How Blockchain could redefine the gaming industry

In Guides

Can blockchain redefine the digital gaming experience that will impact players and developers alike? Can game developers integrate blockchain into existing genres and titles?

In this article, Liquid has covered everything you want to know about the past, present, and future of blockchain-based gaming.

The gaming industry has seen a lot of innovation over the decade, from mass adoption of microtransactions to virtual and augmented reality advancements.

Blockchain has become a pillar for both present and future development across industries, and gaming is not an exception.

The state of the gaming industry today 

The vast majority of online games follow a centralized model. That means that all related data is stored on a server that the game administrators fully control.

Typically, the data includes account information and the server history - which records and stores all events and in-game assets collected by the players (such as collectibles, items, and virtual money).

As the database is owned by a single company, players don’t have actual ownership of their accounts and items.

In other words, the power is in the hands of the game companies. 

How can blockchain benefit the gaming industry?

Let’s take a look at a few ways blockchain technology is changing the gaming industry today:

  • Asset ownership 

Blockchain can streamline and secure the ownership of in-game items, which is one of the main NFT use cases today. Typically, each asset is represented by a unique, non-fungible token (NFT), such as the ERC-721 tokens. Regardless of the asset type, they can all be linked to blockchain tokens maintained by a distributed network.

  • Transparency 

Developers can create self-dependent economical systems within games. Because the structure is decentralized, a level of transparency would be an added benefit.

  • Giving power back to the people 

The inclusion of blockchain will make the gaming space more democratic. By introducing voting rights as per the number of tokens, developers can make decisions that players find appealing.

  • Streamlining payments 

Last but not least, by using the blockchain instead of centralized servers, games can cut down the time and cost spent on transactions. 

Limitations of blockchain in gaming

Building and maintaining a game on the blockchain is easier said than done. Let’s also address some of the limitations of blockchain in gaming.

  • Scalability

Scalability is one of the most significant limitations of blockchain since centralized networks tend to be much faster than blockchains.

  • Demand

The demand for blockchain games is significantly lower than their traditional counterparts due to scalability problems faced by developers.

  • Centralization

Blockchain games are not always decentralized. Some games use a centralized server to distribute tokens.

  • Maintenance

Developers often tend to struggle to raise funds when it comes to maintaining a blockchain game.

  • Resources

Due to small groups, blockchain game developers find it challenging to compete with major centralized game developers.

Example of blockchain games

Blockchain-based online multiplayer games have successfully tapped the potential of distributed storage technology as the fundamental infrastructure. It not only ensures the uniqueness of different in-game assets but also maintains a value proposition.

One of the most successful examples of modern-day blockchain gaming is CryptoKitties. Launched in 2017, CryptoKitties allows players to buy, breed, enhance, and trade virtual kittens on the Ethereum blockchain.

Following the massive success of CryptoKitties, many developers have come up with similar concepts and projects, including CryptoBots.

CryptoBots is yet another multiplayer online game where you can purchase robots and power up their skills to compete with other players.

In the case of CryptoKitties, you can create unique virtual kittens. Similarly, with CryptoBots, you can create robots with unique skills and abilities.

Typically, there are two ways blockchain is applied in the gaming industry:

  1. The entire game is built on the blockchain. The developer can run the game off of blockchain instead of relying on centralized servers. 
  2. The game could be running on a centralized server, but it will have a blockchain-based platform to manage the tokens, digital currencies, and collectibles.

One example of the first type is Taurion - a game built on the XAYA blockchain. The entire game is built on the XAYA and is free from centralized servers. 

In short, running a massively multiplayer online role-playing game (MMORPG) on a blockchain helps developers and players overcome the several limitations of a centralized server.

Soccer Manager Elite is another blockchain-based game powered by XAYA. In this game, you can own, organize, and play online soccer.

TRON happens to be one of the most gaming-friendly blockchains right now, enabling easy setup and a streamlined development process. It is a blockchain-based decentralized platform that aims to build a free, global digital content entertainment system with distributed storage technology and allows easy and cost-effective sharing of digital content. 

We can expect to see more crypto market participants building gaming-centric blockchains in the future.

Closing Thoughts

Blockchain can rebuild the gaming world as we know it, and it could mean an end to the monopolistic reign of a handful of game publishers and developers. 

Online gamers tend to weigh digital items sold as in-game tokens over traditional purchases with no unique value-for-money proposition. Although we may have to wait for a few more years to see the widespread use of blockchain in gaming, we can expect a more transparent, secure, and democratic gaming environment in the future.

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