Year in, year out, people continue to wonder how long the crypto hype is going to continue. The volatility of the market and the crashes it has faced keep leading some to believe that the digital currency’s time has come to an end, but without fail, it always pops back up again. But why?
This month at The Fintech Times we’re going to be looking at what makes digital currencies, most notably cryptocurrencies, so popular, while also uncovering the emerging alternatives to cryptos and why the digital future looks so intriguing. We kickstart the month by looking at some of the most popular blockchain initiatives in different sectors, with banking being the first to come under the microscope.
We hear from Pannathorn Lorattawut, Chris Arthurs, Valentin Cobelea, Assad Dar, and Joseph Derflinger about the most popular blockchain initiatives we are seeing within the gaming industry.
Bringing greater transparency to gaming
Pannathorn Lorattawut, CEO of VUCA Digital, gave his view on the role of blockchain in the gaming industry. He said: “One of the key challenges that players face in the gaming industry is a lack of transparency and credibility.
“Previously, players needed to rely on peer-to-peer interactions in order to buy, sell, or trade their in-game items or in-game currencies which exposed them to fraudulent practices. Blockchain technology is providing solutions through gaming platforms, digital assets, and exchanges. Where once you would place trust in an individual, now you place your trust in a system.
“Blockchain has also brought greater efficiency to the gaming industry. The ability for players to trade their in-game items, tokens, and crypto or fiat currencies on the platforms or exchanges helps facilitate the creation, enhances security, and builds liquidity. In addition, in-game characters or items are transformed into NFTs, which enhances their value. These features have resulted in strong growth and adoption of the gaming industry.
“Enjoyment and community recognition have also been the main success factor for gaming. Play-to-win attracts gamers into the rapidly growing industry, and many of them go a step further to pay-to-win. The development of blockchain, cryptocurrencies, and crypto assets has brought play-to-earn and pay-to-earn to gaming. These have significantly attracted wider groups of players and resulted in a fast expansion and a wider variety of games. Players do not just play to win or play for fun; they now can play to pay the bills. Games like Axie Infinity, Ni no Kuni: Cross Worlds or MIR4 have gained popularity from this initiative. However, some developers have built a Ponzi scheme through the creativity of pay-to-win games. Rug pulls like CryptoCars, CryptoPlanes, or CryptoMines are products of this popular structure as well.
“Blockchain is also playing a role in transforming the esports industry. It introduces new rewards/loyalty programs, incentive models, fan support systems, and voting, to name a few. Above all, blockchain technology will continue to revolutionise the gaming industry.”
Blockchain can enhance connections for creators
Chris Arthurs, VP of Innovation at Hadean spoke on the connection between creators and their creations in gaming. He said: “The creator economy – ensuring that creators can build, enhance, and be rewarded for augmenting gaming worlds.
“Great things can happen when players and content creators are empowered to explore, and we believe that blockchain can enhance the connection between creators and their creations, encouraging more experimentation and sharing, and unlocking more complete in- and cross-game economies. This is important because one key way in which games achieve longevity in the market is via user customisation, keeping games fresh year after year.
“Good examples include Counter-Strike, which originated as a user mod for Half-Life, World of Warcraft is awash with 3rd party customisation, and DOTA began life as a mod for Warcraft III. Minecraft simply allows its users to express themselves creatively.”
Metaverse user experience, ownership, and DAOs
“Many DAO use cases are being explored today, and gaming is no exception. Key players include the Mythos Foundation, which uses a DAO to democratise and standardise game economies. This is an important piece of the puzzle, as it distributes decision-making, power, and ownership, and supplies trust and transparency. These properties are also desirable to give gamers a sense of ownership in worlds that they love, whilst balancing against the commercial needs of the world owners. This is something that we must work hard to get right.
“Some interesting examples include the Star Atlas DAO, the Axie DAO, YGG DAO, MAODAO, and Liberty Gaming. Gaming DAOs can relate to the game itself, or to guilds, contributing to the growth of the player base.”
“The growing number of blockchains suggests a cross-chain future, with increased specialisation in segments like gaming. Cross-chain functionality and NFT transport, therefore, will be critical components to enable a trusted foundation on which the ecosystem can flourish.
“From a technical perspective, we need to be ready to work with as many chains as possible, so that the resulting ecosystem has flexibility and resilience built into it from day one.”
Blockchain is yet to take off for gamers who see through the facade
Valentin Cobelea, head of gaming technology at Zilliqa said: “Despite still being a relatively new concept, we are yet to truly see much diversification when it comes to blockchain-based or blockchain-enabled gaming. By and large, the most popular initiatives that we’re seeing in the market at present continue to be financial products masquerading as gaming products – they might have carefully thought out tokenomics or a nice visual facade, but at their heart, they’re not fun and they’re not games.
“And you can be sure that gamers know a game when they see one.
“The other trend that I see becoming increasingly prevalent in the blockchain gaming space is games that have incorporated a blockchain component just to say that they have got one – that they’re innovative and embracing Web3. But doing blockchain just as a tick box exercise or to say that they’ve done it isn’t going to move the needle. Gamers see that for what it is – a bolted-on feature that doesn’t make any sense at best or a quick and transparent cash grab at worst.
“If blockchain gaming is ever to truly take off and gain traction with a mainstream audience – which it has thus far failed to do – my view is that this paradigm will need to shift significantly.
“This means putting gamers at the forefront – truly understanding that market and developing games that will resonate with the players. If games aren’t fun and couldn’t stand alone save for the blockchain buzzword attached to them, they won’t succeed – it’s as simple as that.
“Equally, the blockchain component must be well thought out and actually innovative: it has to add something new to the experience and offer something to the players that couldn’t be done before. It doesn’t need to be (and probably shouldn’t be) the focal point of the game. Gamers don’t care if their favourite game was built in Unreal or in Unity – they just want to play the best games. Why should blockchain gaming be any different?”
Blockchain has potential in gaming but must win gamers over with gameplay
Assad Dar, the founder and chief visionary officer of Medieval Empires explained: “As more blockchain gaming projects enter the Web3 space, it is essential that they include the right mix of immersive gameplay, strong tokenomics, and a team of experienced gaming professionals infused with a global pop culture phenomenon.
“We believe that the blockchain gaming industry has massive potential to grow even further by attracting more mainstream gamers and even casual gamers into its fold.
“Another trend we envision within the space is sustainability-backed projects which include eco-friendly blockchain technology to ensure lower gas fees, improved security and overall quality of experience.
“The objective of Medieval Empires is to build a multiplayer strategy game for the blockchain with minimal entry-level technical requirements while keeping it entertaining and engaging. By developing games with the potential to earn genuine benefits while being environmentally friendly, they are dedicated to People, Planet, and Prosperity.
“Additionally, it empowers gamers in various manners. While the game is focused on providing exceptionally captivating gameplay, the players will be able to own in-game assets as NFTs. For instance, you can own land NFTs in the game to build your own empire and also earn through collecting tax from other players living in your county, exchange goods like wheat and minerals, and buy and sell unique units.”
The key to blockchain success is empowering players
Joseph Derflinger, CEO and founder of Red Door Digital said: “Integrating blockchain technologies into the gaming sector generally revolves around empowering players to have more ownership and control of the games they play. This replaces the traditional Web2 model where the game developers call all the shots and reap all the financial rewards in the industry.
“Within Web3 gaming right now, we’re seeing a shift away from the finance-first ‘Play to Earn’ model, and instead the emergence of the ‘Play and Own’ model. In ‘Play to Earn’ ‘GameFi’ the gameplay is simplistic and the primary goal of playing is to earn money denominated in a given cryptocurrency. By contrast, ‘Play and Own’ prioritises good gameplay for entertainment’s sake, while leveraging blockchain functionality to give players ownership over their hard-earned in-game assets.
“Within the Play and Own model, we leverage blockchain technology to provide gamers with utility and value in the form of non-fungible tokens (NFTs). Those NFTs could be in-game land, items, characters etc. Ideally, to ensure the emphasis is on entertainment rather than over-financialisation, players earn their NFTs from gameplay, rather than buying them directly from developers, for example by levelling up their characters. Gamers can then trade their hard-earned assets on a secondary marketplace that’s formalised via the blockchain if they so wish.
“Other ongoing blockchain initiatives in this space include reducing friction when onboarding players into a Web3 gaming environment. Right now it takes too much time and a long learning curve for players to set up crypto wallets and link them to games. There’s also a massive, cross-industry discussion on how to enable NFT interoperability across gaming platforms. This will radically restructure the way games are developed and maintained, and hopefully will result in an explosion of creativity in the space.”