Blockchain is the new buzzword in the tech industry. A google search shows a litany of articles, research, and speculation regarding the new-ish technology. Blockchain is being heralded as the “next big thing” with potential use cases in any industry that requires a publicly verifiable database or proof of ownership. Rather than talking about the possible uses as a whole, let us instead narrow our focus to the most visible, and possibly profitable, consumer sector: Gaming.
The gaming industry is a behemoth. What began in the early ’70s with arcade machines like Pong and Asteroids has matured into the commercial powerhouse of today. A glance reveals that it generated $135 billion in 2018, with $68.5 billion coming from mobile games alone. The popular MMO Fortnite was responsible for $2.4 billion alone, the majority coming from the purchase of the in-game currency, V-Bucks.
Great, so nerds playing games in their mother’s basements brings in roughly as much as the GDP of Hungary. While an impressive statistic to mention at your next cocktail party, what is even more intriguing is precisely how blockchain is utilized in the gaming industry today.
Let us first examine what blockchain can not do. As a distributed ledger, or database, blockchain in gaming does not make games look prettier, cut down on lag, or allow users to quickly 360-no-scope an opponent. In fact, to date, blockchain is used for one purpose only: Inventory Management. Like most new use-cases, the purpose of this implementation is unclear at first, but allow us to examine in more detail.
Blockchain in gaming allows for actual ownership of digital in-game assets/inventory. It also allows for the peer-to-peer selling of these items on the open market with no third party.
Let’s take a popular imaginary MMORPG as an example. The developers code a unique item into their game, the Boots of Battle. A user needs to fulfill some quest to get them as a reward. But once acquired, does the user have ownership of the boots? No, as the boots live on the central server of the game company, as do all the other game assets. Tokenizing the boots on the blockchain allows the user to have actual possession of them, as whoever holds the token has access to the boots. In this case, possession equals ownership. Once issued, the game company has no control over the tokens. Even if the game company were to cease operations, the token is still tradeable between users.
The owner of the boot token can keep it, transfer it, or trade it in-game, similar to how baseball cards or other collectibles change hands today. Trading and ownership allow the operation of open markets using the principle of supply and demand to dictate prices. Now we have a burgeoning economy that can take place inside the game, or on another website. Users can purchase items using fiat or cryptocurrency to get those Boots of Battle without spending time finding them in the actual game.
Several games have implemented blockchain gaming protocols. The card game “Gods Unchained” is perhaps the most popular to date, ranking in the top 40 games on DappRadar with approximately $70,000 in trading volume over the last week. Taking inspiration from Magic the Gathering and Hearthstone, Gods Unchained utilizes tokens on the Ethereum blockchain to represent playing cards of varying abilities. These cards can be traded or sold to other players on open markets for Ethereum.
While impressive, most are not captivated with a glorified proof-of-concept that “Gods Unchained” represents. Recently large industry players like Microsoft and AMD are beginning to take note and enter the space. Microsoft is collaborating with the cryptocurrency Enjin on implementing tokens onto the Azure cloud platform. While not technically a game, “Azure Heroes” is an implementation of blockchain on message boards to encourage community involvement.
“Azure Heroes aims to reward individuals for verifiable acts of impact such as coaching, creating demos, building sample code, blogging about Azure or completing certain challenges. Community members that have demonstrated their contributions will be recognized with badges across a number of categories.”
Microsoft also offers “blockchain as a service” as part of its Azure cloud hosting capabilities.
Looking towards the future, CPU/GPU chip manufacturer AMD is also entering the blockchain realm. With its commitment to the “Blockchain Gaming Alliance,” AMD is establishing itself as a significant influence on the burgeoning industry. AMD is also partnering with RobotCache and Ultra, two independent gaming companies, to compete with Steam. These companies allow users to resell their used games on their respective platforms.
If the current offering of blockchain-compatible games is disappointing, remember that this is still the early days. Blockchain gaming companies like Enjin are building quickly and quietly behind the scenes. Implementing a new decentralized platform, partnering with established companies, and integrating into game engines is not an easy task. The addition of blockchain to the gaming landscape is a slow process, and I am, for one, am willing to wait.