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Crypto and The Gaming Industry

June 19, 2024

Apart from the finance industry, another industry that may undergo massive changes thanks to crypto is video games. Lately, the introduction of cryptocurrencies, NFTs, and blockchain and associated technologies to gaming has resulted in the emergence of an innovative new pattern in the development of this booming industry. Blockchain technology's decentralized and transparent nature has the prospect of revolutionizing conventional gaming models, allowing for new types of ownership, monetization, and player interaction. So, how exactly are they getting changed, and what does the future look like for gaming today? Let's delve deeper.

Crypto Games

There are two ways crypto or blockchain technology can affect the gaming industry. Firstly, it may improve existing games and open new opportunities for their further development. Secondly, there are crypto games that have employed the technology since their respective beginnings. Most of the latter typically involve non-fungible tokens (NFTs), cryptocurrencies, or both. For instance, some crypto games have special tokens that can be used to purchase in-game assets, avatars, NFTs, and other items. Others reward users with unique NFTs that can be exchanged between players or sold.

Many crypto games are, in fact, play-to-earn games that encourage players to try them out and engage with them for a longer time by attracting them with crypto assets and NFTs. The play-to-earn model connects the gap between playing for enjoyment and profit, as the rewards for players have genuine value in the real world and can be traded on the secondary market. This shift in paradigms may benefit players substantially by transforming gaming into an even more fertile source of income than it is today. However, it also opens many opportunities for malicious individuals who may use trusting audiences for profit.

Tokenization & Its Advantages

The gaming industry has become significantly more captivating since the inception and introduction of the crypto realm. Cryptocurrency is precipitating a new development trajectory in this sector, working in several ways, the first being in-game asset ownership. Historically, many in-game assets had little real-world value, making them appear useless outside the game environment. In-game items such as skins, weapons, and virtual currency are owned and controlled by game developers, limiting players' ability to trade or monetize them outside the game environment.

Such an approach has two significant downsides. From the user's perspective, who typically may spend their money on certain items within their favorite game, it is the absence of control over said items. They have essentially no rights for them. From the developers' perspective, it also might be disadvantageous. For example, some non-crypto games let players exchange items. Thus, a whole market of players emerged, hunting for rare skins or weapons to sell them afterward. In this case, developers are left outside and cannot control the process. Tokenizing items into NFTs can be beneficial, enabling players to buy, sell, and trade them on decentralized marketplaces in a more organized and secure fashion.

Furthermore, tokenization can help foster cross-game compatibility and interoperability, empowering players to utilize their resources and items more freely across various games, universes, and even mediums (in mobile, computer, and console games). This not only adds to players' freedom and flexibility but also has the potential to cultivate a dynamic and interconnected gaming community. Consequently, blockchain can open new opportunities for game developers, enabling them to create more extensive gaming ecosystems and unite various worlds.

Expanding The Role of Players

A vital advantage of employing blockchain is the power it can give to gaming communities. This technology enables players to interact more closely and creatively with games and each other.

Additionally, the speed of gaming development may also change, causing a deviation from traditional prolonged game development processes. Blockchain technology enables developers and players to collaborate on a game in real time. This decentralized approach gives players the opportunity to show themselves, explore how the game development looks from the inside, and participate in it, thus stimulating the creation of more player-centric games. As a result, gamers will feel more involved and connected to a game and its universe, which is a substantial bonus for development teams.

Security & Economics

Another crucial advantage of blockchain when it comes to gaming is the potential to ensure more robust security. By leveraging blockchain's decentralized ledger and smart contract capabilities, gaming platforms can offer greater transparency, security, and interoperability, facilitating a more engaging and accessible gaming experience. The robustness of blockchain technology surpasses more conventional methods, mitigating fraud and enabling the monitoring of in-game asset ownership.

Moreover, blockchain-based games and platforms are revolutionizing gaming economics by allowing the creation of decentralized economies governed by smart contracts and community consensus. In these decentralized economies, players can earn rewards, partake in governance mechanisms, and contribute to a platform's development in other ways, thereby democratizing both the gaming development and experience.

Unleashing the Power of Crypto Gaming

Currently, the market has a surplus of static and pretty simplistic crypto games that do not offer much to players. The popular enticement often met in crypto games — a chance to earn substantial profits by simply playing — also proves ineffective in attracting an audience because it is becoming firmly associated with scammers. The oversimplicity and scam-like nature of many modern blockchain games are two main reasons why traditional gamers have not been drawn to crypto alternatives much and why many professionals from the traditional gaming industry have been looking at crypto with a hint of mistrust and disbelief regarding its capabilities.

Fortunately, there is a growing realization within the crypto industry that these games must be optimized and enhanced significantly to keep players interested since the crypto element alone cannot entertain for long. The same goes for captivating investors, who are still too cautious when examining investing opportunities related to new technologies. So, developers need to adapt to the ever-evolving landscape, focus less on the aspect of earning, and prioritize the quality to draw more players who are used to the more complex and refined games. The same applies to established gaming corporations beginning to recognize the potential of blockchain gaming and planning to test the market.

Final Thoughts

The merging of crypto and gaming signifies a fundamental change in the gaming sector, as blockchain technology opens the door to increased ownership, compatibility, and community-centeredness. With the ongoing advancement and refinement of blockchain-powered gaming platforms, as well as growing interest in this technology from traditional gaming giants, we can expect more bold, empowering, creative, and inclusive gaming solutions in the future.

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