Why Does the Gaming Industry Need Blockchain Tech?
The only surprise about Google’s recently announced move into the gaming sector is that it didn’t come sooner as the gaming market has been in double-digit growth for more than a decade and isn’t slowing down anytime soon. Although mobile gaming now accounts for more than half of the total market share, there’s still a $35bn market for console games and a further $32bn for PC games. Google is targeting both markets with the launch of its own console and video game streaming service.
The gaming market is already dominated by big names both in hardware (Microsoft Xbox, Sony PS, and now Google) and software (EA Games, Ubisoft.) However, none have so far made significant moves into blockchain-based gaming.
This gap provides room for up-and-coming tech companies that are quickly growing in the space. These companies now have an opportunity to capture the benefits and added value that blockchain brings to the fast-growing gaming market.
Titles such as Fortnite make their revenue from selling in-game assets, so valuable accounts become easy prey for hackers. Blockchain opens up massive possibilities for gaming because storing in-game assets as tokens on a blockchain will ensure their security. Aside from this, non-fungible token standards such as Ethereum’s ERC-721 mean that developers can offer completely one-of-a-kind digital assets for sale to gamers.
Microtransactions have become the backbone of mobile gaming, with many free to play games offering users in-app purchases to enhance their experience. These kinds of microtransactions could be easily and securely executed between individuals and game developers in cryptocurrencies, drastically reducing transaction costs compared to using a bank or payment service.
Blockchain has the potential to catalyze further growth in the gaming industry. Token-based in-game assets provide new opportunities for value creation while lowering transaction costs offers higher margins.
The security that blockchain offers could also help to enhance trust between the blockchain gaming industry and its customers. A 2018 survey by New Zoo showed that trust was the most important factor for gamers when choosing a payment method.
Projects to Watch in the Space
There are currently many projects developing in the blockchain gaming niche, but there are some which stand out from the rest, offering something unique to their users.
Enjin is a platform that enables the creation and management of virtual goods. A developer can issue their own currency, which is underpinned by the Enjincoin token. “Currency” in this case could be any form of digital assets. The platform also incorporates a decentralized payment gateway.
Enjin has seen explosive growth this year. Recently, Enjin CEO confirmed that the company was launching a Minecraft plug-in. Players will be able to join a public server based on the Enjin platform and benefit from in-game tokenized trading. Minecraft has a staggering 91 million users worldwide. If Minecraft were a country, it would be the 16th most populous in the world, so attracting even a relatively small number of its user base will be a massive achievement.
The price of Enjincoin soared in March when the news that Enjin was partnering with Samsung came out. Some versions of the Galaxy S10 phone have integrated the Enjin wallet.
DreamTeam’s CEO and founder Alex Kokhanovskyy is a seasoned esports expert. He’s participated both as a player and as manager of the Natus Vincerre esports team. Having seen the effects of the industry’s fragmentation first-hand, Kokhanovskyy decided to do something about it.
DreamTeam is a one-stop blockchain-based shop connecting esports players, teams, managers, sponsors or tournament organizers. The platform uses smart contracts and crypto-based payments to manage agreements between parties in the industry. It also provides a point of entry for newcomers, as they can browse for teams or events. There’s clearly a demand — DreamTeam has already attracted 1.3 million users.
DreamTeam has attracted investment from Mangrove Capital Partners, a leading VC firm. David Waroquier, one of the partners at Mangrove, stated: “Blockchain is a potential game changer. However, there has yet to be a blockchain application that has taken blockchain from obscurity and pushed it to become a technology used by billions. Esports is changing that.”
Loom Network is a side chain platform based on Ethereum. It was developed as a games and social-media focused solution to the scalability issues faced by Ethereum. Processing on side chains removes the load on the main chain, enabling far faster transaction speeds than Ethereum alone could handle. Loom Network was among the first to implement the Plasma scaling protocol.
A recent announcement confirmed that Loom Network would be partnering with Tron. The move is designed to extend the reach of both projects, giving Loom access to Tron’s dApp pool. Like DreamTeam, Loom Network was also privately funded, having been selected as part of the Techstars NY startup accelerator.
Cocos Blockchain Expedition, or BCX for short, offers developers an environment where they can build and test blockchain-based games across multiple blockchain platforms. Users get all the previously mentioned blockchain benefits such as in-game digital assets stored securely.
The company is based in Beijing. It’s an offshoot from games development company Cocos-2dx, formed after founder Haozhi Chen decided to make the foray into blockchain. Perhaps due to these credentials, Cocos has also scored investments to the tune of $40m from names such as Binance and NEO Global Capital.
These projects demonstrate that blockchain has a lot to offer the gaming industry. The market is already sustaining impressive expansion, but perhaps the burgeoning partnership of blockchain and gaming could prove to be the catalyst for an even bigger growth spurt.