The global gaming market has been growing by double-digits in recent years, hitting $91 billion in revenues last year. SuperData Research called it the “biggest year in the digital games market and playable media world ever.”
While the biggest growth has come from segments like mobile gaming, new technologies have the potential to radically upend the gaming market, providing newfound growth opportunities. One such technology, blockchains, arguably has the biggest long-term potential.
Here are three ways blockchain technology will permanently change the future of gaming.
1. Blockchains will disrupt traditional gaming companies
Blockchains are known for their ability to bring decentralization to massive industries, pushing the power from centralized organizations to the consumers themselves. Blockchains will do the same thing for gaming.
To move from gaming universes where corporations own the content (e.g. Activision/Blizzard, CCP Games, and Perfect World) to platforms that are owned by the users themselves would have huge ramifications.
For example, gamers currently have gatekeepers (centralized organizations) dictating prices, levying taxes, censoring users, controlling content, and monetizing their data. With decentralized platforms, consumers can socialize and transact without intermediaries. This will provide gamers with more control and flexibility when it comes to their gaming experience.
2. Blockchains will enable cross-platform support
As long as gaming content is created on a centralized platform (ie. owned by a single organization), cross-platform support will suffer. For example, Facebook could easily prevent gaming content developed for its Spaces VR world from working on any platform other than Oculus, which it also owns.
By reducing a consumer’s or developer’s ability to use multiple platforms, gaming companies have limited the growth of in-world communities. Decentralized platforms, powered by blockchain technologies, will give gamers and developers what they really crave: full control. Only then will users experience the best gaming has to offer.
Chris Vollmer, a strategist in PwC’s global entertainment and media business, told VentureBeat last year: “If I was a game publisher, I would think more about social community and peer-to-peer connections and a network for a specific property and create more connectivity.” While Vollmer was talking about gaming in general, blockchain-enabled experiences could empower the creativity he thinks is necessary.
3. Blockchains will give the power back to gamers
Gaming experiences controlled by a centralized entity (often a corporation) pose several issues:
- Control over rules — Artists, developers, and consumers are limited to transacting only items and services approved by the platform owner. This has spawned virtual black markets in many digital worlds, reportedly worth over $6 billion.
- Control over transactions — Users are unable to capture the full value of their actions due to transaction costs. For example, Second Life levies a 5 percent fee on any exchange of items between users.
- Control over access — Centralized platform operators can ban access to any user, at any time, at their discretion.
- Control over in-world currency — For in-world currencies, users are at the mercy of a single entity determining monetary policy, with little insight into future actions that can impact their ownership value.
Done right, blockchain-powered gaming can remove these limits, letting gamers take more control over their experiences. For example, FirstBlood lets e-sports players challenge the field and win rewards using smart contracts and oracles in the blockchain. The game world my team has built, Decentraland, is a blockchain-based VR platform owned by its users, not a single corporation. And Blockchainga is developing games where digital items are freely tradable on a public blockchain, outside of the game.
Like any other technology revolution, blockchain will take time to mature. It is still nascent, especially when applied to gaming. But when the disruption does happen, the impacts will be pervasive, shifting ownership, control, and user experiences. It all makes the gaming industry is as exciting as ever.