How Does Blockchain Make Online Games Better?

There are about 3 billion gamers in the world today playing on PC, console, and mobile devices. In 2020, the gaming industry revenue exceeded $170 billion. These are huge numbers, but there is one issue in the gaming industry that pushes it to change — players want to have more power over what’s happening in the game; they want their voices to be heard. Running games on blockchains can resolve this issue and introduce a new revolution in gaming. Let’s see how.

What’s wrong with the gaming industry today?

Passionate gamers don’t usually play one particular game — they are often involved in many. However, as these games are run by separate organizations, it’s impossible to make gamer’s profiles in all of them interoperable. Therefore, one can’t transfer data and earned value between these games directly.

However, this isn’t the largest problem — there is something of a bigger concern. Games spend hours and days improving their characters and getting expensive items to achieve progress in the game. However, all these items and characters are stored on centralized companies’ servers that are vulnerable to hackers and voluntary decisions of their managers. As a consequence, gamers never own their items and characters, while companies do. You can put much effort into your character but you will never have any control over it. This is what users want to change.

Also, players never have a say in what’s happening with their favorite games. Developers and founders can implement changes that most gamers don’t welcome — while the latter can’t do anything about it as the whole power is in the company’s hands. But what if there was a way to run community-governed games where the fans had control over what they’re involved in?

Blockchain — a technical solution to revolutionize gaming

Let’s see how blockchain can become the infrastructure solution for games where users will be more involved and have more control over the flow.

Developers can build on secure encrypted blockchain platforms. These platforms are decentralized — and far more resistant to hackers as there is no single point of failure. The game data is distributed across a network of nodes, making penetrators see no concrete goal to attack. Blockchain-based games are more resistant to DDoS attacks that users of traditional games suffer from.

All data is public. In a blockchain-based game, all data is recorded in a public ledger, and no one can forge it. Users possess their items and characters. No one can just say “this item is mine” without demonstrating publicly verifiable proof of ownership. If you own something, everyone knows it.

For developers, this means their work can never be restricted or undone without the whole network’s consensus. On the other hand, devs can’t reverse the users’ value and data transfers, same as the community-driven decisions that they don’t like.

Blockchain facilitates in-game purchases. Third-party payment providers and banks charge high fees and act in a non-transparent way, whereas blockchain eliminates middlemen and introduces direct payments. Native games’ tokens make value exchange inside games even more transparent and trustworthy.

Blockchain games are open-source. Developers can review the games’ code and independently criticize it. To build your own game, you can freely learn the existing solutions to easily implement the best practice in your creation.

Gamers’ opinions matter. The network operates based on a consensus, so devs can’t implement any changes arbitrarily. First, they have to ask the community, and any member can offer their own vision of changes.

In regular games, users pay money to companies. Here, they buy items to own them which they can cryptographically prove. Moreover, a game’s tokenomics can provide various incentives: users can get tokens for their progress and then trade them.

One could say that this sounds good in theory, but is there any proof that blockchain in games operates the way it was designed? The answer is yes — now is the time to introduce you to the top blockchain-based games that have earned the trust of millions of users so far.

Top crypto games

CryptoKitties

This game launched in 2017 on the Ethereum network has started the blockchain-driven gaming revolution. Here, users can breed cats, buy, and sell them in a decentralized marketplace. The most expensive cryptokitty ever sold is called Dragon, and the buyer paid 600 ETH ($172,000 in 2018).

Even by 2019, the game was counting 1.5 million users and transactions worth $40 million ever made. In 2017–2018, the influx of CryptoKitty players was so high that the game congested the network and surged gas fees to their all-time highs.

Decentraland

Decentraland is a game where users can buy and sell parcels of land. It has also been introduced in 2017 on the Ethereum blockchain. In its ICO, the game raised $24 of crowdfunding in just a few seconds. Decentraland leverages the NFT technology that helps users prove their ownership of items. MANA is the game’s native asset that facilitates value exchange between gamers.

The Sandbox

The Sandbox is another Ethereum-based game that uses the NFT technology. Here, users can buy virtual land, build various game scenarios on it, organize digital concerts and exhibitions. Any item created in the built-in editor can be sold in the game’s NFT marketplace and located in one of the parcels of land. Buying land in the Sandbox is even viewed by some as a long-term investment.

The game became popular in April 2021 after the Winklevoss Twins and Atari gaming company bought some land in the Sandbox. The game’s market cap reached $1.6 billion and continued to grow.

How the gaming industry giants invest in crypto and blockchain

Global gaming companies are starting to embrace crypto and blockchain. The South Korean video game producer Nexon Co invested about $100 million in Bitcoin in April 2021; the Chinese gaming company The9 put $6.7 million in Bitcoin miners.

These investments were, however, not about blockchain in games themselves. But here’s the data that directly proves the interest of investors in blockchain-based games: in the first half of 2021, blockchain gaming companies raised $476M.

Here is another good example: the Asian entertainment giant Atari (the one that created Tetris and Pac-Man in the 1980s) released the ATRI token — a currency that the company is going to use as a native asset in some of its games. The coin raised $1.5 million in a pre-sale event.

Moreover, Atari has created a hybrid PC and console unit that is fully compatible with blockchain-based games and cryptocurrency transactions in them. The company ensures that this move is just the beginning of what it is going to introduce in the domain of blockchain gaming.

Bottom line

Blockchain in gaming does one major thing: it gives users more control of what is happening in the game and what they possess. But importantly, this does not go against the developers’ interests: they can still build great games and generate good profits. The things happening now in blockchain gaming demonstrate that this model works and has a lot of potential. And today, we may expect one thing to happen: the major gaming giants will realize this fact as well, and we will be able to enjoy more robust blockchain-based games soon.