Blockchain digital gaming is the next big thing in the gaming industry. The blockchain gaming ecosystem is evolving so fast and the blockchain gaming market size had hit $55.38 billion by February 2022.
Besides the obvious boom in cryptocurrencies, blockchain technology has opened new opportunities for businesses to create decentralized gaming apps that create a new gaming experience for both game owners and players. In addition, blockchain advancement has also resonated with the rise of the metaverse and non-fungible tokens (NFTs) which have become integral aspects of blockchain digital gaming.
Role of Cryptocurrency in Blockchain Digital Gaming
Cryptocurrencies, which are digital assets that use cryptography to secure, verify, and facilitate transactions, were among the first real word use cases for blockchain technology. They have gained a lot of traction for allowing users to make payments online without the need of using traditional financial systems like banks.
Cryptocurrencies are an integral aspect of blockchain and every blockchain project has its cryptocurrency, commonly referred to as a native token. The cryptocurrency facilitates transactions within the blockchain network and also allows users to participate in other activities like governance through voting.
Similarly, blockchain-based games also have their native tokens that enable secure and fast payments for in-game purchases. Players use the tokens to purchase things like avatars, power-ups, themes, and unique artefacts among others in the gameplay.
Blockchain-based games have also given rise to a new genre of digital gaming referred to as play-to-earn (P2E) blockchain-based games that allow players to earn cryptocurrencies by playing. The earned cryptocurrencies can then be used for in-game purchases, traded in secondary crypto markets, converted into fiat currencies, or directly used to pay for goods and services in the real world.
Metaverse Gaming Market
Sometime past, “the metaverse” was just a term confined to science fiction novels. However, advancements in blockchain technology and integration of blockchain in digital gaming have thrust the metaverse into the limelight through the creation of blockchain metaverse games.
Besides being open and shared three-dimensional virtual environments that facilitate interactions with different digital services and users through digital avatars, blockchain metaverse games are decentralized and use NFTs. The digital avatars in these games are designed in form of NFTs allowing players to truly own the digital avatars and control what happens to them. Players can also trade these avatars in an NFT marketplace.
In the first half of 2022, more than $10.5 billion in the capital was raised for NFTs and blockchain gaming projects. It is estimated that by 2025, blockchain gaming will have grown to a $50 billion market.
Benefits of Blockchain, Metaverse and NFTs in Digital Gaming
Improved User Experience
Blockchain has helped improve user experience in digital gaming by providing a more efficient, secure, and transparent way to access in-game assets and engage in digital transactions.
In addition, due to the decentralized nature of blockchain games players have more control over their gaming experience. Players can create their game characters and storylines.
Secure And Transparent Transactions
Blockchain’s security and immutability add a layer of confidence for users when engaging in digital transactions and sharing sensitive data or virtual assets like NFTs in the case of NFT games.
Player information, game data and user transactions are also prevented from being tampered with.
Blockchain digital gaming platforms also ensure that all interactions and transactions between parties are legitimate and verified. This prevents fraud, which is one of the most common challenges in modern-day gaming platforms.
Earning Cryptocurrency Rewards
Contrary to traditional games where players were only rewarded with points that had no monetary value, a majority of blockchain games allow players to earn rewards in form of cryptocurrencies for completing missions and quests. This has made blockchain gaming platforms some of the most profitable gaming platforms.
The earned cryptocurrencies can be used in the real world for purchasing items from e-commerce stores or paying for services or used in buying in-game products for an improved game experience.
Integrated Gaming Profiles
Blockchain networks normally have a community of users built around the networks’ ecosystem. Similarly, blockchain games allow for the creation of communities where users can access different games. That way users create one profile that they can use across multiple platforms.
Players, therefore, access different games and purchase items that can be used across the games.
Virtual Events and Tournaments
Traditionally, global virtual events require huge resources to manage teams, prize pools, and event venues. These events were also characterized by high registration fees or ticket fees and cybersecurity threats.
However, with the introduction of blockchain metaverse gaming platforms, virtual events and tournaments have become cheaper and easier to conduct. Some of the most popular metaverses like “The Sandbox” and “Decentraland” allow users to hold and organize virtual events and tournaments.
EventX for example purchased a piece of virtual land on the Sandbox, a profitable gaming platform, to be able to host virtual events in the metaverse. By building an event-focused digital world in the Sandbox, EventX allows organizers and marketers to hold conferences and events, and create virtual experiences.
Limitations of Blockchain, Metaverse, and NFTs in Gaming
The complexity of blockchain games does not lie in the gaming process but rather in the onboarding process that requires a player to link or set up a crypto wallet after creating a user account. The crypto wallet is needed for storing NFTs as well as the earned crypto rewards. The process of setting up a crypto wallet can be quite challenging, especially for crypto beginners.
The cryptocurrency space is largely unregulated since regulatory bodies across the world are still trying to understand how to categorize the various crypto assets. A case in point is Ripple’s XRP cryptocurrency which has been accused by the US Securities and Exchanges Commission (SEC) of being a security and Ripple Labs, which is the firm behind XRP has maintained that its token is not a security but rather a cryptocurrency.
Several other blockchain projects have been fined for offering unregulated services and products and the confusion has led to some fear among users who do not want to be caught up in all that.
Future Of Blockchain, Metaverse, And NFT In Digital Gaming
In a nutshell, blockchain, metaverse, and NFTs are the future of gaming. They have helped unleash the full potential of blockchain-based games, especially through metaverse game development.
Blockchain digital gaming grew by over 2000% last year according to DappRadar’s 2022 Q1 Blockchain Game Alliance report. Additionally, blockchain games and NFTs have not been greatly impacted in the current bear market compared to other crypto assets which are reeling due to macroeconomic pressures.
As a result of the blockchain games’ resilience, investors invested more than $2.5 billion in Q2 surpassing the annual milestone of $4 billion set in 2021. At this pace, the industry is expected to have an investment of about $12 billion by the end of the year.