Blockchain and the future of online gaming
Non-Fungible Tokens(NFTs) are a recent development in the crypto-world that enables ownership of unique digital assets for users and it is just what the gaming industry had been looking for decades.
Its 2014, I am 16 years old and I love online gaming. The industry is just emerging and open-world role playing games are booming. This is before World of Warcraft and other huge successes to come. So it starts, I start making friends, joining clans, going to adventures and looking for rare items to boost my character. Along the way, I find a lot of items I don’t need even if some of them are quite special and rare. What do I do?
Marketplace. The game has an in-built marketplace where users buy, sell and exchange items via the in-game currency (usually gold). I am fascinated by this: this game has a micro-economy of its own! So I go around, checking prices, availability trying to figure out what is in demand and what is rare in order to figured out opportunities. I spend days and nights on that marketplace looking for deals, trying to make some extra gold so I could acquire the next cool item for my character. Then comes the sellers on Ebay — if there is a market for it, why not ask for real money? And it works, people started buying and selling not only items but entire accounts with characters that had been already upgraded and leveled up.
The industry just kept growing. With new and popular games like World of Warcraft bringing millions of new users every year, it was just the beginning. The next big step was the introduction of mobile gaming with the mass adoption of smart phones. In-game purchases skyrocketed. Yes you could pay-to-play a game but you could also buy in-game items or options for real money, with a single clic, making your armies stronger or enabling your virtual garden to grow faster. And people — of all regions and all ages — love it. In 2020, the global mobile gaming industry made for 51% of the global gaming revenue of $165Bn.
The gaming industry kept growing and new ways to spend money on games appeared. Free-to-play games like League of Legend and Fortnite took this to an entirely new level. The games are accessible and free-to-play but the accent is focused on community building. You play with your real-life friends or make some online. Where does the money come from? Aesthetic accessories that give you zero edge but make you look really awesome : costumes, skins for items, funky objects that serve no purpose but to look cool. Again, people love it, just look at the revenues of parents companies like Riot or Epic Games.
In comes digital ownership
While the gaming industry has expanded tremendously in the past 20 years, with various ways to spend money and a growing crowd of users eager to do so, one thing was missing: ownership.
Indeed you can buy and sell pretty much anything (in game currencies, objects, characters, costumes, boosts…) but you never actually own any of those things. You are just a user and all this happens in-game, the game is owned and controlled by a central entity that can delete you and your precious artefacts anytime. Until today.
Blockchain technology led to the development of NFTs which enable true digital ownership of assets. These assets can be uniquely identified and you own them like you own real land — in other words the blockchain shows that you have a contract giving you ownership. Speaking about land, guess what else you can own in the massively expanding digital space? Yep, auctions have started in several ecosystems in which you can buy and own land.
Like anything blockchain technology touches, the gaming industry (and others such as digital art) is going to undergo a massive transformation with NFTs. Imagine this: that character you have been spending time, money and efforts to make so special is actually yours, that city you have built over time is yours, that racing car you spent so much money upgrading, yours.
This is not only appealing for passionate users but also opens up endless possibilities, like playing-to-earn. Now the time you spend playing a game can be monetized much more easily because of digital ownership. You can actually farm the cryptocurrency of a certain ecosystem and directly trade it for others or even fiat currency.
Finally, lets add the booming virtual reality industry into this mix. So now you can own properties and have people come over so you can showcase your goods. Maybe you own a little casino where users can come to gamble with the crypto of that ecosystem. Maybe you have your own digital art collection in your digital house and can have friends over to show them all your cool stuff. Possibilities are endless.
I believe that in a not-so-distant future people will own, buy and sell virtual islands, properties, castles, kingdoms, spaceships and even planets.
The 2020s is the decade of blockchain technology and it is just getting started!
