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The Potential and Reality of Cryptocurrency in Video Gaming

By Paul Marcantonio, Head of UK/Western Europe at ECOMMPAY

Cryptocurrency. Everyone’s heard of it. Most are confused by it. And some are betting their future on it. But while the ins and outs of the strange world of Bitcoin, Ethereum and others send plenty of people running for the headache tablets, the potential offered by the technology (and touted by its proponents) stands to have a major impact on a sphere many overlook: not just our finances, but our games.

Paul Marcantonio

It’s actually not so hard to imagine the changes that cryptocurrencies and the blockchain could bring to gaming. The rise of “games as a service” has practically led to the omnipresence of microtransactions: small purchases (usually of cosmetic items) made within the games themselves. Gamers these days aren’t just dropping £40 on the latest Call of Duty and calling it a day, they’re spending in dribs and drabs to acquire new skins, weapons, shouts, and who knows what else.

If you’ve ever been in the presence of Fortnite addict, you’ll probably be aware of just how enticing those little extras can be for players. Nearly three quarters of Fortnite’s players have spent, on average, $85 on the game, generating $300 million a month for the battle royale behemoth. That’s a game you can download, own, and play forever completely free, for the record.

There’s an obvious opportunity for cryptocurrency to slot in here. In order to buy these things, you have to pay for them (a revelation, I know). Instead of relying on external transaction mechanisms, developers could implement cryptocurrencies in their game and internalise the procedure. Players could buy and sell items and cosmetics using secure, reliable systems that operate entirely within the framework of the game’s world, even using their fortunes seamlessly across different games.

Instead of relying on external transaction mechanisms, developers could implement cryptocurrencies in their game and internalise the procedure.

That means a few things. It means being in control of the systems that make you money in your games, and it means no more messy regional pricing: one flat, crypto price across borders. It even opens up the door to a whole new world where players can earn actual, spendable currency from your games. One startup, called ClanPlay, raised $2 million for a system which does just that late last year. Who knows, perhaps in a few years’ time we’ll be paying our rent with Victory Royales.

There’s also the potential for ‘tokenising’ in-game assets, tying them to the blockchain and giving them a form of existence (and value) outside of the game. If that sounds confusing, imagine this: right now, if you buy a new outfit in an online game, you’ll only really own it on the game’s servers. If a developer decides, for whatever reason, that you shouldn’t have it any more, it’s as simple as the flick of a switch to take it away. Even outside of capricious devs, there’s always the risk of things like server crashes or malicious attacks, which can end up wiping your hard-earned progress and flashy rewards. By putting those items, and your ownership of them, onto the same tech that powers cryptocurrencies — the blockchain — you create an indelible record of your ownership and give your items a concrete worth and existence outside of the game. Transferring currencies between games could easily become transferring items. Sooner or later, you have a whole mini-economy on your hands.

But for all the rosy promises, cryptocurrencies have yet to overcome all of the flaws they’ve been laden with since their creation. Confirmation time for transactions (the time it takes for a trade to be registered by the blockchain once you’ve started it) averages about 10 minutes and can sometimes take hours. It’s going to be hard to convince players to get on board with a new system that’s so much slower than the old one, particularly when the old one was usually instant.

Transferring currencies between games could easily become transferring items. Sooner or later, you have a whole mini-economy on your hands.

What’s more, that delay’s not going to get any shorter any time soon, barring some sort of revolution in the underlying tech. It’s baked-in for security reasons, which means the first game dev to properly take the plunge on crypto will have to have quite the marketing campaign in store to convince their player base of the benefits of the new way of doing things. There’s also the recent example of a blockchain ‘bank robbery’ putting holes in the much-vaunted security credentials of the system, even though some experts point out the story isn’t quite as sensational as it might initially seem. 

The promises of cryptocurrency for the gamers still seem pretty tempting. The notion of your work in a game world actually meaning something, creating actual value and real rewards, sure sounds like an appealing prospect. But the fact of the matter is that there are still big hurdles to its widespread acceptance, not least of which is the relative slowness of its transactions and some recent negative press coverage. Still, we hold out hope that all those hours in DoTA 2 might eventually mean more than a bad case of carpal tunnel.

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