Should your next video game be on blockchain? (The benefits may surprise you)

When talking about the future of the tech world, there’s one topic that just can’t be easily avoided: gaming. The gaming industry continues to catch the attention of not only players of all ags in the economy, but the attention of business owners and investors as well. As an industry, gaming is undergoing impressive growth. According to recent data from market researcher Newzoo, the gaming industry is anticipated to grow from $137.9 billion in 2018 all the way to an astonishing downfall in the popularity of single player games), gamers now have different, non-traditional concerns to be wary of.

Rather than worrying about what points they’ll earn completing a level, gamers are unlocking, earning, and buying different items in their virtual world. While we already see this happening in games like Counter Strike: Global Offensive (CS:GO) and the massive world of weapon skin and item buying, selling, trading, and gambling, the most recent game to take the world by storm, Fortnite, offers the most eye-opening example.

Unlike traditional single-player games before it, Fortnite’s most popular game mode, battle royale, is a completely free-to-play game. Gamers don’t have to spend a single cent to Epic Games (the studio responsible for the viral game). And yet, Epic Games earns a considerable amount of revenue from the game each year, even without charging for the game itself. Besides Fortnite acting as phenomenal marketing for Epic Games’ Unreal Engine (the middleware required for supporting the massive gaming community), the developers are bringing in revenue from the in-game items sold.

Gamers have been continuously purchasing items, skins, keys to unlock crates, and nearly any other virtual item possible in existence for their games in an entirely new digital economy known as microtransactions. Regardless of who’s responsible for the growing trend (some blame game studios, others blame the eagerness of gamers to participate in, and continue to buy, in-game purchases), there’s no doubt that the trend is growing.

With the new way games are played and items are purchased, that leaves the industry with
another new problem: who actually owns the items?

Blockchain: a solution for the growing problem

The question of virtual item ownership is an interesting and concerning one for the gaming industry. While gamers foot the bill to purchase items, skins, and other in-game purchases, they don’t truly own the digital ‘assets’ they purchase. Accounts can be banned, authorities like Steam can put personal accounts on hold, and virtual items can be reclaimed by developers. The question of ownership itself is of such issue to the gaming industry that it even sparked an academic paper published by The Duke Law and Technology Review on the topic: “Who Owns the Virtual Items?”

Because of the nature of virtual items in video games, tracking ownership rights is increasingly difficult and, as Shen points out in her paper, more akin to intellectual property rights when it comes to tracking them. So how does the gaming industry improve on this? One word: blockchain.

Blockchain technology doesn’t operate solely as a means of supporting payment, but as an
immutable record keeper and data storage. Whether the system is tracking transactions of value from one party to another or any other type of data, it’s a perfect fit for accounting for digital goods and information. With the technology disrupting industries across the spectrum already, it comes as no surprise that it’s making its way into the world of gaming.

New blockchain-based initiatives are coming to the gaming industry that will enable gamers to take advantage of the technology. When it comes to ownership of virtual goods, blockchain offers gamers a means of accounting exactly for who owns what items and who has transferred ownership to another gamer profile without the need for a third party to act as the middleman.

That means not only a more efficient way to transfer ownership rights, but that there is no way for an overbearing third party to reclaim items and goods fairly purchased or earned. To reborrow Shen’s likening of digital good ownership to that of intellectual property rights, blockchain can do the same for the gaming industry that it’s been doing for intellectual property rights in the creative industry.

Real-world implementation

XAYA is one blockchain-based startup focusing on bringing all of the advantages of blockchain to the gaming world. The team, made up of HunterCoin veterans, is developing a platform for game developers to build their own games atop of blockchain technology so they can get all the benefits of the disruptor. Not only are property rights and ownership handled by blockchain technology, but there are tons of other advantages with the new tech that the XAYA team is incorporating as well.

By leveraging the powerful, decentralized nature of blockchain, developers will be able to create decentralized games, issue game-specific cryptocurrencies to facilitate in-game economies, and host Massive Multiplayer Online games (MMOs) without the need for centralized servers and with a guaranteed 24/7 uptime.

Also working on bringing blockchain into the gaming world is a new augmented reality (AR) focused game called Reality Clash. Morten Rongaard, co-founder of the new game still in development, sees blockchain as the technology needed to disrupt the gaming industry and to integrate a secure method of handling gaming interactions and purchases. Narrowing in on similar concerns XAYA is working towards solving, Rongaard recently said in an opinion piece for Newsweek that:

“My vision is for gamers to be able to truly own their character, their weapons and their resources. They should be able to trade, sell and buy securely using the blockchain. That is instead of taking a risk on platforms such as Steam, where so many users have lost money and have spent thousands of dollars building up a profile that they don’t even own and have no control over.”

There are even more blockchain-based initiatives in the gaming industry as well, and likely many more to come in the future. After seeing all the reasons and benefits associated with blockchain technology in the gaming world, that leaves us with the original question: Should your next video game be on blockchain? If the industry is telling us anything, its a “yes”.