Blockchain in Gaming
The gaming industry, like its fictional characters, is constantly evolving. The industry is on the verge of disruption, where it has historically identified and adapted technologies to ever-changing demands. The industry has been experiencing massive growth, acquisitions, and technological development, and is at the onset of next-gen consoles. Major publications are headlined by news of global tech giants foraying into gaming, virtual experiences, and the Metaverse.
- Microsoft to acquire Activision Blizzard to bring the community gaming experience to every user
- Facebook rebrands to Meta as it broadens its reach beyond social media into areas like virtual reality (VR), gaming.
- Netflix is making a big push into video games and has launched Netflix games for mobile devices.
HOW WILL GAMING BENEFIT FROM INTEGRATING WITH BLOCKCHAIN?
The blockchain gaming sector has earned names like GameFi or play-to-earn, a reference to the new monetization techniques prevalent in this gaming period. Non-fungible tokens (NFTs) or other kinds of tokenized assets are frequently used in blockchain gaming as in-game content that can be traded for cryptocurrencies – or fiat currency – on markets facilitated by the blockchain.
Gaming has been a primarily centralized activity during the last decade, with all data, assets, and in-game currency restricted to the game itself. This resulted in severely segregated ecosystems, and ownership was kept by the game producers, with no benefits being passed on to the users/gamers who are critical to a game’s success.
The integration of blockchain and distributed systems lays the groundwork for a decentralized gaming future in which objects acquired or purchased in one game can be made transferable and composable with other games, and whose ownership will aid in assigning a true value to game assets.
The use of NFTs as in-game assets will aid in both the current monetization regime (in-game purchases) and new monetization methods (royalties from secondary sales). Blockchain gaming has gained acclaim as a result of the recent meteoric ascent of Play to Earn Gaming, led by titles such as Axie Infinity. Despite a drop in player revenues due to the SLP token (Smooth Love Potion (SLP) tokens can be earned as rewards by Axie Infinity players through battle or adventure mode) price drop, Axie Infinity’s daily and monthly active users (DAU and MAU) have been increasing. We witnessed the entire gaming business flourish and create a healthy ecosystem around Axie’s expansion.
Play to Earn Games
Play to earn (P2E) revolutionizes the relationship between the game and the player by allowing them to earn an income in exchange for their time, skill playing the game. Gamers create value for other gamers and developers by engaging in the in-game economy and earning assets (NFTs) or in-game currency (tokens) for their contributions.
We believe Play to earn can be a great mechanism for customer acquisition and can help improve customer retention if implemented correctly. Even though play-to-earn games can provide sizable monetary incentives for gamers, developers still need to create visually appealing, entertaining, and fun-to-play games to ensure longevity. For play-to-earn games, we have identified a few crucial pillars:
At the peak of Axie Infinity’s popularity the cost to enter had rocketed to US$ 500. Guilds were started to remove the barrier of entry into P2E games having a high cost of entry. Guilds would purchase in-game assets (i.e. Axies) en masse and sponsor the new players by lending assets to them for a small percentage of their game earnings.
Guilds at their core are asset managers. They pick games to invest in, purchase token and NFT assets, lend those out to scholars, and earn a yield on their activity. Most Guilds are currently building out custom tooling, wallet management, and reputation software for their scholars. There is a significant gap in this market that can be fixed by a great white-labeled solution.
Further, the process to delegate virtual land, other assets to scholars has certain trust assumptions. A platform that allows lending and borrowing of these assets would make the operations trustless, and reduce some of the risks.
Yield Guild Games (YGG) employs a franchising model via a structure known as “Guild of Guilds.” The smaller guilds (subDAOs) can be game or region-specific that share revenues with the main guild.
Merit Circle builds its subDAOs in-house rather than franchising. Merit Circle wants to produce homegrown skilled players by creating an end-to-end training system. Thus Merit Circle plans to operate like an E-sports management company.
The world of blockchain-based gaming is fast increasing as a result of the growth of NFTs and in-game currency. Its expansion can be viewed as a continuation of a multi-decade iteration across monetization tactics and business structures. While blockchain ecosystems such as Ethereum continue to grow in popularity, scale and user experience difficulties persist. Nonetheless, other teams are developing solutions to improve the experience of creating and playing blockchain games for both customers and game developers. Although a unified revenue model for blockchain games has yet to develop, experimentation with NFTs, vertical marketplaces, in-game currencies, and other crypto-economic primitives continue to remain promising.
WOODSTOCK IN NEWS
- Woodstock is the leading sponsor for the YourStory Metaverse Summit 2022. YourStory is India’s most reputable and major platform to foster the startup ecosystem.
- Pranav Sharma featured in a panel discussion alongside Ashish Singhal, CEO, CoinSwitch Kuber with ET Markets.
- Himanshu Yadav, Founding Partner, was invited for a fireside chat along with Prakhar Sharma, Co-Founder, Metasky (Portfolio Company) for BITS Web 3.0 Summit.
- Woodstock hosted two side events in ETH Denver which were attended by industry experts, entrepreneurs, portfolio founders, family offices, and various traditional VC funds.
- Binance Chain will be renamed to BNB Beacon Chain and will serve as the governance hub of BNB Chain, while Binance Smart Chain will become BNB Smart Chain, an EVM compatible consensus and execution layer.
- Aave team launches ‘Decentralized Social Graph’ With Lens Protocol venture.
- Terra has announced a sponsorship deal with Major League Baseball’s Washington Nationals using US$ 40 million from Terra community members and investors.
- Maple Finance partners with Celsius to launch wETH lending pool.
- Uniswap built an interface to swap altcoins into ETH donations for Ukraine.
- Brazilian crypto asset manager QR Assets has launched a decentralized finance exchange-traded fund, or DeFi ETF, on the Brazilian Stock Exchange.
- OpenSea launches venture arm, NFT ecosystem grant program.
- Gucci bought land in Sandbox.
- Nintendo is exploring NFTs as a part of their ecosystem.
*Updated on 1st March 2022
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