Cryptocurrencies and the gaming industry: opportunities for gamers
The gaming industry is one of the fastest growing in the world: experts expect an average annual growth rate of about 9.2% from 2020 to 2025. According to statistics, the blockchain gaming market has reached only $3 billion but is expected to grow to $65-90 billion by 2030 and take up about 15-20% of the global gaming industry.
Genuine ownership
Online players' data is stored on centralized servers, which, once accessed, can be used by attackers to take possession of players' assets. Valuable in-game items have often been stolen from users. For example, in June 2023, a gamer stole his CS:GO skins for 3 million rubles by hacking into his Steam account.
At the same time, blockchain games grant ownership of in-game items using non-fungible tokens (NFTs), unique digital assets recorded on the blockchain. Players store their NFTs in a cryptocurrency wallet like any other token, and only they hold the key to access the digital assets. Attackers will not be able to get hold of NFTs even if they hack into a player's account: to do so, they will need to obtain a private key to the wallet.
Blockchain is unique because having an asset in a wallet is proof of ownership. The owner of NFT or other tokens can dispose of his assets as he wishes — this is the essence of blockchain decentralization. The platform cannot block players or restrict their access to digital assets.
On centralized platforms, this can happen even unintentionally. For example, one player lost a hero in Diablo IV due to a server error after spending 173 hours playing the game.
Monetization of game experience
One of the major drawbacks of most video games is the lack of monetization options. As users progress through the game, they earn experience and accumulate valuable artefacts that could be transferred or sold to other players.
Of course, there are exceptions. One prominent example of monetized games is CS:GO, in which players can obtain rare and valuable items from expensive cases on the market. In addition, the experience of selling "pumped" accounts is widespread among players. There are even special services through which players can buy and sell active game accounts. But this is still a far cry from blockchain's monetisation opportunities.
Many blockchain games are based on the real economy, specifically tokenomics. Each item or player character in GameFi is a unique asset with real value. In addition, P2E games and similar games often have a reward system: players are rewarded in tokens for progressing through the story, winning competitions, completing quests, and more.
This model benefits both players, who get the opportunity to earn on their gaming experience, and game developers, who can directly encourage their users instead of allocating enormous budgets for advertising. For example, it is not uncommon for projects to give away free NFTs to players at the initial stage, the value of which can reach several hundred dollars. Moreover, NFT owners can still receive bonuses in airdrops or other awards simply for storing their tokens. All this attracts attention to the project, and the developers can issue as many tokens as they want without additional costs: it is cheaper than creating and launching an advertising campaign.
Reducing fraud risks
Often, players buy and sell in-game items on OTC markets, where fraud is rampant. Players must either resort to middlemen to exchange in-game assets or make transactions on trust. Neither of these guarantees that the player will not be scammed.
Transactions with digital assets like NFTs go through autonomous smart contracts that do not require trust on one side or the other. If users sell NFT, they will receive the cryptocurrency specified in the transaction in return. There are dozens of marketplaces for NFT exchanges, such as:
- OpenSea,
- Rarible,
- Magic Eden and others.
Moreover, blockchain provides complete transparency, as all transactions are recorded in a single registry, which anyone can view. Thus, anyone can check the authenticity of a game item and not become a victim of fraudsters. When buying standard in-game items through OTC, you cannot be sure that you are buying the item from the real owner. Imagine purchasing a CS:GO skin and then discovering it was stolen from another player. Most importantly, you have almost no way to verify the authenticity of the owner.
Payment without borders and unnecessary commissions
Players from some countries may have problems with payment through online gaming services such as:
- Steam,
- Epic Game Store,
- GoG.
In fact, users simply lose the ability to buy many games in the way they are used to. Cryptocurrencies remove these limitations: with their help, you can purchase games and items anywhere in the world.
It is not excluded that there will be severe competitors to Steam and GoG in the future, which will allow you to buy games and pay for purchases in them using cryptocurrency. For example, the famous Westland developer Brian Fargo presented a crypto-analog of Steam — an online platform for selling games called Robot Cache. With its help, users can buy video games for Iron tokens. The Robot Cache platform has been in operation since 2020.
A separate problem concerns the cost of video games: it differs in each region due to the exchange rate. As a rule, platforms like Steam set their rate for payment in local currency. Cryptocurrencies allow us to fix the cost of games for all users. In addition, when you pay with digital assets, you buy the goods directly from the supplier, which allows you to reduce prices due to the absence of an intermediary — a bank or a payment system.