It is no news that blockchain games have been flourishing over the past year. The overall market capitalisation of Play-to-Earn games has grown to $29 billion. As such, one example is Axie Infinity, one of the most well-known/popular blockchain games. Over the past year, the latter has seen a 20,000% price increase, along with an enormous growth of its player base.
Yet, the idea of integrating blockchain technology with games, or building games on the blockchain has been around for over a decade, with one of them being Dragon’s Tale. Dragon’s Tale was announced on BitcoinTalk back in 2010 as a MMO RPG with casino-like mini games, where players could bet, play and earn rewards for completing tasks utilising Bitcoin as its currency. While it enjoyed an active and consistent player base for a few years, it slowly started dying out in 2016, making way for a new wave of crypto games.
A new life was put into blockchain games when Axiom Zen announced the release of CryptoKitties in November 2017, a game that quickly amassed tons of players and hype leading to the congestion of the Ethereum network. In CryptoKitties, players could buy, sell and breed randomly generated Kitties with varying levels of rarity, utilising Ethereum as the native currency. What made CryptoKitties special was that it was decentralised and ran fully on the blockchain. This meant that every asset in the game existed as an NFT on the Ethereum network, and that every interaction was broadcast as a transaction. Due to the huge success of CryptoKitties, Axiom Zen started a spin-off company known as DapperLabs to further explore the benefits of decentralization in gaming.
Currently almost all of the popular AAA games, high-budget games developed by major studios, are centralised. This means that all the data from the game and players is stored in servers, controlled by the developers and creators of the game. Therefore, it is left vulnerable to security breaches, data hacks and permanent loss of player progression due to damages to the server. With the game developers and creators being in complete control over the game, they can change and update the game to their liking, often resulting in frustration of the players who do not agree with these implementations.
By decentralizing games, ownership and power is put back into the players’ hands, allowing them to vote on decisions that they would like to see implemented and that they believe will be best for the game they love playing. It opens up new ways for people to earn money, therefore rewarding the players and content creators that put significant time/effort into the game and contribute to its communities. On top of that, the decentralization of games can help prevent the loss of fair play due to cheaters or hackers: The servers will be globally distributed and any changes to the smart-contracts can be voted for, and will have to be validated by a majority of the nodes.
To fully understand the importance and benefits of involving blockchain technology with games, it is important to have some understanding of NFTs. What they essentially allow us to do, is to take an item or character from a game and make it permanent and unique on the blockchain as a Non-Fungible-Token. This allows the items to continue living on, even if the game itself has died out, and give the ability to implement the use of these NFTs in different games or metaverses. The blockchain thus showcases the history of that item, allowing people to collect, trade and use items from their favourite e-sports players, similar to how people collect baseballs, tennis rackets and jerseys used by their favourite athletes. It is therefore not just the monetary value of these items that is important, but also their sentimental value. Being able to transfer items or characters from games that one has put hundreds or thousands of hours into, and gotten so much joy out of, to a new game would be very attractive to a lot of users — it would allow for true ownership of one’s items and characters.
Yat Siu, co-founder of Animoca Brands, expects the gaming industry to move into a direction where content will be king. Developers will create content based on what players already own. They will want to allow users to transfer items and characters from other games into their games, as they want to attract as many users as possible.
This has another added benefit for the developers, as when they create an item that might have multiple use cases beyond their own game, the value of these items can increase exponentially.
The players and communities will be incentivised to promote these items, as they have invested significant time or money into them. By implementing a small percentage fee on the transfer and trading of these items, creators can ensure monetary inflow from their game, even after the game has died out.
A lot of alternative blockchains have emerged due to the high gas fees and limited scalability of Ethereum 1.0, of which some have the sole purpose of hosting games. An example would be Flow, a fast, scalable and decentralized blockchain, designed in such a way to maximize developer friendliness and to serve as the foundation for the new generations of games, apps and their digital assets for mainstream adoption. While Flow is still in its early stages, it already has the backing of and partnerships with a numerous amount of impressive names, such as Google, Ubisoft, NFL, UFC, NBA, Samsung and Warner Music Group. One of the first games to be released on Flow is Chainmonsters, a free to play Pokémon-like MMO-RPG. Players can earn money by catching, breeding or trading different Chainmonsters, to later sell them as NFT’s on the blockchain marketplace. Unlike many other play-to-earn games, Chainmonsters does not require players to spend money to start playing and earning.
Another interesting blockchain that is currently attracting the development of many games, and will most likely continue doing so, is Solana. Due its high transaction speed and fees at a fraction of a cent, as well as the added bonus of readily available guides and tutorials on how to develop on their blockchain, it has caught the attention of many developers. Solana is speeding up the adaptation and growth of gaming applications on their blockchain through the joint investment with FTX to finance a game studio, onboarding developers coming from established studios such as Riot Games and Electronic Arts.
WAX, Worldwide Asset eXchange, is a blockchain specifically made to trade virtual items and collectibles, NFTs from video games and metaverses. Hosting a decentralized marketplace and dApp platform focused on NFT games with the vision to give ownership back to the players. While having gas-free peer-to-peer trading they have also partnered with ClimateCare to ensure a neutral carbon footprint of their blockchain, proving to the mainstream that blockchain technology can be sustainable.
Some interesting projects to keep an eye on are Blankos and Illuvium. Blankos Block Party is a casual game where players can create their own mini-games and invite their friends to come play with them. It has looks and funky gameplay similar to Fall Guys, with one big difference. Blankos Block Party runs on a custom version of the EOS blockchain in the background and by hiding all the blockchain technicalities from the players it runs and feels just like any normal PC or console game. By incorporating blockchain technology , players are able to trade and own their in-game items as NFT’s, without the hassle and intimidation of getting familiar with crypto and blockchain technology.
Illuvium is one of the first AAA games developed and released on the (Ethereum) blockchain. While many blockchain games nowadays claim to be AAA quality, they often lack the experience and credentials in the gaming industry to back up those claims. Illuvium is being developed by members with sublime backgrounds, with lead roles in The Last of Us, Bioshock Infinite, Epic Games, LucasArts, Marvel etc., bringing quality to play-to-earn games. Featuring RPG gameplay in an open fantasy world, you can travel across this world to catch and defeat creatures, Illuvials, while completing quests and battling other players.
Leading triple AAA game studios have shown their interest in integrating blockchain technology with their games. In a recent post, Nicolas Pouard, Head of Blockchain Initiatives at Ubisoft, stated that they believe blockchain holds the potential to transform video games, as long as it is “done right”. For Ubisoft, this would mean making sure that it will not be confusing or intimidating for players to understand, handling a ‘player first’ approach, where the mainstream can safely experience blockchain’s true potential. This can be used to show that blockchain is not something to be afraid of, despite stories on the negative aspects of crypto regarding criminality, scams and theft. On top of that, Ubisoft would require the blockchain to be more energy efficient, which will be the case once Ethereum goes from proof-of-work to proof-of-stake. Most important to them is making players stakeholders in their favourite games, and rewarding them for the time and effort that they put in.
Once mainstream game studios will start implementing blockchain technology in their games, a gateway to the crypto world will be opened for over 3 billion gamers, allowing new streams of revenue for developers, studios as well as the players.