play a pivotal role.

Using blockchain, developers will be able to introduce competitive gameplay to almost any game on every platform. This will add a whole new appeal for consumers, and will help level the playing field.

The adoption of this model will mean that more players can participate and compete – not just a selected few, as is the case currently with eSports events. In this case, blockchain offers security, transparency and a simpler transaction process by eliminating third-party entities.

Moreover, the introduction of competitive gameplay will create a more engaged community of eSports fans, who will be able to easily view – and even interact with – competitions.

Can blockchain resolve the issue of digital goods ownership?

Whenever there’s talk about blockchain and gaming, digital goods ownership almost always become the focal point of the discussion. Since there’s no real solution on the market, I can only offer my opinion, which reflects my status as someone who has been working in the gaming industry for the past 10 years.

From one perspective it sounds like a great solution that every item you own in a particular game actually belongs to you. That creates the possibility of using that same item in other games published by the same company. Moreover, this provides a chance to regulate the trading process of in-game items and make trading possible even outside the game. For many, this is the best use case for blockchain as a technology and cryptocurrency as its byproduct. But my personal stance is a bit different.

While this may sound like an easy solution to a problem that has been plaguing gamers for many years now, it raises more concerns for game developers.

Ultimately, this is a choice that game developers and game publishers will be making, and from their point of view it isn’t such a seamless solution. Creating the in-game economy is a very difficult task as it is. There are numerous variables that influence the decision-making process, and even the biggest gaming companies have made determinantal mistakes in the past.

By liberalizing the whole in-game economy and allowing your items and currency to be used outside your game, you will also lose any control you once had over the situation. Everything that engineers, designers and developers worked hard on creating can be changed by external factors that are now beyond their control. That is a significant problem that needs to be addressed before any progress can be made in that direction.

Conclusion

Everyone at GameCredits strongly believes in the open-source approach, especially when it comes to emerging technologies. In order for blockchain to evolve and reach mass adoption across different industries, more companies need to get behind the technology in a mutual effort. There’s a wealth of accumulated knowledge between all Hyperledger members. GameCredits will look to incorporate existing know-how and use it to make further progress with our gaming products.