How Blockchain will change the Gaming Industry as we know it

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How Blockchain will change the Gaming Industry as we know it
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“If I had asked people what they wanted, they would have said faster horses.”*
These words, commonly attributed to Henry Ford, reflect the difference between visionaries and p9ragmatists. They suggest that in order to build the future, we must observe things not with the eyes of those who are stuck in the present, but of those who dare to think outside the box.
Achieving this mindset is more difficult than we’d like to admit, especially considering that we live in a world where social norms influence so much of our behavior, from simple aspects such as music — I doubt that in the 17th century young people would have enjoyed a 48-hour rave of non-stop techno music — to more profound elements, like morals.

The video game industry has managed to reinvent itself a few times,  being a cultural reference for generations of young people since Pong first appeared. For this industry, it was not just about improvement, but about reinvention and pushing boundaries.

In the 80s and 90s, people enjoyed ‘fun’ games. However, someone dared to think further: What would happen if we created non-fun games? If we create action or horror games? What would happen?… Today sagas like Resident Evil and Silent Hill have perfect answers to a question that in the times of Pacman and Mario Bros nobody would have ever imagined…

These kinds of innovations and questions are the reasons why the gaming industry  never settled with “faster horses.”
Something similar happened a few years ago when a mysterious character under the pseudonym of Satoshi Nakamoto dared to imagine a technology implementation that would disrupt the established financial system: What if people could make financial transactions over the internet without having to trust anyone? What if the banks were not necessary and people could engage trustless and immutable payments between two parties without the man-in-the-middle? This is how bitcoin was born, along with a technology that has the potential to revolutionize almost every industry as we know it: The Blockchain.
Blockchain is much more than Bitcoin. A simple concept such as “Massive copies of a giant Excel spreadsheet” allows the creation, transmission, and destruction of value in an auditable, transparent, almost immediate and permanent way. This provides a huge potential use for industries, should they have the courage to innovate and go beyond the comfort zone provided by the statu quo.

How can the video game industry use blockchain to take that next step? The first thing we need to do is open our minds to the possibilities. There are only a handful of examples listed below, but the applications extend to the limits of human imagination, and that is the beauty of blockchain technologies: They offer the possibility of collective building of the future.

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CREATION OF INTERPLATFORM TOKENS

What if, one day, you’re playing World of Warcraft and you want your character to be able to enter the Lineage II world where your girlfriend is playing, to give her a $10 gift to buy the costume that she talks so much about? You can’t; of course, the incompatibility of both games’ code makes it impossible. However, the use of blockchain technology can make it possible for developers to create linked environments where characters can interact.
Even if developers don’t necessarily want to create linked games, it’s enough to adopt the use of a specific wallet and a common in-game currency so that a player can —without intermediaries— immediately send $10 to another player in another game.  Thanks to Blockchain-based developments, users will be able to easily do things that were considered impossible before.

VALIDATION OF MILESTONES, SCORES OR PROOF OF EXPERTISE

This is a strong reason for those with a competitive streak, who seek the title of “Number 1,” with the prestige that it brings.
How can the best player in Flappy Birds prove that he legitimately got through all the obstacles? Although it may not be a reason that many care about, blockchain technology can attest — and immutable record — not just that in-game achievements occurred, but that they were accomplished transparently without cheats. This is something that the players of cult games back in the 80’s-90’s would surely have appreciated at the time.
Players whose ‘expertise’ in a particular game has been validated may also be able to benefit by securing paid training or advising gigs that help other players get better.
Just as a more experienced lawyer can charge thousands of dollars more to sign a document than a newly graduated lawyer can sign for much less, so a world-class player can prove his experience and charge much more to participate in a quest or train a particular player.
A further benefit of blockchain technology is that in the event of non-compliance, a smart-contract could refund the player’s money. It all depends on how far the developers are willing to raise the bar.

FULL OWNERSHIP OF IN-GAME ASSETS

Imagine a world where you could only ever rent your home and never purchase it, no matter how much you paid for it. This is the exact situation in the vast majority of game worlds. Why would you think that the armor you just bought for your character is yours? Actually, why are we talking about “your” character in the first place?.
A few years ago, Need for Speed World shut down its servers. That moment marked a before and after for many. It also opened the eyes of several players to the needs for blockchain technology without knowing that it was what they were thinking about: “Why did my vehicle have to disappear at the will of someone else? Was there anything I can do?”
The use of blockchain technologies solves this problem by giving users real property rights to their assets. When players buy an item, and it is transmitted to their wallet, the car, the character, the cloak – they are all THEIRS. It’s not a use permit; it’s a transfer of ownership. This can in many cases mean a real increase in the value of the property.

A CHEAT-FREE GAME

Have you ever played Gunz: The Duel?
If not, this example is perfect to show how the most excellent game can quickly become pathetic because of the cheaters. Another example may be Counter-Strike: A much more widespread game with lots of cheaters ruining online matches.
The use of blockchain technologies can allow developers to track each of the assets. The blockchain by definition is immutable, which in addition to blocking any “hidden” modification of an asset or a player’s stats, could make it impossible to program such changes.

Cheaters can destroy a game; blockchain can destroy cheaters.

SAVE RESOURCES AND TIME WHEN PROCESSING PAYMENTS

The use of blockchain technologies can allow instant payment between players, or even the purchase of goods from developers in a way that is fast, secure and free from the fees of traditional payment processors, thus making players pay for precisely what they see with no additional charges.

A POSSIBILITY OF USE FOR PLAYERS WITH RESTRICTED RESOURCES

Imagine you are 15 years old or living in a country where the use of payment processors is forbidden. An example could be Venezuela, where the penetration rate of mobile phones is exceptionally high. However, in-app purchases are practically nil due to the monetary restrictions. How can a player under such conditions buy that super-fast vehicle, that powerful weapon or that beautiful item to impress his colleagues?
The use of blockchain technologies would give you this option, since the purchase of crypto is possible in a p2p way in any market of the world, facilitating commercial transactions. Also, the possibility of exchanging virtual money for FIAT makes it possible to develop a business inside the game universe.

ABILITY TO CREATE ITEMS BEYOND THOSE DESIGNED BY THE DEVELOPERS

The creation of tokens with different characteristics is something that CryptoKitties knew how to take advantage of perfectly, turning a small project into a million-dollar industry. More advanced development can allow players to create their own designs for sale in the marketplace. Unique pieces with specific features that have a real-time quotation helping players to increase their level of commitment and motivation to the game.
Blockchain makes it possible to improve games in a way that even developers could not imagine.

GAMING 2.0: EVERY GAME COULD BE A COMPLETELY IMMERSIVE REALITY

There have already been similar ideas in which players stop playing and start living the game. The economic aspect is one that makes this idea easier to understand: while to non-gamers it may seem meaningless, the concept of virtual property is as valuable to gamers as it is to “fanatics” or investors.
What difference can there be between the owner of a diamond ring and the owner of 6M$ Planet Calypso from Entropia? For those who don’t “understand” the mentality of a gamer, buying a product in a game is like throwing money in the trash… Sort of like buying a ring with a cute transparent stone attached to it.
The use of blockchain technologies would allow players to have an almost unlimited range of actions once the purpose of this technology is consolidated. Players could make a living making rare products, making transactions to their relatives abroad by trading the resources collected in this new reality, they could audit operations, participate in the decisions to update the game. To summarize, players could do even more things than we dare to imagine at this moment.

WHAT SOLUTIONS ARE CURRENTLY OUT THERE?

There are many startups already working on solutions. But some are worth mentioning for their robustness and long-term vision:

The Hoard platform is one example of a project that understands these trends and is trying to make it easy for game developers to integrate blockchain technology into their games. It aims to facilitate three pillars:

  1. True ownership of virtual game items
  2. Fundraising platform for game developers
  3. Provide virtual employment opportunities for people who lose their jobs to technological unemployment.

The project was founded by people with strong roots within the gaming industry, including Martin Amor, who was previously the lead programmer for Anarchy Online and technical producer of Hitman. Their core team consists of developers who have worked on games like HUGO, Kane & Lynch, The Witcher, and DMC. Co-founder, Wendell Davis, was one of the founding members of Ethereum, Golem, and OmiseGO.
According to their roadmap, they are currently in the initial prototype and research stage with Milestone 1 of launching a ‘coherent platform with key features present’ to be delivered in Q2, 2018.
MyDFS is a gaming platform specially created for the fans of fantasy sports: an online gaming style with 59.3 million players only in the US and Canadá. An important growth considering that by 2007 it had 19.4 million active players, and ten years before that, back in the 90’s it had around 1-3 Million players.

They look like the standard DFS platform, but providing tokenization of information opens the door to instant global transactions, making easier for players around the world to put their money on the platform being a common financial ground for the whole ecosystem.

Dmarket aims to be the Amazon of blockchain game trading. They offer a “100% secure and commission free” trading platform where users can offer their items and trade them using the blockchain as a familiar environment. This means that a trade does not occur in-game so players won’t be breaking the rules of some games that don’t allow item trading. What happens inside the game is just a donation of an item, but outside the game, a smart-contracts gives users the certainty that a transaction will happen by the terms they both agreed.

The use of blockchain technologies is revolutionizing the world of economics. Several financial institutions have already declared that cryptocurrency is a threat to their monopoly power. Already large financial giants (such as JP Morgan, Venrock or the SWIFT system itself) are entering the world of Blockchain. Sooner or later the gamer industry will adapt as well, and being so historically innovative; this move will likely to happen soon. The future is now, and it’s no game.

* By the way, according to some investigators, this phrase was apparently never said by Henry Ford, but that’s a story for another post.


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The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.