Blockchain Slow to Break Ground in Gaming, But Not for Long

The video game industry has long been known for its predilection to using only the most cutting-edge technology and innovation. From Pong and the 8-bit NES, gaming today entails virtual reality, augmented reality, high-end 4k graphics, motion controls, and other technologies considered revolutionary at their time. Indeed, Sony’s PlayStation 3 was the first device in the world to use Blu-ray technology exclusively.

This drive for innovation is propelled largely by consumers’ desire for more of everything—better visuals, new experiences, different genres, and unique concepts. Demand for these factors has been the primary driver of development in graphics rendering technology, faster processors, new peripherals, and more reliable online infrastructure.

One of the more recent innovations garnering hype, if not real momentum in the industry is blockchain. The technology’s promise of greater decentralization, improved peer-to-peer communications, and digital assets makes it a seemingly natural partner for video gaming. While there has been some traction already, the industry has yet to crack the puzzle for integration.

Nevertheless, the promise of a piece of the gaming industry’s massive revenues, as well as access to the equally valuable esports arena, means that the blockchain and gaming industries have incentive to ensure a successful marriage of ideas.

Blockchain and Gaming are a Natural Fit

Gaming and esports have become two of the most valuable markets in the world in recent years. The former was valued at nearly $135 billion at the end of 2018, and the latter saw revenues soar by 38% to reach $906 million. With such a promising trajectory, gaming has become a hot property, and one that is incredibly valuable to blockchain and crypto.

The technology has already made some inroads into gaming, and game apps using blockchain have been some of the more successful products launched. Indeed, applications like Crypto Kitties—notorious for crashing Ethereum—and a variety of casino and betting games have already staked an early claim to success. Even so, these games don’t really make use of blockchain in a novel way as much as simply residing on the chain itself.

Optimism remains high that blockchain can make an impact in both gaming and esports, and industry mainstays as well as entrepreneurs are betting on it happening. With esports becoming a serious industry, blockchain companies have started providing services that can facilitate team communications, management, and even payments.

Institutional Interest Could Be a Game Changer  

Outside of individual developers, what has been encouraging about blockchain’s breakthrough is that major players are showing their belief in the prospect. Ripple, for instance, showed its trust in the sector’s potential by creating a $100 million fund alongside blockchain startup Forte to aid in the development of mainstream games based on blockchain. This show of faith is huge, as it empowers companies to think of the many verticals available to explore and expand in.

DreamTeam, a company founded by a former esports pro, Alexander Kokhanovskyy is building a full platform for esports teams and groups to train, monitor performance, handle payments, and schedule practices and scrimmages. While teams already have tools to do these things, blockchain facilitates things by providing greater transparency and efficiency in payments at all levels (between teams and in competitions). Similarly, it allows easier entry points for gamers, fans, sponsors, and managers by removing gatekeepers and providing a more immediate network for access.

Esports are far from the only valuable application of blockchain, however. Some companies have focused on providing a better toolkit for developers who wish to build on blockchain. Blockchain-based game stores let users pay developers directly and avoid the complicated tangles traditional game publishing and AAA releases create.

The thriving digital items market—where users buy and sell in-game items they have found or built—can also benefit from marketplaces that reduce transaction costs and allow for direct user-to-user dealings. Platforms like Hoard offer users the ability to determine true ownership of these assets and have more transparent dealings with strangers on the web when buying and selling their items.

A Promising yet Challenging Future

Despite its relatively slow start, blockchain could find fertile ground for mainstream growth in the gaming industry. A sector that is so defined by its embrace of cutting-edge technology can only benefit from blockchain’s many advantages.

Challenges remain, of course. Notable is that blockchain remains constricted by physical realities. Scaling must be resolved to support real mass gaming—as the Crypto Kitties fiasco showed—and the cost of developing on blockchain must also become more feasible. The technology’s multiple applications and real use cases, stretching from smarter marketplaces to virtual resources for developers to tap into, make it a perfect fit for gaming. Although it may come with some lumps, it seems blockchain and gaming are set for a productive and mutually-beneficial future.