Blockchain’s promise for the gaming industry

Elder Scrolls Skyrim

Over the past decade, the gaming industry has gone through immense revolutions and transformations. The old model of paying once with cash and buying games of the shelf is slowly giving way to platforms such as Steam and app stores where you buy games online or pay as you play.

Games have now become full-fledged commerce platforms and markets, where players spend money to pay for services, access expansion packs and extra levels, or buy and exchange in-game assets and resources with other players.

While the online model has opened up new possibilities, it has also introduced new challenges that stem from inconsistencies in the global payment landscape.

Cybersecurity in gaming is also becoming an issue, and the industry has had quite some troubles of late.

Blockchain, the disruptive technology that is powering cryptocurrencies such as Bitcoin and is proving its worth and applicability in other industries, can possibly provide a remedy which will be beneficial to both gamers and game developers.

Meeting the payment challenges

One of the biggest problems in online payment is its fragmented landscape. There are dozens and hundreds of payment services, and each of them apply to their own geographical region. While this causes no problem to services that are offered in those specific regions, it can be bothersome to game developers, who usually cater to a global audience.

Offering all those different payment systems in games is virtually impossible, giving developers integration headaches and still leaving out gamers who don’t have access to those platforms.

Moreover, the revenue collection process has even more hurdles. Apple Pay, for instance, takes up a 30% cut from any in-game purchase, and it takes a generally 60-day-long process for the developer to receive the funds.

A blockchain approach could solve many of these problems. Cryptocurrencies such as Bitcoin are globally available, which can provide a universal method for all developers and gamers to use.

Moreover, blockchain removes intermediaries and brokers, providing developers with a means to be directly compensated for the use of their game. Instead of waiting out for revenues to be doled out, a platform based on smart contracts can provide a mechanism where players immediately direct funds to the developer’s wallet, without any intermediary taking cuts. As with the music industry, blockchain gives power back to the creators of art.

Some platforms such as Steam have integrated support for Bitcoin as a payment medium. Players can now buy games or in-game assets with the crypto cash.

Other companies such as Gamecredits, provide their own cryptocurrency which users can purchase through a local payment medium and spend across different games that support the Gamecredit wallet.

However, the adoption of cryptocurrencies in games will itself be a challenge, just as the case is for any other payment medium. Despite the hype surrounding Bitcoin, Ethereum, Monero, Zcash and other cryptos, they have yet to find audience beyond niche enthusiasts.

But blockchain has other uses as well.

Meeting ownership challenges

In-game objects are becoming more and more valuable and coveted, trailing a range of management and security problems. Proof of ownership, prevention of duplication, fraud, theft and other problems that are present in any platform where assets of values are being traded are present in online games.

As an immutable ledger of transactions, blockchain can provide a transparent and frictionless platform to express and exchange ownership of in-game assets (similar to what what we explored in the intersection of blockchain and the supply chain a few months ago).

The blockchain approach will remove many of the obstacles currently blocking the path of gamers who wish to trade in-game objects. It can also provide a distributed market where assets can be traded across games. This is an alternative to black markets that are at best risky and riddled with fraud. So you can trade a laser gun from a sci-fi game for a pouch of gold in your fantasy RPG without fearing fraud or the lockup of your PayPal account.

Blockchain also opens the way for a whole new line of games that are based on in-game trading, such as trading card games. Blockchain can perfectly support concepts such as limited prints and fluctuations or changes in value, while removing problems such as card condition deterioration.

Meeting the security challenges

Gaming platforms are a hot target for hackers. From direct attacks to huge gaming platforms such as Steam, to scam plots carried out in unconventional trading hubs, fraudsters and hackers have taking away big chunks of the money being circulated in the industry.

Truth be told, these platforms aren’t the most secure places to be storing assets that are worth money. Often times, the developers aren’t security conscious people like the ilk of the banking and finance sector.

Blockchain has proven its resiliency against hack and fraud schemes. While there’s no such thing as absolute security and hackers will find ways to social engineer their way into the wallets of their victims, the blockchain offers a harder target to strike at and a more secure infrastructure, and there’s no need to reinvent the wheel.

Some believe that 2017 is the year where blockchain will go mainstream in the gaming industry. There are many projects that are ready to launch and more that are being developed. It’ll be interesting to see if developers and gamers will be able to overcome the hurdles and achieve the milestones required to fully leverage this exciting technology.

 

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