Today, the gaming market is bigger than all other media categories combined. With an estimated size of $336B, gaming can be currently divided into three main segments. These include games (sales, virtual goods, esports), hardware (PC, consoles, & accessories), and software (Unity, Twitch, Discord, etc.). Like many other industries, Web3 has the opportunity to revolutionize gaming.
In this article we’ll explore seven ways blockchain technology makes gaming better across each of the segments. We’ll dive into online gaming, how video games are evolving toward pay-to-earn, and look at real world applications for fungible and non-fungible tokens in blockchain games.
Traditionally, it's always been fuzzy who owns an in-game asset. For instance, if I buy a skin on League of Legends is it truly mine? Sure I can use it in-game, but the IP is still with the gaming company. In a sense, I have bought a license for using different in-game assets but not true ownership.
With Web3 gaming, however, players can have actual ownership of in-game assets and collectibles through NFTs with verifiable proof on the blockchain.
Today, in game assets are lost when a player wants to change the game they’re playing. I cannot use the skin I bought in League of Legends in my Apex Legends account for example. Blockchain-based gaming could solve this with interoperability between platforms. This way with my proof of ownership through my NFT, I can now carry my virtual assets between gaming platforms.
By giving ownership of assets to individuals and supporting interoperability between games, this opens up opportunities for creators. Games such as Roblox or development engines such as Unity already have marketplaces to reward creators for their work, however, these worlds are siloed.
Imagine designing a cool piece of digital architecture in Web3 that can be bought, sold, and used across gaming platforms. Blockchain technologies give individual creators the power to create their own IP that they may monetize through royalties. The assets ownership, usage, and transaction history can all be tracked on the chain and royalties can be automatically paid through smart contracts.
Play to earn is not a new concept in the gaming world. Many games reward players with in-game assets or in-game currency the more that they play. These rewards could be for completing a daily quest among other achievements.
What’s different about blockchain gaming is that these rewards can now have real monetary value. Instead of in-game currency this would be in-game cryptocurrency that can be traded on the open market. Similarly, rewards for in-game assets could be traded as NFTs.
Another play to earn use case is staking. In-game cryptocurrencies could be staked to obtain loot boxes as rewards. These loot boxes could contain limited edition NFTs that can then be traded.
Tying together reasons 1-4, there is a ripe use case for brands to enter this space. Many companies are already launching their NFTs successfully including Tiffany’s, Nike, Gucci, and many more. As a user’s digital identity becomes more and more important, their digital profile and assets are likely to involve more than a simple JPEG profile picture. And since NFTs are on the blockchain, which is immutable, it will be very easy to tell who owns an authentic Tiffany’s, Nike, or Gucci NFT.
There are always varying opinions among gamers whenever a new patch or content is released. Conventionally, this is a centralized decision on the part of the game maker, though public discourse does sometimes influence development. With Web3, gamers could have direct input on new content and patches. Gamers can propose their own ideas and consensus methods can be drafted for decisions to be made.
The desire to play any game, anywhere, on any device has been a key trend over the past few years with cross-platform games, new hardware, and cloud gaming solutions. Instead of relying on services such as Google Stadia where games are gated by publisher support and servers are centralized, Web3 cloud gaming can allow users with high end hardware to rent their computing power to others. Blockchain helps secure and verify this decentralized network and smart contracts automatically handle transactions between players.
This all sounds good, but how do we do it? There are many challenges to solve to make this happen including:
Gaming is a very high throughput use case with many users at any given time. A blockchain network needs to be able support up to thousands of transactions a second. With Kaleido, you can build your own custom chain using a high throughput protocol such as Polygon Edge. You can customize the chain however you want and bridge to a public network such as Ethereum for extra security.
As discussed above, it is very important for gamers to be able to use their assets across gaming platforms. With Kaleido and Hyperledger FireFly, you can easily connect to any chain you want.
A mass scale platform is needed to mint and exchange NFTs. Additionally, security and reliability are needed for a seamless user experience. With our NFT service, we provide the infrastructure needed to launch a NFT Platform. Plug in your backend services and work with our digital asset API, orchestration engine, chain connectors, sidechain solutions, and more. Additionally, Kaleido also supports rollups or bridges with public chains for enhanced security.
Digital wallets are important to store in-game assets and identify players. They are also important for protecting personal information. Kaleido makes it easy to set up a managed wallet or HD wallet service. Additionally, you may connect third party solutions such as MetaMask.
Smart contracts are important to automate and govern a variety of game processes. As discussed above, smart contracts can be used to handle transactions, reward gamers, and manage voting and decision making. Kaleido makes it easy to register, deploy, and manage smart contracts on your blockchain network(s).
There is a lot to be excited about in the future of Web3 gaming. One thing that's clear is blockchain game developers need an enterprise-grade system to manage throughput and keep users online. Kaleido has a history of developing plug-and-use blockchain tools, and is now looking at ways to deliver out-of-the-box NFT platforms and sidechain services that make rewarding players and scaling transactions easier. Blockchain-backed games might be the future of gaming—and we’re excited to see where the game industry goes.
Kaleido is your easy button for developing next era blockchain based business applications.