A new GamesBeat event is around the corner! Learn more about what comes next.
Technology is mostly incremental. We make batteries last 20 percent longer. We make glass strong enough to serve as the front surface of a cellphone. We let headphones sample ambient sounds so they can filter more noise. Products perform better. They cost less. They last longer.
Sometimes a different sort of innovation comes along, a technology that serves as the platform for unanticipated breakthroughs. These innovations disrupt the status quo, toppling established market leaders and creating opportunities for a generation of creators: artists, technicians, leaders, or dreamers.
The full implications of these major innovations are never fully grasped at first. A few visionaries get a glimpse and play a hand in the disruptive transformations that accompany the new technology. But disruptive technologies don’t achieve full fruition until they are harnessed by a community of creative dreamers who use them to instantiate their creative visions.
That’s where we stand today with blockchain.
Three top investment pros open up about what it takes to get your video game funded.
What is blockchain?
Blockchain is a data structure and associated set of algorithms for distributing, storing, and accessing data. Computer programs use blockchain protocols to ensure that access to information is, due to the unique distributed nature of the blockchain architecture, secure, authenticated, and authorized. The technology supports the authentication and transfer of digital data, including everything from medical records to cryptocurrency without the need for an intermediary broker.
That’s why blockchain is ideal as the technical foundation for an international, friction-free virtual currency like Bitcoin or GAME. Every unit of cryptocurrency is indexed and every transaction is recorded in a secure, authenticated open ledger that maintains anonymity and privacy among those who conduct the transaction while providing a verifiable record.
Blockchain data and currency transfers are implemented as “smart transactions” that take place without the need for a middleman. If you’ve ever secured a mortgage to buy a house, you know about escrow, a place the buyer’s funds are held by a bank until all the contracts have been signed and they are released to the seller. With blockchain, there’s no need to pay a bank to hold funds in escrow. The buyer and seller can conduct their transaction in a secure, verifiable environment. Every step of the transaction is stored as a block in the chain, and each block has encoded pointers to the preceding and following block. Blockchain data is therefore permanent, private, and secure.
Blockchain technology exists in a spectrum of usefulness. At one end, you could visit the player’s home and deliver groceries or bars of gold. Then there’s PayPal, cash, credit cards, bank transfers … there are many mechanisms for transferring funds from one person to another. The blockchain solution is no more useful, but it is more convenient because you can do it from within the game environment. The end result is the same no matter which technology you employ. Blockchain is distinguished from other solutions by its convenience and the way it does not disrupt gameplay.
This mirrors the way automobiles have impacted the world. The fact is, the automobile originally didn’t do anything you couldn’t do on foot, on a horse, or on a train. Cars were more convenient, but some questioned whether the incremental benefits justified the establishment of a network of fueling stations and the construction of roads, bridges, parking lots, and so on. If all a car does is give you a little more speed than a horse, then where’s the revolution?
The revolution wasn’t obvious at first. But over time, the automobile fundamentally changed the way we create cities and neighborhoods, the way we separate the places we work from the places we live, the way we distribute food and other goods … not to mention its huge impact on the global economy. Although it offers only an incremental benefit over the horse and buggy, the automobile really has changed everything.
Blockchain technology is rapidly finding important applications beyond cryptocurrency. For example, it seems to be ideal for giving doctors, clinics, and hospitals appropriate access to digital medical records. Blockchain lets you share all your medical records with specialists and clinics from a single distributed datastore secured with a digital key. This eliminates the privacy, access, and data-format barriers that have historically prevented medical records from being digitized and shared despite the obvious benefits.
This new way of looking at data, privacy, transactions, and ownership promises to serve as the foundation of a new wave of imaginative products and services. Software companies, financial-services firms, research consortiums, national governments, and other groups are investing heavily into research and tools for developing products and services based on blockchain technology.
Transforming the gaming world
The most obvious way to integrate blockchain technology into gaming is to use the same blockchain-based cryptocurrency to reward in-game achievements, to purchase upgrades and game options, and to purchase other games from the online store. It turns out the blurring the line between game-commerce and real-commerce creates freedom and opportunities for players. We at GameCredits were the first to announce technology that integrates cryptocurrency into gaming in these ways, but we won’t be the last. A host of start-up companies have announced their intentions to implement similar features.
But blockchain can do much more. For instance, a blockchain could also be used as a data structure to store gameplay, with each of a player’s moves within the game stored as a transaction in a verifiable ledger. It’s a simple way to document the record-breaking high scores you earn when no one is around — even for tournament play. In a blockchain-structured game, this storage would happen automatically and the historic data would be accessible to anyone who receives a key.
Developers could even use blockchain nodes to store executable elements of the game program, linking to them at run-time to create a more varied, unpredictable gaming experience.
Let’s talk specifics.
Blockchain technology enables four key freedoms for players.
Freedom to collaborate
Role-playing adventure games enable you to form teams or cohorts to accomplish quests. With blockchain, you might transform your time investment and game-playing skills into a career as a game master, requiring prospective members to buy a place on the team to compensate you for your leadership, management, and story-crafting skills. This is already happening, on a limited basis, in tabletop role-playing games, but blockchain could help the profession grow by supporting game masters in existing and new MMORPGs. Integration with a blockchain-based cryptocurrency makes it simple to collect the payments, to distribute them to players for excellent performance or prizes, and to share the spoils your cohort earns upon slaying a dragon or rescuing a village.
Blockchain lets you send gifts or loans to team members without leaving the game environment. In fact, clever programmers could associate blockchain-based cryptocurrency with particular prize objects within the game’s miniverse. When you give a cohort member a purse full of gold or a fist-sized ruby, the value is not merely symbolic: It’s actual, based on the underlying cryptocurrency’s value within the miniverse and — crucially — outside the game in the game store or the virtual currency exchange. Blockchain helps make interactions with other gamers more social and more lucrative.
Blockchain is a way for you to interact and negotiate with other players directly — inside the game — without using the game’s developer, the online host, your bank or credit card provider, or even the game software as an intermediary. It’s a flexible, friction-free alternative to a game-disrupting pop-up window to enable an e-commerce transaction.
Freedom to profit
Serious gamers accumulate lots of in-game rewards. In traditional gaming, those rewards disappear the moment you log out. They are useful only within a single game, and even then, once you’ve achieved the top level they really aren’t good for much.
With blockchain, the rewards you earn stay with you, and you can use them however you want. You can spend them in the game, use them in the game store, hold them as an investment, or transform them into cryptocurrency or fiat at an online exchange.
A very good player could conceivably accumulate enough in-game achievements to play games for a living. Gaming has become a profession in the esports world already. The next few years will see the continued transformation of gaming from a hobby to a career, at least for some people, much like music or athletics. Among the new gaming-based careers will be a kind of achievement-mining, in which good players accumulate cryptocurrency through in-game achievements, ad hoc competitions with other players, and wagering on amateur competitions.
Blockchain means more game developers and managers will announce tournaments with prizes with rewards in cryptocurrency that winners can use within the game, in the e-store, and in the offline world.
Without blockchain, players must count on game publishers or store operators to convert achievements into cash. Some publishers would participate and others wouldn’t. Policies and restrictions would vary by publisher or by game. Credits accumulated in one game would disappear if the game were to be discontinued. Blockchain supports the conversion of achievements into cryptocurrency that is accepted throughout the gaming world.
Freedom to grow
You can use your blockchain wallet to invest in your own success as a player. You can double-down on the game you’re playing, purchasing options and upgrades. You can enlist the help of expert players or enter expert-only playing levels. You can use rewards earned playing one game to skip past tedious opening levels in another, although this would require developers to build this possibility function into their games. You can study the moves of expert players – stored automatically and efficiently in the blockchain database – to benefit from their expertise.
Without blockchain and a widely accepted cryptocurrency, such investments are limited to a single game, publisher, or ecosystem. The verification, openness, and freedom from intermediaries offered by blockchain technology make it ideal for breaking through the barriers that separate businesses and players today.
Freedom to create
With blockchain, the game designer’s goal doesn’t have to be your goal. Blockchain technology empowers you to pursue your own goals and tailor your gaming experience to your own preferences.
In-game wagering is an example. If you’re playing a neighborhood simulation, you might bet another player that you could have a better garden or make more virtual friends during a session. You each contribute a bit of cryptocurrency and the winner takes it all. Without a blockchain-based cryptocurrency, you would need to approve each potential transaction with your bank or credit-card provider. And you would need a trusted intermediary to hold funds in escrow until the wager is resolved. With blockchain, such intermediaries — and escrow fees — are unnecessary.
Alternately, you might pay a neighbor to collaborate with you and help you plant virtual crops or build a barn. Blockchain lets you create your own solutions to challenges you encounter in the game. You could do this today in a particular publisher’s in-game technology of rewards and achievements. With blockchain’s verified open transaction model, you’re free to create and dissolve such partnerships on an ad hoc basis — including partnerships that the game publisher never anticipated.
Even the most open of today’s gaming platforms restrict your options. The game’s goals and environment are dictated by developers. You play the developer’s game or you don’t – those are your only options. With blockchain, every player can create new games in the developer’s world by incentivizing certain achievements. You can collaborate with who you like, set game goals and rewards that make sense to you, and play your own game within the developer’s gaming universe.
It’s not just monetizing, though that feature is garnering lots of attention. What the approach really implies, long-term, is the creation of a rich world like World of Warcraft in which the game developer’s quests are just the beginning. Players can establish their own quests and assign negotiable achievement points to tasks along the way. Advanced players can accept fees as game masters or as designers of quests. A cohort that’s facing a big challenge might hire mercenaries within the game — temporary cohort members. Blockchain isn’t necessary for any of these changes, strictly speaking, but once you’ve re-engineered a game for blockchain and digital assets, it’s a small step from developing games to developing game-worlds-as-platforms for customers to create their own adventures – either on their own or with the assistance of experienced guides.
Game developers will be free to implement this feature or not, of course. But some surely will. Historically, the trend is for gaming miniverses to allow more flexibility and freedom for players over time. Games get more and more like real life. Armed with blockchain, future developers could shift their focus to world-building, selling a game as a Quest Kit – a customizable world-building kit plus the infrastructure to create and incentivize behaviors. People could create different quests or communities as they wish using the kit as a starting point, making every player a de facto game developer.
Blockchain for game developers
That’s the player’s side. For developers, blockchain represents exciting opportunities to innovate.
You can create games that are more compelling. Players will be drawn to games that allow them to earn meaningful rewards instead of mere in-game trophies. They will work harder and longer to achieve milestones. They’ll create strategies and explore your world in ways previous generations of players couldn’t. Your games won’t just have fans – they’ll have enthusiastic collaborators, gamers who help create new adventures for other gamers. That’s one reason so many cryptocurrency startups are following GameCredits into the gaming world these days.
Blockchain also supports you in your desire to be more creative. With an in-game economy that interacts with real-world currency, you can open up all sorts of options that never made economic or practical sense before. Custom adventures. Special versions for elite players. Worlds with lots of resources but few rules. Blockchain lets your users collaborate to create their own games within the worlds you envision for them. For example, a game master might create a quest to colonize a certain region of the virtual world or to collaborate in gathering certain kinds of objects — creating games that never existed before. There’s no need to type in a credit card number or type in your PayPal ID. These features can be implemented without breaking the spell that gamers crave and developers work hard to sustain.
It’s up to you to make those worlds sufficiently enticing to capture their attention. Look for a software development kit that lets you add blockchain technology — including cryptocurrency support — with a couple of mouse-clicks.
Higher profits are on the way too. When games are more compelling, players purchase more upgrades and add-ons. They explore optional equipment and additional lands or histories or scenarios. With online wallets full of cryptocurrency they’ve earned playing your game, they’ll be eager to purchase more, especially since a fully integrated cryptocurrency makes the purchase friction-free.
Plus, the ease of blockchain-based e-commerce means that the e-stores that sell your games can afford to charge a smaller commission, pay you faster, and perhaps create incentives to publish more games for the blockchain platform.
The sky’s the limit
Of course there’s more. Thomas Edison never imagined Spotify or the Apple Store. We have note seen more than a glimpse of the blockchain-transformed world of gaming that is barreling toward us at 60 seconds per minute.
Blockchain is more than a cryptocurrency, more than a way of allowing interaction without intermediaries. It is also an auditable, verifiable datastore that records players’ moves within a game, serving as a sort of finite-state-machine record of how players progress through the game. Developers have always been able to create such datastores. What’s unique about blockchain is that the data is protected yet verifiable in an open ledger. Having every move of every player automatically recorded opens up a world of possibilities.
- Developers or sponsors could hold a virtual tournament for a single-player game. Just ask players to send a pointer to the best game they played during the contest period. All their moves are in the datastore, so it’s easy to verify the quality of the entrant’s performance. The sponsor could even publish the move-by-move record of the winning game.
- New players could challenge record-holders – like playing a legendary master of chess or Go. The datastore lets them step through a one-on-one battle against a great player, analyzing the player’s every move before proceeding to the next move.
- Play-by-play records could support the development of game coaching and clinics, in which experts analyze players’ performance, pointing out errors and missed opportunities. Similarly, teachers could create seminars in which they analyze and explain the work of expert players.
These features have unlikely precedents in the world of tabletop games, where masters’ moves were recorded on paper. By creating and maintaining records of game-play, blockchain will more efficiently bring those benefits to the world of video games.
Watch for the emergence of big data tools that scan through the game-play records of tens of millions of anonymous players, identifying winning techniques and strategies. That information can help developers make games more challenging and compelling. It can help game coaches and educators create substantive, worthwhile seminars. Gamers can study the information to improve their own play. Gaming is a $100 billion worldwide industry.
And that’s just data. Blocks of distributable code can also be stored in blockchain nodes. Every industry group associated with the blockchain movement is starting to assess the potential of incorporating a distributed, verifiable data structure as the basis of a distributed computing system. Blockchain could address and nullify the security concerns of malicious executable code, not just in games, but everywhere in the internet-connected world.
One thing’s for sure. We stand at the threshold of a disruptive transformation in the ways games are built and played. The next generation of games will be more flexible, more rewarding, and more profitable for players and developers alike.
J.D. Hildebrand is director of content at GNation.
GamesBeatGamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. How will you do that? Membership includes access to:
- Newsletters, such as DeanBeat
- The wonderful, educational, and fun speakers at our events
- Networking opportunities
- Special members-only interviews, chats, and "open office" events with GamesBeat staff
- Chatting with community members, GamesBeat staff, and other guests in our Discord
- And maybe even a fun prize or two
- Introductions to like-minded parties