What Blockchain Gaming Means for the Future of the Economy
Blockchain is fast becoming the biggest talking point across a wide range of industries from fashion to finance to art, and video gaming is certainly no exception to the rule. Venture capital firm Bitkraft values the video gaming industry at a staggering $336 billion across software, hardware and intellectual property. As the industry has grown, it has continually integrated the best consumer technology available — be it graphical fidelity, immersive audio, 3D and virtual reality (VR).
Now, blockchain technology is similarly being adapted into video gaming’s ever-expanding scope, and for good reason. Decentralized blockchains open the door to verifiable digital ownership, enabling players to truly own the items they play with. Moreover, the revenue models of blockchain gaming are typically skewed toward the player rather than solely winding up in the pockets of the game publishers and developers. This new paradigm is unlocking an entirely new, and mostly unexplored, digital economy with real-world implications.
Centralization is the Enemy of Property Rights
Gaming has grown to become the world’s largest media category, ahead of TV, on-demand entertainment, film and music. Crucially, almost all traditional game-based economic activity is centralized, giving developers and publishers the ownership rights to all applicable revenue streams within their games, accessing potentially billions of dollars from the sale of in-game content, digital items, and subscriptions.
The end-users meanwhile hold a limited share in that value, despite having invested their hard-earned money into purchasing a game. This is compounded by additional spending on in-game items, add-ons, and upgrades, the ownership of which all stays with the game producers and creators, and cannot be transferred out of the game environment or sold on.
In 2021, players spent approximately $61 billion on additional in-game content that they don't truly own. To make matters worse, by 2025, in-game purchases are projected to surpass $74 billion. However, this one-sided revenue model is now openly being challenged by the arrival of blockchain gaming.
Placing ownership back into the hands of players
Blockchain games flip the script on traditional gaming by prioritizing player value creation, doing so by leveraging blockchain technology — predominantly in the form of non fungible tokens (NFTs).
An NFT is a tokenized, digitally secured claim of ownership for a unique, non-interchangeable digital asset. NFTs have a wide case use in virtual gaming worlds, be it as characters, items, virtual plots of land and even digital clothing for avatars.
Thanks to the immutability, and veracity of blockchains, every tokenized in-game item acquired really can belong to the players themselves.In blockchain gaming, users do not have to rely on the permissions or rules of game publishers and creators, and any NFT’s they own can be sold freely on secondary marketplaces both inside and outside of the game.
Global blockchain gaming impact and what the future holds
This fast-developing new type of gaming will redefine how users interact with and perceive traditional socioeconomic structures like financial institutions, marketplaces, and governments.
In Latin America, for example, blockchain gaming has surged in usership amongst the younger generation in a climate of spiraling price inflation, with Argentina and Brazil climbing to 5th and 7th respectively in the global users per country of the popular Decentral Games platform.
For many, this provides a glimpse into the future of work, or at least a significant aspect of it. With the world careening ever more toward digitization it’s not unfeasible to imagine new career options opening up, particularly as the ‘metaverse’ moves beyond mere conception.
The blockchain gaming movement is a testament to this, particularly in emerging economies where returns can exceed that of the average minimum wage.
But having a discovery portal where gamers can access independent reviews and analyses of the latest blockchain games is essential for the ecosystem to evolve, thereby opening the floodgates for billions of dollars of digital assets to flow in. By leveraging gamers' and experts' scores and analyzing over 2000 leading blockchain games including Axie Infinity, Splinterlands and Skyweaver, extracting ratings, daily earnings potential, reviews and streams — much-needed gaming data can be provided to players that they can use to maximize their earning potential.
In this way, blockchain games have been providing a proof of concept for a self-sovereign financial system that could be adopted not only by the 3 billion-plus gamers worldwide but also across a mainstream audience by focussing on a wide variety of emerging digital environments and forms of value creation.
Indeed, with the rapid expansion and huge institutional investment seen in both Web3 and Metaverse case uses, it is arguably blockchain gaming now at the forefront of the increasing merge between the physical and digital worlds.
About The Author:
Will Deane is CEO of Rainmaker Games and a serial entrepreneur.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.