Gaming On The Blockchain: How Crypto Impacts The Industry
Blockchain gaming has fast become one of the most popular trends in both the crypto space and the gaming space. GameFi has all the makings to bring about a gaming revolution in the way that it offers players brand new gaming opportunities, including the ability to earn as they play.
According to DappRadar, gaming related NFT sales represented 20% of the total market in 2021, generating $4.8 billion in revenue. Furthermore, GameFi is now proving to be more popular than DeFi among global consumers. According to Bloomberg, 50% of active crypto wallets are connected to gaming applications, with only 45% connected to DeFi apps.
Decentralised Payment Methods
One of the most impactful ways in which gaming with crypto impacts the industry is through delivering a decentralised payment method for in-game microtransactions. Distributed Ledger Technologies promote transparency, meaning that any record made on the ledger is permanent and cannot be altered. From a development perspective, this improves the security of a game or gaming app.
As an alternative payment method, cryptocurrencies are also disrupting existing real money gaming sectors such as the iGaming market.
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iGaming, which encompasses online poker, sports betting and casino gaming (including variants like roulette, blackjack and slot machines), is largely populated by gaming operators like PokerStars Casino, who typically only accept fiat currencies. This means that, in order to play the wide range of digital casino experiences available on such platforms, players need to make deposits and withdrawals using traditional payment methods, including debit cards, bank transfers and eWallets. The integration of cryptocurrencies offers a new alternative.
Meanwhile, a series of crypto casinos have emerged in recent months that not only offer players the convenience of making deposits with or withdrawing their funds as cryptocurrencies but also provide their own tokens. These tokens are loaded with exclusive benefits, which give gamers access to things like discounted games or no withdrawal fees.
Play to Earn Games
The play-to-earn gaming model is already proving to be popular, indicating just how much potential it has for mass adoption. Under the P2E model, gamers are rewarded for the time they spend playing with cryptocurrencies or digital assets like NFTs, and there are ways in which this is impacting the gaming industry.
Gamers dedicate a lot of time and energy to the titles they play, but with traditional video games, there are no options to monetise their in-game efforts. Neither is it possible to turn in-game assets, like new weapons, vehicles, character skins etc., into assets with real-world value. P2E games provide players with opportunities to earn digital assets that have genuine value, which they can then trade on open markets and convert to fiat currencies.
P2E gaming can also prove to be a more sustainable approach from a development perspective, particularly in the mobile gaming sector. Currently, many gaming app developers can only rely on a small percentage of their user base to generate revenue. With P2E games, the potential is there to generate higher revenues from a larger percentage of players since the majority will have the opportunity to earn digital assets.
Shifts in the Industry
We can typically rely on movements within the industry itself to predict just how disruptive new technology can be. There are clear signs from significant players that indicate the future potential of gaming on the blockchain.
Entertainment powerhouse Amazon is the latest powerful corporation to focus on blockchain gaming in 2023. According to a report by Blockworks, Amazon’s NFT initiative is still in the development stage but will likely launch in April 2023. One track of the initiative will allow registered users the opportunity to play blockchain games and claim free Amazon NFTs to spend onsite.
In 2022, Amazon CEO Andy Jassy stated that he expected NFTs to “continue to grow very significantly” and that the eCommerce giant was open to the possibility of “adding crypto as a payment mechanism...down the road”. This new blockchain gaming venture may well be the first step towards a shift that sees a full-scale crypto and blockchain ecosystem.