Impact of Blockchain Technology in the Gaming Industry

When blockchain first burst onto the scene, the sentiment was that it was a revolutionary technology that could impact the financial industry and change how we transact with cryptocurrencies. While this has been the case, many other industries have been affected by blockchain technology.

One such industry is the gambling industry. Games benefit greatly from the incorporation of blockchain into the ecosystem. And while crypto-enthusiasts have embraced the revolution in the blockchain gaming space, the larger traditional gaming community still hasn’t caught on to the technology.

Regardless of this resistance, we can’t deny that the gaming scene is no longer a one-size-fits-all experience. The days of limited ownership and centralized control are fast disappearing. Blockchain technology has brought a revolution unlike any power-up ever encountered. From reimagining classic game genres to weaving interactive dystopian narratives, blockchain games are changing how we play, earn and connect. In this article, we delve into blockchain gaming, its impact, benefits and future.

What are blockchain games?

Blockchain gaming, in simple terms, is playing games that incorporate elements of blockchain technology. Traditional games allowed you to earn in-game assets for your efforts, and these served as a form of reward that gave you a sense of progress and ownership in the game. But with blockchain games, you earn rewards in the form of in-game items that are minted as Non-Fungible Tokens (NFTs), allowing you to trade them on an open market for fiat or other cryptocurrencies.

With games like this, there is a complete sense of ownership as it allows players to own the items they earn or unlock while playing. Additionally, blockchain games are less susceptible to asset loss, unlike traditional games. There have been instances where a traditional game’s servers have faced lag and crashes, causing players to lose valuable in-game items. Imagine if such a game used blockchain technology, those items would still be in the player’s wallets because they are minted as NFTs.

Impact of blockchain Gaming

In 2022, the global blockchain gaming market size was valued at $4.83 billion. This number will expand at a compound annual growth rate (CAGR) of 68.3% between 2023 and 2030. Over the past decade, we have seen a significant increase in the popularity of blockchain games. According to DappRadar, the blockchain gaming ecosystem reached 1.5 billion daily unique active wallets (UAW) in January 2024. This was 28% of January’s entire industry activity.

We cannot deny the impact of the technology on the industry. Aside from the increase in usage, the games that use this technology give players an alternative way to earn money. Axie Infinity was the first major game to embody the play-to-earn game model. In this game, players can breed and train Axies (NFT creatures) that they can sell whenever they want for cryptocurrency. This game has helped people make a significant side income by rewarding players.

At its peak in 2021, the average Axie Infinity player could earn around 4,500 SLP tokens ($800) monthly. Blockchain games also offer game developers a way to monetize their efforts. Developers can earn royalties on secondary sales of the assets in their games.

Blockchain Games and NFTs

NFTs are an important feature in the blockchain gaming world. These are unique assets that players can earn, use in-game, buy and sell to other players on marketplaces. These NFT assets are generally valuable because they are produced in limited quantities, which promotes their scarcity and ultimately adds to their value.

Night of The Living Dead (NTLD), Lussa, Outlanders and QORPO are apt examples of this. NTLD is an innovative addition to the Battle Royale genre of games where you can choose to play solo or team up with friends to survive a zombie-infested landscape and earn tokens while you’re at it. Lussa represents an immersive narrative set in a dystopian future.

A choose-your-own-adventure story where the player’s decisions affect the game’s story and determine the fate of humanity. Outlanders is an Open-World MMORPG that uses blockchain technology to onboard the masses, while prioritizing user experience with intuitive interfaces and high-quality graphics.

The game helps to bridge the gap between traditional and blockchain games. QORPO is a blockchain-powered developer with a mission to make eSports accessible to everyone. They power the hero shooter Citizen Conflict that fuses fast-paced gameplay with eSports intensity for ultimate competitive action.

Some NFTs are transferable across multiple games due to their compatibility with different blockchains. This is an excellent example of how interoperability works in the blockchain. The blockchain secures these NFTs, and their authenticity and ownership can be tracked and ensured.

How blockchain improves gaming

There are several unique advantages that blockchain technology offers players and developers. With traditional games, game publishers have sole and complete control over the game, all of its data, and its servers. Every decision is made by the company that developed the game. They can decide to end the game with the players left out of that decision making process.

It is unfair to the players who spend their time, money and effort to play these games. The blockchain is changing that. Game data and assets are stored on the blockchain, which puts information and details about the game on an open ledger for all to monitor.

Unlike traditional games where players buy in-game assets that are either unusable or cannot be transferred to another game, blockchain games allow players to earn and own assets that they can use in other game ecosystems. And because the blockchain is inherently decentralized, games built on it encourage community participation. Blockchain games are often built by members of a decentralized autonomous organization (DAO) rather than by a corporation.

This step makes it more difficult to compromise or strike them. The Ready to Fight (RTF) ecosystem accepts both the DAO and gamified mechanics in its operations. RTF is a digital arena where boxing stakeholders can monetize their content, set up DAOs for platform management, access to Move2Earn, PvP games, decentralized ticketing services, etc.

Due to continuous innovation, game mechanics are also adapted to other niches such as Watch2Earn. As with Play-to-earn and move-to-earn, users are rewarded for actively participating on blockchain platforms with these models. Web3 users can now be rewarded for viewing content from their favorite creators.

A platform like YouTube with over 2.1 billion active users used to be very creator-focused as it only rewarded creators, but that is changing. XCAD is at the forefront of the Watch2Earn revolution, rewarding viewers with $XCAD tokens for engaging with their favorite creators and channels.

Future of blockchain gaming

I am confident that the future of blockchain gaming is bright. While blockchain gaming has arguably moved beyond the conceptual stage, it is still in its early stages of development. That we have already seen several exciting projects and developments in the space in the last few years shows you the potential here.

Traditional companies like Sony are moving into the NFT gaming sphere with a filed patent for an NFT gaming framework. It is still unknown how the company plans to use this patent.

There has also been a lot of institutional money coming into the blockchain gaming industry. According to data from DappRadar, the third quarter of 2023 saw more than $600 million in investments flow into the blockchain gaming space. The ecosystem had a total investment of $2.3 billion that year. This was despite the crypto industry being in a bear market. The influx of significant investments into the blockchain gaming industry points to a future characterized by rapid growth within the ecosystem over the next few years.

Closure

Blockchain games blur the lines between entertainment and financial opportunity. With an emphasis on player ownership, community and innovative play-to-earn models, blockchain technology offers a glimpse of a future where players are no longer passive participants but stakeholders in the activity they love. Although challenges such as user-friendliness and interoperability exist, the influx of investment, rising adoption rates and the sheer creativity of developers show how much potential the industry has.