informa
8 min read
Blogs

Blockchain – The Game Changer in the Gaming Industry

Blockchain has been revolutionising many industries across the world and Gaming has already jumped on the bandwagon. Now the trend is Blockchain Gaming. The present article is a detailed account of the next big thing in the gaming industry and the way it

This article is originally published in Avakai Games’ Blog.

12 May, 2017- the cyber world was aghast at the ambush of WannaCry ransomware. Not a couple of hundreds, but more than 300,000 computers across the world were infected by the virus. Okay, for us here, the four-day attack was a different story. But we should talk about the aftermaths!

Everyone knows about the cryptocurrency saga started right after the ransomware attacks. Especially, Bitcoins! This first decentralized digital currency was proposed in 2009 itself. However, it went popular, as we know it today, only after the Wannacry attacks. The building block of this cryptocurrency, Blockchain technology, opened an all new way of digital transactions.

So here, Blockchain is our protagonist that has been revolutionizing many industries across the world and Gaming has already jumped on the bandwagon. And you know what’s cooking in our gaming world? It’s Blockchain Gaming! So here, let’s delve into the nitty-gritty of this brand new trend.

The Inception of Blockchain Gaming

The entire gaming industry is running on two P’s: Play and Pay, isn’t it? Okay, let’s recount the way the industry survived for decades so far.

It all started with arcade games that accept tokens from players and allow them to play a certain number of games. The players have to buy those tokens from a counter in the gamezone. And that is how the pay and play business model works. This model is akin to network cafes where players pay for the time they spend playing games.

And then enter game consoles like Xbox. This thing just bypasses all the hectic things like buying tokens and counting the clock. Players can have fun from the comfort of their couch. And the business model? Well, we get to buy the games before we derive an unlimited fun.

The user base for network cafes and game consoles are increasing rapidly. On the other hand, the revenue publishers and developers make is not in line with the player count. Yes, the industry has been suffering from the pirate fever.

Though the end-user ends up paying for the game, the money is not going into the pocket of the publisher, but someone who had no rights on the game content. And it is the biggest threat the industry faces. This has to be checked, doesn’t it?

So, could our guys come up with any plan?

Yeah, they could.

The size of game equipment got much thinner in all these years. Now we download games on our smart gadgets from app stores. From the millions of games available on these stores, there are games that we still require to pay to play. But the larger slice of the pie goes to games that are free to play. Yes, games have become free to play for us. So, there is no need look for pirated versions and compromise with quality and security.

But they need revenue also, don’t they? The publishers are smart enough to conceive business models that would fill their money bags. The in-app purchases and ads shown in the game are there for the same reason.

Well, with one example, let’s make the free-to-play model clear for you. When we have Candy Crush Saga, why going with any other game?

The Case of Candy Crush Saga

The thing is simple - let your game make as many people insomniac as possible. For that, you have to build it with excellence in every inch of it, don’t you? The animations in the game should be juicy. The sound effects should refrain the players taking off their headphones. And the gameplay! It should keep a tight grip on the player.

King kept each of these points in mind and built Candy Crush Saga. By the time this article is written, the game is downloaded for more than 2.3 billion times. The game is free for play. So, everyone with a smartphone in hand tasted the delicious candies. From a piece of news from VentureBeat, King reported a revenue of $250 million in the third quarter of 2017, an upsurge by 97% from 2016.

And how could they make this fortune? Just take a look at the screenshot below and you would get to know what King sells on Candy Crush Saga.

https://prnt.sc/jby1fc

Yes, they are leveraging game itemization. You can see the price list of in-app purchases over there in the image. And most of the players, who are already neck-deep in love with the game, have no second thought for making purchases. Simply, they are immersed in pay and play.

Not just Candy Crush Saga, you can find plethora of examples that feast on the tendency of players to make in-app purchases. Ads add an extra cheese, of course. And this scenario in the gaming industry rises curtains for the inception of Blockchain Gaming.

How Blockchain Changes the Face of Gaming?

Why do we look for alternatives? 
Either there are problems prevailing with the existing solution or something could be done better. And sometimes, both.

Okay, let’s see if there is anything of that sort with the existing models in the gaming industry.

Rebuilding Credibility

Gambling is not something invented a decade or so ago. For centuries, gambling has been a part of many cultures and civilizations. With the days passing, gambling too grew bigger, from streets to casinos. Years later, it also entered the digital space just as any other discipline did. And the size of online gambling is estimated to be a $60 billion by 2020. 

However, the hunger of fraudsters remained same. With online casinos, chances are: the game developers could tamper the odds of winning, bonuses, and the symbols. Definitely, this is something that has a great deal to do with the credibility of online casinos, isn’t it?

Same is the case with Loot boxes, also called Gacha model. There is an opaqueness with these models like there are some mean publishers who often change some lines of the code for these loot boxes. This definitely an alarming situation when the factor of credibility concerned.

When the industry is looking for a solution to to tackle these issues and retain the trust of players, Blockchain appeared as a concrete solution as data once stored on the decentralized servers cannot be tampered.

Game Itemization Made Simple

With the example of Candy Crush Saga, we have shown already told you how big the size of in-app purchase market. When a player gets addicted to a magnificent game, he/she show a tendency to invest on the game items. Thus, game itemization brings a bang for the bucks of a publisher.

So far so good. But this model too has some . First off, the purchase goes through a bank ecosystem or an app store, or a third-party in-app payment providers. Secondly, the players who spend their money on the game items can use them in the game ecosystem only. Having this said, those intangible items which are bought using fiat currency would be worthless anywhere other than the game environment. However, there grey markets that would allow the players to trade their items to other players.

Of course, one size may not fit all. But blockchain is enough to tackle both the problems prevailing in game itemization.

Let’s bring cryptocurrency into the picture. We already heard numerous stories of these virtual currencies like Bitcoin, why they are secure and how they are faster. The reason, it eliminates the need for a central authority. So, players can directly make purchases using their cryptocurrency. Want an example? Then you must find CryptoKitties, an online game that pioneers the use of cryptocurrency. This is a game in which cat lovers can buy virtual kitties, breed them, and even sell them. And here, the transactions are made using Ethereum, a Bitcoin like cryptocurrency.

Here, the virtual kitties are cryptoitems that are placed in a blockchain environment. So, each of them is unique and a player can know more about each and every kittie. Besides, a player can easily send the cryptoitems to other players directly with ease.

Conclusion:

The size of online gaming industry is projected at $140 billion by 2020. Such is the rapid growth it witnesses. While it is rushing to the pinnacle, it’s quite natural to face hurdles and challenges. As we discussed throughout our article, credibility and game-itemization, when not dealt properly, could be the barriers to the growth of the industry. But it is laudable that Blockchain technology is evolving to give new shape to the industry.
 

Latest Jobs

Treyarch

Playa Vista, California
6.20.22
Audio Engineer

Digital Extremes

London, Ontario, Canada
6.20.22
Communications Director

High Moon Studios

Carlsbad, California
6.20.22
Senior Producer

Build a Rocket Boy Games

Edinburgh, Scotland
6.20.22
Lead UI Programmer
More Jobs   

CONNECT WITH US

Register for a
Subscribe to
Follow us

Game Developer Account

Game Developer Newsletter

@gamedevdotcom

Register for a

Game Developer Account

Gain full access to resources (events, white paper, webinars, reports, etc)
Single sign-on to all Informa products

Register
Subscribe to

Game Developer Newsletter

Get daily Game Developer top stories every morning straight into your inbox

Subscribe
Follow us

@gamedevdotcom

Follow us @gamedevdotcom to stay up-to-date with the latest news & insider information about events & more