

Dragging a jet fighter across a battlefield
This image sums up how blockchain is used in the gaming industry right now. Basically, the blockchain games are used to lure players to spend cryptocurrency. In somewhat veiled form, players are basically exchanging ERC-20 for ERC-712 (or in rare cases, newer ERC-1155). This practice is best showcased with one of the earliest and most popular blockchain games — CryptoKitties. Using Ethereum’s network, players pay in standard cryptocurrency (running on ERC-20 standard) to purchase a kitty which is, in fact, a non-fungible token (NFT) a.k.a unique item. A player can collect kittens and sell them, when and if the value grows. The player can breed kitties too, for a small fee. Now, a distinct 256-bit genome (cattribute) is embedded in ERC-712 token. This means that some of the very desirable traits could be passed off to “offspring” creating unique and more valuable kitten for the collector’s market.

The roadblock
There are two major obstacles blockchain gaming faces. The primary one is, obviously, scalability. There is a sore lack of blockchain games. Centralized game platforms currently run a number of advantages over new solutions. Slow network speed leads to many games being simple iterations of popular titles or collectible-focused games. The other obstacle is a lack of developers activity. Blockchain currently, within its limits, already provides for fantastic possibilities in terms of game design and game mechanics. Let’s explore some of the cases for use of blockchain in gaming beyond the current landscape.Best of both worlds
Hybrid solutions could bring new interesting models. For example, Gods Unchained is a collectible cards game running on a centralized server, just like all the current-gen games. However, the trading cards that players obtain are non-fungible ERC-721 assets on the blockchain and owners can trade them in decentralized markets.Security, frauds and booming in-game trading
Currently, trading in-game items is a blossoming market with an estimated worth of $50 billion. Yup. Billions. Heck, one of the highest fetching items was a virtual planet sold for $6 million! Considering that number of players is 2.5 billion and growing, plus the fact that over 60% of players engage in purchasing virtual items with an average spend close to $150, you can see how lucrative this field is. That is why in-game trading attracts frauds. Credit card scams, as well as black market trading with illegitimate copies of virtual items on top, create huge losses for the developers and publishers. In China, there are 273 fraudulent items downloaded for every legitimate item. In the USA this practice is down to 1 fake item for each legit one. It is estimated that, globally, for very legitimate download 7.5 items are lost to fraud. Depending on where in the world you play, 50–90% of virtual goods purchases could be illegitimate.Gaming economies
The ecosystem built around a game can become very rich and varied. There are games which allow content to be added, leading to a culture of “modders”. In Second Life, an online virtual world, users can create new objects in the proprietary coding language Second Life runs on (LSL). A niche market has developed where users pay others to design their virtual houses, manage their virtual properties or create unique items. Importing of data is done through a client, leading to fraudulent use of third-party clients. Developers and modders have always had a love/hate relationship. Modders can enrich a game, bring amazing new content and make the experience better for everyone. However, they can also “hijack” developer’s efforts, essentially creating a new game or new stream of revenue that is parasitic on top of dev’s original work.
Are you ready to get your mind blown?
With ERC-721 or ERC-1155 standards connected to unique in-game items, it’s very easy to imagine tokens moving from one game to another. Say you play a fantasy game, swinging sword and slaying monsters. Sword is a crypto token which transferred to another game turns into an object appropriate for the game you play. Suddenly your magic sword is now a super special sniper rifle. Or a unique space fighter. Or super rare card in a collectible trading game. Not only would that be awesome, but it would add to the value of each individual item. Gaming companies could join to create parallel gaming universes, sharing their user base for the benefit of everyone. Blockchain proof of uniqueness combined with smart contracts would make sure that game-hopping items are safe to use, providing better loyalty across the linked games.
To boldly go…
As you can see the blockchain has massive potential to impact the world of gaming across the industry. The more blockchain evolves, the tighter fit it will make for the gaming industry. Tokenization of in-game items is just one tiny aspect and it’s already promising the world of new benefits for players, developers, and publishers. We could even dare say that it would be the gaming industry before fintech that fully embraces the possibilities that blockchain technology brings.
Many agree that Blockchain was a disruptive tech, but once it was clear that cryptocurrency was not its only use, minds started to open to a world of possibilities. Experts are convinced that Blockchain in the gaming industry will be the first real case scenario and possibly help other industries open their doors to this tech. Of course, it is not all perfect, and they might be some drawbacks along the way, but ultimately, in the future, many might not even know that they’re using this technology.
Experts from all over had discussed the topic of Blockchain in the gaming industry, how it affects it and how it will be a game-changer, and this is best expressed on Unblocking Blockchain: Gaming Is the Tipping Point for Mass Adoption.
This article is part of our blockchain awareness posts where we try to help newcomers and people interested in blockchain use cases enter the space more easily. Follow us and subscribe for more upcoming articles such as this one, and feel free to join the conversation on Twitter and LinkedIn.
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Hybrid Gaming - How is Blockchain Affecting the Gaming Industry? was originally published in MVP Workshop on Medium, where people are continuing the conversation by highlighting and responding to this story.